Investor Update - 3/23 - March 23, 2023

Investor Update - 3/23

Hey all, I wanted to take a minute to send you an update on the status of the company.

First of all, I want to formally apologize to all of you for having failed as the leader of the company.

Although I believe that my overly optimistic outlook and drive to grow quickly led to much of the company’s success, I also believe that it ultimately led to the company’s downfall. A lot of you trusted me with your personally savings and I failed and am truly sorry.

The Status of the Business:
Nothing has changed in regards to the status of the business. We have had very few interested parties come to the table who are interested in purchasing the business assets. Our landlords (Kilroy Realty) were planning to give us until February to find a buyer, but at this point are essentially just continuing to sit on the building until someone comes along.

Kilroy has asked me to remove the remaining items from the building that they are considering “personal property”. This includes all of the furniture, small kitchen equipment, pool tables, misc. branded goods, etc. I have hired Rabin Auctions to facilitate the sale of this “personal property” which will be held on April 6th and can be viewed here: Upcoming Auction.

Our Options:
To be fully transparent, I cannot continue to sit on my hands and wait for something to happen for much longer. I am personally liable for the company’s tax obligations, and for a significant amount of the company’s debt. With that being said, I am hoping to get your feedback on the following options. I know that this is not the most traditional way of doing things, and to me the choice is clear, but I am greatly appreciative of any feedback I can get.

Option 1:
Wait. I will continue to wait and look for a buyer for the facility. If a buyer comes along it is incredibly unlikely that the proceeds from the sale will be enough to settle all of the company’s debt. However, we will at least have the option of continuing the business at some point in the future. If we do not find a buyer and a significant creditor calls their debt we will be forced into bankruptcy which will result in a total loss.

Option 2:
Surrender. I will file for bankruptcy and will no longer be involved in the business. The government will liquidate the company’s assets and use the proceeds to settle the company’s debts in order of preference. This will result in a total loss and you will likely have the opportunity to write a portion of the losses off on your taxes.

If any of you have any other ideas please offer them here. I will entertain any other options at this point.

Again, thank you for any advice/feedback and I hope that you and your families are all happy and healthy.

Sincerely,
Tim Obert