They had one store that was break even. Then they tried to go all silicon valley and take on as much investment and expansion as they could. They followed each unprofitable expansion with another one until they ran out of people to fool in to investing in their ponzi scheme.

I say this having seen the investor prospectus.

In 2009, they had one store that was break-even. The plan at that time called for opening "149" stores by 2015.

By 2015, there were 2 out of 8 stores that were break even, the rest were money pits.

If they stuck with growing slower and reinvesting profits, instead of taking on investments in an effort to make a unicorn, the bay area shops would still be open.

As I read it, the mismanagement is going broke before closing up shop. If the whole thing has been nonviable for a while, canceling insurance without notice and failing to issue final paychecks is a nasty thing to do.

Both. An all-you-can-eat buffet with caviar wouldn't pencil out either, but that's what they wanted to create. $99/mo for access to $500K of machines doesn't work. Pay-as-you-go is the only way it works and this was presented to them multiple times. The licensing "pivot" was basically them telling other people to go lose money with their flawed business model.