Hey uNintendo

The rest of the mall was closed, but uWink has an external entrance so doesn't rely on mall traffic in order for people to come in.

Thanks

SOKAL6

Thanks for your input DiggR,

I did check the latest SEC filings and they are inconsistent with what Yahoo has. I think my analysis is correct, at least approximately.

I tried to post printscreens but the board doesn't let me. The share count in the latest 10Q is 12,684,403 (which I beleive includes the latest shares from the financing but not the warrants)

I think the massive fall has something to do with this. A bottom will be put in soon; the price to book is way less than 2 now.

-SOKAL6

Why the stock may be falling erroneously - -

I figured out why the stock may be falling. Yahoo says the market cap is 36.68 Million with 26.2 million shares outstanding. I did a calculation off the latest 10Q and this is totally wrong.

They had 6,513,486 and they did a 5.2 million unit offering (1 share @ 2.00 and 1 warrant at 2.4) which makes the non-diluted share count to 11.7 million shares and the diluted share count to somewhere around 18 million shares. (I’m adding some shares related to the convertible notes.)


At any rate, as of Nov 17 their outstanding share count was 12,684,403 (which was after the equity financing)


So… my calculation of the market cap, conservatively is (12,684,403 outstanding shares + 5,200,000 warrants) = 17,884,403


17,884,403 * 1.40 /share = $25,038,164 market cap


Interestingly google finance has the market cap at 17.74 million, which is basically my non-diluted number times 1.40. (so I think this is accurate too and even lower from a market cap perspective)


This is a difference of 36.68 – 25.04 = 11.64 MILLION!!!


11.64 million / 17,884,403 shares = 0.65 cents upside!!! This places the actual value at around 2.25 , not 1.40


I am going to keep buying down here. Next buy is at 1.30.

uWink was closed for New Years Eve

I went there to celebrate NYE thinking it would be really fun, but was dissappointed that it was closed as of 10pm.

I feel this was a mistake as it would have been the perfect place to ring in 2008

If any of the uWink management is reading these posts, please consider keeping the restaurants open for the next new years.

Thanks

SOKAL6

105.3 K shares traded. I have a feeling tomorrow will be even more. Money flow into Uwink, we formed our base. This is a HUGE bullish signal for something with such a low float.

- SO KAL 6

Nice work guys. The ask is at 2.95. With PR I think we will see 4+ easily.

I especially like the talk of 'definitive agreements.'

With the offering over, the stock above 4, we then move to AMEX. More liquidity will give us an additional 30%+ premium right off the bat.

At the end of this 5.25+ is what we'll be looking at, just around the corner.

I love the low float on this, watch how we skyrocket...

-SO KAL 6

Options pricing

Ok guys, as I discussed in my previous post, I have priced the options value based on the information presented on this board using a Black-Scholes-Merton calculation.

I come up with a call option value of $1.42/share. See below for the calculation components, although most of you may get confused by it.

So that means the at 2/share, the investors are getting 1.92 ((2.5-2.0)+1.42) of upside. Basically a 96% sweetener. That is insane...

Here are my inputs:

S=Stock price in dollars and cents: 2.50
X=Strike price in dollars and cents: 2.40
T=Time to expiration in years: 5
R=Interest rate per annum as decimal percent: 0.05 is 5% per year
SIG=Volatility (Std Dev) in percent per annum: 0.6 is 60% per year (general market is usually .3 to .6 - I'll go aggressive on this since we know he stock to by highly volatile.)

S X T R SIG Dividend bond SIG*sqrt(T) d1 d2 Normal(d1) erf Normal(d2) Call Value Put Value Call Delta Put Delta Call Theta Put Theta Call Vega Put Vega Call Gamma Put Gamma Call Rho Put Rho Call Omega Put Omega
2.50 2.40 5.0000 0.0500 0.6000 0.0000 1.8691 1.3416 0.8876 -0.4541 0.8126 0.2691 0.3249 1.4243 0.7934 0.8126 -0.1874 -0.0023 -0.0005 0.0150 0.0150 0.0802 0.0802 0.0304 -0.0631 1.42636905 0.590439007


- SO KAL 6

I'm not arguing that private offerings don't work this way.

I'm asking how the person I replied to came up with his logic. It seems backwards to me.

What's up with the board today? Seems dead.

No volume on the wiki either...

- SO KAL 6

This argument doesn't make any sense to me. If they are being allowed to buy at a discount (i.e. 2/sh vs 2.50/sh) they are getting .5/share upside in ADDITION to the upside of out-of-money options that have a time premium associated with them.

I'll run a Black-Scholes-Merton European call option model if I get time later(Europeans are not exercisable until a specific date) to get the exact price (of course std. deviation I'll have to imply. I think .8 would be fair). For arguments sake I'll stick my thumb in the wind and value them at .30 cents. That means they are getting .80 better than market.

Their options would have nothing to do with selling at close or impacting the market price. The options are a "right to buy."

What you are talking about are written call options, which these are not.

Please let me know if I am not understanding something.

Even if this info of 2.00/sh is correct, I beleive that the current value of 2.55 has already priced the offering in. This is because the cash infusion has increased the overall viability of the company.

I would rate the shares as a HOLD through the financing. I would start immediately adding post-offering if the price remains depressed.

The important thing is that the INVESTOR not remain depressed :)

I went to Uwink again this weekend and business was booming. One of my coworkers went with me and noted many of the people there were "amped." We got a winner here folks...

- SO KAL 6

Based on their last 10-Q, Uwink will run out of cash somewhere around now. Please see analysis below

"We believe that our working capital as of the date of this report will not be sufficient to fund the current level of operations through the end of the current fiscal year 2007. We believe that we will need additional amounts of working capital to finance future losses from operations as we endeavor to build revenue and reach a profitable level of operations. We plan to obtain the additional working capital through the sale of our equity and/or debt securities."

"Our cash and cash equivalents position as of July 3, 2007 was $415,797"

"During the six months ended July 3, 2007, net cash used in operations was $1,624,508,..."
------

... so, reading between the lines; 1,624,508 cash used per six months / 6 = 270,751 cash burn per month.

415,797/270,751 = 1.53 months of cash left.

Based on this, the company should have run out of cash in mid-september. Seeing as we are in mid-October I think even in the most conservative estimates on cash burn rate, we are running on fumes.

The offering must close this week otherwise we will be facing an insolvency issue , i.e. inability to make payroll, etc. This is usually a doomsday scenario for a company.

I am bullish on this stock but am extremely concerned about the poor cash management.

The only savior I see to not closing the offering immediately is another personal debt note, which from the first 10Q excerpt I copy/pasted would not be out of the realm of possibility.

- SOKAL6

Just picked up more shares at 3.65. Very light volume at these levels (actually ridiculously light) so looks like we have a hard floor here.

Sit back and relax. We'll be above 5 easily after the announcement to the AMEX.

We'll be above 10 after the new CA locations open.

This is too easy

- SOKAL6

Ummm... if they get $15 million in their offering, that more than satisfies the $4 million SH Equity requirement.

That's the whole reason they need to wait for the offering before they list.

- SOKAL6

something must be going down. Ask at 4.20

Hmmm only 280 shares volume. Perhaps the trading has been halted so the offering and move to the AMEX can occur?

Thoughts?

SOKAL6

I went there about 6:30 pm on Saturday and left around 8:45 pm. When I first arrived the demographic was family oriented. By the time I left it was a mixture of family and the 20 something crowd.

I live only a few blocks away so I frequent the restaurant as much as I can so I can get first hand research on my investment.

The terminals were working better than before. In past experiences they would glitch and freeze, especially when running video in the 'all things video' content library.

A new enhancement to the ordering software is a 'batch' ordering system where instead of sending orders to the kitchen one at a time, you can group your orders and submit them all together. I think this helps so you can keep track of what was ordered and get your food all at once (great for group meals.)

A few of the table terminals had credit card readers but most still do not have them. I'm not sure if the few ones that were installed are functional yet.

Everyone in my party loved the food they ordered.

We also tried out the group games. The one that comes most prominintly to mind was a game called 'U sketch it' or something. The table of 4 was split in half and the game used the two screens opposing each other. Very fun game similar to 'pictionary.'First time I played a game with using more than one screen.

... More anecdotal stuff. After visiting uWink, 3 out of 4 my party now hold shares in the company. The 4th plans to purchase some.

- SOKAL6

You can assess the secondary offering from a market cap perspective. They want to issue $15 million and the current price the market cap is slightly less than $30 million. So,
as long as the new shares issued do not exceed 50% of the current shares outstanding, we can assume a price offered will at least be as high as current levels.

On another note, I went to uWink this weekend and it was PACKED. I couldn't even make my way to the cash register to pay my bill without knocking into 3 people. No matter what the stock price, the business is sound, if not phenomenal.

The current earnings reflect high SG&A costs (these are effectively non-product related costs) due to only having one restaurant open. Upon opening more restaurants, these costs can be allocated across multiple restaurants, and each restaurant will incrementally add contribution margin. EPS will rise dramatically as a result.

Stay long, stay strong. Add on weakness.

- SOKAL6

I got 500 sh at 4.00 ...

sweet. Ameritrade is good at getting priority.

Average buy point is still over 5 though

Another huge thing at Uwink is the On-table credit card reader. Now patrons can sit down, order, pay and leave without waiting at the center paystation. I saw it on a few machines for testing, hopefully they roll it out to all the tables soon.

This will be HUGE...

SOKAL6

I just added a few more shares at 4.40 today, but I'm not worried.

I've gone to Uwink around 15 times over the last 5 months and I am very impressed by the traffic. And at each part of the day that I go there is a different demographic crowd. IMHO, the restaurant concept is proven.

This is an explosive stock - just sit tight and forget about your shares for a couple years. You'll be looking at 10x returns at least. Buy more on weakness.

- SOKAL6