Their gross profit was negative last quarter (read my last post to you or their financials for details) and has been negative as I posted before. Operating loss last quarter was $276K. What number are you calling gross profit? Cost of goods sold without counting labor???
Revenues don’t cover deficits - cash generation does and they have been burning over $1MM a year even before covid and not due to growth/ working capital or investment in new stores. The $5MM deficit is huge compared to (un)profitability and they have been running most of these locations for years without improvement. Food is one of the most profitable businesses out there? The old saying isn’t 9 out of 10 restaurant owners become millionaires. It’s super competitive and most go bankrupt as WCVC would have of not for the dilution friendly WCVC stock buyers (who subsidize the death spiral convert and death spiral SPA equity buyers) and the covid payments from the US government.
The assets grew lately mainly due to having received over $1MM in covid loans and grants from the government this year. They lose money on an operating basis so more locations won’t really help - doubling the locations from 5 burger joints will not produce economies of scale. Despite diluting from 34MM shares to over 5.2B shares in less than two years, WCVC has no resources to file financials on time never mind attracting JVs or build out several new locations. What source of sustainable competitive advantage do they have relative to CBD? That they know how to source CBD packets? They have no proprietary licenses, technology or significant experience related to CBD. Any VC could and would copy this if they wanted to rather than invest in a debt ridden vastly unprofitable dilution machine. No legitimate company finances years of losses with death spiral converts and death spiral equity (SPAs). The burgers may in fact, be excellent.
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