Aug. 12 at 12:01 PM
Same song and dance with
$WKSP. Always overpromising and underdelivering.
This time it's the constantly moving cash flow breakeven target. First we were hearing around
$9M in quarterly revenue at 35% margins. Now management says the current cost structure requires roughly
$12M to
$12.9M per quarter at 35%. The
$9.3M scenario only works if margins improve another 300 bps AND recurring costs fall by roughly
$1.2M per quarter.
Second, while they did a nice job on sequential revenue growth, expenses are still way too high. They spent
$1.7M on S&M versus only
$1.65M in total gross profit. G&A was another
$3.55M, roughly 68% of quarterly sales. What is Rossi spending all this money on? He is the absolute king of incinerating cash.
They ended Q2 with only
$1.2M in cash and are still burning millions per quarter. Unless cash burn falls dramatically and inventory converts quickly, I don't see how they make it through this without raising more capital.
Stay far away. This is a loser like Rossi.
