Transcript
Speaker 2 Scott
Hey, Jimmy.
Speaker 1 Jim
Hey Scotty, how are you doing?
Speaker 2 Scott
Risk and risk allocation and and and so obviously you know kind of you I've told you where I'm at relative to the you know, Pleasant Valley. I'm sort of I'm at the limit of the amount that I can do there. You know it's at about a million right now and so I'm trying to figure out a way to. Solve that as sort of project 1. And as I've said before, there's kind of three different ways there is sell the company, you know, land enough deals to continue making the payments or something that we do together. So. So in terms of you know the selling the Company 1 you know with the Trump tariffs and everything that's hit. Effectively, until that resolves itself, half of our business is on hold. So I'm like, OK. That's really not an option. We have a number of larger deals that are in the hopper that if we can close them this year, then that could go a long way toward getting back on schedule and catching up in those types of things. So I'm I'm pursuing that lane and then the 3rd lane is relative to the to the chariot. So you know, might as well, you know, put out the. Kind of quote UN quote, bad news. First, you know I'm not going to be able to make any more payments unless one of those things happen. And you know, so it's just pure, you know, probably not not not able to make it happen and and so from a you know solution standpoint I've been kind of racking my brain what's the best way that we can. Try and get this back to win win for everybody and so that that's kind of the the backdrop and and I know. We traded some emails back and forth, that sort of links them. That says hey, unless you get current with that, we're not going to move forward here. I don't have an ability to do that. So if that's where you land then then then that's where you land. But where my my solution is is when I look at tartar and I look at them specifically and. How they continue to have significant interest, what we don't want.
Speaker 1 Jim
Yeah. Wait just a second. So you're So what you're saying is?
Speaker 2 Scott
Well. Yep.
Speaker 1 Jim
That without the chariot sale, you wouldn't be able to. You wouldn't be able to make any more payments. Is that what you're saying just to?
Speaker 2 Scott
No or without things coming in on northbound. Yeah. Yeah, it's it's. It's one one of one of those two things, you know, has to happen, you know. Yeah.
Speaker 1 Jim
Something. Did you? Did you? Do you know that before we close this deal?
Speaker 2 Scott
Yeah, yeah. In fact, we had had discussed that and and I had said, you know, hey, I don't have the ability to do. This all you know, but you know, we had said, hey, let's do it and I'll try and do as best I can and you know, and then the, you know, the third option that sort of could be out there is trying to raise more debt on my side. But the debt that I generally raise comes from deals that I get done right. It's. I closed a $20 million deal. Now you have $20 million. Give me 250,000. You know those types of things. So yeah. So so when when you know? Yeah.
Speaker 1 Jim
That.
Speaker 2 Scott
Yeah.
Speaker 1 Jim
No, I know that, but that that. But that's why we you know that's why we. You know won't enable you to make the down payment in 4-4 payments. We enabled you to assume the mortgage payment and we, you know, gave it a no interest payments on the rest of the balance that was that was our way of trying to help that along. You know. So I understand what you're saying. But that's what we did to help you with that, you know.
Speaker 2
Yeah, yeah, totally. We we created the deal that could fit within the structure that we and the ability that we had, right. I mean, if I'd had the capital to do it all in one thing, I would have just done it like I'd be, you know, we have saved a ton of legal fees, a ton of complicated structures. I wouldn't have had to bring in investors. You know, all all of those different you know.
Speaker 1 Jim
No.
Speaker 2 Scott
Types of things, so you know, so yeah.
Speaker 1 Jim
But.
Speaker 2 Scott
And I'm not saying that you we we both kind of bent to try and make this thing sort of work and and you know and and you bent a lot to try and say hey how can I you know make this work and and I bent to try and make it work and and frankly was like OK. You know, you know, with, you know, with things that have happened, there's only so much I can bend before. It's like, OK, I I just can't go any further and that and that's kind of the limit of. Where I'm at, you know, yeah.
Speaker 1 Jim
I understand, but you know, but you understand that the payments are the lifeblood of our existence and that, you know, and the. Need it for the sale of the property and our assets. So that's really very important. You know for our, for our survival and our our home and our you know and our well-being. So, OK, alright. So let's let's go on then.
Speaker 2 Scott
Critical critical. Yeah. Yeah, and and and I and I totally totally you know like that you know that though you know just to emphasize that absolutely if I can you know continue to get one of those three things to happen or 4 things I want to get right back on the schedule do the catch up. All of that so. The intent hasn't changed. The ability has changed due to factors that have changed over the last year and a half. You know, in, in, in my situation in my business. But yeah, you know, but I I totally understand you know that right now this is you know, lose lose, right? This is not benefiting you at all. And and and we need to get we need to figure out a way to get those back on track. You know that that that is the way I'm looking at it. Yeah. So when I think about the chariot, I think there's a, you know, and I come back to. This concept of risk. Uh, there is a risk in moving forward and then there's a risk in not moving forward and what I think what I'm thinking of is how can we get the other party to bear the risk so that we don't have to bear risk. When I say we, I mean Jim and Scott, you know and so the the ideas that I've been thinking about is, hey. If they believe in this to the level that they do, which you know, Doug is continuing to say that they do, they are the people that should pay the most because they have the widest distribution network. They can instantly roll the product out. So what I've been thinking in my head is. OK. If we were to structure something, first of all, the step one is they haven't. They've signed an NDA, but they haven't signed a non circumvent. So and do you remember what the difference between the two of those is? I think you do. But I just want to make sure.
And then the second part of it is one of the concerns that I am, I'm not trying to put concerns in your head, but I'm just saying, if I were you is, I'd say well, wait a minute. If Scott was pause the payments one time, I want to make sure that he doesn't pause the payments again. One of the problems we have or I have right now. Is that because? And again, I'm not trying to religiously history, but my envisionment was we are going to be in a partnership in an entity and that would allow me to qualify for capital gains tax on any of the monies that I received. So right now if I just get things as a sales Commission, I have to pay ordinary income tax on that. So I pay 40% in taxes. Rather than 20%, so literally it's like, you know if instead of if, if, if, if I get $100,000, I only end up with 60 rather than 80, which seems kind of. Manipulus. So the second part of the idea would be is if we move the the the tractor chariot asset into where my part of the fees comes into Pleasant Valley directly then that money can then be used to filter out to you directly so that we know that the. Value of the tractor charity at the economics of that at a minimum, is covering that $200,000 a year first, right? That's when I say 200, I mean 180 or whatever the 15,000 a month. So that way then they're they're probably and I haven't gone to a tax accountant on it, but I think this would be the way that it would flow is that if that money flows into there, then we can deduct, then it's now an operating entity. Cause I met with your tax person, can't remember her name. Yeah. Lisa. Lisa. Yeah. I was going to say Lynn. Yeah.
Speaker 1 Jim
Where, where, where are all the NDA's stored now? See. So. So did you did you send tarter that the message? That to inform them that we're converting this to. A. From a licensing deal to a patent sale deal, remember I asked you to send to them? Could they? Did they get? Did they get that?
Speaker 2 Scott
Yeah, yeah. Yeah. Yeah, no, I didn't send it to tartar directly because Doug has asked me to work through him because he brought in the relationship, but I told them that I told Doug the exact message that you told me and said we are not interested in a licensing deal. We're interested in a sale. They confirm back. That they only want to do a sale as well, so we are everybody's in a sale mode, there is no licensing mode, but they they're not going to pay for it all in one payment. The payment structure is going to be over time and it might be variable to how many units you know are sold. So that everybody can win together, but everybody is sale mode and and and and and one and what? Yeah. And what he got back was that that works for them and more importantly they.
Speaker 1 Jim
So they know they know, yeah.
Speaker 2 Scott
Don't you know there's no obligation on you after the sale, or very limited? So you know, if we can get to commercial terms with them then it's you know, they've got the manufacturing, they've got the, they've got kind of everything that we want. They don't you know you know you know from that side of things.
Speaker 1 Jim
Where are all those NDA's stored, you know?
Speaker 2 Scott
Yeah. So Zach would have all of those and. I'm. I'm sure there's somewhere on a, you know, on a Google Drive somewhere in a folder I I don't know where they are, but he knows where he's saved all of them.
Speaker 1 Jim
So I I haven't, you know, I haven't talked to anybody. I haven't talked to Doug or Zach, you know, for quite some time or hardly ever. Would you mind if I ask Zach to? For that information. And those NBA's I need to.
Speaker 2 Scott
Let let let me let me do it just because we're in a in a bit of an odd I can have it over to you. He'll do it right away. It's not not that, but we're in a bit of an odd situation because we haven't agreed on how we're going to treat Zach. And so I've been trying to really minimize you. Know just being, yeah.
Speaker 2 Scott
That's.
Speaker 1 Jim
Yeah, I I should have all those, or at least access to where those NDA's. So I can read them look. At them, make sure they're.
Speaker 2 Scott
Yeah. Yeah, exactly. Yeah, yeah.
Speaker 1 Jim
That were that were covered. So. You know.
Speaker 2 Scott
I'm just gonna while you're thinking of that, let me just write a note down so I don't forget that I'll make. Sure that he gets him over to you.
Speaker 1 Jim
OK. That.
Speaker 2 Scott
OK, go ahead.
Speaker 1 Jim
So if if the sale you know still is a big question whether or not the deal will go through, so if they don't go through. You know, if they still doesn't go through, then we're kind of back to square one. Are we really we're kind of in a jam. We're we're, we're we're still in a jam. If the if the if this deal doesn't go through. So. So I think there's a few you know this next couple of weeks we have to do a few things. We haven't got it you know so and we could do. I think they'll go. It can go smoothly if you work. We work together through it. But I think we have to. We'll have to get you the notice and I'll do it myself. You know the default notice have to get you that just so that's documented. And and then I think we need a Members meeting, I think within the next two weeks, I'd like to have a Members. Meeting with the four of us. I think it's appropriate things to do so that we all we're all on the same page and we. You know, we take the next steps is I don't know. I'm not sure if Julie is informed at this point of anything, but she's a voting member, so we have to. We have to, you know, it's part of the obligation of the LLC to to to the include all the Members and have a meeting. So I'd like to, if we can do it as a zoom or we can do it here, we could meet somewhere, whatever, but that's in order to do so. I guess at this point, I should. You know, let me let me talk to Sandy and go through your proposal with this thing and come up with questions. I'm sure I'm going to have questions for you. It'll mostly be like risk analysis, quite type questions about working with tartar. And and before you, you know again, don't don't go forward with any, you know spreadsheets or anything or figuring out that but. I don't want you to put, you know. Ton of effort into anything right now until we're on the same page but. You know it is a path it it is a possible path. So we got to explore it. But I I think we should, you know set a goal of you know knowing where we stand here in the next couple of weeks. You know they're anxious to know what's going on, right.
Speaker 1 Jim
I'll, I'll say I'll. I'll. I'll. I'll throw out a couple of dates and see if they work for you guys and you let me know for a for a members meeting, probably wouldn't be this week, probably next week if that's OK.
Speaker 2 Scott
Yeah. And and frankly, I kind of want to know where we're going at with the chariot. And if you're kind of saying, hey, I don't want to do that, you know, and kind of create a structure of the the Members meeting and all of those things. Jim, I think I've been kind of clear where I'm at. And you know, and and and I and I'm trying to figure out a way to to work this, but what I don't want to keep doing is the same thing that we've been doing and and and I, you know and and and that's and that's what I'm kind of feeling you know is that you know I understand totally where your position is. I understand the the level of risk that, that, that, that I've borne. I understand the level of risk that you're. I I think we have an opportunity here. I you know I want to communicate that to you, you know and and I kind of want to understand but if these things are going to be linked then then let's just pass on the chariot because I'm not going to go down the road where we're going to link the. Putting things together and if you.
Speaker 1 Jim
I I don't. I don't want to link them either. I don't want to link them either. I think it's an opportunity, but the the LLC stands on its own, so I you know, that's the the meeting will be about the LC, OK.
Speaker 1 Jim
I think at this point, you know, we we should stay flexible, but I think we have to work through the the process, OK, so we we. We have to. We have to have the meeting. And we have to have the and I have to send you the the default notice. Now that I have to do things, you know, I'm and I'm doing it without legal, OK. I'm doing it myself. So we don't. If we can avoid getting the, you know, going legal with this, we'll both be better off. So I'm giving you that courtesy and I hope you understand that that we think we think we can work through it. We think we can work through all this, so that that I think that's the first shot.
Speaker 2 Scott
Well. Yeah, I. Mean can't?
Speaker 1 Jim
So let's do it that way and we're just to put you. You gave me your presentation on tartar, and on this deal, and I'm taking it seriously. I'm taking this and I'm trying to understand what that deal would be, and I'll I'll review this and I'll look at the, you know, I may come back with questions for you, but that's I'm not. I'm not turning off anything at this. This point OK, so.
Speaker 2 Scott
Well, yeah, but you you, you know, just you, you were the person that kind of went legal, right. So I was sort of like, you know, with when you went to Rick and you said Rick said this and.
Speaker 1 Jim
Where did I? Where did I go legal? I'm just consulting to understand what's going on. I'm talking to you. I'm talking to you right now instead of having Rick talk to you. OK. So. So let's keep it communicating.
Speaker 2 Scott
Yeah. But, but I mean, but he he kind. Of gave you. Yeah.
Speaker 1 Jim
Right, but I need to consult just the way you need to consult. So we both have that that right to do that and it and the and the requirement to do that we have to know where we stand. But I I'm interested in working through this and we'll. But we need to just do this step by step, all right.
Speaker 2 Scott
Yeah. I didn't mean that. You shouldn't be able to. You went to him, though, and he gave you, in my opinion, inaccurate and incorrect information. Right. And and and. And so, you know, you know, he he said things like I'm personally obligated for it. None of that is true.
Speaker 1 Jim
Well, I think he wasn't specific on what you're personally guaranteed for. OK, so don't don't overreact to that. You know, that was just.
Speaker 2 Scott
Well, but you know, it's obviously it was a. It was it. Was a pretty weird notice to get. You know that you know that from. From my perspective, it's like well, wait a minute here. Does this mean you know that that they're going to try and come after me and my personal assets because that's what it, that's what it read, you know? And I'm like.
Speaker 1 Jim
Well, I think you're personally guaranteed for a few things like the mortgage and things like that. I think you know.
Speaker 2 Scott
Well. That. That's it. You know that that. That's it. But you know it.
Speaker 2 Scott
Yeah, and and and from my perspective, I I just I you know I I I had an idea to you about the chariot. I wanna understand where you're at regarding that. So I'm not linking them to the to the Pleasant Valley. And all of those things send what you need to send to on that. But I'm not going to. I'm. I'm not gonna, you know, schedule things on that side. I wanna understand where we're at with the chariot because it it we owe it to. To Doug and, and if you're telling me it's going to take another two weeks to have an answer on that and you're going to link it to a default notice in a members meeting, then to me it just means we're not going to get there and but I'll let you take the next step, but I'm not going to have them linked. I want to have a conversation with you. You've heard my ideas on the chariot. I want to have a conversation with you regarding the chariot. Do you want to move forward together? I think it's a. Great thing to do. You're going to end up with the bulk of the economics from it. The way that I've mentioned it. And I want to know what you want to do on that side. And and specifically, I want to understand is if you're going to make it a requirement, I need to, you know, understand if that is going to be a requirement that they have to come there. I want to know that early. Because I I don't wanna go down a process that's just gonna lead to a no, it's just gonna waste your time and it's gonna waste my time. We have an incredible buyer at the.
Speaker 2 Scott
Table.
Speaker 1 Jim
Yeah, well, I can't commit to anything right now on that site.
Speaker 2 Scott
Exactly. So Nope. So I'm just saying, when when you get back to me, just you take the time and and then you come back to.
Speaker 1 Jim
And so.
Speaker 2 Scott
Me on what you want to do on the chariot. Yeah, I'm not expecting an answer now, but I'm just saying I I, I, I I don't want them linked and I just want to understand where are you at relative to to the chariot. And you take the time that you need and I'm I'll answer any question that you have regarding the process and and anything that you recommend that you want to do. I can be a conduit and I and I just want to get to an answer of whether or not we think we we have any chance of getting to a deal on the chariot or not. And if we don't, then you know, then I understand. But I just I I you know, I just want you to let me know where you're at regarding that.
Speaker 1 Jim
And and. We'll have the member meeting. We'll have the members meeting regardless.
Speaker 2 Scott
I'm not going to make the Members meeting contingent contingency so.
Speaker 1 Jim
Well, it sounds like you're it sounds like you're making it contingent the the the chariot is its own separate opportunity. The member, the LLC is a is a functioning LLC or or non functioning, but it's an L It's an LLC and it requires a. That I call a Members meeting so that we're we're we're all clear on the on the on the LLC and we make decisions as the four of us. So that's that is A and so that doesn't have any to do with the the chariot it's a members meeting and.
Speaker 2 Scott
Right. But but you you you were saying?
Speaker 1 Jim
It would, it would behoove us all to have a members meeting and. And be clear about where we're at as far as the LLC is concerned, the chariot is a separate issue. And so I'm asking for the I'm asking for the Members meeting. If you don't want the Members meeting, then tell me that so.
Speaker 2 Scott
Yeah, I'll, I'll, I'll take. I'll take a look at it. I I I was expecting us that we were going to talk about the chariot. I'll take a look at the.
Speaker 1 Jim
We did, we did. We did talk about the charity. Now I'm requesting a members.
Speaker 2 Scott
Right, no, but but but but. Yeah, and I'll.
Speaker 1 Jim
For the health that. You're that you're a member of.
Speaker 2 Scott
Right.
Speaker 1 Jim
So if you if you don't want to do the Members meeting, tell me that too. So I'll send out the notices and then you say it. I want to participate or I don't want to participate. If you don't participate, it will escalate things. So that's these are decisions you have to make, Scott. So I hope you make them, you know. For everyone's benefit. No, no, because it's deep.
Speaker 2 Scott
Yeah. No, I mean, you know, again, I'm, I'll take a look at what the you know what the requirements are on that side. You know, I'm I I'm I'm not. I'm not going to feel pressured at all. I I'm not going to pressure you at all. I'm not going to feel pressured at all by any of this. I'm I'm.
Speaker 1 Jim
They have a members meeting as pressure.
Speaker 2 Scott
No, no meaning. I'm just, you know, you said, hey, our things will escalate. You said well things will escalate.
Speaker 2 Scott
Well.
Speaker 1 Jim
If we don't have a members meeting. Then you're denying that that, that, that opportunity to have a a formal Members meeting, which is a core required which is necessary in an LLC. And I'm the I'm the manager of the LLC and it's my right and requirement to call for a members meeting. So that all the Members. Our our attend that meeting and and communicate. Where we're at and.
Speaker 2 Scott
Yeah, I'll. I'll take a look at. I'll take a look at that. What I'm reacting to is I'm reacting to. There was an S from my perspective. I'm not saying that you were wrong. I'm just. Saying how it. Was received OK from my perspective. OK, what I received, you know, was. A A I consulted with a lawyer and and that lawyer said. I have personal obligations, you know? And and I didn't react well to that. And and and. I'm not reacting well to this either. For that reason, I've done what I can do to help you. I want to do everything that I can to continue to help the both of you. But I'm not going to. Feel an ounce? Of pressure when I when. I got that notice the. The world changed for me and I was like ohh. OK I I am going to. I am going to be risk averse now as well and and and I'm going to I'm going to do the things in the way that I think that they need to be done. I will happily look at the LLC requirements and make sure that we're fulfilling that you know. And you know that side of things I I can't commit to that right now because I need to, you know, read it.
Speaker 1 Jim
What about having? Members media.
Speaker 2 Scott
Yeah, I I don't know when. I don't know what the requirements are on that. I don't know if it's annual. I don't know when it is, you know.
Speaker 1 Jim
It's when it's when I I'm calling for it, so I'm officially calling for.
Speaker 2 Scott
But you you've said that to me. Now I'm going to read the document and I'll and I'll come back to you on that. But when you said to me if you you, you just said to me if we don't do that things are.
Speaker 1 Jim
OK about that.
Speaker 2 Scott
Going to escalate and I'm like.
Speaker 1 Jim
Well, I have to have. I have to have. I have to have a meeting with all of us. If so, that we're all clear, we all have to be clear about. So. So again, the choice is yours. I'm done talking about it now. So you just do whatever you want to do.
Speaker 2 Scott
And and and and and and and and again.
Speaker 1 Jim
And we will we we will handle that on our side as well this you know this is our, this is our life and our our our ability to survive. So we will we I'm offering you the opportunity. To communicate together and that's up to you to decide, OK.
Speaker 2 Scott
Yeah, yeah, and and I'm happy to communicate with you. And I am also saying to you, I want to understand where we're at with the chariot, and I want to understand where we're at and and. And I. And I don't want that sort of, hey, I'm not going to move forward on the chariot until I have my members meeting. You know, and I'm so.
Speaker 1 Jim
Absolutely. I'm not moving. I'm. I just wanted to hear what you had to say about your plan. The next step is the members meeting and then we'll go back to the chair if that. If we work through the Members meeting successfully. So, so and and I'm not waiting.
Speaker 2 Scott
Yeah, and and and. Yeah, and and that's what I mean, you're linking that, that's what I mean by you're linking them.
Speaker 1 Jim
That's that. That is no linkage. You're trying to link the two together. You're asking for a decision on the chariot before the members meeting. You're linking it. I'm just listening to what you had to say. There are lots of different things I have to consider, but that's one of them. Is that the next step is to miss. I did you the courtesy to listen to your your proposal for the for, for the for, for the chariot. Now give me the courtesy to have the Members meeting. That's next. OK. All right. OK. And that I would appreciate if you would do that, it would behoove us all.
Speaker 2 Scott
My perspective is that that is linking them and so I'll think about that because I don't think it's not that you're you're essentially saying I'm not going to move forward on the chariot until I have a meeting.
Speaker 1 Jim
No, I'm not. Well, I'm saying that the next step is the meeting. And that and and I'm there's no way I'm going to commit to that the the chair. Get prior to the meeting you're trying to link the two together.
Speaker 2 Scott
That's what I mean. That that's what. That's why they feel.
Speaker 1 Jim
Not that's not linkage. That's your linking. Well, that's disappointing. And that's your, that's.
Speaker 2 Scott
Linked to me. Well, I just let me. I'm just literally confused because let's just say that we hadn't done the Pleasant Valley. If we hadn't done Pleasant Valley, we would make the decision on the chariot based on what the decision on the on the chariot is that that's no linkage.
Speaker 1 Jim
There's nothing.
Speaker 2 Scott
Right. If we if we've never done Pleasant Valley and all I was was the salesperson for the chariot, then we would.
Speaker 1 Jim
That's back. I'm sorry. That's backwards. That's backwards. This chair it stands on its own. That's it's its own decision, with or without the the the legacy. So right now.
Speaker 2 Scott
So imagine we never did the legacy. It's like the legacy never was done.
Speaker 1 Jim
If you're asking me to commit on the. Sure, it prior to solidifying the the the legacy agreement then with the with the meeting that's backwards. OK, all right, I understand your position. OK, we disagree. We disagree. We disagree. You know, I still love you. So you know, that's it. I'm done. OK.
Speaker 2 Scott
Yeah, yeah, yeah, yeah. Yeah, yeah. No. And I and and I love you guys. You know as well. And I and I came here because I wanna offer a solution that can help us win win and you know, and and and and even if we don't do something on the chariot, if I can turn the things that I say. Before I, I understand the importance of this to you. That's why I did it in the. 1st place you know? Yeah.
Speaker 1 Jim
We have to, we have to. We have to, we have to solidify that exactly. I agree. I agree. OK. All right. Thanks. OK, bye. Bye.
Speaker 2 Scott
Yeah, yeah. And and yeah, so, OK, I'll come back. Yeah. Yeah. Bye, bye.