Negotiation Strategy for Transportation Resources Acquisition

term sheet as it's able, based off of what it's able to glean from this and any other conversations that it's been fed.

Generate a term sheet and a one or a one-page term sheet.

Yeah, basically just like what terms and structure and mechanics have been discussed and just see what it can do just so we can get something on paper to react against and then potentially be able to hone from there.

Okay.

What time is it? Some morning time. Let's take a quick break and then pick it back up. You said Penny just woke up? Sam's with her?

Yeah.

You want to go hang with her for a minute and then we can—

Yeah, I'll go eat some breakfast and hang with them and then I'll—

She ate breakfast? Oh God, that's right. Right, because it would have been like 9:30 your time when we got on. Yeah. Okay, yeah, eat breakfast and hit me up when you're back. Okay, sounds good.

Goodbye.

No. I'm trying to investigate why the financial model is not pulling through all of the account data. Into the consolidated view, comma, the income statement is off by approximately $100,000 in revenue, period. Can you please investigate this and implement any fixes required to make this change? What was it?[No speech] Are these changes live? Question mark. In production. Please deploy them. There we go. Please add in the ability to create reporting entities that combined multiple entities into one reporting entity that is a subcategory of the organization, period. For example, I want SilverCo, NC&T, 2-family to all report as one entity called Avon, period. Can you make that happen and have it pull through all of the financial data from the financial model and the budget perspective? Question mark.

Oh, come on.

Wha—[No speech] Please review the transcript from the Q Review 225 call between James and JD and give me the key takeaways, comma, and a draft one-page term sheet with deal points. That we discussed, period. You can also refer to the valuation methodology document that is in this folder if you have any questions regarding how to put together this term sheet. Hi, Stephanie. Palmer. Please see the responses to your questions. Hi, Stephanie. Please see the attached responses to the questions on item 5. Just wanted to confirm that our Full payroll costs include everything that you mentioned except for workers' comp insurance. That's broken out in our insurance line. Period. I did include the health insurance costs in our insurance breakdown just for reference, but it is included in our payroll costs as well. Great, comma, please push this to production so I can test it. Bang, bang, bang, what's the hang?

Still you stay with it.

And when it's bad, feels like, I don't know, actually, that shit again. May you please also give me a call breakdown in a Spark brevity style that I can share with James? Hi all, comma, I just checked this bill and saw that it was allocated to February rather than January, period. Please make sure we allocate this bill correctly in the future. This all looks good. Comma, one thing I want to add is on the consolidated view on that entity breakdown, please add another tab called a reporting entity breakdown so I can see the contribution by each reporting entity rather than having to see it with all entities. Please put this in HTML so I can send him an email. The fuck?[No speech] In the—[No speech] This is the day your life will change. Okay, this is great. Um, it looks like you solved the problem, period. Now I need you to solve a new problem, uh, The balance sheet accounts not seeming to be showing all of the data. Can you please help me understand why all of the two-family balance sheet accounts show that they are not pulling through on the master general ledger, but when I go to upload a new mapping, it says they're already mapped? Question mark. 2Family seems to be the only company where this is happening to all of the accounts. 2Family seems to be the only company where this is happening to all of the accounts. Can you please look at the financial model and make sure that the formatting of the sum totals of the gross margins and operating income line items are not showing as percentages? Dreaming of me, dreaming of you. I see your eyes and know I see they too. And now I know, little taste of what we're about to do. What in the world? Please make sure that the budget information that is being uploaded Please make sure. Please make sure that when I check the budget box on the financial model, that the budget information is pulling through depending on whether I'm looking at a consolidated or single entity view, period. It should be pulling the relevant information and relevant budgets from each entity and either summing them or showing them on a standalone basis depending on whether looking at consolidated or single entity or reporting group view. Respectively. It looks like she's pleading with you, saying, please, please, please take me out of here. Julian said he might be joining us on Thursday.

I don't know, you lying question mark.

Please deploy these changes. Hi, Devin, comma, my Thursday just got taken up, period. Let me know if you're available on Friday morning-ish to go over These questions.

Mm-hmm.

I guess my real question is, why isn't the two-family information pulling through to the financial model? It seems like even though I have mapped the accounts and they should be pulling through, they are showing as unmapped, period. Is there something that is not allowing the Accounts to map through to the master general ledger, question mark. Upload HSS. The same thing is happening on HSS also, comma, none of the financial information is pulling through even though it is showing that these have already been mapped according to the import wizard. Please push this change to production.

Okay, I've been Tell me, pen, what's up, my best pen?

Go ahead and fix the underlying issue, but confirm that this is the cause with the database.

5, 59, 929.

How you doing, Derek? Yeah. Okay. Even if we get the title today, there's only 3 minutes left before they get the wire out. So I don't think we're— yeah, I don't think we're getting it, but I'll send them an email and ask for a copy of the title. Sweet. Cool, right? Yeah, absolutely. Okay, will do. Thanks, dude.

Bye.

Please deploy this fix to production.

Ah.

I have a I have a list of tasks that I want you to fix on the financial model when it comes to formatting. Please make sure that when I press print, it captures the page fully rather than printing out the sidebar and the tabs and all that. Comment, I wanted to export the financial statement and please break out the statements into each page, one page for an income statement, one for a balance sheet, one from a cash flow perspective. Please allow me to print only down to the operating margin level. An operating margin percentage by toggling EBITDA only as a toggle. This should work for any of the income statements or entity breakdown views or reporting entity breakdown views. Oh, were you ever even asleep? Were you ever even asleep? She took a nap. Okay, I'm proud of you.

But not on your own.

No, you needed your help.

She fell asleep with me.

You gonna hang out with Daddy today while Mommy goes to tutor? You gonna hang out with me while Daddy goes to tutor? Are you looking forward to it? I think it'll be fun. What kind of bread do we have?

I made it with the baby.

Sourdough? It's really good, yeah.

You put pesto on it?

Oh, I should have.

Don't you hate that when you realize you could have put pesto? Oh, I know. You could have done something and like, I'll never get that chance again. Do you have avocado with it?

No, I just had turkey, cheese, arugula. Arugula? And mustard and mayo.

Mustard?

Not hard.

Ain't gonna love me like I do, oh babe, ain't gonna love me like I do, ain't gonna love you like I do. Give me a big old smile there. You happy girl, Peanut? I'm gonna love you like I do, oh babe, I'm gonna love you like I do.

Should be a workout.

What is it working out? My mind. Your patience. Uh-uh. Penny, guess what? Penny, guess what? It's Survivor night tonight.

It's Survivor 59 tonight. Yeah, yeah, yeah, yeah, yeah, yeah. Penny, this is your first season of Survivor.

No, we probably won't watch tonight, but we will watch it this weekend. You want to go look in the mirror? You want to do smiles in the mirror? Want to do smiles in the mirror? Oh yeah, oh yeah, oh yeah, oh yeah, take it easy baby, make it last the last night.

She was An American penny.

You're not. You're the happiest, happiest girl.

You're the happiest girl. A little egg.

What's up? You ready? Are you gonna have a bottle with Daddy later? Oh yeah, like a bottle while Mommy's gone. We got some fun, huh? You know, any daddy mess around.

JB, they made me spell Penny's name, like full name, Penelope Arthur Westfield, by being like P as in pumpkin, P as in Penelope. It was so hard, like I had to write her name down because I couldn't Woods track where you were just like, with the farnsworth, I was like, am I spelling this right? I like second-guessed it.

Have you fed her recently?

No, I gotta feed her. She just ate dinner.

That means we're doing baby bench press. Baby bench press time.

And I was like, P as in pumpkin, E as in envelope, N as in— and then I couldn't, I couldn't think of a word. She goes November.

It's like, sure, why are you making me do this? So you— okay, so you can hear. It was so annoying.

Took like 10 minutes.

Baby, thanks, baby.

You're okay, baby. Hi.

Hi.

This is a funny picture I'm looking into. You look so small on my phone. Your phone over here?

Yeah.

Oh, it's a moose! You doing tummy time with Daddy? You doing tummy time? Oh my gosh.

Oh, I love you.

Oh, I love you.

I never thought to have her do tummy time like that. Baby shark, baby shark.

You just look so small compared to me.

Hi baby! Oh my God, yeah.

Thanks for the hangout. Thanks for the hangout.

Hello! Are you having fun?

Yeah? Who's the tallest, strongest girl?

Who's my tallest, strongest girl?

Hey!

What? Wait! Whoa!

Penny, isn't it such a treat that we get to hang out during the day? Isn't it such a treat? Look at all the toys.

Yeah, can you imagine if you had to leave her for all day every day?

It would stink on ice.

Mommy's going to have to go.

Poor Googly Monster.

Don't make me do it, baby. Don't make me do it. Oh, you have a rash on the back of your head.

That's probably from rubbing her head on it.

Also, I think she knows what that is. Dead ass, baby. She looks around, she looks around, and she goes Right into it. It's really crazy.

Then go love you like I do, babe. Mommy girl. Mommy's getting in here bouncing.

It's good for us.

You looking at those boobies?

Where are you guys' boobies relaxing? They look good.

Question 5 is about whether our payroll costs are fully baked or just salary and have a response there in an email draft. So that's six.

Seven, I need the org chart.

Let me get the org chart.

And then eight is just our debt overview.

I don't know how transparent you want to be with that or not, but this Is the view.

This is the truth.

Yeah, yeah, yeah. Whoa, that was weird.

You ready to go back to Mommy? Mommy with the backwards hat. Mommy with the backwards hat. Mommy with the backwards hat. Mommy with the backwards hat. Wow, Mommy looks like a boy right now.

Mommy's not a boy.

We go get you some milk? Okay, ready for some milk? Love you, Dad. Love you. We are gonna go do our errands after this feed. Okay. It's gonna happen.

Love it. Please make sure that the variance is correct. Right now it's showing green cells when the costs are higher and red cells when the costs are lower. Period. The coloring is correct on revenue, but the coloring should be different for expenses. How is it going? Question mark.

Yeah, we're close.

This is incident.

Same chat. Hi, Devin, comma, 10 AM works great. I will send over a calendar invite. Thanks, JD. Please create a tool similar to the entity breakdown, sorry, pro forma adjustments called allocation adjustments where I can move costs across entities.

Hey, can you hear me?

Yeah, yeah. Hold on. I'm currently prompting him to do the— Claude to do something using my microphone. Right. For example, if I want to move personnel costs from Avon to Versatile, please make sure that is possible, period. Also make it optional for me to attach a schedule and move it across months as a regular calculation if I want. Okay. Could you hear me when I was doing that? Do what? Could you hear me while I was prompting it? No. Okay. All right. Let me turn on the reporter. Okay. Did you get the recorder? Did you get the breakdown? Or the summary that I sent?

Yeah, one second. I need to figure out how to turn the volume down on this stupid dock because it's a lot.

Say something. Test, 1, 2, 3. Test, 1, 2, 3.

Jesus Christ. Okay, yes, it's definitely still loud.

I did scream that at the top of my lungs, though.

Um,[No speech] I'll do it this way.

Can you still hear me?

Yep. Is it better? Do I sound better? Yeah. Am I still loud?

No. Okay, so Where do you want to pick back up? I like this thing you sent. Like, there's some edits and stuff, obviously, but it's a really good thing to start with.

Um, first, let me— am I going to just send the email responses to Stephanie that I have with the tabs? And then we'll like, we can bring up the— what I've been saying, we're not going to send a term sheet or anything. So just respond to her email with the information and say, talk tomorrow with more. There's nothing you want to include. Yeah. Pull up. Good call.

Pull that little one back up.

Pull up what?

Sorry, that deliverable backup. Look at this. Do you have a new microphone in front of you? Yeah, this is what I got. It's like the game show.

Yeah, come on down. The Price is Right.

Come on down for a tax-free reward. I love how many times it says it on the thing.

It's like, like these guys are onto something right now. Um, okay. So here is the headcount broken out. Now it's got LA and Georgia, um, instead of putting it all in one lump sum. So 1,088 employees. Um, 2 is the lease schedule, which didn't fit well in here. So I've got that on a separate tab. We'll send. 3 is an insurance cost breakdown. Pretty standard, straightforward. 4, operating cost breakdown. Standard, straightforward. Um, to make sure that the, the insurance costs pencil, because they're in 2 different places for us, but then they're all in one lump sum here. But I'll do that after. Um, pro supplies breakdown. Question 5 is about whether our payroll costs are fully baked or just salary. Have a response there in an email draft. Um, so that's 6, 7, uh, I need the org chart. Let me get the org chart. And then 8 is just our debt overview. I don't know how transparent you want to be with that or not, but this is the view. This is the truth.

I do not. Um, the carry date is August 2027.

For who?

First Source.

Oh, it's not on a yearly term?

No. Okay, interest rate's 9.25.

Is it 9.25? Wow. I still haven't gotten a statement from them. I've been asking Christy for it, but she's not gotten them to me.

I mean, there are fucking 3 pages of recitals. Um, yes, August 31st, 2027. I would say on notes, restructure. Q4 2025. Um, all right.

And then the straw man, I mean, their org chart makes our org chart look like a child's plaything, but I guess just send them this. Like, I don't think they necessarily need to get into anything, any more details than this. Right. What? They asked for an org chart. I assume it's TR. Yeah. Okay. But they would sit outside of MT Studio Services ownership. So how would you?

I know I would put a dotted line.

That's interesting. Let me see.

Or I would put it in a triangle, or I would do something that indicated that it was different from these other ones and beg the question, Why is it a triangle? Like, why is it a parallelogram?

Why did you put this in a tesseract? I don't understand.

What's the rhomboid doing there? Oh, I'm so glad you asked. Okay, pretty straightforward. Uh, TR is in the shape of a pentagram with a Baphomet, uh, head in the middle of it. What is that? It's a deal with the devil.

You know what a Baphomet is? Uh, what?

A Baphomet.

I don't know what a Baphomet is. I was not raised religious.

It's the opposite of religion. It's the devil.

Oh, it's kind of like how if you map conservatives and Democrats far enough, they all come full circle again. Like, right, right, right, right.

Or like, if you have no exposure to it, you don't know which side is the good guys or the bad guys. So you could invert and be rooting for the wrong team.

Right. Can I open a PDF in— I was hoping I already had this in a Power— I mean, I had to have made it in PowerPoint, so I don't know.

December 2023. Is when we would have put an illustrative work chart together.

2023?

That's when we would have been trying to put in— that's when we would have been trying to put TR together.

Oh, well, I'm just talking about adding this one that's on the screen right now, adding TR to it. You can insert it, just you can edit it. I know, but it always comes out ugly when I do it in PDF. I wanted to put it in PowerPoint so I could just copy and paste. What we already have. So it turns out it's a con.

Also, apparently Klon crumbled under Pentagon pressure.

Oh, they did? I was, I was seeing, uh, they're aggressively saying like, you're gonna get put on like a— no, I forget what the list was— if you don't give us what we want. Well, the interest—

the other interesting thing is that the federal government theoretically has the power and to our knowledge, often not often use power to just appropriate whatever technology it wants to under the auspices of national security and give some nominal payoff.

Right. Which is— that's cool. It's a cool feature.

Yeah.

Okay. Make you watch me struggle through this. I'll, I'll add that and send it. Yeah.

Well, the answer is we just need to somehow— it doesn't even necessarily need to be connected. It just needs to be a shape in and around the company.

Okay. Here, I got it. Came up for me. So, all right.

Okay, sweet. All right. So yeah, just that and then send it back. I'm wondering if there's not anything else that we could also send. Oh, Something I thought about sending was just, you know, the appendix from the May deck. Yeah. With all the data. Yeah.

What would be the, the goal there? I feel like they have not been very forthcoming with their data, so I don't want to That's like, who gives a fuck? Like, but that, that, what, I guess, what, what, what goal does it serve?

Well, it's called Transportation Resources LLC. Um, it It theoretically, like, reduces the— we share more, they share more is something that it could achieve. It's like a benign test to see if we send them extra data. We've asked them for extra credit. We can send them some extra credit and Ask them to follow up on that other stuff. I mean, like, it's really more just like, okay, I agree. But we also haven't been like saying, give us your headcount by name and salary. We've been like, give us the sweeping overtures.

Well, we asked for a roster with names redacted so we could see titles and pay. They didn't give us that. We asked for carrying values of the vehicles. They didn't give us that. Like, they're not giving us any substance with which we could do real analysis. They're giving us like their, I don't know, their 30,000-foot view, which we can't really get to a— which I guess plays to our advantage. Like, we can put this term sheet together and be like, based on the information you've provided us, this is what we think is Like, this is the offer that we want to put in front of you. This is going to be All right, so I put like a dotted line then? Is that what we decided?

As opposed to just inserting a maze like on the back of a cereal box? Thank you. We included a fun activity for you.

Okay, let's do this.

Um, Valhalla texted me saying they didn't get January rent. Okay, I'll send that out.

Next week. No, I'm just kidding. I'll send it out tomorrow.

I just got an email. They ran HDR. Joanna keeps texting me pictures of our trucks.

Um, that's good.

And she's like, are you guys just killing it right now? I see your trucks everywhere. And I'm like, not really. Like, I've literally every time I got in a car, I've at least seen 2. And she even saw a 1010, and I was like, oh, that's actually a rare one. Yeah. How are you sleeping at night?

How am I sleeping? Is that—

you know what I would do? I would pull MT back down and just have a, like, just a dotted line off to the right of it and say nothing. And you could put East Coast hub on it, like East Coast operating partner, because we're using them as a platform, right? Oh no, I mean, keep it Transportation Resources LLC, but then the way you have Los Angeles Transportation, Los Angeles Pro Supplies, and bathroom stuff under it, have that be East Coast Operating Hub. 46% today. Oh, nice.

I haven't checked right now.

I guess 43.2 for the whole.

That's great. That's better than I expected. Okay. That seems about as good as it's going to get.

It does seem like we're overweight in cubes still.

I, uh, why is there just a random line right here?

Uh, maybe not. We're at 54% for the day, 61% right now on cubes. Yeah. Wow. 54% of the day though. Let's drop this and just get this actual error out the door, this little poison pill out the door. And wow, 64 on 5 times, 57 for the day. Nice. 54 on 29. Okay, everybody's favorite cargo van with liftgate is 64. 58 for the day.

All right, so that's good. So now, all right, I will send this to Stephanie after this call. I better— I'll queue it up. I just want to do one final pass. Okay, so where do we go?

So why do we send them extra information to kind of dunk on them? Because I kind of want to dunk on them. Because if you look at the appendix in— and not necessarily at the fleet-level asset data, although I think that also tells a very compelling story as well, right? But the headcount data which probably doesn't tie to what we're telling them here. So maybe you don't do that, but like, you know what I mean?

Well, let's see. I'll pull it up and we'll see what we actually have here. 5-5.

Cargo Bay liftgate at just a flat 50%, and there's not a new— there's 2 reservations rolling off tomorrow, and there isn't another one that starts until March 9th. Weird. Oh, I'm so sorry. That's a Class 40.

Oh, Class 40 is at 50%. That's great. Shorty 40s.

That's too low enough now. Okay. Okay, here's the board deck here. Feels like we actually are pacing higher than that 900 number, but that's obviously a moment in time.

Yeah, I mean, we are pacing higher. It's just, it's only 28 days in the month, so that's why. Okay. This is honestly be a really funny thing to give them because they can't like synthesize it in any way because it's not in Excel. It's just like Enjoy.

Take my word for it, right? Look at these pictures, right?

Yeah. And the pro— and it's also only through beginning of 2025, through March of 2025, so we could But this— give this to them.

This. Okay. Yeah. No point. Is there something that we could give them that we would ask them to give us in return? Is that Sam though?

Yeah, she's loading Penny up in the stroller right now. Hi. Hi, James. Hello, Samantha. Yeah, you want to come over here? I don't know if you can get the stroller over here.

Hi, James. Hi, Samantha.

How are you?

So good. Did JD tell you about how amazing our business meeting was yesterday?

Oh my goodness.

She's grumpy right now.

She didn't like this thing. How'd y'all get her to like it?

She doesn't like it, but I— yeah, we're forcing her. We're testing things out.

Yeah. Yeah.

Okay, I'll see you guys later. Bye. Love you. Love you.

Love you too. Love you too, James.

Um, the only thing I can think that we could give them is, uh, like the carrying value or the fair market value of all of our assets. Once we get that, um, appraisal back, we would give them that and be like, here's our carrying value, here's our, like, say, like anticipated, like, liquidation value. Can we have something similar from you so we can understand like how our two fleets compare? But we don't have it yet. So that's the only problem. But that is what I would— that is like the thing that's like cards on the table. Give us what we need because here's what we have on our side and we need to understand it from your guys' side as well.

Back on the deliverable you're about to fire over to them. We need to soften the debt piece. Or speak to somewhere just like that when it says investor line of credit, that it's friendly debt not being serviced, basically like preferred equity.

Okay. You get what I mean? Yeah. That's why I, I'm glad you said it because I thought it was a bit like alarming to send something like that.

So stopping it, stopping it, downplay it, reduce 27. Like, when is this thing closed? What's the earliest that we could be required to give them a debt schedule?

Wait, sorry, what?

I'm just trying to figure out how to smokescreen the first source debt. It's at 27.5 in there. Put it under 26. Okay. Or put it under 27. Sorry, just chop a million off. Like, does 27 include their bullshit interest B-note? Yeah. Take it out.

Okay, well, that's almost 2 million, so we can call it 25. I'll say 25.5.

I'd love to be under 25. Can we pull forward a couple payments?

24.9 after anticipated March payment. Investor debt, uh, friendly investor debt?

No, I wouldn't use the word friendly, but Yeah, you can use just friendly terms, but really it's almost really more like structured growth equity.

I'm going to say effectively structured equity.

All right, um, and then let me just confirm.

So[No speech] All right, I'll send that back out.

Okay, so I'm gonna pull pull up this in a Google Doc. Let's see how the format is. Pretty good. All right. I think that we should take out the capital partner section. And all references to it. I think that we should figure out how to do this deal without a capital partner, and we convey it to them as we believe that a capital partner will ultimately be necessary, but our best position to negotiate from will be coming at it from a place where we don't actually need it.

I'm going to ask AI to create a version of this without the capital partner component of it right now. Okay. Please create a version of the term sheet that does not have a capital partner component in any references.

I like actually the governance section.

Yeah, I'd say give it a once over and just make sure that it reads how we want it to. I already have. Okay.

I don't like the wording in some of it. I think I shared a document with you. They are not contributing grip and lighting inventory. Yes. Yeah, I meant to pull that out. They are not contributing associated employees. falls on sending option 1. You get nothing. You're welcome.

You get nothing and you'll like it. I wish— I do wish that we could somehow anchor them towards like that being a fair— like if you are a third party and you look at this, and the option is keep this on your books and keep losing money or give it to someone willing to take it off your hands with no risk associated. Like just that being like in the realm of possibilities, that creates a much better anchor point.

Wave a magic wand and 4 months from now it's all gone, right? Like all the carryforward losses and any potential hope of future upside that you may have been able to eke out. Right. Over years, but you'd be digging for a long time. Right. How high is your conviction?

Um, here, here's the terms. You know, capital partners.

How high is your conviction? Drop it in Google Sheets and send it to me. How high is your conviction?

You're talking to me? On what? Yes. What you just said. It's not—

You said, I wish we could get them anchored to this framework. How high is your conviction on that? If it's 9, then we should lean into it. If it's like 7 or 6, then we should like be realistic.

My conviction on it is— wasn't— it was higher. It wasn't as high until you like brought me to that like mindset. We were talking about what— getting them to give it to us. Um, and now that my conviction is not high enough to where I think we can convince them one way, like that they can walk into Victor's office with a term sheet that says you're going to give this company away. What would you need to get there? I don't think we can get there because I don't think— I think it wasn't the question. A direct line to Victor, not having it go through Victor, would increase your conviction on being able to like make that work, right? Because I don't think having Stephanie or Sean try to relay why it's beneficial to them. I think a lot of it gets lost in the game of telephone. But if you can go— if you can go right to Victor and say like, we're taking this off your hands, we're taking—

make the 0% offer their risk-free ride or— sorry, then don't give them the risk-free piece.

Right. There you go. Yeah.

Put another way, it's like it's another fucking Nelson, right?

So you're on the hook for like securing your percentage of the equity even though you're a minority stake. Like whatever stake you want in the ongoing entity, that is the risk that you're putting up, that certain amount of risk, that percentage of it.

You have another call. I am about to go into dad mode for like 2.5 hours. But here's what I think. I think that we should play around where you're going to give them what they've asked for, for tomorrow's call. I do think that this is worth spending time this evening, the two of us, just like having the conversation we were about to go have or move your crew call. Because the, like, I'm not disinterested in, like, exploring the mechanism through which we develop the conviction or, like, at least making an attempt to, I'm going to use the, I'm going to appropriate the term steel man now., but come up with a pretty ironclad reason for why there is no free lunch here, because it's fucking true. So we're coming out, I know you're coming out of the gates here at this 14 to whatever, 47% range, but it's like, How are you all doing this year? Are you making money? Like, are you doing like whatever? What's their quarterly revenue? $15 million. Are you doing $15 million in revenue to not make money? Right. Or like to break even? Right. Point being, like, their best outcome short of a rising tide situation where we all win, or they figure out the alchemy or the spell required to convince a studio to just single source with them. Or knocking, you know what I mean? Like they're in this boat and they might do $60 million in revenue to make half a million dollars of cash. Right.

You have a 5 o'clock or 2 o'clock. So I just, I just pushed it. Sorry. I don't know if you heard that. That was more important. Um, okay, yes, you're right. I think the way to kind of drive that point home is— I like what you said about like, there's no free lunch. Like, if you are getting a stake in this, you're not just like walking away and rinsing your hands of it. Like, you need to have ongoing involvement in the capital structure and the risk associated with it and being like—

really quickly— proportionate to your ownership stake.

Right, right. You should have the ongoing risk proportion to your ownership.

Right.

If you were above 20%, like, if for no other reason, then like, if you're going to be 25%, if you're going to be a 25, 30, 35% owner, and we get to say publicly traded REIT is securing this debt, like all of a sudden a lot of things open up to us. Like that is a benefit to the ongoing company. So if that's something you want to throw your hat in on, great.

Yes. Yes. This. Yeah. If not that, then sub-20, 0 to sub-20, right? We're literally just chasing them into a corner, telling them to tell us why is what you— why do you think the thing you're giving us is value? Right. Explain your value proposition here.

Right.

And we're getting rid of all of your employees. We're getting rid of half of your assets. We are taking on dead losers in fucking New Jersey and bumfuck Georgia. Right. Like, you get to put a bullet in the head of New Mexico where you curiously bought land. Like the only thing of actual value in this thing that you're getting to hang on to, you're keeping your grip on Lightning Division. Like, explain the value proposition to us, right? That you feel you deserve a risk-free ride for. Like, we're happy to engage in the conversation with you, but it has to make sense. Like, we're not going to give it to you unless you say— and even if you say it's like, you know what I mean? It's like It's chasing them into a corner to either force them to say, like Nelson, like, look, this just is what it is. Fucking Victor is not going to do it for less than 25. And then we have a business decision to make, right? But we're not just— I, and I know I'm all over the fence on this. It's just because I didn't feel like we had a solid position to be coming at them from this afternoon. But it was really through that exercise that I kind of came back around to like, what the fuck are we talking about? They've already given away $6 million of revenue-generating assets in exchange for $3 million over the next 3 years.

Right. And in the same vein as what we were talking about earlier, it's like we're not negotiating against ourselves or we're not negotiating from a perspective of your company is valuable because of what we can do with it. Your company is your company. You're— it's what you're contributing. We get to assign the value on the other side of it based on what we're able to do, but you don't get credit for what we're able to do to your loss-making operation.

Do your tax loss harvesting operation, right?

Right. You don't need another one of those, Victor. You got enough of them.

You take the debt out of this as well. I don't know what— I don't know if you've shared a Google Sheet version of this with me. The spreadsheet? No, the term sheet.

Oh, Google Doc version. I can share with you. I just gave it to you in Word, but Let me—

but I don't have Word, so you have to use Google Sheets. Wow.

I'm not paying for a Microsoft license. Do you have to pay to use— to view documents?

I don't have Microsoft Office, so I would have to get Office for Mac on this or fire up the dumb fuck Lenovo that's sitting behind this computer. It's basically a laptop stand.

You should give me that Lenovo so I have two AIs. That way I can do two things at once. And I got— you want it? Yeah, next time you come out here, give it to me and I'll— because it's the same computer I have, right? One of those delicious Amazon refurbished.

It was not Amazon refurbished, but it feels like it was. Damn, it should be. Thank you for bringing that up. I bought my first Amazon refurbished item yesterday. Really? What was it? It was a Really, it was a refurbished in excellent condition Hyperboom speaker for the gym. Oh, cool. They go for like $400 new. It was like $180.

That's a great time to get it Amazon refurbished. Um, all right. Are you going to load? Here you go. All right. Now I'm sharing this with you and we should be able to edit this one. So this is without the term sheet.

February 2026, Section 721, tax-free contribution, no cap between parties. Do you see it?

Do I see what? It's like there's a sub-sub headline that Yeah, I was like, yeah, that's in the deal overview. What are you talking about? I don't know why they felt the need to include this in the—

Avon Rince Inc. Not an Inc.

You know, you can lead a horse to water, but you can't teach it about the capital structure of the business or the org chart of the business. Okay, that should be a link to your—

Thank you for reminding me.

Of the—

in the middle of our call today, I got the approval for our entity.

Oh yeah, send that to me. I will.

I'm going to file for the EIN now.

And Hudson Pacific Properties, which is actually EHODI.

Use the, um, Where is that from yesterday? The entity, the counterparty is— damn it. Super. The counterparty is Hudson Pacific Services, Inc. and Sunset Coyote Holdings. And we are MT Studio Services.

Not MT Studio Service.

Also, MT stands for Montana. It does not stand for mayonnaise tuna.

Got it. What was the second? How's it Pacific Services Inc. And what was the other one? I can look it up. I just didn't have it.

Sorry. It's Sunset Coyote Holdings LLC.

Sunset Realty Holdings LLC.

And it is a taxable REIT subsidiary. They answered our question. They are all taxable REIT subsidiaries.

Trade names and IP, real property leases, and they're not transferring employees.

Not at this time, but I think that, I think that's something that we're going to engage with them on. I don't know, maybe tomorrow, maybe another time, but basically like I gamed out the union thing with Richard and Aaron this afternoon, and they're going to— in order to, in order to solve it more or less wholesale, we do need to step into— we need to decide, are we keeping or killing New York or— sorry, New Jersey, New Jersey motorhomes? Which is a decision that is basically just like, do we lose more money if it's closed and we're just paying the rent, right, versus keeping it open?

All right. So in this structure, the debt structure on the indication of interest, are we saying it says neither HPP or Avon guarantees? We should be saying both entities guarantee guarantors pro rata with equity.

Splits. Let's just take this out. I don't have any. Okay, what are we Okay, standby. The debt is not— because we restructured the debt, it's being serviced at $430,000 a month. Like Ultimately, it's like, again, I struggle with cash trailers, but like the trucks is where that actually converts to something of value. Right. It's, it's weird and anomalous that they are contributing a fleet of trucks with zero debt against them.

Right. But their debt is their operations.

I get it. I'm on the fence about including a debt section in this at all.

Yeah, I don't think we necessarily need to include the debt.

Yeah. Like, I would say what we're looking to do with this is start to delete start to, um, use this to start to just capture and hone in on basically terms and things that we have talked to. Is that how we're positioning? I love how they would call it Coyote. Like, what do you mean today? Why are you asking if AI wrote this?

I actually think we take this valuation methodology out and we just say proposed equity split. And then the document that we can send alongside Kin.

Did you put that to your lockup on membership interest for 721 compliance?

No, it just came out of— no, it came up with that.

Yeah, that totally makes up for Coyote.

That's, that's AGI right there.

We definitely don't want this, but it's a good idea. I'm gonna highlight that because I don't love it, the wording on it. Okay, we're in the weeds on something that I don't— we can mess with this later. What time is the call tomorrow? It's at noon your time? Yeah. Okay, so we've got some time tomorrow. I actually do like this. This is just so transparently AI, this thing.

Yeah, well, I was thinking like—

I love the section, right?

But we should speak to it. It shouldn't be on a piece of paper. What's that? We should speak to it. It shouldn't be on a piece of paper.

I don't hate it being on a piece of paper. Where I would put it is in I would put it with a section. We need to sell SuperCo still. Yeah, like SuperCo still has to— like, we need to sell the attributes of SuperCo with like a— it's a $60 million top line, XYZ bottom line. We need to sell the amount of operational cuts we can say to save, like the cost takeouts, the synergies, those types of things like That is where, like, if you condense this into— you eliminated some of these, like, removes non-qualifying service income. So we're just going to delete this row, but I love where it adds that. This I'm going to highlight because of what we talked about earlier. Right. Narrative from that.

Um, I know that, that section's hilarious.

Minimal risk for moon.

Eliminates remaining impairment exposure in that it accelerates it to today rather than needing to slowly whittle it down, rather than amputating your finger, then your wrist.

It goes away. Goodwill risk immediately realized. That's professional-grade spin. Okay. All right. We'll pick the rest up later. I— okay. Here's where I think we need to spend some time. How we're going to, like, It's one thing to convince Stephanie, it's another— or Char, who gives a fuck? But it's another thing to— the rationale basically has to be the same. And basically, like I said, I feel like what we're trying to accomplish is just get it to a point where Victor's either agreeing or he's saying it's got to be some fuck up, like, number I'm making up, a number that makes me feel good, right, for me to do this. And then it's up to us to go back and be like, okay, if you want that, then you need to give us $10 million.

I was gonna say put $10 million of cash in and that will give you your remaining percentage that you're looking for. Yeah. And then it turns into Huck Finn paying the guy to paint the fence for him. Can you believe it? They let us get this off the books for only $10 million.

Part of the deal.

I got this toxic asset off our books and only had to pay $10 million to do it. The analyst is like, you only received $10 million for these assets?

No, no, no. We were losing $20 million. I got a steal on this thing. I'm not going to give them $10 million. Are you kidding me?

Uh, okay, I'll, uh, I'll put this email together and send it to Stephanie. We'll plan to get on a call tomorrow to talk. Make sure this— soften the debt language, downplay it. Here, I'll show you what I have right now just to confirm you like it.

This is probably our only kind of weakness in the thing, but like, and ultimately the reason underpinning a capital partner.

Um, all right, this is what the debt section looks like now.

Finish the sentence. Effectively structured equity used for— used to purchase assets.

Used to purchase trailer assets.

Yeah, okay. All right, I'll talk to you later. Bye.