Struggling food-and-entertainment chain GameWorks filed an intent to raise up to $15 million in an initial public offering.
Even before the pandemic, the eight-unit concept reported significant losses totaling more than $28.8 million from August 2017 until the end of June, according to the Securities and Exchange Commission filing entered on Friday. The company, in its SEC filing, said it “may not be able to achieve profitability in the near term or at all.”
San Francisco-based GameWorks warned potential investors that it may struggle to remain a going concern, saying it has funded its previously losses from cash flow during strong months, a line of credit from ExWorks Capital and convertible notes issued to some inside the company.
“At this time, we are unable to determine the duration or extent to which COVID-19 will continue to affect our business,” the chain wrote in its IPO filing. “Our inception-to-date operating results coupled with COVID-19-related uncertainties have raised concerns with respect to our liquidity.”
GameWorks further noted that its growth strategy depends on its ability to open new venues and that it has identified possible sites for new locations. Typical units range from 20,000 to 35,000 square feet.
Just three of the brand’s locations are currently listed as open on its website. GameWorks is promoting an online gaming series, in which competitors pay $100 to compete in a variety of video game tournaments.
The planned IPO is the latest twist in the chain’s rocky history.
ExWorks Capital assumed full ownership of the chain two years ago, restructuring its lending agreement with GameWorks to take it over.
GameWorks was founded in 1997 as a joint venture between Sega and DreamWorks and once had as many as 15 units, all of them showcasing high-tech gaming and other entertainment such as bowling and laser tag.
DreamWorks got out of the eatertainment chain in 2001 and the concept declared bankruptcy a few years later, with Sega Entertainment taking it over in 2004.
GameWorks again filed for bankruptcy in 2010, trimming its unit count before being purchased by a group of investors.
Esports tournament company Oomba acquired GameWorks in 2017.
GameWorks debuted a new restaurant concept, The Works Kitchen at GameWorks, in October 2018—a month after being acquired by ExWorks. The restaurants feature a modern American menu designed by Guy Fieri collaborator Tony Leitera. Gameworks also operates the TableTop Tap House, a sports bar with pub fare, in San Francisco. The tap house is geared toward private parties and corporate events.