Strategy discussion on facility consolidation, valuation, and future planning

Like, what are we losing? What are we not able to do? What is, what is the trade-off from doing that? I have not heard a compelling trade-off yet.

Like, meaning that it makes sense for us to do it?

Sean's, Sean's first response was you won't be able to have 5 trucks being loaded at once with 4 or 5 outside waiting to be loaded. He was like, so it just doesn't scale as much. And I didn't even bother to be like, Sean, that's never going to happen again. Like, this was like, okay, if that's what his gut is, because ultimately— and forgive me, let me pull this up because there is a very helpful map where I thought I had an idea of how it could work. And then I asked the question about leading them, how it would happen, and the answer is all the same. This is across the street, it's separate. You keep your parking here for actual customers and some of your truck parking, but you convert Stage 5 to your pro supply. This is contingent— this is contingent on understanding what the performance of Stage 5 versus Stage 1 might be, but from what it sounds like, most people shoot Stage 1. You probably drop— my thinking is you probably drop the Avon. You've dropped most of the Avon business out there. You definitely drop the one-day business out of there.

Yeah.

And you just focus on like, if you have to run Avon business out there, it's out of like coded TV type projects.

Yeah.

That type of stuff. But May 2017, you drop Kuanga preemptively.

2027?

Yeah, you drop Kuanga preemptively, you clear up another $75K at least.

Well, you have the trade-off of this, like they don't own—

so you— but like you're off. It's like you're taking the combined revenue here plus the revenue that Versatile generates out of Kuanga, and that would be the bad math version. Because this is ultimately— this is my answer in a super— like, there's how we beat Galpin today, how to beat Galpin again. And there's how do we beat everyone, but specifically Galpin in SuperCo? It's we have the all-in-one stage offering. What's bringing you in when you need to be on stage and when you need to go out. You're probably running out of static because if you're picking up or one of the facilities in the Valley, because if you're picking up a combo and some other shit, It's not—

it just doesn't make sense to do it here.

We wouldn't do that here. They don't do it here.

Right. There you go. Yeah. Okay.

The other thing is we can offer incentives, which Coyote's probably— Coyote's definitely already doing this to drive, to pull traffic up to the valley.

Right.

But the thinking here is that We are getting every last drop of potential revenue in the commercial segment in the heart of Hollywood while it's still there.

Yeah, yeah, like a, like a pool of water in the middle of the desert that's evaporating quickly. We want to be in the middle of that pool rather than on the outskirts. Yeah.

With a definitive expiration date, right? Which we need visibility into. The other thing on this, and this is just to say it, we've asked around the West Hollywood performance a couple times now, and I just finally want to— I want to just put a flag in the ground, say we want this, whether it's true or not, right? I want to see how they act when we ask for it now. So that's kind of my answer to the what's the current view on the future of North Korea, because I think their question is more geared towards like, are we going to be consolidating into their Bokoyama warehouse? Which, no, we're probably going to be exiting that Bokoyama warehouse. And that's $1,500 a month, actually, unless they're going to give us $1,500 a month rent.

Right, right. Yeah, I mean, we don't need that.

We definitely don't need that. Okay.

Uh, thoughts, I guess, before we move on?

I think it makes sense to have a contingency plan for Coenga, especially because you don't like Either it doesn't— either versatile doesn't work and we're happy to get out of Coango when we can, or it does work and now we're out in 2027. We're kind of fucked because it's built around being in Hollywood. So having this contingency in West Hollywood makes the most sense. So I do think it becomes like a crucial part of like the actual 3-year, 5-year plan.

What we have to get all these fuckers away from is thinking that we're going to be investing in these facilities. This is a real conversation from yesterday. Garrett, hey, vertical shorts are really taking off. The Santa Fe guys are about to take out a 50,000 square foot warehouse to sign deals with vertical shorts companies. And those are the bottom of the barrel budgets. He's like, what if we took Winona and turned that into a vertical short stage? And I was like, what are you talking about? We are out of there in November, right? Like next year. I know, like, but if it worked, we would like want to extend it. And I was like, then these guys are like, you know, I really want to understand like what conditions it's in, what, how they're running it and like, you know, what kind of investment would be needed to bring it up? Like, none.

You don't get it, right? Yeah. The days of needing to have the, like, super high-tech, like, everything stick is state-of-the-art, cutting-edge shit. It's over.

Garrett would not shut the fuck up yesterday because whatever jobs they've been sub-renting for Anytime Rentals, an arrangement I do not understand, because he bought that company, right, for $50,000. So whatever revenue they're doing is should be his, but whatever. Anyway, apparently their events people are saying that they're complaining about the quality of the gear that HDR is giving them. And apparently they sent some from Versatile and they also turned their nose up to that. And so I'm just like, what do you want, Garrett?

Right.

Like, you really want to go spend $5,000 or $10,000 on chairs right now?

Right.

That's it.

That long-term stake bed rental today was nice.

I know. I didn't know they were bringing that back.

You didn't know who was bringing that back? Uh, yeah, yeah.

I wonder who the coordinator on that is. I haven't seen that on any of our any of our 399 stuff, but must be coming soon.

Um, okay, so, so maybe what I'll do is, as for the Future of cooling, uh, per supplies, let's discuss Thursday as there's a minute. Does that make sense?

Is that what it's called, Fuller? Yeah.

Yeah, let's discuss Thursday period. We would like Do you know that most of our leases don't have square footage of the land?

They're all approximate, or it's the parcel at like—

yeah, or it's just not even— it's non-existent.

We have a schedule somewhere from someone.

Yeah, we have our insurance, our insurance schedule. I can pull it from.

Yeah. Okay. Ownership of MT Studio Services.

Yeah. Do you want to share that with them? I don't know why we would.

You don't know why we would?

Yeah. Why would we share that with them?

I mean, like, are we giving them Avon rental holdings and walk-and-talk holdings?

Like, well, that's my point. It's like we could either like give them one level up, which doesn't give them any information, or we give them the full cap table, which doesn't feel necessary at this point. I would say— I would just say it's owned.

I'm just going to say to discuss live is there's several layers and we want to understand like what you're looking for.

Right.

I'm happy. I'm actually happy to provide them visibility on like the whatever Bearcat table just because it's like it's still a feather in our cap even though we fucking hate them.

Right. Like it technically is a— yeah, technically is beneficial.

Did you ask Aaron onto this?

What was that?

On payroll A?

No, I just— that, that's what I assume the reality of it is.

Do we want to respond to 5B?

Yeah, well, I didn't put a response in there. I was just going to say like noted, but at the same time, it kind of does pull through because we're assuming that just fixed asset costs decrease. It's the challenge of them, them being able to pencil fuck their own numbers when they have the detail and we have the summary making assumptions.

Okay, hit him with that.

Right, so I'll, yeah, I'll say it like Also, did you see what I said about selling an asset for $37.5?

No, but did you see that they're trying to sell Radford for $300 to $400 million?

No, I didn't. That's more than $37.5. That's the one they defaulted on, right?

Yeah, $1.1 billion note.

Yeah. A steal at $300 million.

50% occupancy. Yeah, we need to—

I—

this is, this is playing out in a really funny imposter syndrome way.

What is?

Like, our— my imposter syndrome, I should say. My imposter syndrome is continuing to rear its head in really funny ways in this where it's like we keep just fielding questions around what the fuck are y'all doing? What is a TR? Like, what is it?

Right.

It's like, oh, we should just exclude Georgia entirely. I would, I would challenge this one. I know that's in their appraisal, but I think that if we can challenge—

which one?

Uh, 11B. Did you pull that from the appraisal?

Yeah.

Do we have visibility into what they're carrying or what they're saying theirs is?

Yeah, theirs is inventory value 97%.

We're saying 7.75.

Yeah, we could also say, like, I don't know, they say inventory value. I don't know if that's at cost or if that's fair market value. I would bet that it's at cost. So we could say $11 million at cost, $6 whatever at fair market value, $6, $7 at fair market value.

We're including the versatile rental revenue in the— in above.

Yeah, that was just how it was allocated when we— when I ran the numbers for 2025 because it was such a small amount, it hadn't been broken out yet.

Can I say about $140K in total?

Sure.

All right, 12.

I already answered all these questions, so I was just going to copy and paste what I had sent to Shawn. Fine.

I do, I do think that hitting them on your point of like understood on the like carry value piece, but We have nothing. Like, if our goal right now is to, like, close in on a valuation, we do not have what we need, right? At a minimum, we would request—

if you don't want to give us carrying values, we need a fleet list so we can derive our own valuation of your fleet.

Yeah.

Okay.

Okay.

Sitting in on the conversation, I sat on a couple conversations today, but sitting in, first off, it feels like what I imagine. Well, it feels like I'm the principal sitting in on like the teachers bickering. Yeah. But there is like, credit to Mike for trying, but like, he, he does not have the, like, sales manager. I don't have it either, but I know what it is because they've had it, right? And Steve did. Um, but it's not like something that's not what is needed. As an example, John spent 5 minutes talking about how he just couldn't believe that someone wouldn't even reply to an email and he thought it was disrespectful because of how long he's been in the industry and like how small this industry is. And, you know, even if they have a deal at Galpin, like the leasing agent would say, hey, John, thanks for reaching out. Like, this or that, I just want to be like, dude, you got to be kidding me. Like, that's like Garrett hounding me because Santa said salesperson is— he doesn't want to get a reputation for like ghosting. Like, that's their fucking job, right? Is to just follow up into oblivion. Like, um, But I nudged them on a couple of deals where they either have a deal out that's getting no feedback on or they're— they need something to like invigorate a conversation they had some momentum on. I was like, the Dodgers start next week, start hammering the Dodgers tickets. Yeah, because the amount of games that we have, like Like the Dodgers tsunami is coming, right?

So this is a good— the best time possible to sell those tickets. Yeah.

Um, okay, I think that's it. I'm going to— I have not heard from Let me check. Yeah, I have not heard from ADC guy from last week and what the outcome of his potential outreach is. But if I don't hear anything by end of the day tomorrow, then I'll nudge him.

Okay.

Um, okay.

All right, I'll get this out.

Otherwise, good.

Um, Yeah. Was there anything else that I needed?

No, I think we're good.

Do you hear those?

I did. That came through. Clips.

Is that what that was? Yeah. Plus 9 reservations for Friday, plus 7 for tomorrow, and then 43 total for today.

Not bad.

All right, I'll let you go.

Okay, I'll send this out.

All right, thanks.

Bye.

Sherms. Savings based on exceptions.

Please deploy.

Here.

Additionally, comma. We do not need to see the carrying values of the assets if you're able to provide fair market values of the assets, period. It is important for us to understand, as this is the backbone of our valuation methodology and our Proposed structure. An alternative would be if you were able to provide an asset list that we can assign values to ourselves so we can come to an estimated fleet value. Let us know if that is something you are able to provide.