Versatile Revenue Review & Insurance Freakout

like an hour.

Yeah.

Um, before we start, can I just ask a question to the group? It's an insurance-related question. Um, Sean, are you guys renting out those Bright Drops to customers?

Not yet. We were going to, but from what I was told is that we cannot long-term lease them, but we could short-term rent them. Is that not the case?

Okay, I don't know where everyone got their information. Uh, those are not rental assets. I just found out HDR has been renting those assets. Um, they are not listed on our rental policy, so do not rent those assets until I add them to our policy and confirm that we can actually rent those out because they're not owned by a company that is in the MT Studio Services group of companies. James, is that correct of how I should think about that?

Okay, the piece of it that is The piece of it that needs to be rectified in that chain, though, is just at least some type of intercompany lease type thing, which that risk is on the Walk and Talk side. Oh God, this is so fucking stupid.

So those vehicles are under a master lease agreement from Walk and Talk to someone in the Avon Group of Companies as service vehicles. So they are insured under the MT Studio Services umbrella as service.

But on the business policy, not the rental.

Correct. So they have not been included in the insurance reporter for the monthly rental. And I just found out that we've been renting out an asset. I'll add it to the policy going forward. I'll probably add all of them, but as of right now, they are not included on our rental insurance.

So if we're using them for deliveries, then that's part of the—

they are insured to be service vehicles, so they're fine to do that. Yeah.

Okay.

Sorry, I didn't want to derail. That was just my freakout that I had to account for.

Okay, okay, okay.

How's everyone doing?

Good.

All right, on the way to the airport.

Um, all right, let me pull up our—

that was a good wake-up call, JD. That was just wake up, everyone.

Hot.

I never— I've never heard you get so fired up with an insurance.

Yeah, there's a couple of things that can blow over this delicate house of cards we have going on, and one of them is renting out.

I'm like, that's my boy. Yeah, that's my fucking boy.

Um, okay, so here is the month preview report that I think I shared last week, um, as an update to kind of the numbers, Avon's is going to be about accurate. Um, the increase in overtime on the Avon side was related to getting all the trailers. We had a lot of trailer rentals start in February, so there were some overtime hours required to get those out on the road, um, as well as some vehicles that needed to just be pushed through because we were turning over pretty frequently. So that's why you're seeing this, um, overage of about 4%, $14,000 on the payroll cost. Otherwise, we are largely in line. Um, HDR, I mean, a similar thing. We're very, um, we're still having a hard time figuring out what their exact revenue will come in at for the month because of the nuance of how they use QuickBooks. And then Garrett has this report that's showing that they're going to be $100,000 lower than we would have expected. So we're trying to triangulate. Hopefully this all gets fixed when we're on RentalWorks. Um, but for the time being, I'm kind of estimating we're going to be in line with budget. Potentially a $50,000 to $75,000 variance either way, just depending on how our accrued, accrued revenue comes in for March. Um, but working on visibility there. On the versatile side, the estimate here is $180,000. That is based on versatile currently, if you were to take all of their open orders and, uh, just assume they're all going to be 100% revenue, you would be slightly over $200,000 from what I can tell. But I know that there are discounts that come in as orders actually get closed, as commercials come back and ask for discounts on closed invoices. So I've estimated at $180,000. I will say if you go back to January, versatile actually ended up at $237,000 because there were invoices from January that did not get closed until March. So when we added those back in, there was an additional $27,000 of revenue. So the total revenue for Versatile January was $237,000 as opposed to $210,000 or whatever we had estimated it at. I think we estimated it at $210,000 and then it ended up being about $220,000. Um, so Sean, maybe that's a separate conversation is just how can we get that in the process quicker? I know that we have, um, the consideration of just things get closed late because people aren't closing their, their jobs. But that is a pretty significant delay. And then on the payroll cost, the variance here is going to come from those 4 employees that were allocated to Versatile at a 50% capacity that we had otherwise not accounted for when we had done the budget. And I believe that's under where we had been on payroll for January, so. That's my piece. Uh, we're coming in at 1.8 compared to 1.9 on budget. Like I said, it's going to be highly dependent on what HDR actually comes in at. Avon was slightly under. I blame that on the 28-day month compared to the 31-day month. If you look at where we're pacing for March, Avon's looking— it's gonna be in the 1.2 range, and then we'll have to figure out where, um, HDR and versatile ultimately end up. But I'm confident that we'll be above 1.9 for the month over where we had budgeted for. So if you look at the quarter on a blended basis, we will be above where we had budgeted for 2026 in the first quarter.

Also, if you guys remember January and February from like a bank covenant, bank monitoring perspective are freebies, like March is the first month that we really enter this year's first of 3 monitoring periods. So would— don't like missing anything, but would rather miss because of a 28-day month and like, you know, unconventional accrual methodology in these other months, but feel stronger going into March. Um, so we're not— right, it's measured on a 3-month rolling basis, like the average, but I'd love to have, you know, I'd love to be around or north of 1.9 for just the first month that it actually matters. Sean, I have a couple of questions. Like, the— obviously this is all nascent and new in terms of developing, I guess, visibility and just kind of understanding what patterns, if any, exist. But if we think about the start of February, it was pacing. Well, I don't even think that pacing is really the word that we should be using. As it relates to Versatile. So I'd be curious though, because if you think about month over month where no VersaGroup revenue, you ended up at— we ended up at like $180K of just standalone revenue, which I want to say is the second highest month, um, if you exclude VersaGroup revenue. Obviously December and January were both higher, but if you back out VersaGroup, December would be higher.

I believe it's in line with— yeah, about a little bit under December, but it would be the second highest month.

And in any event, it— without nitpicking on that, I think there's a conversation we had about like what's the composition of this. Like, I think it's a It's a strong sign, like setting whatever pace it needs to be aside for a minute. I'm curious just to hear your commentary on that number because it's a good thing.

The other question too, before you answer that, Sean, is what is all the studio stuff for February in this number yet?

No.

No.

So I know Donna hasn't done it. We need to sit down. I need to sit down with her. Like, I sat down with Luke and her to go through every invoice that we did for True Beauty. So we need to do the True Beauty and lighting stuff, which I think we actually might be able to finish today and get done today just because like Donna, even this week, she was sending emails and invoices and stuff yesterday until like 7, 8 o'clock. So yeah, I'll sit with her and go through it. We'll lock those invoices up. We're gonna do them. I think we're gonna do them as dummy invoices where we don't, enter every single line item for every piece of lighting gear that we got from Luke. But, um, yeah, it should add probably $40 or $50 grand at least.

Okay, so what are you saying? What you're saying there is that there's potentially still upside to this $180 figure?

Correct.

Okay, great, great to hear. Yeah, but I think my high-level question still remains of just like I would love to hear your commentary around how this number came together because it's a good thing that we need to kind of support and stay on the flame of.

So I think, um, just like getting back to when you talked about how setting up a subscription model is an easier way for businesses to look at revenue because it's consistent, uh, we kind of work in the exact opposite paradigm, which is If you look at like Partizan from December, they did a few jobs and spent a ton of money and Partizan hasn't done a single job with us yet in January, Feb. I do have to update the sales sheet. I did text with Annie yesterday, Mike, but she and Julie have not looked at it yet. So I said, okay, well, let me know when you can and would love to talk about it.

I can come down.

The commercial production company is still very much— and Mike, you can back me up on this because you have, I think, the same paradigm— is very much location-based when it comes to how they're doing their bids. Um, LA typically becomes the bid place when you have the celebrity talent or you have a big budget and you can execute there. But so many production companies are bidding their jobs either in other states or other countries, so So even if we have a regular client like Anonymous Content or a Versa Group, we're only going to see them in probably 2 to 5 months a year, like do a lot of work because they'll still be doing jobs, but they'll just be doing jobs in other places. So, you know, like having a really big January for Versa Group was those jobs made sense to shoot in LA for whatever reasons. Mike can probably elaborate on that. Um, production company kind of falls in that same paradigm. It's like, it would be nice to say every company just, you know, shot one job a month and it was even and equal over the months, but that's just—

okay, right.

It's not true.

Is there a big concentration in— at any particular— I haven't gone into rental works in a couple years. Concentration in clients that that revenue came from?

That actually is a better way to phrase the question. It's like, who made up this number? Because understanding, like, understanding the pattern and the trend that you just spoke to, yes, that is, that is true. It's becoming increasingly evident for us, you know, neophytes. And like, I think getting— but I think just even simpler than what you just spoke to, which I think is well heard is still, how did we pull— how did this number come to be? What's the comp— what's the revenue mix or composition of it? And it's really the question behind the question is coming from a— when— how do we keep— how do we keep taking a bite out of this like $200K a month elephant, and then $200 becomes $250 and $300 if Connecting it to now what you said, if we're only seeing them 2 out of every 5 months, then it underlines the work on that other kind of sales initiative that we're talking about, where to make it happen, you need to be tied into as many of these people so that when they're here in those 2 to 5 months, you are getting some percentage of or all of it, right? Is that a fair summation?

That's a very fair summation because I think, I think the way you could look at it right now, if you were to think of it like a broader— we can definitely look at the customers, which customers rented in February and which are in March. And like, March is looking great for us. It's very, very busy, right? So I'm, I'm very confident. But it's if all our customers at once, if all the producers and all the companies and all the freelancers that like renting with us right now were to book jobs, were to book like all jobs in the same month, we'd kind of be screwed because we don't have things like enough walkies and enough whatever. We, you know, we'd figure it out, but it's, that's a month we probably could have like a $300,000 or $400,000 month easily if we had a bunch of jobs that were booking in the same way like Versa Group was booking in January. So yes, getting more customers is key. I think it's also, you know, a little bit of, how would you say, the leverage of the operations of this business while we're, you know, while Ronald and Mondo and everyone are working on all of this. It's if you turn on the faucet to like $500,000 or $600,000 a month right now, It would probably be very hard to keep up with the amount of work there would be with just the size of the staff and the certain quantities of equipment that we don't have enough of. Most of the equipment we have enough of, and I'm not— I'm like, everything you need to buy, the tents and tables and chairs and things like, all that's great, but, you know, if we're only holding about 350 walkies here, and all of a sudden we need 800 in rotation, you know, that's a lot of subrentals, that's a lot of orders from HDR. And even, you know, Garrett called me yesterday saying, can I say Garrett just ran out of walkies?

I mean, yeah, I think ultimately that's, it's a good, that's a good problem to have, and I would love to have that problem and solve for it one day. But, um, I think, yeah, I definitely want to dig into and see who that concentration of income is because I think it's an important exercise.

Okay, so JD, pull up the dashboard that shows just like at least the revenue reservation matrix from maybe January to February.

Um, let me try this first because I've got the QuickBooks.

I can see what it's doing. Richard, would you mind responding? Or Richard, maybe JD, could you guys respond to what Sean is speaking to at the end where it's I guess, fear and trepidation around if there were kind of like a coalescence of significant demand, the lack of operate— there's maybe a lack of faith in that the operation would be able to pick it up. So I think in hearing that, I would appreciate a response on what the countermeasure to that would be. Or, and, or, like, I think we can't be afraid to have a $300,000 to $500,000 to $600,000 a month revenue thing because of the operation. So I think capturing that as a soundbite and then Richard either responding here or after the fact, um, would be helpful.

Oh, okay. Um, so, Sean, you, you, you, is your worry that there's not enough staff member. I mean, I hear you on the equipment, right? There's two issues, right? One is amount of equipment, another one's amount of staff. Is that, is that correct?

Uh, yeah, I think, I think the part, you know, part of the like, hey Sean, get out and sell more, is we need another trained CSR for, um, for production supplies, which takes some time to learn. So like, we are actually training Mondo right now to be more of a CSR. And that is to say, he knows how to put stuff in RW and handle the jobs from a check-in, check-out and whatever. But he doesn't— he has never— and part of the issue, like, you know, like that email you sent about not responding to the email earlier this week, it's— he's never been the person focused on client communications. It's always been other people, you know, sort of siphoning that, that info down to him. So what we're trying to do is be like, hey, like, listen— and this is really the truth of it— is if you are on top of your emails and you see all that data, then you know everything that needs to go on in the warehouse. It's just more being a matter of being responsive and being able to make sure we have all the right paperwork, right contracts, etc. So we're working on that. I actually did a recording yesterday with him and Donna making a sort of SOP out of being a rental agent so I can, uh, turn it into an SOP for HDR and Avon too, for to be able to train CSRs for production supplies and specifically for rental works.

Okay, um, to answer that question, right, there's the, the email with, um, uh, regarding the communication. That's one thing. Okay. Second thing is the main email actually that was replied to Mondo was Mondo was saying that we're making decisions without doing our homework, which if you read the content, I asked him to kind of tell us like what his thoughts are, okay? Like what would it mean to do the homework? What will be a better method? Okay, read the email, give him that open forum. He did not answer anything on that, okay? So if a person's telling you You're making bad decisions because you're not doing your homework, and you're saying, great, show me your homework so we can do it your way, or let's take in consideration, and they say nothing, then they don't have the homework either. So let's put that aside for a second. Okay, now as far as like another CSR, I am working on that. Okay, I'm working with Katie. We're trying to recruit somebody. Let's see how long it takes to recruit someone. And going forward. Because one of the things that I want to make clear, okay, we cannot have any more— I call it too special people, okay? In other words, there's no more crazy rental agents. We cannot have that. You do have to have people who will actually do the work, not just act emotionally all the time, okay? So our interview process this time is going to be different in that there has to be oversight in that, okay? Because Mike already had a talk also with Mondo yesterday, and Mike's been seeing what's going on over there as well. Okay, Ronald and I've been talking about that and so forth. That's why I sent that email this morning. You saw that email this morning, right? Is there anything in your opinion that's wrong with that email? Anything unreasonable?

No, no, no.

Okay, so it—

I think it's, um, just as a personal side, I think Mondo has a certain proclivity to think of himself as a warehouse guy that loads trucks and handles equipment and has not— I think there's a little bit of fear around becoming like more business-like and more professional. And I, I believe Mike, you can actually speak to this, Mike spoke with him yesterday about it. He's on board, but it's, you know, it's— I think, I think Ronald has the right idea of Hey, like, let's train everyone here in as many sort of— right, and as much, as much info as they can have. So like, if someone walks in and says, hey, I'd like to rent a thing, and they have never called in, that person could give them paperwork, open an account, make an order, check the equipment, make sure it's good, check it out, have them sign for it, boom. Like, being able to fully understand to do process end to end without getting into billing.

Also, also, we're training, uh, Eric, uh, Jacinto also, okay, later, to have him help like after hours and things like that as a CSRO also. So we have several things in, in plan right now, okay? But that email was simply to follow up on what Mike did and also what Ronald's talking about with Mondo today and so forth, okay? That's just together. And also, if you, if you read it in there, it says we want to get out of this, we want to get out of your face. You see that, right? You saw them in there, right? We're trying to tell Mongo like, hey, do the course correction so we can be out of this, so you can be autonomous, right?

So, guys, I'm gonna, I'm gonna jump in just to try to pattern interrupt us for a second because at the end of the day, the purpose of this conversation is on a higher level kind of strategy as it relates to the business unit. We have these other kind of forums for the more tactical elements. And I think the element that I don't want to lose sight of is, yes, this revenue mix that JD's now kind of teed up to speak to, but I want to understand when Sean says if we had a $500,000 or $600,000 a month, or $500,000 or $600,000 revenue month, it would I don't remember how you said it, forgive me, but it would break us. It wouldn't work, it would break it. And what I think what I heard there, because I'm trying to just get to a distillate of like an action item, is there's to actually— sorry, to actually capture the revenue on the top of the funnel, call that the doing the quote formation through its various iterations and getting it even to a day of loadable, loaded state, there's more kind of CSR quote formation bandwidth required, right? And it— and so it is maybe more that, Sean, than it is out of the warehouse wherewithal. Like warehouse bandwidth.

Is it—

is that fair to say that it is— it is more— I think—

forgive me for this—

sales ops focused than it is like we wouldn't have enough guys in the warehouse to load the trucks?

I think it's tertiary. I think it's— we probably wouldn't have enough labor. Like, labor would be tough. This is something we can talk with Ronald about too, because he's already seeing the sort of waves of how things go labor-wise. Uh, uh, I think the CSRs— as CSRs, we'd be very overwhelmed and working 12 hours a day to keep up, um, which is fine. It's just what it would be. Um, uh, and then I think from a gear level, what we'd find is we have a lot of sort of holes in the inventory, which is to say that, like, things like walkies or Wi-Fi boxes or Starlinks, right? Like I think we only have 4 Starlinks here total right now.

And from a gear perspective, that's an easy solve. We go out and buy the gear from— it's staffing.

I'm sorry, it's not an easy solve when you're slammed to be like, oh, I'm gonna go buy 200 walkies and labor, but it's bring them into inventory and have the cases and have the cases with the cutouts of the phone. Like, there's, there's a level of detail where it's not like you can just go down the street and buy the thing and bring it in and be like, now I'm gonna rip it.

I get it, but I guess when I say easy solve, it's, it's a, it's a purchase versus training somebody, which takes time, right? Um, yeah, but I guess by easy solve, like, yeah, you can't do it.

Let me write this in because I think, I think it's well heard on the gear piece as well. Like, and I think that, Richard, hopefully what you're taking out of this is like And maybe what JD, Richard, and I can do is try to take a pass through kind of an understanding on just like globally where are we at inventory-wise because it is interesting to hear on the walkie side. And I just kind of, I would, I think Richard would appreciate just like us kind of having a separate conversation around just like What are some, maybe some measures we can take? Because ultimately all this is for is trying to make sure that we are clearing obstacles out of the way for the upside engine that Versatile is to hit that upside case.

And just as an aside, when it comes to the training stuff too, like we had a thing last week where there was a pile of 7 wardrobe racks that had red tape on them because they all needed to be repaired. And someone, I don't know which person that hadn't been trained—

it was me, I did it.

Well, someone put them on a truck to deliver to go to a stage that we were delivering 15 racks to because they saw a stack of racks and they counted them, but they didn't realize that they were BO. So the customer called us and was like, yeah, you delivered 15 racks, but 7 of them are broken. And I was like, that's a lot to be broken.

How did that happen?

It was like, well, that's just like an operational foible, which happens. It's okay. Like, the customer is totally cool with it. I explained that once I found out. It was like, sorry, someone— we had a stack of bad racks. Boom, boom, boom. But like, those— even those little details, like, you know, they all become pertinent. Which is to say, like, having trained people who recognize, like, hey, this gear is good to go out or not. It's not just about having a body. It's also about having a body that knows, you know, I have a quick question about, um, like inventory, right? Just—

this is just a quick— we can talk about later on, but like, is there a— do you have a current list of inventory or what process you're in? Or do you have a current list of, let's say, equipment that needs to be thrown away, right?

Because we have a repair section that's over in— we keep it where the, um, where it used to be truck maintenance, that overhead. We have like a shop with all our tools and all the, all the gear in there, and Miguel and Mondo and some of the guys are working on it when they have time to go fix a piece of equipment and put it back in inventory. It just— in this case, it was— there was a stack of racks in the back.

No, my question was, do you have a list of current inventory, right? Like, like, what do you have overall? And do you have a list of inventory that needs to be thrown away? Not repaired, but like, like, these are just outdated, whatever, right? Like junk, like throw away, because to purchase more inventory. Also, you have to know what you got, what you— what's going to be gone, right? So that way you have the most, I would call it, efficient inventory, right? Stuff that you're really going to use, stuff that's going to make money, not just junk sitting around, things like that, right?

Let me sort of answer that. Most of our inventory is relatively new, so like, there's not a lot of stuff that we need to trash because of quality. Okay. HCR side there is, because like we delivered 15 office chairs to a commercial yesterday and they called back, or they emailed back last night saying all these chairs are not to spec and we don't want to keep any of them. And I was like, oh yeah, I'm sure HCR had some really old office chairs just kicking around that they rented. And this is a high-end fashion commercial where they're like, we don't want dusty whatever that's been around for years, you know. So, um, there's that. I think for us, as far as the inventory, RW is mostly accurate. Uh, there are certain line items that we are missing that, like, me and Mondo have been repairing. Mostly Mondo has been repairing. I've done a little bit.

Would you say you're 90% there, 80% there, if you have to take a guess?

I'd say we're 90%. Most of the things, like, we brought the inventory in from the inventory purchase We brought in most of the inventory from when we first got here accurately, but there's just certain line items that were not accurately brought in or like things that we needed to adjust.

Okay, how about this? Are you able to maybe like take a little bit of time next week, maybe send us a list, not the inventory, but the list of actual stuff you want to buy? Like let's say item and quantity, right? That way we can—

Yeah, I can—

James, did you want to say something?

I think it's broader. I think, yeah, we need that list. I think we need that list. I got a call from Garrett last week, not to blend all this together, but he was making a request for like temp tops and things, and it wasn't necessarily out of like needing to go out. I think his was more— his was a separate thing. But I would say that, like, their inventory being 90% nominally loaded, it's good. But we need 100%, obviously.

But does that include the Better Call Paul stuff?

Yes.

That it's loaded is my question. That's all loaded in.

The Better Call Paul stuff has been loaded into my knowledge, correct, Sean?

Better Call Paul is all in RentalWorks. Yes. If I need to send anything, which I could send stuff to Garrett if he needs like 10 pops or whatever, we would just need to— the issue would be in RW, we would need to make a transfer order out on Versatile. So it would lower the quantity on our side and then it would up the quantity on the— Sure. But I don't have any quantity yet, so.

Correct. So cool. And actually, this is, this is more or less what I had in mind. It was like, Sean, give us your list of things that you need. Garrett is similarly needs to be responsive and send a list of stuff. He probably— he does not have visibility of stuff that you might have that could be helpful to him. I think the walkie-talkie thing especially is well heard. It's something that you've spoken to for 2 months now. Um, and I would like Richard to take that— I would like Richard to take these 2 kind of needs, cross-reference them with JD and I, and then work to kind of fix that so that the parties aren't having to chase them. Understanding though that in the meantime, inventory will still get thin and it'll continue to ebb and flow and this will pop up. So I would say trying to tie the whole thing back into a bow. When we think about how do we achieve a $500,000 to $600,000 a month thing, there's an inventory constraint component. And I think that that's something, Richard, I think you need to own in helping to just kind of between the two groups. Figure out how we come up with like a solve for that. I think that we are, we have, we're already aware of just kind of like the additional quote building capacity needed on the versatile side. Um, if we are to continue to help Sean focus more on the very top level thing, which is the more ties he has into these companies, the bigger percentage we're capturing the 2 to 5 months they're here. So if we need more companies in the 2 to 5 months that we're here, and to get that we need to have an inventory solution, quote building solution, and then that third piece, which I will just tell you, when push comes to shove and we have to surge fucking labor somewhere in this company, I am not afraid of that.

Yeah.

And I think that like, regard— even I would On that piece, I'm less concerned, understanding that it's not sustainable. So that if there's a sustainable $500,000 to $600,000 a month type thing, or a $300,000 to $400,000 a month thing, that, that labor picture will need to be bolstered. But I just— my point in all this was like, of the 4 things that are kind of comprising that, how do we make $500,000 a month work? I'm not concerned on the labor surge piece because I truly do believe and I would bet a lot of things on our ability to make that happen, which leaves then, what does it leave? It leaves the inventory kind of exercise. There is this enduring kind of quote building piece and then What's the third? Training, maybe, but whatever. Go ahead, Richard.

Uh, okay, same. So, so action item, right? First, today I will send out an email to HDR and Versatile, um, requesting that needs list, right? Like, what do they need? Okay, and then once we have that, you, me, and JD, and now we can talk about that, analyze it. And also, at the same time, we are— I am already working on the additional CSR.

Okay?

And also, that's on top of— it's like one dedicated CSR for Versatile and also flipping Eric, you know, to get him to participate. So that would kind of increase the quote building, you know, part of it. And then like you said, labor, I'm not afraid. I'm sure we can figure it out as needed.

Okay?

My only concern now is to make sure, you know, Versatile inventory list is accurate so we can actually, you know, check both sides, like the need and what's the existence. I'm a little bit worried about HDR inventory.

Yeah, that's—

I'm not concerned about Versa. I'm concerned on the HDR side.

Yeah, so that's something I will send a separate email to Garrett to, like, hey, you know what, how are we doing on inventory? Based on that, do you know what you have?

Well, the thing is, his walkie inventory is, it exists. There is a sheet that tracks ins and outs to some—

Okay, but I mean, what I mean is that it depends on what he wants. Let's say if he wants something else, Like, it'd be nice to know, like, does he even know what he has, or does he know what he needs to throw out? Like, sometimes when you have larger inventory, you just think about what you need, but you're not really thinking about what you have or what you need to get rid of.

That's true.

I don't want to— I don't want to interrupt. I have to— I'm just pulling up to the terminal, um, but— and I mean, I can jump off if we're just gonna— I think it's an important conversation to have, but yeah, um, but do we want to look quickly at, um, what JD pulled up, and then I can bounce.

Yeah, also, just FYI, Arnie got back to me about Omaha, Michael.

Okay, I'll call you after this.

Wait, what's the verdict? I'm invested in this.

So it was funny because— so I emailed Arnie at his email, his work email, that he didn't see because he doesn't use his— it could be mac.com. He said, hey buddy, just got off the phone with Rebecca, the producer for the Macy's with Omaha. She sent me for TV, television stand-in, say 21. I told her I made a deal for Omaha and you, your company. She's using VersaPal on another shoot today, FYI. Great. Uh, she said I never got that email from you, but she told me she hadn't signed it yet, loves the deal. Uh, he didn't get the email because he didn't check his work email because he only uses his email, but I just forwarded it to him, so I think we're good to go. All that is what—

but are we going to move them to Coyote, or are we going to—

I don't know yet. Uh, and actually, sorry, can I ask as an aside for that too, James?

Yeah.

Is it more productive for us, is the framework of SuperCO to be sending state work to Coyote?

Yes.

Yes, definitely.

Okay.

And I would say if we could win this one ASAP.

It's especially—

it's helpful, but it's not mission critical. At the end of the day, we got to do what's right for our business, but it is very helpful.

Yeah, I just thought I could make a deal offer today easily. He's forwarding the email to her right now.

So who's— who did she work for? Omaha? They're using us today for something? Um, she works for Macy's.

She's— I think it's— I think she is producing that Macy's job freelance, not the EP that he's friends with. But it's weird because I actually have to look. I think it's Rebecca Case, who AJ is using. Uh, AJ, that, you know, the AJ that came to the office yesterday. There's a name, Rebecca Case, who's on that email that I had never met before, ironically from a production company called Park City Films, which is—

oh, Park City. Yeah, how do I know Park City?

Oh, Park City. It's just strange to me because I was raised in Park City, but whatever.

Yeah, uh, I made it.

I made it.

I emailed what I asked her about that. I was like, are you from Park City too?

She never replied, but, uh, so, okay, we'll talk more about that after. I'm going to just double park right now before I pull up to this terminal. Um, so it looks like it's a ver— this is all the clients you pulled up, JD? I'm just scrolling through it.

This is everyone from February. Um, there are still a couple that are not included. I believe True Beauty will actually be the biggest customer of the month. They just haven't had any of their invoices closed yet. From looking at it. And then anything that is not currently in RentalWorks, I don't have an estimate for that, but that will be added in as well.

Yeah, that's the— True Beauty is all the studio— they probably have half of the studio rentals for February with True Beauty, and then the rest will be Summer Jacks. Summer Jacks isn't even in here.

Yeah, Sean, correct. Right.

Okay, great.

All right.

I mean, this is good because it's It's not even— I mean, other than No Brand Films, I don't even know what job.

Yeah, it's pretty decent. It's pretty— there's no— there's low concentration, at least from a company perspective. But Sean, is there concentration from like a freelancer perspective that we don't see here?

To a degree. I mean, a lot.

I mean, also like, like Crawford, right? I have an email out to him. About a deal, because I think they're only getting trucks, is my understanding.

I'd have to look at that. She's— I gotta call Donna. Fuck, that job is not supposed to be Madsen Media, it's supposed to be Canyon Road Films. It's so annoying. Um, the Canyon Road Entertainment should be a $17,000— that was the big stage job.

Um, okay. All right, guys, I'm sorry, I have to jump. Yeah, um, this is how I'm gonna send me this, JD.

Yep, I'll send it right now.

Thank you. Um, because I think it's also just helpful to look then dig in and just keep in mind what are they renting from us right now. They just renting trucks? Do they know we have all this other stuff? Or, you know, but who— because I don't know some— just some of those clients, I don't know some of them.

So it's good to just see what they're actually getting from us and if we can Mike, you could probably build a pivot table that pretty easily that would give you that information just based off of the way their quote name nomenclature is. The one thing I was going to say is, JD, maybe something helpful for the global kind of monthly view is a stage revenue versus supply revenue versus vehicle revenue. So it's like 180, knowing how much fell into just those very high-level buckets.

It will be very hard to pull that information out until it's synced over, um, because we are not getting studio information in real time. We still, like, like I said, we still don't have that in RentalWorks. Um, I can have it as an addition to the month-end report, like the financial package. I don't know how I can do that.

Yeah, I think that's, I think that's helpful. The month-end, if that's all it is, I think it's still helpful.

Okay.

And then do we have— and then Mike, feel free to jump, but do we have the ability to call you all?

Thanks, guys.

John, does the ability exist as— so we have this giant list of customers, but you were kind of mid-thought in explaining how there's probably more concentration than what would have originally than this would lead you to believe. Does Rentaworks have the ability to— I know it has the ability. Are we putting the information in that would let us see that these, uh, 25 customers is actually 12 or 15 decision makers? Do you get what I mean?

Yes. So there's two things you can do. Well, without someone actually tracking, like putting every customer thing into a CRM where it's like this person did this job on these dates, boom, boom, boom. There is a contacts section in RentalWorks where you can put contacts. So if you save the name in there, that as long as they expressly use that exact same contact every time, which the issue we had at our, at Kiyoti with this was Someone would go like, hey, I'm putting Theresa Martin and they misspell her name. And then all of a sudden there'd be a duplicate or a triplicate or a quadruple contact name. But those jobs are tied to that contact in our W. So you can look at the contact and see all the jobs they've done. Therefore, you know which freelancer to bring you what work.

Got it.

So I understand how it works in RentalWorks, but the, data entry piece is not without its flaws, but if it is tightened, it is possible so that if Sean French, the commercial head of production freelancer, moves from Pretty Bird to Canyon Road to No Brand across a single month, we can see that Sean French was— yes, it was across these 3 companies, but it's the same with Avon. It's like if George Sack is doing 3 shows it looks like we have, you know, more or less concentration than we actually do. It's actually just short of SAC.

Yeah. So like Eric Kunal, he's a client of mine regularly. He literally sent me like an email where he said, hey, I'll have a shoot shooting 3/23, 3/24, need a production camera truck and equipment, but, but, but, and then he followed up with an email right behind. Also have a job at Pretty Bird 4/7, need a production truck and camera truck 4/6 to 4/8. So like, I know that he's renting— he's— that guy has done 3 jobs with me in the last 5 weeks because he's just very busy, um, right now, which is fair. Uh, nowhere in Railworks or nowhere is it tracked that this is happening right now. Like, I—

so Richard, this is going to be something that not immediate, but as a broad strokes, like when we think about how we're rolling RentalWorks out at large and as we're tightening our data capture and inputs across this CSR function, that's going to be high-value target stuff. JD, tell me if you think otherwise, but, um, yes, 100%, um, very important.

What I will say is that there is a field in RentalWorks called outside sales representative that might be the best fit for this. It may not be actually what outside sales representative is meant to include, but if we're going to say like, here's the person responsible for bringing us this business, whether it's a coordinator or a locations manager or a freelancer, I think that would actually be the best place to do it. Um, maybe not, but that's just from what I'm seeing that looks like it makes the most sense.

Well, okay, so we'll Let's— instead of figuring out how we're going to track it right now, I just think that we can accept it as, Richard, as we, as we pull the materials and all this stuff together, that has to be a— that's a very highly valuable piece of information that we'll want to hone in on. And understanding, like, what Sean— what you just spoke to on the, like, triplicate customer entry, it's actually why we lock down who's able to input customer information into the system because we have 26,000 or something customer records for not 26,000 even possible customers.

Yeah.

And they went through and purged a bunch.

So yeah, so we've got this button right here. Click on that. It gives you a list rather than having to type. So if I wanted to type in, I think we've already tested this. No, I thought we had George Sack in there, but we could pick any of these people who we should preload and then no one has the ability to add them except for like, let's call an admin. So if it's you or me or Julie or something like that, that way we're not allowing everyone to make duplicate, duplicate.

Um, okay.

The one thing, well, there's a way I could, it just as an easy sort of fix if you wanted to upload a lot of contacts. I could take all the contacts out of just my Google. So every time I get a new, anyone emails me that I wanna keep in my contacts, I save them as contact in Google, right? So I have their names and emails and typically their phone numbers and other info too. That's probably a few thousand people and it's all the regular people we work with. So if you wanted me to give you a spreadsheet of that, you can upload that into our W. It would at least give you the, not necessarily everyone that would be on that list would be relative and I can clean it up and get rid of people who are not clients, but at least we give you the start. You could, as we're booking jobs, we could just tell Donna or any other CSR, hey, whoever's booking the job, go to outside sales rep and find their name and put it in.

It might end up being multiple people. What'll be interesting, Shawn, You know what, it's not for the purpose of this call, but I would say that let's go easy on ourselves and just like, until we have a plan for how we're going to track it consistently, I don't think that we should change anything on the fly. So we're minimizing the amount of just like shit that we're just like floating in everyone's orbit. It's nice to have, it's very important, but until there's a comprehensive solution and identified plan, it's the type of thing that needs more CSRs. Like the more tasks in these types of things that you have, it's, you know, we are, we are, we're bumping up against kind of like our, you know, data entry capacity, I think, right now.

Well, and then like Sean said, I can— there's a way to just bulk upload all this information that we already have. And we already have it in CARS Plus for transportation coordinators. And we already have— if Sean has it for his contacts, I think that makes sense.

Having it's one thing. Having the people use it effectively is another. And I think that's the piece that I'm more, I would say, reticent to just like have. Because like, I would be— I would honestly be— how helpful is it if we're half tracking it? It's a real question.

Yeah, I agree. We have done it with Avon and Cars Plus. I'm confident we can do it here.

Yeah, I think it wasn't a rhetorical question. I'm not trying to dickishly be like, how helpful is it? It's a real question. Like, is 50% tracking it helpful to anyone on this, to any of us? It's not helpful to me. I don't know.

It—

John, you know it already. Like, it's all in your head.

So I'm trying to think of like what would be helpful about it. Like, you know, I'll give you ways that it can be helpful, which is like, think of it like this: if you have a Facebook friend, you usually get an update when it's their birthday. It would be nice to be able to call clients on their birthday or send them a little thing or something or a card because Just like anything in business or marketing.

I'm so sorry, Sean. The question is not how is this helpful? The question is if it's half, like if we're doing some half measure, we're capturing every now and then, is that helpful when there's bigger fish to fry?

And that's all I'm saying is what's the— just because you have a big CRM and you have all the people there and you're tracking, you can see, oh, this freelancer did a bunch of jobs with us. It's like, I mean, I guess if there's some reporting where it was like, hey, at the end of the year, make sure to take these people, you know, to a steak dinner or whatever, like there's that aspect of it. But like, I don't know how else it's actionable, you know?

Well, let me give you an example of how it's actionable at Avon. Um, we've been tracking it for 3 years now, and we have pretty much just recently gotten Julie to stop saying, oh, this is such a great customer for us, like we need to make sure this person's taken care of. And we find out they've done $1,300 of revenue with us in the last 3 years despite being on 6 productions. It's like, but then there we, then we know like, okay, this person is worth $1.4 million to Avon. We will do whatever it takes to make sure that customer gets what they need. And then this person has done nothing for us, but we're treating them like they're someone who's done $1.4 million. We can triage resources and make sure that we're not, uh, we're not cutting short the people who really matter at the expense of people who do matter.

That is true. I mean, that's what— that's kind of what I was saying about the steak dinner. It's just, I took— I took Rebecca, a producer, out for dinner last week.

Big dinner is so funny.

She brought me $32,000 in revenue in the last two jobs, and I was like— it was her birthday, so I was like, let's go to dinner. So, um, you know, to me, I always try and do— where'd you go? As Sushi India, which has a 4.8 rating, and it was maybe one of the best sushi meals of my entire life.

Well, dude, I had katsuya while I was waiting to catch my red-eye back last night, and the quality of sushi relative to fucking Ohio—

No way. So who would have thought?

Look, I know that that's obvious, but what I'm saying is you have no fucking idea how crazy, crazy different and good it is.

Yeah, well, if you get a chance, sushi in the United States, it might change your life. Like, even the sea bream was the best sea bream I've ever had.

Well, Sean, one more thing. I have built an automated version of that rebate tracker that I can share with you later. The only thing it basically requires is that I know what the customer numbers are for each customer.

You reminded me of something that I wanted to ask you for, too, with regards to this. I pulled out the Anonymous spreadsheet to send it to Anonymous for their rebate that we haven't paid yet, and she never replied to me. And the reason she never replied is because she got busy. But then she said, oh, when you sent me the spreadsheet, it doesn't make sense because there's data missing. And I realized it's because the data is tied to multiple pages of the thing. So I was like, hey, what's— is there a way we can make this a little more customer-facing?

Yes. It's not in that spreadsheet anymore. I'll show you later. But give me— you need anonymous and serials rebate combined. Good.

If we can see them separately, that would be great. They go to the same place, but they're technically two different companies.

Okay, I'll send that over after this call.

Richard, will you please recap us action items?

Uh, okay.

Um, of course I can. I mean, the— for me, the big one is the, the inventory or the needs list, right? But we're not really gonna do anything with, uh, how do you say like how to create that, you know, not half-assed, half-measured customer.

Right.

Right.

We're going to leave that for now because I think we want to finish implementing RW first and then we figure the rest of the stuff out. Right. And I think, I think right now, I mean, to me, the needs list and also current inventory is kind of really, really big items because it's hard to analyze everything. And spending without, you know, having that.

Okay, so Richard, then what I would ask is, um, I guess a couple things. I need help keeping our calls and conversations calendared.

Okay.

Like, I think that—

I know that Mike pulled, I think his person's name is Megan, in, but I think we just need to make sure that we're keeping ahead of getting these conversations calendared, not just this time, this like month in one, but also our kind of biweekly one. Biweek— on the biweekly front, I feel like we have a lot on our plate from what— from a couple of weeks of this. And I would like to get visibility across all of us, for all of us on what that is and what the status is. So that we can just stop adding shit to it and just focus on knocking this shit out. Some of them are conditional. Some of them are like contingent on one another. So I think, Richard, I would ask you to maybe work with JD to like just give us, even if it's an email that goes out, even if you are sending us an email once a week, but just like, here's an update on where things are. I think we all need to know where this— what the status of the— what's the status on the things so that we can keep them moving. Because we got on a bit of a heater. I still think we're on a bit of a heater.

Yeah.

Um, I want to keep it going.

I think last time, right, JD put it already on the other spreadsheet on the VS track spreadsheet on action items, right? So I'll go back and look at those action items to see where they are.

Yeah, yeah, yeah, yeah, yeah.

Okay, so that's one. And this is number two. And also the CSR, right, which we're in the— I'll go into that email also right now. Okay, so that way Sean will get like, uh, almost 2 extra CSRLs. Okay.

Yeah.

And, and, and, and, um, right, right now, like I said, I think one of my worry and more pursuing is that like Sean's part is pretty easy actually. I mean, that's pretty much all in motion. I don't see a major issue. I see more about like, you know, how do we get the needs list out of HDR? I mean, the need list is easy, but the inventory and the get rid of list is going to be hard out of HDR.

So that's it. Sean, would you be opposed to us, I don't know, downloading or hijacking, um Your brain. You're sorry, Mike sent me something. Would you be opposed to having us jailbreak your emails and feeding them into a GPT so that it can I don't know, there's a couple of like soft— there's a couple of like software tricks out there that we can potentially bring to bear here as we onboard these new CSRs to help them on like email formation or just like if they need to ask. I know, don't— everyone knows who the singer is more or less, but it's like it would be cool if we were able to pull the pull that in so it's like we could ask like the question like, what's a stinger, instead of asking it to you and waiting on that or something like that. Do you know what I mean?

Well, the CSR is going to be in the warehouse, right? So they can ask like Mondo, like there's guys— I don't think the CSR will have to go bother Sean on every like, what does this item mean, because there has to be some training process inside there and so forth.

Well, I just want to say this. So I realized Ronald sent me over his SOP that he's been starting on, and I realized that I really needed to be doing SOPs 6 months ago because his SOPs, while he's taking in what data he can take and put it into place, they're very incomplete. So I've told him, I'm like, hey, I'm going to do SOPs. I'm working, I'm doing with AI. For every piece of equipment, for testing, cleaning, loading, this and that. And then also, like I said, I'm working on an SOP right now that I should have done today for how to be a rental agent in RW.

The—

I think the management of customers, of how to manage, um, the flow of information, the back and forth, the volleying where it's like they're sending you something, you need to be responding, and like Yeah, smile over email.

That— yeah, kind of. It's kind of like that, but like almost more the sense of like, kind of like what you said, Richard, in the email about the email not being replied to quickly enough, which I thought it was ironic that you sent it because like we usually are jotting out the spot with our emails, but one fell through and then Michael brought it to your attention. But the concept of like if you were to see and like if I— if you want me to put CSRs on the rentals@versatilestudios email group that is just comprised of me, Mondo, Donna, and Dan Olivo right now, those people can just observe our emails and see how we deal with a customer and start to learn. Like, they just would have to read each one and understand, and then also understand the pace of reply. Like, if somebody emailed 45 minutes ago asking a question, it'd probably be replied to before lunch, you know?

Yeah, I mean, like, look, The CSR, whoever is going to be that new CSR, is going to go through training. Okay. And like, let's say when we flip Eric, as we get Eric more and more involved, it's a little bit easier for him because he's already there learning already, at least the equipment part, right? Like knowing what he's looking at, hopefully. But definitely there's going to be an acclimation period for sure. You know what I mean? And I'm sure between you, Mondo, and Donna will be a great example for that new CSR. To figure out, and you know how to get them to actually do the things you need them to do, because this new CSR is really dedicated to, to support you, right?

Well, and ultimately, like, if Mondo can have much stronger of a CSR, it's going to make the warehouse that much stronger. And I think ultimately, like, like, I don't know, just as an aside, like, I don't know who Benudo is, and I don't know who leads HDR, but we're talking about the way information is passed on. I know like on the HDR side, it's like Danny and Reed basically deal with their customers one-on-one. They don't like— no one has the oversight. Garrett kind of has that too. And then that's— that info's all flowed down to the warehouse to figure out how to expedite it all. And it just—

it like—

I'm not gonna say it's right or wrong. I'm just gonna say it's like, to me, it's like a smarter business, the information would flow to everyone, so everyone would have context of what they needed to do.

Yeah, no, I mean, I, I don't, I don't have any problem with what you're saying. I think it's fine. I mean, like, I think it's just more like style. Like, you know, you, you know what works for you, you know what I mean? You know what works for your group. Garrett does things his way, right? But like, to, to say, to continue what you said just a little bit with like the Menudo situation, is like It was really an HR issue, you know, and then one JoJo destroyed the whole place, you know, like, it's not about the HR.

What I'm bringing up is this concept. This, this is the basic how information travels. If you have a group email where like, hey, the driver of the vehicle that's going to do a delivery in the morning is also on the email, and the driver also knows to look at his email, if the client replies on and says, hey, can we have that delivery at 6:30 now? Can't be at 6 because if you come into the neighborhood at 6:00 AM commercial fine. And if the CSR doesn't see the email, then call the driver and tell the driver he needs to be there at 6:30, then that, that information is lost, right? Where it's— if I— that's all I was trying to say is I think the way we do this business, it's making sure people have the information they need to move forward, right?

Because then the more people, the more filter, right? Less chance of it getting away, right?

Correct.

Yeah, no, no, I mean, I don't, I don't see a problem with that. I mean, I think it's good, you know, just again, if everybody take a look at their email, you know, so yeah.

Okay, um, is there anything else we need to hear, guys? Uh, cool, I'll keep working on these SOPs. Uh, just as an action item for me, Richard, should I just be sending the SOPs to you? Like, how are we collecting them? I'm just putting them—

I think the SOP should be sent to me, Ronald, uh, Katie, and Mondo. Like, just our regular group, you know, so that we all see it that way.

Anybody with who needs to be shared with?

Yeah, like, you know, my normal group. So, you know, so, so That way anybody can see what's going on in case, like you said, what if somebody sees something that none of us saw? Who knows? I mean, like, we go, hey, bring it up to our attention. Like, what if, you know, let's see. I mean, without seeing it, I don't know, you know. Yeah, it could be an issue or everything's okay. I don't know.

Okay, cool. Uh, all right, thanks guys.

Thank you.

Thanks, Sean.

Bye, guys.

JD?

Yeah.

Sean, I texted Sean Griffin last night. I actually pared down and edited Herp's screenshot and just sent it to him. One, because I was exhausted yesterday and started having a panic attack in front of Richard about like, saying something that could have potentially compromised Sean if he had— if investment banker dude went to Victor. So my way of combating that was by showing Sean how the information came to me and telling him that I brought it up in the meeting with the investment bank so that if it ever gets that way— anyway, I sent it to him. I already sent you guys this, didn't I?

I saw the text.

Yeah, you explained. Yeah, no, I'm sorry. I told you all that. I'm so tired.

No, it's okay.

I mean, try to get some sleep first.

But yeah, I, um—

But I think today's meeting went okay, right? I think it was good, right? Today's meeting overall?

Yeah. Um, feels like he's actually a little salty with, um, Mike.

And also, I think he's still a little bit worried about like how many noodles in the kitchen. He's still a little bit worried, a little bit. I do. Yeah, I think that email I sent this morning maybe kind of made him just a little No, spicy fights.

Yeah.

Um, I don't know if I did— I don't know if this is in the screenshot that I sent you guys last night, but he did say they were going to send some more questions.

Um, yeah, I saw that.

Yeah, yeah, yeah, you did see it.

So what's your plan, I guess, like, in terms of getting him information back on that? Hopefully when they send their questions, they send us the CBA as well. I'm wondering if the flow of information potentially slows because Galpin— we don't know when Galpin came to the table. Right. But I wonder if the information slows because of it.

Well, same thing that we've been kind of worried about the whole time is that a cash offer might be, uh, more attractive to them, even though they would have to say we sold this whole thing off for $25 million as opposed to not having to report that, but it's one lump rather than realizing zero, if that's where their head's at, being like, this will never work.

I don't see how— I've run that through the traps a lot. I don't see how Galpin solves this problem. I don't see how Galpin solves the problem. I don't see Galpin stepping into the New York operation, like taking over the Atlanta piece of it. I think to say nothing of the like, so unless they were, and dealerships historically are not good at sharing things. So they don't, I don't see them proposing like a joint venture type thing.

No.

And like the level of sophistication required to put it together, much less manage it. I don't think that they would. I don't think they're set up for that. So I think the real risk is that Bo Bachmann gets afraid or something and ultimately throws a number out that they say yes to. And that number is like still— that number is not 25. It's like 75 to 100.

That would be insane.

It would be fucking crazy. But I do think even 50, I think, would be crazy. Yeah, you're paying $50 million for a giant hole. Yeah, in the ground. Um, but I think if we can get him— do you need my help when responding to any of the questions that he sent?

Who you talking to, me? JD? Yeah, they sent questions.

Yeah, a couple weeks ago, a couple days ago.

JD's like, what, what questions? You know, James, I'm really wondering what— how Garrett's going to answer the inventory thing.

I'm not dedicated to this.

How do you— how do you mean?

I—

he called me a couple days ago and started trying to chisel off— like, actually, on his— it wasn't even— he called me.

I—

when I asked y'all to jump off the call, I wanted to— I was— I wanted to understand, like, what do you mean you're falling behind? Like, what are you Who's out there with better gear? Who are you losing jobs to because our gear is not of high quality? And so he was like, I'd love to get $5,000 to $10,000 a month approved to just be able to start buying stuff. And I'm just like, why?

That's what we just did with the Better Call Paul thing. I don't understand. That's why I asked.

But what I think— okay, so what I think that is is he doesn't have visibility into what's over there.

Yeah.

And in the same way, he doesn't have visibility in anything. I heard that even on that call we were just on.

Um, and he doesn't know what needs to be replaced or what condition in certain— I don't know.

I don't think he has an exact number. I think he has approximate. I think he just wants this like supplement and something he's been talking about for years. But my point to him is, and in the middle of this conversation, I was like, who has better gear than us? He was like, I don't know. I don't think it's really about that. You know, it's just we sent a job out and 3 of the 7, 3 of the 10 tents didn't work because we don't have anyone testing it or QCing. I was like, okay, but that's not, that doesn't mean we need to go buy more tents.

That's a labor thing.

Like, that's a process thing where, like, they just— you don't have— and then at the end of it, and I kept, like, hammering him on that, I was like, okay, well, have you talked to Richard about this? And he's like, well, no, I talked to Ronald about getting this. I was like, but that— I didn't ask you that. Did you talk to Richard? And he was like, no, I haven't talked to Richard about it. At the end of the day, it's like— I was like, okay, so there's no pleasing you. Like, you don't want this solved. Like, you just want to be able to buy things.

Okay, just so you know, okay, instead of calling me for that, he did call me yesterday or day before for hour and a half about want to kill Ron, okay? So, so I talked him out of it. I said, okay. So I made a deal with him. This is a good one for you guys to know. From now on, anything he want me get involved, okay, in HR matters of HDR, he is to strip his executive status, which means he can no longer hide behind that as protection. For him and Daniel. Anything I touch, he agreed to that, it will be in writing. In other words, the chips will fall where it means that if it's here, if right now, like for example, they want to write up Daniel Rodriguez, they can't because Gary says no. And I told him, if you want me to get involved, you will drop, and I will put it in writing, your executive status, and so will Daniel's. So the chips will fall where it may. So if you're willing to do that, I will do whatever it takes to have to help you. He go, oh, okay. Then he dropped the Ronald case, right? I said, you're gonna try to prosecute Ronald? There's gonna be mitigating circumstances and tangents coming out of that. I'm pretty sure the missile will land in your yard. So I will need you to agree to drop your status. You cannot hide behind your rank. You don't get to say stop. Once I bring a third party, if it means kills you or anybody else, it does. And then he agreed to that, but then afterwards he's okay, we don't need to do that. Okay, great. So, so now I told him, I said, if you're not willing, that means you're not going to play fair. If you don't play fair, we're not talking. And then so he said okay. So now anything you want me to touch HDR, it will be in writing. You can no longer hide behind your executive status. The chips will fall where it falls. Okay, so just so you know, that's a good negotiation. That's a good win on that one.

I've been wondering how that was going to manifest. Um, all I have to say, like, he— it's, it's not clear he wants to actually solve the problem by just like not sending out broken tents when we have—

oh, he wants to hire CSR too. He wants to hire more CSR too. So which I've been stopping.

So he called me yesterday and was like, does Richard have the authority to just like say go hire a CSR or go hire someone? And I was like, what are you asking me? Like, he was like, Daniel asked Richard if he could hire somebody, or Richard told Daniel he could hire someone, that he was approved to do that. And I'm just wondering if Richard has the authority to do that. And I was like, why do you— why does it matter? I just never answered his question. I was just like, I just like kept trying to just like deflect because I was like, I don't know, not knowing what the fuck you were talking about. I don't want to get into some like, yeah, pissing match with him.

Yeah, because we, Katie and I and Ronald, we discussed, right, like we were going to take out JoJo anyway. So since we take away somebody, he gets to replace somebody, but now he doesn't get to because we swap somebody. So he gave up that opportunity. So, so we did tell him, yeah, sure, you, you lose one person, you get to replace that person.

Sure, why not?

Okay, uh, JD, back to the questions.

No, I got it. I'm sorry, I didn't notice those come in, so I can handle them.

Okay. Um, Okay. Mike just side-texted me that he doesn't want this inventory thing to be another thing that Sean is whatever holding up is why we do it, which I heard it, which is why I immediately honed in on that call. And I just said to Mike, like, we're already talking about it. It's probably a Garrett thing, but that you— Richard has a path.

Um, well, yeah, I have to send it out because Sean's gonna want to at least get— I think Sean should at least give us like, what does he want to buy, right? I mean, that's something has to come from Sean.

The walkie thing is something they've been talking about for a minute. Yeah, I don't understand like how it's possible that Garrett would be out of walkies. unless it is, like, what the. Johan makes a hundred plus thousand dollars a year. Like, what's his throughput?

I. I don't know. I have no idea that I. I honestly do that. Because we haven't really go step in, like, look that deep yet into that.

Yeah.

Because we need to be prepared when we do that because that's in the ruffle. Okay.

Yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, you're right. Even still, I feel like Garrett has a backstock of walkies that he just hasn't like unwrapped.

That's what I was thinking, is that he— I remember him saying he bought like 2,000 walkies or something.

Yeah, I think he has stock, he just hasn't unwrapped them. And so he needs them in a pinch for a legitimate thing, and he's— I think he was looking for something that was maybe more readily available. But why we're not maybe accessing that stock to just shift more to versatile. They, they need it. It's clear they need it, right?

Here's the thing, Garrett and Daniel has never been efficient at using their labor. That's a fact. So yes, so, so that, given that, that's why they aren't. I'm just saying that's probably the cause of them not being able to go access their own stock.

Yeah, I mean, be that as it may, I would say HDR probably has backstock that can absolutely help Versatile. Versatile has stock that can help HDR. Your other point that no one wanted to talk about, but it's very true, is getting rid of shit that you don't need.

Yeah.

I mean, there's 100 air scrubbers in the second floor, just space vampires.

They cannot be hoarding stuff that are not— they are useless.

We're not hanging on to those till the next pandemic because they're not going to fucking work in the next pandemic, right?

Right. They like to hoarding stuff that are useless, and, and, you know, it just— it's overall habits needs to change.

What's the dragon from Lord of the Rings that hoards gold?

Oh, that one.

Sorry, man.

Oh, oh, it's actually— oh, it's on the tip of my tongue. I feel like I know what it is.

Snog.

Yeah, there you go.

Look, I only know Ferengis from the Star Trek universe, the nice business people, the Ferengi.

Yeah, I, um, the nice bit.

Um, okay.

I mean, yeah, it's—

I am—

I caught up with Christy afterwards, our call JD, and I am— I further expressed my dissatisfaction with this concept of them letting Ben BI off the hook. Apparently they're gonna— what?

They're gonna take a write-down? That's insane.

I've been thinking about it pretty much nonstop since yesterday, and I'm just like, then what the fuck am I bending over backwards trying to not bribe people and do sketchy shit for?

Right? Like, So on the hook, we're on the hook.

And just to say this, she has repeatedly brought up the like, well, we got to be careful because I think you guys got a lot of referrals. I'm like, so did fucking he, and he did a bunch of other like shit.

Like, right.

And it's not like we didn't pay for it. We have to pay every dollar of interest we accrued and all these bullshit late fees that got added onto this B-note. So like, yeah, it's not like this stuff got forgiven. Every single penny that we owe them, we still owe them. Which I didn't realize at the time. I just went through and reconciled it all, and that's what I found out yesterday, which was frustrating.

Oh, there's no forgiveness. It's just in a B-note.

I didn't realize you were getting dinged for those late fees. I thought those were getting forgiven.

They would have gotten forgiven if we had paid them off.

Like a quarter million dollars.

Yeah, but I do have a scheme.

You always do.

It's—

what is your scheme?

Well, it's gonna take them a minute to operationalize all that. Also, they're at— she said that they're asked— the workout department's asking for our forbearance agreement. It's like, no, I fucking paid for that. Don't use that.

Right. Yeah, I would like— I would like them to also pay $75,000, or we get $37,500 as a credit. Totally. We can have Richard's crab boil with.

There you go. And a laser, probably. Yeah, you get your fucking laser, Richard. I know.

Hey, I'm still waiting for that $2,000 laser. Jesus.

But I was like, I just think it's pretty insane that you're not having a conversation internally about how doing this, giving him a second lease on life makes things exponentially harder. Like, you effectively have a larger debt picture out here, over elsewhere, over here, that you're putting at an increased risk because this fraudulent, like, bad actor is playing hardball with you, and you're let— had more creditors, and he's playing hardball with you, and you're just gonna roll over.

Right.

Jesus. The problem— the scheme hinges on— like, the scheme hinges on— I mean, it is in effect fraudulent conveyance, but like They can't repo. It's $22 million in just trailers. And they're gonna take 70% of forced liquidation. But we know that Rouse forced liquidation is just a percentage of cost, right? And his cost is an inflated bullshit number.

Right, right, exactly. Yeah, I should have— getting stuck being the good guy again— when I had to transfer those assets from NC&T to two-family to shore off that tax bomb, I had to mark them up by the value of all the, like, labor and all that to, like, fully compensate for it. I should have just given them those cost numbers because that is effectively what they did to their own equipment. So by not doing that, we kind of shot ourselves in the foot.

We definitely should have done that.

But that just feels so disingenuous that I can't do that in good faith.

Well, they're going to take a $2 million charge-off on us.

Is that what the regulators are saying? How are they taking a $2 million charge-off on us?

But I'm like, I said, are you fucking kidding me? Like, y'all do y'all, but are you out of your goddamn— that's irresponsible. Especially because, like, look, it's— I'm not saying it's not continuously at risk, but it's also getting serviced now.

Right, right.

So what— this feels like you're actually really cutting off your nose to spite your face.

Yep.

But the scheme— the timing is not going to work out for the scheme ultimately.

Right.

But what Christie said is that when I asked her the question, if we were willing to buy at par value their debt, would y'all say yes? Of course, why wouldn't we? But now what that means without that was a little bit ago. Now they're in this situation. Let's say 22 becomes 17.

Yeah.

17 still now has to go get amortized.

Right.

And they're in, you know, nonaccrual land. It's not without risk. 17 could be 14 lump. Okay, so you buy the 14, the majority of which is green light. You basically buy $22 million of trailers for 14, but you are getting You're buying the collateral, you're buying the UCCs, right? And it's effectively a swap. Like, you're— it's not even a swap. You're not— it's not a swap. You're like, um, it's just an assignment and an assumption. Like, we would be in effect BIA/Greenlight's creditor at that point and could foreclose on the assets. And what's different from us than every other lender is that we would actually have the infrastructure and everything else to operationalize it, right? Which is what's keeping all of these other lenders from doing anything because they know that they're virtually useless and they have zero value, and them repoing a bunch of trailers and shit doesn't do them any good, right? There's like this— there will be a persistent— what's that?

That is a scheme right there.

But here's the thing. This doesn't go away once it's— once they're restructured. There is now a persistent backdoor hostile takeover that will exist in that company. And all of those creditors will have like— I don't even need all of them. I just need the big one, which is First Source, because If we then go in and exercise our right as creditor, we can cause the house of cards to fall and then we can scoop up the rest of it for pennies on the dollar.

How many assets, though, secured by that $14 million?

The same that were secured by the $22 million.

Right. But it's not all of their assets. It's just a tranche of the trailers.

$22 million is probably 200, 300 cash trailers, maybe a little more.

Wow. Okay.

And, and then from there, because here's the thing, once you do that, and this is really why, like, restructuring and distressed credit is really like the dark side of finance, because I mean, did you ever read Caesar's Coup? The Coup at Caesar's Palace?

No, that's— I read Barbarians at the Gate, but I didn't read—

Go read The Coup at Caesar's Palace.

Okay.

But restructuring and all this and distress is like the dark side because you can buy debt for pennies on the dollar and then recoup 3 times whatever par value of the original debt was.

Right.

Like, but in this particular circumstance, what we can do is if we were to assume, can assume position of senior secured, like largest senior secured creditor, if we then go in and start threatening to exercise our rights as largest senior secured In effect, we become a bully inside the schoolyard and can bully them. They don't have— they are not in the same position as we are, right? And so we can actually go in and like twist their arms to give us their— like give us their debt and we'll like foreclose, give it to us and we'll operationalize it for you. We could take the— we could basically— there are blanket UCCs in there there are blanket UCCs, and there is enough UCCs, and there's enough debt that if you force a bankruptcy— and Chapter 11 is not going to save you here. Like, Chapter 11 will save him personally, but like, we will— there is a backdoor hostile takeover that now exists at that company. That is the scheme.

Yeah.

Are you shaking your head because you're like, this is never gonna happen, or like you're afraid that this is now what I'm gonna fixate on?

Both.

I do those things.

It's actually a pretty good idea. I'm shaking my head because like, how the fuck Ben got himself into stupid shit into that. And also, first source, like, like what JD was saying, like A lot of this stuff, it just—

look, at the end of the day, what this has taught me as a lesson is that it doesn't matter. It doesn't matter if you're Jeffrey Epstein or Sam Bankman-Fried or Ben Patel or a couple Boy Scouts like the two of us.

Casting a wide net there, brother.

What's that?

You're casting a wide net there.

He's the Boy Scout. He's the boy.

Is if you make your payments, it doesn't matter, right? Yeah. Like, you can do whatever the fuck you want, right? If you make your payments. And as long as you don't get very publicly caught. But even if you get very publicly caught, as long as you're not impacting the payments, right? They have the outs, but they wouldn't take it if they're going to just make their nut. I guess what I'm saying is like, let's get criminal with it, guys. Come on, let's spice it up.

Well, so what's your problem?

Yeah, none of this actually sounds criminal. It just sounds like it requires to get someone on board with doing it. Yeah, this heist, which—

what, the revenge fantasy?

Yeah, I mean, we'd have to find the cash to actually pull this heist off. It's not like we can just buy the debt out. Like, unless you're saying we assume the debt, but I don't know why we would—

like, that's also an option.

But if we assume the debt, then we don't have the ability to do what you're talking about, because if we assume the debt, we are not the debt holder, we are the debt payer. So First Source is still the one. So we would have to buy the debt to exercise these rights, which would require us to come up with cash.

I think that there's a multifaceted spectrum of creditors there and a bunch of different solutions that can be tailored more or less to each of them. But I think the main point of it is like, let's say it was $15 million that we needed to raise, um, in a super co-posture. Oh man, I think that like Michael— so do you know Oaktree? Howard Marks?

Yep.

Like the distressed credit firm?

Yep.

Michael keeps talking about how he wants to bring this Oaktree managing director who's now in his own family office in. So the guy was just a distressed debt, spent his entire career at Oaktree. And he's like, he sent him our stuff. And that guy called and said, what are you doing with this? I want to put some money in, like, let's get into this. Buyers are liars. Michael Elliott wants to bring this person in, and I keep saying, Michael, I don't need that person.

Right.

Like, we don't need money and we don't need more voices in the room. However, if we wanted to go do that, that is right in that guy's wheelhouse.

Yeah.

And that would be so fucking messy. But the upside would be huge. It's 14 against whatever the revenue of that company is, right, against our then cost structure. And it's dirty, but it's cool. Like, you can't deny that it would be an Ocean's Eleven type heist. Like, that's some Barbarians at the Gate shit.

Yeah, well, I mean, that could be pulled off. That would be something truly awesome. Jesus. Well, James, you got the bandwidth?

One thing at a time.

But like, that's right, one thing at a time.

But ultimately, I don't think like the other— the flip side of all of that is that like even if he does restructure, and they're talking about doing a $600K a month for payment for them Ben?

Yeah.

Yeah.

And $600K plus whatever settlement they take with everyone else, that probably takes him to a million dollar a month principal and interest payment.

Geez.

Probably down from like 2-something right now, right? I mean, he was probably at $1 million, $900K to $1 million, $800K to $1 million with just First Source.

Yeah.

Yeah.

So with everyone else, he was probably 1.52. But anyway, like, unless there is some meaningful increase to his revenue, I don't— he's kind of— he might be in the same position as us. Like, the guy is— we're all in the same boat except for Gopin.

So I don't know.

All right. I'm going to go to sleep.

Okay.

I'll answer these questions for Sean.

What's that?

I'll take care of these.

I don't think we ever fully caught up after I sat with Michael for like an hour and a half yesterday.

Yeah.

Very quickly. He does not— I confirmed one, the imposter syndrome piece. Like, he is— he was like, you need to get like a badass CFO. Like, you can't be going— I was like, look, no, you don't. These companies don't need CFOs. And like, why? I was like, Michael, why do you think I need a CFO? Like a really big expense. He's like, well, you can help with banks. Like, in terms of like, I don't need that, right? I just delivered a fucking one of one, like, incredible deal with this bank. And two, I've never gone into a meeting with JD and come out and gotten feedback that like, man, those guys really had no idea what the fuck they're talking about. The commentary is actually always, man, those guys are really sharp. It's a shame that they're stuck in a terrible industry in a dying company, but it is what it is. Anyway, but he does, he's pretty like, I don't know, Michael is Michael, clearly, because even so he was like, you know, you were kind of wishy-washy. I thought we could have really played on the like, we're going to take over live events, we're going to do this. And I was like, yeah, Michael, here's the thing. Every time I've ever like slammed my fist on the table and high conviction on something that requires a third-party transaction to happen after there's this intermediate transaction, everyone runs for the hills, right? Like, that you and I believe it is possible does not matter here. And it was also further to that point that, like, thank— as I was talking to him on whatever, Tuesday or Wednesday, I was like, I will take another pass through this one sheet, but I'm not building a deck. I'm not doing this other shit. Because they couldn't even look at it, right? They could not touch it, right? And so there's that. And then I explained to him the governance thing. He wants in, like, he might want like some pre-transaction option price. And so there was a conversation around like putting a value on the company today and being able to maybe have some type of option thing like around that, but like Sure. Like if a deal happens here, like whatever, but like, okay.

Yeah. Put your money where your mouth is.

I mean, oh, but the funny thing about that is that we could, again, we've always had that Huck Finn opportunity there with the Nelson stake from last year.

That's true.

Which kills a lot of birds with a single stone. So, yeah, um, but he's scared about being in there with Greg, and I was like, just buy Greg.

Yeah, like I said, he could get what percentage of— so I just did the— hold on. If you take that 20%, that pref B and Greg's stake.

I'd still, I still want to take a piece of that pref B. Like, I do still think there's a conversation. Look, at the end of the day, I'm not focused on the I'm not focused on the third-party or capital solution piece of this yet. I'm more focused on that. We will need it, and I think he can be helpful there.

Um, he could get just over 20% of MT Studio services by buying the PrefB and Gregscape.

I know, but I want that.

Like, well, you can cut a deal with him where he gives you a 20% finder's fee. Get yourself a cool 2.6%.

Man, oh man. Okay. I'm trying to think beyond that. I guess like the thought yesterday was there is no reason for Victor to say no to allowing us to work together, right? But I don't know that they would be okay with some two-sided— I don't know that they're gonna be okay with, like, there's enough— there's a world where we just landed ADC, the mandate. Instead of like a middleman advisory broker type thing where because they have this other conversation going, they'd rather just ADC deal with all of it instead of them just working with us exclusively.

Right.

And potentially going and trying to bring more buyers or groups in.

Right.

Right. Because their money is best. They're going to make the most money. Advising HPP on how to get the best offer, not by middleman-ing for us, right?

Yes, but there's a world where, I mean, like, look, at the end of the day, it's the how hungry is the, I guess, how duplicitous, I guess, is the investment, is that dude? Because Michael brought him a lot of business over the years.

Right.

And they probably cleared 5 to 10 on DOD alone.

Right.

So it would be interesting to see where he— where this lands based off of where he thinks his bread is buttered. But we should know within the next few days.

Okay.

Hopefully by Monday.

Yeah.

All right, all right, thanks guys.

Get some sleep. See you guys. Bye.