On a more positive note, if you look at this stock as a technology stock, a vendor, it is unique in that there are very few vendors that can boast of having money-making enterprises (the restaurants) that double as marketing tools. There are 2 ways of looking at uWink, either as a restaurant chain with technology, or as a technology company with restaurants. The drivers for both are different.
The problem is that is trying to be both and really doing well at neither, and also not communicating it's strategy for success to shareholders in a way that can be readily understood. It is a kind of weird hybrid.
As a restaurant chain, they are top-heavy, expensive in terms of a franchise, and the best they can do is break-even in the short-and-medium term. The franchising agreement I have seen has nothing in it for them in terms of profit except a puny 4% Royalty, which I believe was designed for a much larger expansion to have any effect. And the SG&A is way too high, IMO. And I further believe they are not practicing any kind of cost control and looking realistically at the future.
As a technology vendor, they are in their early stages in terms of marketing their product. At least, there is nothing visible that tells me what they are doing. Most tech companies conceive of great ideas, put together a prototype, then sell it hard and struggle to deliver what they promised. uWink appears to have the goods, but is nowhere on marketing. There is no evidence of any revenue stream other than the restaurant chain. Lots of potential, that is not my point. Smart companies compromise and try to build relationships with major players (restaurant chains?)... with money.
Their product development, on the other hand, is well along. They should have something they can market successfully. Over the last 5-10 years they have invested something like 10 Million. So why aren't they more focussed on selling what they have?
Financially, they are structured more like a restaurant than a hitech company, just ridiculously top-heavy. The terms of the senior's deal (100K licensing fee) represent more the kind of revenue stream and deals they need. Hitech companies usually have kick-ass R&D budgets, whereas uWink has a small staff.
Anyway, I would like to calculate exactly there they will be in 3-4 months, but in looking at their burn rate, not good. If I had more of a sense of how they intend to leverage their restaurants or market their products, it may get interesting. Right now it appears as if hey will have a crisis very shortly. I can't see how they can avoid getting down to 500k in cash in another qtr, how can they keep going?
That could kill the stock price and makes the whole thing very risky. But, it could also represent a buying opportunity if a licensing deal or potential comes along. After all, they have revenue-generating restaurants that double as showrooms. They are just burning too much money.
I wonder to what extent the shareholders, especially those that partook in the 2007 offering, have the right to be angry for feeling that he misrepresented his intentions? After all, didn't uWink state that they intended to start a "chain" of restaurants (corporate and franchise)? They did not state that they wanted to build 3 "showcases", run a money-losing fat cat operation, and come to the brink of insolvency... did they???
All in all, quite an interesting and unique situation.
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