I think there are several potential problems, and they need to be more open, to avoid pitfalls for both themselves and any would be investors.
They should disclose information about the seemingly not particularly successful Jetsons (run reported to be less than half planned), and discuss what happened. How much did it cost to develop? How much did built inventory cost? How much did it sell for (average - i.e. margin)? What were total sales figures ultimately? If they lost money, or it tied up a lot of capital, how much or how far did it set back the business or impact the rest of their operations, if at all? You could say that was sensitive information, and it was possibly a one-off. But it's something you'd need to disclose to potential investors, IMO, and as this is crowd sourced, it ought to be public.
What is being presented is a pure sales and dealerships pitch. What has been reported from several different sources is that they are trying again with their own machines, having acquired the license for Scooby Doo. How much did the license cost and what are the terms? What are development cost projections? What are sales numbers and margin projections? After everything is accounted for, what do they expect to make net? How does that compare with projections vs reality for Jetsons? If the reporting is not errant, then they must address this.
Per their response to one of the questions on the page, they do have debt. When or where did this date from? What was it used to fund? Did the Jetsons project incur some or a large portion of this debt? If this is the case, is this why they are not tapping loan markets at a time when money remains extremely cheap still, because it didn't work out last time? With their sales growth forecasts and healthy margins, with *relatively* modest stated costs for their expansion plans, loans would seem like a better idea, all else being equal.
Storm clouds are gathering, economically. Several large economies globally are in trouble. The US economy will cool significantly next year and in 2020, whilst interest rates have to go up to combat inflation, and ensure that the ballooning public deficit can be financed, even if it increases the cost of doing so. Things could be ok, but on the other hand they might not be. Valuation seems generous, and sales growth pretty optimistic. If there are significant economic headwinds, they could stagnate or grow only modestly. If there's another crisis, their sales might crater.
The pinball market is close to saturation now. If DeepRoot manage to deliver on their promises, it is going to be absolutely flooded with machines from early next year. If this comes to pass, a combination of the agony of choice and declining values of games on the secondary market may lead to significantly less than expected revenue from existing product lines that sell well at the moment, and are expected to in future, and / or force margins downwards.
What contingency plans do they have if either scenario happens? How badly effected would the business need to be before servicing their existing loans became difficult?
