My name is Marcus Lemonis and i fix failing businesses. You would never be able to pay off that debt. I make tough decisions. You know, youre causing strife right now. And i back them up with my own cash. Will you take a credit card . Its not always pretty. We dont like the fact that you can say no. Go stand in the corner and shut the [bleep] up. But this is business. I want you to think before you talk. Are we clear . I do it to save jobs and i do it to make money. Thanks for your business. This the profit. [upbeat music] skullduggery is a toy manufacturer located in anaheim, california. Purchased as a fossil replicamaker in 1987 by pete koehl iii, skullduggery is now run by his two sons, steve. We got to make sure we make this fast enough, okay . And peter. They wont be ready to ship till tomorrow. Who have expanded the company into more traditional toys, such as race cars, helicopters, and cast and paint kits. [laughs] although skullduggery racked up 1. 6 million worth of sales, they still showed a net loss of 50,000. Thats a big loss. And although the brothers are spending a lot of time and money launching new toys, they still do it without testing and research. Its more like we come up with something that we think is fun and then we go with that. If skullduggery doesnt find a way to generate sales. I mean, i dont know how were gonna come out with a new line of products. And get into a big box retailer, the debt is gonna come crashing down on them. Its my [bleep] life. I love this company. So were gettin to the point where were gonna have to scramble. [sighs] the toy business is very competitive, but its not complicated. With the proper marketing and strategy in place, i know i can make millions. [forklift beeping] careful there, buddy. [laughter] how are you . Im marcus. Marcus, im peter. Peter . How are you . Nice to meet you. Nice to meet you also. Warehouse is big. Yeah. 10,000 square feet, if you include the offices. And so what is your role here . Im the vice president. I am in charge of operations, logistics. Marcus, im steve. Nice to meet you. Nice to meet you too. Steven, my brother, the president. Im the boss. Okay. Im in charge of the company. I run the everyday business. Ive designed pretty much everythingscience kits, skulls, race cars, race sets. I wear many hats. And so when did the Company Start . 1987. My dad, hes the majority owner, was looking for a business to purchase. That was when it was all fossil replicas, so we hadnt gotten into the toy part of it yet. All of this stuff. Both yes. Thats where skullduggery comes from. We make sabertoothed tiger skulls, humans, hominids, primatesmuseumquality replicas. I was wondering where the name came from. Both yes. cause its not so toyfriendly. No. And so the skull line that you were telling me the business started with, what percentage of the business is skull business . Less than 10 . And so why are you guys still in it . We like to keep our guys busy in the slow season. I would love to see all the toys. Is there a way i can see them . Yeah, let me take you into the office. Okay. Ill give you a quick breakdown and then well give you a tour of the factory. Okay. The first toy that we ever came out with, casting kits. So casting came from the skull business. So the kids take the material, mix it up with water, pour it in the molds, sets in 30 minutes, airdries, and then they paint the pieces. It takes that Moldmaking Technology that we have and puts it into a toy. Casting and painting molded shapes isnt my idea of a hit toy. We have the marble copter, the max traxxx, and then the new tracer racers right here, which is our hottest item. Kind of taking racing with a track and cars to the next level. Its a car with two purple l. E. D. Lights in it. And when they go over the glowinthedark track, they leave traces on the track. I mean, its really cool. Very cool. Can i see how the car works . Yes. Is there somewhere we can test it . On the track . Sure. Yeah. Turn the lights off, pete. I came up with a Patent Pending where the tracks connect sidebyside so the kids could race. Cool. Isnt that neat . I love this product. Its pretty awesome. Very cool. Whats your favorite toy in the whole place . The aero flixx are awesome. This is a discthrowing game, kind of like disc golf, and when you hit the targets, they shoot up in the air, so the kids could play frisbee golf. Its in market today . Itswe went to toys r us last year. Uhhuh. It didnt do very well at market. I know, yeah. How come . Um, were not sure. It just didnt sell, and i know its a winner. All i essentially do is there you go, you got it. [laughs] [laughs] we wanted it to be somewhat challenging, you know . Almost got it. Well, i dont get this game. Its not fun. Theres no kid that wants to throw cardboard paper at a cardboard target. What research do you do to understand the market before you just make an aero flixx . Do you do any . Not really. Is this focus grouped with kids . Whathow do you both no. Does that mean that youre the focus group . I dont need a focus group. I have a lot of experience in this business, so my focus group is about 20 years of just toys. And so who do you normally sell your toys to, major retailers . Independent retailers, momandpoptype places. Okay. Which is a shrinking business, and that is one of the reasons that we really feel we need to get into some big box retailers. What marketing do you do . Tv . We do not run anything on tv. You know . Youre talkin about a lot of capital. Okay, so i think that the key to this business in a very crowded toy space, where youre trying to get attention, is a licensing play, because thats whats gonna get some interest from these big box stores. The reason that licensing deals work is because you build on the brand that somebody else spends money on. You take the tracer racer, which is virtually unknown, and you slap that nascar sticker on it and you got a builtin fan base. Then you dont have to double spend and try to create your own brand. Can i see where the Assembly Line is . Yeah. Absolutely. [upbeat music] who manufactures this . Its called jb plastics. They are a injectionmold company over here in tustin. What does it cost to make this . That costs us about 1. 19 to make. Including the packaging . Including all our labor, including the packaging and everything. How good is your margin on that . 12 cents. These cars are a great toy, but theyre only make 10 margin on em. Thats way too low. How many do they make at once . On one cycle, its four pieces. Okay. So the machine spits in the material, pops open, four pieces pop out. Plastic manufacturing costs are all about time and efficiency because youre essentially renting the manufacturers equipment. The more you can make in a single run, the lower your cost. If you lower your costs, you have better margins. Better margins, more profit. I think you can take 10 out of this cost, cause in this game, pennies count. So when you guys come up with ideas to launch a new toy, whats the process . And well use the track as just an example. It takes quite a while. I mean, you have to come up with a prototype, so we have to outsource the sculpting, and our sculptors actually in new jersey. It takes a couple weeks for him to sculpt a piece. Oh. Yes, and then it keeps goin back and forth until we get the right angles, make sure the connectors fit. That seems super inefficient. It is super inefficient. And i worry about it, in a business like this, or any business, is if im not quick, who beats me to the market . And theyre there before we are. I think thats the achilles heel of this business is you got to be first. Well, how are the financials of the business . We had a little bit of a down year this year. Sales are down. Sales are down. From what to what . 1. 6 to 1. 45. Whoa, thats almost 10 drop. Both right. Were gonna have a bit of a loss this year. How much do you think youre gonna lose this year . Well, i think were gonna be around 50,000dollar loss. And then how much debt is in the business . Its about 800,000. Okay. How did you accumulate the debt . I think itsover 30 years, its just kind of creeped up on us. You know, umyou know, weve tried things and they havent worked, and mistakes. Mistakes, yeah. Definitely mistakes. How much total inventory is in this warehouse . About 365,000. And how much of it is aero flixx . Thats probably 60. 60,000 in aero flixx . Probably somewhere around there. We kind of went over the top when we got into toys r us with that, and we thought that it was gonna fly out the door. And thats part of the reason for the debt that we have. You know, being able to survive a 60,000dollar hit is tough for a business our size. What keeps you guys up at night . I dont know. I sleep really well. Yeah . I love my job. To be honest with you, you know, its a 1. 6 milliondollar business and it doesnt make any money. Mmhmm. Right. So it should keep you up at night. The fact that it doesnt keep you up at night freaks me out a little. How about you . Ive put half my life into this thing. I mean, i took a second mortgage out on my house for skullduggery. Its aover 200,000 more in debt than it should be. Why do you sleep at night . [laughing] id love to see the books and make sure everything checks out. All right. Of course. Weve put together somethin for you. This is all the debt. So i have it broken down. If you take all the debt together, including the family debt, thats the debt right there. So, peter, this is you, 224 . Yes, thats me. You have about a 1. 1 million of debt in total, not 800, and you have another 200,000 in payables. So between payables and debt, theres 1. 3 million. And how much is there in inventory . 360 . 360. Of which ill put 330 on it, cause i think some of its not good, and then receivables are 474 . So thats 770 in assets and 1. 3 million in debt. Why should somebody invest in this business as opposed to another toy business . What makes you guys unique . I think the infrastructures herei think we are organized, we know what were doing. Were very efficient with what we do. Were entrepreneurs, and we are ready to take that next step. So, the way i should think about it is that this is one step better than a startup because the tooling is there and theres some proprietary knowledge about the toy space . Right. Skullduggery seems like a good company. Theyre hurting themselves by putting their valuable resources into bad toys, like casting molds and disc games. If i can get them to focus on their core products, like cars, and license a big name, we can make millions. I came here because i like the toy business, and its fun. It makes people smile. But this company is about 1. 1 million in debt, and based on the earnings, youve lost anywhere between 30,000 and 50,000 for the last couple of years. You would never be able to pay off that debt. I think the other challenges is understanding where your revenue comes from and getting very focused on a set number of things, as opposed to being all over the place. From now on, i dont want to focus on anything but cars. I think you believe in the whole car model. It doesnt work without licensing, because as i go through that aisle, im not paying attention if i dont see a brand name that i know. Okay. So im gonna want to license everything, because i think thats how it stands out on the shelf. And i want the company to be as debtfree as possible, but i think that the amount of equity im gonna want is gonna be its gonna be painful for you guys. We both have gone over this. We all played you and asked questions we thought you would ask. [laughing] im Marcus Lemonis. [laughter] thats gonna cost you. [laughs] so heres the deal. My offer is, uh. Ill pay off the 1. 1 million of debt and ill provide another Million Dollars in a working capital line, and i want 50 of the business. No. Thats not gonna happen. Why not . cause were not gonna give you controlling interest of our company. Why is that . Because its part of who we are. Skullduggery is me. I am skullduggery. Its my company. Its our company, you know . Its not your company. You didnt spend 25 years building this company. So 1. 6 million in revenue, youve got no cash in the bank, and you lose money. And you think giving up half of the business is a bad deal . Youre asking for our whole life. Youre asking for everything that ive ever worked for. Yeah, i mean, it feels like a punch in the gut. I just offered to wipe out a Million Dollars worth of debt and then give you another Million Dollars in working capital, and youre acting insulted about it . I am insulted. And you think that i just pulled it out of my ass . You can pull whatever you want out of your ass. You have the money. Id rather be in more debt than have you running my company. Should we get the [bleep] out of here . Coming up. The, uh, aero flixx, it was kind of confusing. Can you read . And later. Were gonna pitch on licensing the nascar brand on one of our toys. I could give a [bleep] about nascar, to tell you the truth. When it comes to scent, helens motto is, the more the better. So, when she tried new gain scent blast detergent,. She loved it. Her son loves it, and her husband loves it, too. And the delivery woman . Awkward. Gain scent blast. Its our most intense scent. In matching fabric softener and scent beads too. Some things are too important to do yourself. Get customized security with 24 7 monitoring from xfinity home. Awarded the best professionally installed system by cnet. Simple. Easy. Awesome. Call, click or visit a store today. Id rather be in more debt than have you running my company. Should we get the [bleep] out of here . He wants half our business. I mean, we just cant do that. Its not worth it. It doesnt make sense. 25 is our line in the sand. I mean, its a line in the cement. [knocks] come in. You ready . Yeah. Hey. How you guys doin . Were hangin in there. Sure. Okay, why dont we sit down at the table . These guys are not acting professional. You invite somebody into your business, you ask for help. We sit down for a negotiation. You dont get up, run into the office, and slam the door. And so i wanted to bring them back to the table, kind of coach them through that process. Peter, what thoughts do you have . You know, i came into this whole thing hoping we could do something, but there are certain areas we wont go. We have drawn some lines in the sand. I cant take that offer. Yeah, i mean, to have to take such a reduced percentage of the company would be extremely painful. But you have a business that doesnt make money today. To be debtfree and to have working capital and to have a 10, 15, 20milliondollar business has to be worth something. 20 . No. To tell somebody that if they provide all this stuff, that they will then share in 1 5th of it, its a tough sell to me. I feel like the companys worth more than youre putting your eyes on. I think its worth a lot. Based on todays numbers, you61,000 in profit in 2010. 36,000 loss. 38,000 loss. 127,000 loss. 200,000 in payables. I mean, come on, guys. [sighs] you give me this line in the sand, so the way that i think would be a good compromise for me would be pay off the debt of 1. 1 million, but im not also going to give you a Million Dollars in working capital. All the debt on the Balance Sheet is cleared. Hmm. I want 30 of the business, and thats a test of whether you really are guys who compromise as opposed to everythings going to be a line in the sand. Im down to a much smaller number, one that makes me wildly uncomfortable. Im nervous about having 30 of any business, because that means im not in control, and that makes my investment a lot more vulnerable. So i want to be able to have control over the financial side. In order for me to protect myself, i need to put in some very basic deal points that put in specific controls. You control the creative side, but i possess financial control. Financial control is very simple for me. I dont want you taking on any debt or taking on any other partners without me being okay with it. I think thats fair. What do you think, peter . You want to shake on it . So do we need to run this by your dad . No, i dont think so. He trusts me. He trusts my judgment. If i had to ask him everything i did, then this place would just slow to a halt. Do we have a deal . I feel good about it. This is a 1. 1 million check. I think marcus is lucky to do a deal with skullduggery. We have the most innovative and unique new products out there. Lets do it. We got a deal. Yep, we got a deal. Heres your money. Thank you. Oh, boy. [laughs] its time for a drink. Hey, guys. Were gonna talk as a group. What i wanted to do is get everybody together today so we can talk about what is happening. Peter and steven and myself have made a business deal, and im gonna become an investor and an owner in this business, and a lot of things are gonna change. I focus on people, process, and product. In the case of this business, i think we have good people. I think the process is a little broken. Not only the way we design toys, but the way we bring them to market. In terms of the product, you have some things that make a lot of sense. You have a lot of things that dont make a lot of sense. Were gonna be narrowing our skus down for the ones that do sell. A sku is a common term that describes a singular product or piece of inventory. Right now, skullduggery has way too many skus, and many of them, they dont make any money. Were gonna eliminate the skus the customers dont want, and were gonna get very focused on the ones they dothe cars. Number two, we need to get our foot in the door to the big box retailers. I believe the secret ingredient is licenses, because the consumer ultimately recognizes the brand and the big box retailers see our ability to sell through to the market. Number three, in order to have a successful toy company, you have to have a toy lab. Until now, creating prototypes for skullduggery has been a lengthy and expensive process. So were gonna create a toy lab with the right technology and the right equipment so that the staff can bounce crazy ideas off each other and come up with great caroriented products, whether its racetracks, selfpropelled cars, whatever it may be. And then once we have the prototypes, i actually want to put it in front of a focus group in this lab and get feedback from people. I dont want to just launch things without focus groups and without research. Its bad business. And then the last thing is, were gonna lower the cost of things that we make. Its my expectation that we double or triple this business in the next couple years. Thank you. We have a lot of work. Lets get to work. Guys, how are you . Good. Hows it goin . So i brought you here for a focus group and research. Going forward, before we launch a product, were gonna bring it to kids. Were gonna find out what they like and what their parents like. All right. So lets go inside. Hi, everybody all hi. How are you . Hi. [laughs] all good. This is steven and peter. Now, theyre asking for some help. So what we want you to do is pick something that you think youre gonna like, and then were gonna have you play with it, and then were gonna ask you a bunch of questions. All right . So ready, set, go. So up your alley. Theres two decision makers. Theres the child, then the parent. You got it. Launch it, launch it [laughs] i think its fun, but mom, lookit. If you were in a store, would you buy this . Yes. You guys almost ready . How about you ladies . Well, i played with the aero flixx. It was kind of, like, confusing. Can you read . For somebody whos in the toy business, he needs to learn how to be better with kids. Instead of getting rude with this girl, he should be paying her for her valuable feedback. How about you, big guy . I liked how, like, the cars on the bottom light up. I can play police when it lights up. Thats pretty cool, right . All yeah all right now id like some feedback from the parents. In todays market, theres so many toys that are automatic, and my daughter even mentioned that she wished that it was already put together. These toys seem like theyre already out there. Not the tracer racers. We have a patent on that, and mattelnone of those guys can do that. Steves behavior is totally unacceptable. Thank you very much, folks, for coming today. All these toys, you can take em home. The importance of a focus group is having people tell you if they like your product before you launch it in the marketplace. If they had done it with aero flixx, they would have saved themselves a lot of money. These are the consumers that are going down the aisles. For this company to get profitable, we got to listen. I want these guys to understand, the consumer is telling us one thing. They like our cars, but thats about it. So you have to focus on your core competency, which is cars. We can do a lot better. All right, come on. Lets go. Hey, guys awesome news. I called the head guy at nascar, the chief marketing officer, and we have a meeting. And so were gonna pitch him on licensing the nascar brand on one of our toys. Really . Anytime you can have a chance to take your toy car and partner with somebody like nascar, well, thats a huge opportunity. We want these big box retailers to take us seriously, and this gives us that shot. And those 75 million nascar fans, well, they now become our customer base. We want to talk about getting into retailers, this is a gamechanger. Okay. Um, i think that that is a mistake. Some people would stay away from the nascar name. Why . Every time i go to the shows, they say, no, we dont want anything to do with nascar. I jui mean, its like all almost instantaneous. I tell you, nascars down a bit, and you go into those stores. Go walk into a walmart. How many nascar items do you see in there . Well, heres the two issues that i have. You say that nascars down. There are 75 million nascar fans in this country. Mmhmm. And we know that when people think about cars in this country, they think about nascar. You cant afford a marketing plan that allows us to put the brand on the map. If we dont get a licensing deal, were not gonna get into big box retail. I so if you have another idea other than nascar, i am all ears. I just talked to my toys r us rep about nascar and he says, no. Nothin. They wont even buy it. So were gonna base this whole decision on one company . I dont know, you tell me. 75 Million People across this country know it, whether youre in topeka, kansas, or wherever it may be, every man and every woman has at least heard of nascar, and i want to bank on that. It doesnt matter. It doesnt do anything for me. We have a company here that does 1. 6 million a year, and these guys think that theyre too good for a company like nascar thats worth billions. Im speechless. Thats the person that goes to nascar, that drinks the beer, that does the nascar stuff. I mean i have this weird feeling that you have disdain for nascar and the people that go to the races. I could give a [bleep] about nascar, to tell you the truth. You absolutely embarrassed me. That will never happen again. burke at farmers insurance, we know a thing or two because weve seen a thing or two. Even a ernie lost rubber duckie . burke you mean this one . ernie rubber duckie cookie what about a broken cookie jar . burke again, cookie . cookie yeah. Me bad. grover yoooooow oh what about monsters having accidents . I am okay by the way burke depends. Did you cause the accident, grover . grover cause an accident . Maybe. bert how do you know all this stuff . burke just comes with experience. all muppets yup. We are farmers. Bumpadum, bumbumbumbum if theres gonna be a sticker on it has to mean something. That you got into college. Or crossed the finish line. Eventually. What . That you went someplace worth going. Or maybe. You have opinions. 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I have this weird feeling that you have disdain for nascar and the people that go to the races. I could give a [bleep] about nascar, to tell you the truth. At the end of the day, whether its nascar or the man on the [bleep] moon, what matters is, is that you dont have the money to be on tv, you dont have the money to do print ads, so what i have to do is find the next best thing. And the next best thing is to actually draft off nascars marketing. Drafting is when one car rides behind another and they use the aerodynamics and the wind support of the car in front of them to pull them along. By attaching ourself to a brand like nascar, we gain instant credibility, which will allow us to draft off nascars big brand. I mean, thats free advertising, and that free advertising turns into sales for our company. Now, i need you to not shoot things down before you give them a chance. Were going to new york. You guys are gonna make the presentation. Im gonna help you if you sink, cause im not gonna get embarrassed. [rock music] [beeping] now that we focus grouptested the cars, were gonna laser in on that part of the business, and were gonna get rid of the things that arent selling. Is there anything here thats obsolete . We got some aero flixx stuff up here. Great, so we want to bring that stuff down. Aero flixx is worthless to us. Im gonna sell this stuff at cents on the dollar to turn it into cash. No, no, no, no. You know, youre causin strife right now. Whys that . Ive sold all of this. You just got orders after this stuffs sitting here for years . Wei did. I just got orders for all of it. Just magically, in the last couple of hours, it came together . It did. I got an offer. Bull[bleep]. Steve doesnt want to let go of his prized possession, aero flixx. There is no way he got rid of all that inventory. Tell me why having this stuff sit here and not just throw it out and move on is a good thing . Well, i thinkcause i think i can move that stuff. Well, guess what, steve. Ive already sold it to the dollar store. Its gotime. [groans] [forklift whirring] hey, marcus. Youre from the dollar store . Yes, sir. How you doin . Come on in. Is this the money . Yes, sir. By clearing the inventory, we have generated over 70,000 of cash for skullduggery. Youre welcome, steve. Thank you. Appreciate it. You have a good day. Thanks for your business. Thank you. Im taking steve and peter to jb plastics, the company that manufactures their car parts, so we can see if we can lower the cost of manufacturing each one of our cars. This is joe. Joe this is the owner. Im marcus, how are you . Welcome. I came to see how we could save some money. And we can do that. Thats important to us. Theres a lot of ways we can do it. So how many of these will we sell in a given year . 300,000. We pay 25 cents for the car and we pay a nickel to have them put all the stuff in em. For the labor. So its 30 cents to our factory. Uhhuh. Heres where it comes out. How many are in the current mold today . What if i went to an 8 or a 12part mold . Will that help my cost . Yeah, you can knock off a minimum of 20 cents, easily. So id be down around 10 cents at that point. Probably. Im gonna need a new mold. No, no, no. Thats more money that we dont have. I understand that, but if you make us a 16part mold, how much do you think thats gonna cost, approximately . 60,000. So if i give you that commitment that ill spend the 60,000 or 70,000, youll get my cost down 20 cents . I can get your cost down. You got a deal. Okay . Good. Last year, skullduggery sold 300,000 cars. If you multiply that by the 20 cents savings per car, we would recoup the cost that it took us to make the initial investment in just over a year. Over the next four years, we would stand to improve our profitability by almost 250,000. It takes money to make money. Yes. Thats a good example. Hi, how are you . Hi, how are you . Marcus lemonis for steve phelps. Yes, come with me. Great. You know, i believe in utilizing resources, and i wanted to give skullduggery a real big resource, so im gonna take peter and steven to meet steve phelps, the chief marketing officer of nascar. Why dont you guys have a seat . I have a great relationship with nascar. Its going on almost ten years. Hey, marcus. How are you . Im well. Im steve phelps with nascar. Hi, steve. Peter. Hey, steve. Steve koehl, skullduggery. Hey, steve, how are you . Welcome to our new york office. You know, marcus had asked me to take the meeting. This is a little bit unusual for us, but wanted to take the meeting to understand what it is about your company that you believe will help the nascar brand. Let me go first. Steve, why do you think nascars good for skullduggery . [laughing] so, you know, we are in a really good spot at this particular point. The sports growing. Were really trying to attract a much younger audience, a more diverse audience. You know, were finding partners to invest with us in s. T. E. M. Im sorry, stestem . S. T. E. M. Science, technology, engineering, math. Okay, okay. Nascar is a technologydriven enterprise, and i think its awesome that they want to attract kids through education. And so the question is, do you have something that you could focus on that . cause thats an important area for us. Um, im havinyou know, i had some meetings withi just met with toys r us, walgreens, and kmart. Yep. And they didnt think nascar was a good idea. No interest at all. Hearing the stuff thats coming out of stevens mouth is shocking. Ii dont know why, but he just didnt want anything to do with nascar. I am mortified. I got some real big pushback. Probably assumed that you would charge em more. I didntno, it wasit was a stopper in the meeting, so we moved on to something else. I cant believe what im hearing. How does a guy with a 1 1 2 milliondollar toy company tell a multibilliondollar company that no one wants their product . Who does steve think he is . So, you know, where do you go from that . If you can come up with a good idea, i would love to do it. Why do i have to come up with the idea . cause youre part of the company. Im a minority shareholder that just paid off your debt. Thats bull[bleep]. That is complete crap. Limu emu doug hour 36 in the stakeout. As soon as the homeowners arrive, well inform them that Liberty Mutual customizes home insurance, so theyll only pay for what they need. Your turn to keep watch, limu. Wake me up if you see anything. [ snoring ] [ loud squawking and siren blaring ] only pay for what you need. Liberty. Liberty. Liberty. Liberty. Walkabout wednesdays are back get a sirloin or chicken on the barbie, fries, and a draft beer or cocacola all for just 10. 99. Hurry in wednesdays are for outback. Outback steakhouse. Aussie rules. 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Listen, the reason why you guys are here is because of this man. Definitely. And marcus, in his other businesses, uses nascar to move product, and it works for him. Steve is about to lose a multimilliondollar opportunity if he doesnt shut his mouth. I need to step in here, or were gonna get kicked out of this meeting. You know, after spending some time in their business, there are plenty of really good, educational products. I know we can satisfy and hit the mark. It is an area that is very, very important for us. We will lead that process for you, and what were asking for is a shot. Sure. To put a product together, to deliver on your expectations. Were gonna get a lot of feedback, and were gonna come back to you in a couple weeks and youll tell us if were off or not. Great. Thank you, guys. I tried to keep my composure while we were inside of nascar, but im about to lose it. [elevator dings] you absolutely embarrassed me. The chief marketing officer of nascar does me a favor. You go up there and tell him that the big box retailers dont want him . And then you ask him why they should do business with you . Are you kidding . What were you thinking . I was just trying to get an idea of what theyrewhat they have, if they had anything new. If i could learn about what they had. But then ask the questions. Do the interrogatory as opposed to saying, why should we do business with you . And then, when you talk, youre a reflection of me, and i dont operate that way. I dont want to go into meetings and be embarrassed. Going forward, i want you to listen and think before you talk. Thats all i want from you. Are we clear that that will never happen again . Good. Holy purple this is the way our place should look. Those guys totally blew that nascar meeting, but my job is to make money and get refocused on putting process in place. So im heading to purple platypus to buy a 3d printer. If you want to compete with the big boys, you have to have the latest technology. A 3d printer allows us to build prototypes right on site. This is printed . That was printed. Layer by layer. By investing 270,000 in this 3d printer, it will give us the ability to create new toys, innovative toys. Well see a big increase in sales. Will you take a credit card . Well take a credit card. Were excited. [claps] steve and peter have somehow convinced themselves that their company is wildly creative. At best, its dull and uninspiring. So this whole room is gonna turn into a lab. The toy companys a place where people should be able to bounce crazy and fun ideas off the walls, and the best way to propel that is to build a very cool space. This entire wall will basically be the computer lab, so 3d printer and then mac stations all the way around. The creative lab is gonna cost me over 100,000 to build, but thats no big deal when i think about the type of revenue im gonna be able to create. Ill be able to improve the efficiency, and i wont have to send my prototypes across the country. Holy crap look at this. Isnt this great . Yeah, its a little more fun. Were in the toy business. Yes, we are. [laughing] i like the fact that you put colori see in steves office, color on that wall, color here. Yeah. This looks awesome. Feels awesome. Im very happy with it. So how do you guys use this space here . Its a play space, creative space. We have meetings here. I like the fact that youre using these boards and know what youre doing with product. You know what youre doing with packaging. Theres a real process in place. When a buyer comes here, show them product, lay things out, display things. Show em how you walk through ideas, builds their confidence. Absolutely. Dramatically. Guys, i have to tell you, this looks fantastic. It just feels open, and it feels like a real business. Hey hey. How are you . Good, how are you . So, um, you know, we left that nascar meeting and we were gonna kind of come up with something. What ideas do you have . Ive given peter and steven all the resources they need to be successful and make a new nascar toy. By now, they should have something really great. You know, we havent even had time to sit down and brainstorm it. Did you try . Weve been doing did you sketch anything out, or steve, all i asked for was some ideas. The guy told us what he wanted to focus on. I mean, how couldhow where are the storyboards, or sketches, or something . Im not a drawer. I cant draw. I know youre not an artist, and youre not getting out there bending the plastic or whatever, but, i mean, you literally have nothing. You didnt reach out to me one time about that. You didnt say to me, man, im stuck. I dont know what to do here. Ii dont even know what to say. I havent asked you for anything. I just dont think you want to do it. Iif you could come up with a good idea, i would love to do it. Why do i have to come up with the idea . cause youre part of the company. Im a minority shareholder that just paid off your debt. I mean, honestly, i just feel like you basically just said, [bleep] you. Im just not gonna do it. Those deal points . If theyre not gonna be ironed out, were not gonna have a deal. We dont like the fact that you can say no. Go stand in the corner and shut the [bleep] up. All Money Managers might seem the same, but some give their clients cookie cutter portfolios. Fisher investments tailors portfolios to your goals and needs. Some only call when they have something to sell. Fisher calls regularly so you stay informed. And while some advisors are happy to earn commissions whether you do well or not. Fisher investments fees are structured so we do better when you do better. Maybe thats why most of our clients come from other Money Managers. Fisher investments. Clearly better money management. Well, heres to first dates you look amazing. 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Why do i have to come up with the idea . cause youre part of the company. Im a minority shareholder that just paid off your debt. If these guys think im gonna pay off their debt, transform their business, and come up with the ideas, they are in for a rude awakening. I mean, honestly, i just feel like you basically just said, [bleep] you. Im just not gonna do it. Marcus, theres so much goin on right now. No, theres not. This isnt so much going on. I mean, all i asked you to do is one thing. I wrote a big check. I didnt ask you to do anything else other than come up with a toy. Ive said, ill build up the lab, ill do all these things. I asked for one thing im trying to figure out how to do it and where its gonna go. I knew there was an opportunity to leverage my relationship with nascar to help the business, but to have that sort of attitude and level of ungratefulness, thats totally unacceptable. When you dont want to do something, you just dont do it. No, no, no. I dont i dont not want to do it. I justitthis is such bad timing. You have an excuse and an answer for everything. Instead of just saying you know what, i dropped the ball. I didnt think it was that big a deal, or i dont agree with it. I said we can try. I gave you every opportunity to come up with an idea for a toy, but you guys are looking for me to come up with the idea for the toy no, were not. No, no, no, no. You just said that to me. Ithats bull[bleep]. That is complete crap. [bleep], you guys are. Its bull[bleep]. Hmm. Were doin a lot of stuff. I know we are. We can only do so much. Im not worried. I know im bustin my ass. I cant do any more than i do. Im ready for that army of people to start helping. Yep, me too. Well, let me give him a call. [phone dialing] [line trilling] hello . Hello, marcus . Its peter and steven. We didnt like the way that ended. Wed really like to get together with you and talk it out. Uh. We need to know where we stand and we really want to know exactly where you stand. Id like you to sit down and talk to my father. Okay. All right. Bye. After our disagreement yesterday, steve and peter called me. They said they talked to their dad and we should all meet. Im hoping that their father has convinced them that its time to step it up. This is my father. How are you, sir . Im marcus. So what is it that you guys wanted to talk about . I mean, when you and i shook on the deal, i told you that i didnt want to give up control of the company. When you guys did the handshake and we looked back, we would have done things differently. We want to be in charge of our own destiny, but if we agree to all your deal points, youre in charge of our destiny. My deal with skullduggery is for 30 of the ownership. I made sure that deal came with financial control. I did that to protect my investment, and now all of a sudden, im hearing that they have a problem with some of my deal points. The deal points are very simple. I dont want you guys to take on Additional Debt without my permission, and the reason that i dont want it is cause i dont want to get back into the same position. I dont want anybody to change their salaries without me knowing about it. Because if the Company Starts making money, and all of a sudden, you take your salary from 60,000 to 600,000, you could essentially suck all the earnings out of the business. What was the number one deal point that didnt sit well with you . Give me an example of something. What are you prevented from doing that you want to do . Lets say i did want to pay myself 600,000. I would say, no, you cant. I know you would. And im not gonna budge on that. Im not gonna budge on the debt. Not gonna budge on the executive salaries. My motive is that if the Company Makes money, i dont want to find out that its turning from profits to salary and bonus and i have no control over it, and as a 30 owner i dont want to wake up one day and find out that all the moneys gone. I guess ultimate veto power is a little bit hard to take. Thats the hard part. I mean i think at the end of the day, if im just reading between the lines, honest to god, you just dont want to have a partner. What you guys dont like is that you have to talk to somebody about it. We dont like the fact that you can say no. Iyoure asking me to throw a Million Dollars in and be subjected to whatever fate you decide and have nothing to say. Go stand in the corner and shut the [bleep] up. Thats essentially what youre telling me to do. Im not a bank. Im notthis is not a loan. Were noti can tell you right now, we are not gonna iron out those deal points. No way. Those deal points, if theyre not gonna be ironed out, were not gonna have a deal. 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Work so hard give it everything you got strength of a lioness tough as a knot rocking the stage and we never gonna stop all strength, no sweat. Just in case you forgot all strength. No sweat secret. All strength. No sweat. The lexus es. Every curve, every innovation, every feeling. A product of mastery. Lease the 2019 es 350 for 379 month for 36 months. Experience amazing at your lexus dealer. Million dollars in and be subjected to whatever fate you decide and have nothing to say. Go stand in the corner and shut the [bleep] up. Thats essentially what youre telling me to do. Im notim not a bank. Im notthis is not a loan. Were noti can tell you right now, we are not gonna iron out those deal points. No way. Those deal points, if theyre not gonna be ironed out, were not gonna have a deal. You dont make all the rules. Im giving the money too, so i get a little bit of a say. Youre not the only decision maker. And ive spent money, and now youre telling me how things are gonna go down. I believe in corporate governance, and when i find a company that hasnt made money and has a lot of debt, for me to want to put some parameters for how they operate the business, i dont think its unreasonable. If those kinds of constraints dont work for this company, then thats it. These guys think im just gonna hand over a 1 million check and theyre not gonna agree to some very basic and reasonable terms . Theres no way im going through with this deal. Steve, honestly, you kind of fought me all along the way. You just did. I dont want to be a passive investor. Mmhmm. I am a active shareholder, and i dont see it working. Ive already spent over 100,000 here, and ive put in a lot of energy fixing the process. But at this point, id rather cut my losses than risk losing 900,000 paying down their debt. Then we can justwe can justpfftif you want. Yeah. Its easier for me to take my lumps cause its the cost of doing business and cut my losses. Any time an entrepreneur goes into business, they know that theyre gonna spend money. And sometimes, the deal works out and sometimes it doesnt. Thats the cost of doing business. All right . Okay. I wish you well, and im sorry it didnt work out for both of us, okay . Both all right. Thank you. Too bad. I know. I appreciate it though. Thanks, guys. Thank you. You have to know when to fold your cards, put em on the table, and walk away, and make it up on the next hand. Im craig melvin. And im natalie morales. And this is dateline. She was so alive. To hear that news and realizing that its amber, how could that be . Her life was just beginning. Natalie morales amber made friends for life. There was just no trying with our friendship. It just was. Natalie morales but that life didnt last long. Amber is on the floor face down, and she has a plastic bag wrapped around her head. The tills open. The doors open. Most people that rob a store dont kill anybody. My whole world just died right there