Navigating the Financial Landscape: Insights into Equity, Valuation, and Growth Strategies

The following transcription was from the Bulletproof Youtube channel. Here is the https://www.youtube.com/watch?v=0oUkEL_4BCI

Craig Spodak
0:00:00
You know, yesterday I went up to see Pete in Atlanta for the day.

Dwight Pecorra
0:00:20
Oh, nice.

Craig Spodak
0:00:21
Yeah, it was very nice. We had a cool day and I consumed 12,000 calories at Rumi's, my favorite restaurant. I was reminiscing about the day, last time I was there I sold my Bitcoin.

Peter Boulden
0:00:33
He was like, right over there, it was right in that seat.

Trey Tippit
0:00:36
Right.

Craig Spodak
0:00:36
Did you walk out with a ranch this time?

Trey Tippit
0:00:38
I should.

Craig Spodak
0:00:39
No, no, no, no, I just walked out with like a belly that felt like I swallowed two cinder blocks. But anyway, what I wanted to say is, Pete has a very interesting story about how he got started. And I can't wait for you guys to hear it because I've never fully heard the full story. He doesn't want to talk about it because he thinks it's like, you know, when I was your age, I ate glass for breakfast and walked 15 miles in snow and all that. But it was a really, made me proud. Made me super proud of you, Pete, the thing that he did to start.

Dwight Pecorra
0:01:07
It's cool.

Craig Spodak
0:01:08
So we have to do that. Yeah, I went through, honestly, guys, we had some car time. I actually picked him up at the airport and there was another gentleman with us. And so I was kind of going over like the whole, from dental school to kind of now and like the bumps and bruises and the things that he did. And so Craig's like, this is fascinating, we need to tell the story. I'm like, yeah, no one really wants to hear that. Like, so I, I grinded it. Right. And, and so he's like, why have you never told this? I was like, cause I don't, I don't, no one cares about my dumb ass life. Right. No, I agree. By the way, I think that when you realize that like I had no idea like his first job, he's like, I'll work for free. You know, I just want to be a part of this. You've told that story, I guess maybe more mastermind. I think what I went through Dwight is a whole pod. Never to the context from that to then, then like the journey through right and location and then this like ups and downs and highs and lows and you know, embezzlement and part separation, partners, new partners and new locate, you know, all the whole things. And so Greg, Greg was just like, never heard it all in, in. Continuum, I guess we would say. Yeah, it was really cool. It was really cool. So we'll do a bumps and bruises and scars. That's like a, that's like a 10 part mini series. The law, like train will be the first quarter of 2024. Might it will be the second quarter. I might know I was looking at, I was actually looking for subscribers. I was actually looking at, I think that's, I was looking at Jesse Itzler's pod, sorry, post this morning about like you did on Instagram, basically saying like his biggest business failure. Right. And of course, whenever you see something like that, you're like, well, we're mine. And you, you know, and Craig, to your point, you're thinking like that would be a long time because we talk about like, it's, you know, especially on Instagram and social and at summits and stuff, we talk about like, look at what we did, look at all the successes, look at the vacation I'm going on, look how much better my life is, right? And it's really like, and I loved how Jesse gets real, you know, authentic. Um, got to know him really well. Like we, we probably spent about 50 hours together. This is in June. Our kids were on the same baseball all-star travel team. So he and I were just like sitting there watching baseball practices and all summer. And so it was really cool. What was his biggest business move? Was it marrying Sarah? I mean, for those that don't know, that's Sarah from Spanx. Sarah Blakely. Is that who it is? Yeah. I mean, it wasn't it wasn't a bad move, right? No, definitely not a bad move. But you know, but y'all, he sold Marquis Jet and Zika water to Coke. Like, so it's not like he's like, he has his own chops. Like he was rich before Sarah, that's for sure. So anyway, but he's got a great business mind and great philosophy on family and balance and stuff. And it's probably easy when you've reached that crescendo of life, but anyway. You're selling, right, Peter? Yes, so speaking of selling, we are gonna go through an actual LOI today. This is gonna be, and I don't want this to be, I'm going to kind of present because it's in my possession. I'm going to put it up on the screen, but I do not want it to be just me sitting there talking about stuff. I want you guys to offer your own context. Craig, you and I have gone through processes of where we've had private equity and people have come to us unsolicited. So we've been hit up a number of times. We are all in agreement that we're kind of in the camp of like it doesn't make sense to sell. And so we're not, I'm not saying we're in camp never sell, but I'm a firm believer in a way to really educate yourself in the business acumen is to go through this process, right? Learn about the vernacular, learn about the process, learn about the upside, really dig in. And Craig, like our conversation yesterday at Roomies, I was like the true valuation to find out what your practice is worth is maybe go through this process if if if private equity is interested in you or a DSO is interested in you. The value of what your practice is worth isn't based on a on a valuation from a CPA firm. That's complete dogshit valuations. They're always 85 percent of top line revenue because that's what a bank is willing to pay sub one million dollars. So I will I will kind of jump into this one. Just for the audience understanding, an LOI is a letter of intent. It's the first step of an offer. So it's like, hey, it's a formal – I mean it's really just an email typically, but it's a formal step in the sale of anything or the intent to buy something.

Dwight Pecorra
0:05:31
And I want to make a comment. I think it's kind of like just whether you're prepping a crown or whether you're trying to go through whatever it is that you're learning to do, the more of these you go through, the more prepared you are when it faces you too. And I think what I like about this, this is as practical as it gets. I mean, if you're listening on audio, this is a big one where maybe pulling it up on YouTube can make a bigger difference because you know, when Pete first said, Hey, I've got my hands on this, let's try it. And he's got maybe a little bit more information than what is shown on there, knowing about that, that's fine. But the bigger purpose here is, I would love to do as many of these as we can, because I think it serves our industry.

Craig Spodak
0:06:08
Like a case study, Dwight, right?

Dwight Pecorra
0:06:10
Yeah, and just go and go and go. Three quarters of law school is case studies. You're learning what the law has been established and how it works, so that you can then go argue what has already been historically established. And I think it's really relatively important, because in particular, COVID changed a lot of the laws when it comes to the way we do things now, how things are appraised, how things are bought and sold. So a lot of old case law is not relevant because there's new ways of doing things, new ways to evaluate things. So this is why I do like this one. It's a good evaluation to start on and then future things to look at. So let's go.

Craig Spodak
0:06:45
Craig, I like how you kind of stopped and said, LOI, because we come with an expectation, guys, that we assume that people know things and there's no shame in that. But I think I want to really slow us down and really kind of over-explain some of these things. A lot of times when you're talking to people, you've ever done this, you'll talk to someone about this and they'll kind of shake their head and you're like, they have no idea. They're just shaking their head. So let's kind of really bring value and kind of educate the space. The skill here is the process and the familiarization with all of it. And what you start to realize that these deals, the more you look at, the more you see these similarities in them and that there are nuances that are different as time goes on, like Dwight's alluding to. But the structure of the deals, many of them are very, very similar. Very similar, and I would actually agree that they're very similar and there's some that you have to be, they're similar in that they're snowflakes, meaning they're all gonna have different little permutations, but you're right, Trey, 80% of them are probably tracking the same direction. So the actual familiarization with that process is what's gonna get you into the idea of what this means. And this is so new to so many people, because like Pete, what you said, you're used to selling at a percent of last year's revenue. Yep, so, okay. So obviously, this is, the names are going to be protected in this. And like we said, this mindset comes from the fact that you should only really sell or be in a position to sell or encouraging these offers if you're in a position of strength, right? We've always said that you never, never kind of like surrender and go to the, go to the negotiation table, come from a position of strain. If you're in the market to do this, we obviously have said, we don't think you should right now, but you will feel better in your life and your business by either going by the strategic partnership or the amount of liquidity event that's in it for you. It's just, it's just a whole lot of, a lot of stuff here. So sometimes guys, sometimes it's like the net worth analysis. The offer is material. It's materializing what your practice is worth. And then from that you plug it in like, Oh wow. Okay. I didn't realize that. And then you can plug that in. So sometimes though, to Pete, just to kind of add on to what you just said, some of us don't have, I've gone to the table from a position of weakness before, because sometimes you have to. There might be a situation where somebody's sick or something's going down and it is what it is. It's helpful for no matter what your situation is. But would you agree you were more vulnerable in that situation? Oh, yeah. Yeah, that's all. It's like, just identify and you're right. Life happens, tragedy happens, things happen. But just identify that like you're negotiating from a position of weakness, which is probably not going to behoove you.

Craig Spodak
0:09:29
For sure.

Peter Boulden
0:09:29
That's all.

Craig Spodak
0:09:30
All right.

Peter Boulden
0:09:30
So this is again, we'll go into it. These are kind of the first steps in this LOI where they're talking about, they're saying the company, right, which is the practice, and then the DPO, which is the DSO. And basically saying, you know, basically here's the, this is where they're kind of selling you, right? Key strategic areas, an overview of the process. You guys have had a chance to process some of this. Do you have any insider feedback on this specific thing? Would you agree this is where they're trying to kind of say, like, hey, this is why we're the right fit for you. The funny thing is, is how common these are. Like we have a history of successfully integrating your business development activity and through our, you know, we believe in clinical autonomy for our doctor and patient. It's like so much of this is literally like just, just templated shit.

Dwight Pecorra
0:10:17
Right.

Peter Boulden
0:10:17
Right. Like who does it?

Peter Boulden
0:10:18
Who doesn't say that?

Peter Boulden
0:10:19
We believe in the highest clinical care. Have you ever seen someone who doesn't say that?

Craig Spodak
0:10:22
And then you see that, you know, like we, we, yeah. This is the elevator pitch. This is the elevator pitch of the culture fit. Right. The culture fit. And why we are best.

Dwight Pecorra
0:10:33
And there's also the side of like, why to sell, right? To be bigger, to do something bigger than yourself, to be a part of something bigger than yourself. And you know, they're right. It's not a lie. I mean, clearly that's a component, but do they actually follow through with being the ethical personality, you know, that's the other component, clearly. But there's a lot of doctors who would read this and be like, yup, I can see that, but you're gonna get this, this is boilerplate, yes.

Craig Spodak
0:10:59
But when you don't realize it's boilerplate until you have like two or three in your possession. So this one, Acme, like, oh my God, Acme DS is amazing, look at this, they believe in clinical autonomy for our doctors, and we're gonna join forces together, make it better and stronger together. So if you don't see multiples, you're like, wow, Acme's a badass.

Dwight Pecorra
0:11:17
Yeah, but most of us who have group practices might have some template like this that we provide to all our existing associates to become partners and grow with us too. So it's like, it's boilerplate, but it is who we are. We think, like in group practice, I think I'm better together than I am alone. I just believe that. And that's a major piece.

Craig Spodak
0:11:33
Right, but it's at the end of the day, and I think this deserves to be mentioned right here at the beginning, is Acme, in this case, is backed by a private equity firm. Correct. And private equity has demands on the return on their investment that are different than Dwight Trey or Pete does. You know, you guys are making decisions for a timeline that might be three or five or seven years or maybe a legacy, a 10-year time period. These people are not doing that. These people are strictly about pleasing their investors, their boss is their investor. And you work for them and they work for their investors. So vicariously you work for their investor. Yeah, you work for the LP. You're saying the LP, the limited partner. Yeah, they're the general partner and limited partners. The interesting thing that I will bring up is just to start kind of breaking down some definitions. Right, they're saying through a partnership with this DPO, Dr. X will play a role in the business. And it's basically saying they're selling themselves again here. Our track record is we are in the top 1% of private equity returns at 7.6X MOIC. Craig, you want to break down MOIC? Yeah, it's just money on invested capital.

Dwight Pecorra
0:12:38
Multiple.

Peter Boulden
0:12:39
Multiple on invested capital.

Dwight Pecorra
0:12:40
Multiple on invested capital.

Peter Boulden
0:12:41
Yeah.

Craig Spodak
0:12:42
Multiple on invested capital, sorry. Yeah, which basically means that- So I should stop talking from now on.

Peter Boulden
0:12:47
No, no. I mean, it's the same thing. It's basically saying like that, you know, for every $1 you put in,

Craig Spodak
0:12:52
they kind of would have returned $7.60. Right. So how do you, I mean, that's just the biggest thing. Like, so that's really a pitch for the second bite.

Peter Boulden
0:13:03
Yes, exactly. Actually second and third. We're gonna get to that slide. We're gonna get to that slide.

Craig Spodak
0:13:07
But just put up a more important thing. One thing I think in this industry that is that I think a lot of people start getting unclear on too, is dumbing this even farther down, DPO versus DSO. Yeah, it's just- You hear that a lot and you hear- Throw D-A-L-O in there, through the Dental Leadership Organization in there. That sounds even better. Or the DDSO.

Trey Tippit
0:13:28
Or the DDSO.

Peter Boulden
0:13:29
There you go. We crush that one live on Instagram. So go through it, Trace.

Craig Spodak
0:13:34
For the nature of what we're talking about here, those are things that you essentially, they're essentially the same thing. But they sound so much better. I'd rather work for a DLO than a DFO. I would rather have a DPO, a partnership organization. Partnership organization, really.

Peter Boulden
0:13:48
I sure as shit don't want to work for a…

Craig Spodak
0:13:49
It's really pretty, not so church is it up. I don't want to work for a dental service organization. What about a DKAO, a dental kick-ass organization? I like it. I want that one.

Trey Tippit
0:14:00
All right.

Trey Tippit
0:14:00
I'll try it.

Dwight Pecorra
0:14:01
Let's try a good point for that. You're just getting away from the nasty, you know, feel that comes from a DSO because it's been marred by the market and society. That's all.

Dwight Pecorra
0:14:10
It's just in the industry.

Dwight Pecorra
0:14:11
So, okay.

Dwight Pecorra
0:14:11
Go on.

Peter Boulden
0:14:12
All right. This is what I would call the money shot.

Trey Tippit
0:14:14
Right?

Craig Spodak
0:14:14
So this is where they're saying at the top of this one, this is the value of a good size practice.

Peter Boulden
0:14:18
Yeah.

Craig Spodak
0:14:18
The good size practice, evaluation proposal overview. We value your practice X practice at total enterprise value. And this one is a 32 and a half million dollar enterprise value. That's the hook, right? You see that and you can't unsee that if you're the doctor, right? But it only gets worse from there.

Peter Boulden
0:14:39
What are you laughing at?

Craig Spodak
0:14:41
That's just funny. It's like, you see that you're like, yeah, it's like you can't unring that.

Peter Boulden
0:14:47
You can't unring it. Right. And, but, but then when you start, this is the whole purpose.

Craig Spodak
0:14:50
But these are also the letters that you get. You get these letters like we'll pay you 25 times top of the line. No, but this is a term sheet and so term sheets are different than red mail and yellow lines. It still doubles the details. Are you aware of how multiple that is or what? Yeah, this was about a 10. This was about a 10. So this practice had about a $3.6 million EBITDA at the time.

Dwight Pecorra
0:15:13
That helps.

Dwight Pecorra
0:15:14
Thank you.

Craig Spodak
0:15:14
It's like a nine then or less than that. OK, yeah, yeah. So it's not it's not it's not it's not crazy like the ones we heard about those astronomical ones, but it's a healthy nine, nine and a half, 10 is a healthy is healthy in any market. Yeah, it doesn't matter. So then it breaks down and says, OK, here's the enterprise value. So how do they how do you get to the enterprise value is the aggregation of all the little constituents that we're about to talk about. So basically what they're offering here is, okay, it's worth 32 and a half in our eyes. We'll give you 18 million cash at close 12 and a half million in equity. In a go forward DSO, basically stock.

Trey Tippit
0:15:52
Okay.

Craig Spodak
0:15:52
But it breaks down that further break down that further Dwight. I know where you're going. It's saying half of that, half of that 12 and a half million, which would be 6.25 is in preferred equity. Preferred equity, as we know, as you all know, is a bond. That's it. It's not equity in the hold code going forward. That's the rollover preferred C. That's a promissory note. Exactly. Now you do get paid on that first, but it's essentially just a 7% bond. It's owner financing is the only way to put it down.

Dwight Pecorra
0:16:25
Correct.

Dwight Pecorra
0:16:26
Yeah.

Craig Spodak
0:16:26
It's true.

Craig Spodak
0:16:26
It's like paycheck advance.

Trey Tippit
0:16:27
Yeah.

Craig Spodak
0:16:28
So we're basically saying, Hey, we're going to give you this money to make this, this, the top number looks sexy, but it's just a bond on the money that you'll get paid when we have our liquidity event, meaning when we buy your practice and then we roll into that second bite, that's when you'll get

Peter Boulden
0:16:42
your money with interest.

Peter Boulden
0:16:43
Yeah.

Craig Spodak
0:16:43
Okay. The common equity, the rollover equity, the preferred C that's where you want to fight for everything if you're going to be doing that. If you believe in the thesis of the DSO or DPO or DLPO or whatever it is, you believe that they're going to the moon, you want to fight for as much common equity as possible.

Dwight Pecorra
0:17:05
So this is what's called the shuffle that private equity companies use because dentists have no idea what the hell all this means. Right, which is why we're breaking it down. Yeah, so what I laugh about, I look at this situation and to the average consumer, if I give you a multiple choice and you're a dentist and you prep MODs and crowns every day and I look at, and I tell you, hey, how do you want your money? In preferred A, equity, or in rollover preferred C, common equity. It's like saying commonwealth. Are you part of the commonwealth or are you part of the preferred A equity, right? Well, let me be clear. Preferred A equity is basically a promissory note that's due to you, paid to you over time. And it has no upside. Like it is a notes payable to you, you get paid on it.

Craig Spodak
0:18:00
It is still in capital gains. There's no multiple on that money is what you're saying, right?

Peter Boulden
0:18:04
You get the percentage of interest and that's it.

Dwight Pecorra
0:18:07
That's it. Now the second component, the preferred C common sad sounding one, is the one where it has actual potential upside for what we call the second bite at the apple, which we'll go into in a little bit. But this is why they call this, and a lot of private equity groups call this the shuffle, where they find a way to make it look nicer than it is, while at the same time, making sure that they're limiting your bigger picture success in the long run, and what you're going to get in that second bite of the apple. So I just want to make that comment right off the bat, because whatever they label it,

Craig Spodak
0:18:44
preferred gold equity, preferred silver, like that's- Dwight, would you agree though that this preferred is their arbitrage? Oh, part of it. Exactly. That's the game. More preferred equity, that means the less common they give up, which means if we're going to take a note on this for 7% but we're going to make 100% on that money, that's a

Peter Boulden
0:19:10
good arbitrage.

Dwight Pecorra
0:19:11
Yeah. Not to mention that they're able to, they're actually able to take, with their line of credits, we're talking about private equity, they're literally going to borrow the money to buy your practice on the percentage that they have to pay. The truth is, is they're just doubling down on the wins on making this happen.

Craig Spodak
0:19:33
In reality, if they just say, great, this is your preferred equity, you get this paid out, you know, it's owner financing and the rest, we'll see what comes of it.

Peter Boulden
0:19:41
Right. Right.

Craig Spodak
0:19:43
And is it safe to say, gentlemen, that at the end of the day, it could be stipulated if things don't go well, that you could have to walk with the 18 million. In other words, the other half is not guaranteed to you. There's no guarantee in that. Yeah. So what you're saying, Craig, is basically the first number that we said is the only thing that's guaranteed. In this instance, in this example, even though that was valued at $32 million, $32 and a half million, you could potentially only ever see that 18. And are you okay with that first number? Because the DSO could go to shit. It could be run by a bunch of Yahoo's. It could all that quote unquote stock could become a penny stock. You could become worthless. They're basically taking the keys to your, to your equity and you have no control over the direction of this. So, you are right, Craig. That's why your diligence in this is really important. What have you done? What's your track record? Going back to that first page, you want to find someone who's like, this is our first time trying this. We don't know what's going to happen. Like, ooh, I'll take less equity, please. More cash at close. You better believe that that first cash at close is what you're willing to get. In totality. At a maximum, correct. In totality, everything else. And I'm sure we'll touch on this later, not a good time now, but the taxes that are involved in that are something you have to think of too. Well, I'm gonna break that down. I'm gonna break that down, Drake. One thing on the preferred stock that I would bring up too, that if you're listening to this or looking at this sheet exactly, you may get another deal where the same thing is called something different than preferred A equity. This is defined by the company and the deal. So you need to know what it is.

Dwight Pecorra
0:21:20
So you need to know what it is. Private equity, there is some of this, it's pretty consistent elsewhere, but I'm with you in that I've heard like five different names for the same exact thing.

Dwight Pecorra
0:21:29
Yes.

Craig Spodak
0:21:29
It's just the- So be aware. The language around it is what really matters. You just want to make sure that whatever that, whatever is labeled on this, you'd know what that is defined as. One, one way to maybe, you know, unravel that mystery is to ask a simple question is, are, are my shares in the go forward DSO para pursue with y'all shares? Like, wouldn't that distill it down to say like, do I ride equally to the, to the common stock of the partners that are in this? So here it's not.

Dwight Pecorra
0:21:58
Here, no, here it's not.

Craig Spodak
0:21:59
I know, but couldn't, couldn't that be a way to unravel the mystery of what they're calling what or not necessarily?

Trey Tippit
0:22:06
Yes.

Craig Spodak
0:22:08
The ultimate goal would be to stop and say, can I handhold with the private equity?

Dwight Pecorra
0:22:13
Can we be at the same level?

Craig Spodak
0:22:14
That's the definition you're looking for though.

Dwight Pecorra
0:22:16
That's what I'm getting at is-

Dwight Pecorra
0:22:17
That's the kind of-

Craig Spodak
0:22:18
You look at another one and you may see a subtle change in what it's actually called.

Peter Boulden
0:22:23
All right, pause for a sec. I would actually push back a little bit, try that.

Craig Spodak
0:22:29
These are pretty industry standard terminology, right? It's common versus preferred.

Dwight Pecorra
0:22:36
Sure, I get that. But we're talking about A, C, all the other random.

Peter Boulden
0:22:41
Yes.

Peter Boulden
0:22:42
I've heard a lot more of. Yeah. Yes, it's probably designed when it gets technical, just like any contract we've ever seen. When it starts to get technical and clunky

Craig Spodak
0:22:49
is probably not in your benefit. Yeah. Okay, so that's where you would want to dig in and find what is, what is the stipulation? Pref a pref C in general. Here's a little diagram. If you're watching on YouTube, I found it's ownership. You, so this breaks down the common stock versus preferred ownership, common stock. You actually have ownership preferred stock. You have no ownership. Cash flows are less predictable with, with common stock. They are more predictable preferred because again, it's that sure it's that bond voting rights. You have voting rights with common stock. You do not have them with preferred board representation. Again, that's something you could fight for potentially if you were the big enough size to be like, I want a board seat. So this is, is this how fixed dividend, there's no fixed dividend with common stock, but of course there is with preferred. So that's a general, that's a general breakdown of kind of just the difference. And you are right, Trey. Look, there's differences in PREF A, PREF C,

Peter Boulden
0:23:43
things like that.

Dwight Pecorra
0:23:44
I think that's good.

Craig Spodak
0:23:45
Okay, so let's keep going with this. So then we're going further down. So now we have an $18 million cash to close. We have $12 million of quote unquote stock, which sounds sexy, but we all know that now it's only half of that's a bond and half of that is actually equity in the whole co. And now in this instance, there's a $2 million contingent payment. And so this is what we call hold back or earn out money. And it's basically part of the deal, but it's predicated on how in this instance, okay, it's the retention of the dockers in this ecosystem.

Peter Boulden
0:24:18
have a larger clawback.

Craig Spodak
0:24:19
Yes. But don't worry about the dollar amount, Craig, we just talked about. In this instance, the contingent payment is usually revenue-based. Agreed. Yes. And just to kind of… Yes, top-line revenue-based. Yes, correct. But just to give another lay of context to it, these people, the DKAO, may decide to fire your Morgan or your Erica or your, you know, Meeks and they may decide to not make you use certain plans. No, no, no more diagnostic wax ups guys. Like what's that all about? Like we, we can't do that. So in some ways you're, you're charged with the responsibility to hold the revenues the same, but they may make unilateral decisions to make your practice fit into their model. Yeah. The underlying way you got there might be modified highly. So it's not that you're in the locus of control for these decisions. They may force these decisions upon you, so you may have that clawback actually happen.

Dwight Pecorra
0:25:23
Well, with that, hold on, hold on. I think Pete just made a really, really important point that I think a lot of people do not understand on these deals, and I want to bring it up. And that is, he said, most clawbacks, which I don't actually, I don't read this as a clawback. It's not big enough to be a clawback. I see this as kind of a maintenance clause. It's like a, don't be a schmuck clause, meaning sell. And then everybody walks out on us type thing on their side. So it's like, this is kind of that schmuck clause scenario where everybody's looking at it. It's not big enough. And it is on majority of the time. I'm going to say majority because I know we have listeners of all types on this pod. So you've got top line revenue. Why? Because EBIT is going to vastly change as soon as you get a whole new management company brought in, things are going to change. And you're right, Craig, that they may have access to how you pay payroll because they're getting rid of certain people, all these other things. The goal here is that that then transitions to them. And the top-line revenue is the most important component of what we're talking about, that you get to maintain the amount of dentistry that's being done and the consistency of the operational flow. It is their job to make it profitable.

Craig Spodak
0:26:30
In the instance where, for example, take away all the equity in the stock, the higher that amount of holdback money, the more incented that potential private equity is to find a way to not pay you. I wonder if that's, they'd want to do that though.

Peter Boulden
0:26:47
No, no.

Dwight Pecorra
0:26:48
Because they're part of the owners now.

Craig Spodak
0:26:50
I'm not painting anyone in a bad box. I'm just saying, Craig, it's just human nature, right? Like if there's a $3 million carrot that potentially you can or can't go, we're going to probably look for a technicality to not pay you, right?

Peter Boulden
0:27:01
Yeah.

Dwight Pecorra
0:27:01
And if I was acquiring a practice and I was placing a hold back on a doctor who was telling me they're going to stay for five years and blah, blah, blah, and doing all that, let me be very clear. I'm going to do it on top line revenue because the second they're a part of my ecosystem, their EBITDA is going to go up because a lot of the stuff that they're spending money on there, I'm not going to need that.

Peter Boulden
0:27:18
That's the arbitrage. That's the arbitrage we're going to talk about. That's their arbitrage that they're going to have in the acquisition. Full stop.

Trey Tippit
0:27:24
Yes.

Craig Spodak
0:27:25
I want to give one disclaimer.

Dwight Pecorra
0:27:26
And that one disclaimer for other individuals who are listening to this pod, who actually do state-based like Medicaid, Medicare, and things to that degree, I think you should know that a lot of those acquisition models, and this happens more in pediatrics, and I've seen it in those deals, it's actually tied to patient visits, not actual annual top line revenue. So it's tied to patient visits because they know that there are fluctuations in government impacts and things to that degree. So just FYI, some of these deals are built in in that way when you don't have as much control. So I think everybody should know that.

Craig Spodak
0:28:02
So basically the contingent payment can be a number of things. In this one, it was doctor retention of the ecosystem. Usually is revenues. It could be patient visits. It varies, but it's obviously what is the most important to the private equity at that point. Meaning what's most important before they feel like they had success in their investment. It's a hedge. And if you bring it down to a single practice too, I've done this a number of times with practices that I've bought. I have contingencies that's just a basic earn out. And it's a way for me to, I may pay 80% of what my offer was and then you get the rest in 12 months, 18 months according to XYZ. So it's a protection, it's a hedge. That's actually the way, 100% right. Because you want that doctor to stay on? And if they bail, then that's your pain in the ass factor that you have to go find a doctor immediately and write that 20% is now to the house, if you will. Okay, so continues to go, we're about to get into the bites of the apple, but it continues actually to explain things or the assumptions, the considerations. Basically it talks about prep A, it talks about prep C, and it's saying how it's basically the same rate as their equity. So here's where people start getting googly eyes when they get a percent. And this is where you've heard the term bite of the apple, second bite, third bite. And when it works, this is where you can really hit a jackpot. But it also, like we just illustrated, it's no guarantee and it's sometimes just you got lucky or you didn't. Okay, so basically this is giving the proforma of a five-year opportunity, meaning if you say yes today, that's gonna be your first bite and it's breaking down. Can you guys see pretty well on this? I'm gonna kind of- Perfect, yeah, we see perfectly.

Peter Boulden
0:29:52
The whole slide.

Craig Spodak
0:29:54
First bite, so basically it's showing the consideration we just went through. The first bite was all of the constituents, all the components we just talked about just now, right? The cash at close, you can see that 18 million, which they're doing it in thousands, right? So it says 18,000 here, which means it's at three zeros to all these numbers. The, the common equity, which is right here in the green circle box, the prev, which is in the pink and then the, and then the stuff going forward. So this is where. That they try to make the next look as sexy as possible. The next, the second bite. And there's some assumptions done in here. Have you guys had a chance to look at this? Okay. So this is where they're saying in a scenario where there's three times return on your rollover money, right? Your common equity, here's what you can expect. You could expect, and that's like five years, right? So you bought, you sold today in five years. Here's what you could expect because we're probably what they're basically saying is when we go to sell to the bigger private equity, this is going to be your liquidity event of the of the of the pro rata stock that you have left with us that you invested in holdco. And so in this instance, it goes from in this model, it goes from six point to five million, which we illustrated to eighteen point seven five. And that's at a three X return. They also then take it a step further and say, well, it could be a Forex return. And then they modeled it this way. It could, that 6 million in five years could turn into 25 additional million. Hey guys, why did they model the cash at close to grow? That was based on a yield, Craig, of your capital. Okay. So they've already invested your capital. Oh yeah. Oh yeah. And there's no tax implications by the way. No tax.

Peter Boulden
0:31:35
It's even better.

Trey Tippit
0:31:36
No tax.

Dwight Pecorra
0:31:37
Yeah.

Craig Spodak
0:31:38
We don't pay taxes. Right? In this world we're going over. So it's – I like this world. Yeah. The PREF grows because of – it's the bond, right? And I'm not sure how the contingent payments grew, but I guess it's because you got the payment and it grew too because of interest. I don't know. So this is where you start looking at it and you're like, holy cow, the second pipe. What the freak? 70 million? So your enterprise value could go from 32.5 million in this in the first column to, and all someone's going to look at is going 3, not 4, not 5. This could turn into 69 million dollars. That's the best number I've ever heard actually. 69 million. get romantic about these. This is where these sheets get, people get googly-eyed about it. And it only, it said it only ever gets worse from when you start evaluating this stuff. Because in true life, Craig and I have talked, as I'm sure you guys have, countless people who it didn't work out exactly the way they thought. And there have been a couple.

Peter Boulden
0:32:40
There's been a couple.

Dwight Pecorra
0:32:42
I know plenty on both sides of it, yeah.

Craig Spodak
0:32:44
Okay, so you guys know people that have had sales of their dental practices, and the second bite was like Triple and the third bite and all that you guys have actually real-world experience Dwight you're shaking your head. Yes, absolutely

Peter Boulden
0:32:57
Trey

Craig Spodak
0:32:59
Yeah So Dwight you mind just 30 second detail of what that looked like for them I mean, and I could think of three off the top of my head where they were early on enough I mean, I know I know somebody who's early on enough in Heartland and kept that stock in there. Oh, stock. Yeah. Yeah. Yeah. And just sold his last batch of stock for 108 million. And that was like the fifth bite of the apple, sixth bite of the apple. So yeah. Yeah, that's a great example of that. Well, it's a little bit better than I think than these roles. It's a little bit more transparent. Well, I think this is what we're going to,

Dwight Pecorra
0:33:39
this is what I'm going to say. And I'm going to be very blunt about this and y'all can, you are not, but you know, I, there are a lot of millionaires that are made as entrepreneurs and in business, but I, there are not very many billionaires in this world. Right? How many are there, Craig? Do you remember?

Craig Spodak
0:33:56
2,500 I thought.

Dwight Pecorra
0:33:57
Yeah, like 2,500, 2,600 billionaires in this world, right? None of them became billionaires without private equity. So I want to be very, very blunt that there is not one billionaire on this planet that did not partner with private equity and make that kind of money. But we're not talking about the average dentist. So I do want to lay that out because I do think that there is a method and there are some people that are crazy deals, but there's also people we know that won the lottery and people who play it every day, right? So there's a little bit of everything. I just want to make sure that we understand what we're talking about. There's not one billionaire out there that hasn't played with private equity. And there's a lot of millionaires out there that have made a lot of money and they're very satisfied with life running their businesses.

Dwight Pecorra
0:34:40
Yes.

Craig Spodak
0:34:41
So there's 3,200 billionaires in 2022, which is a decrease from the year earlier. But when you say there's no billionaires created without private equity, does that mean people that invest in private equity or people that have sold to private equity? Because I think that people…

Dwight Pecorra
0:34:53
Sold and partnered with private equity.

Peter Boulden
0:34:55
Yeah, I think that's…

Dwight Pecorra
0:34:56
Elon Musk isn't out there running it all by himself.

Craig Spodak
0:34:59
Yeah, but I think Dwight maybe included the word like with bank leverage, right? Like meaning there's real estate billionaires who have not used private equity. So whatever, we're getting too tangential. It doesn't really matter. But I hear what you're saying. But making money at a large scale is a thing that prop- It's a totally different thing. Yeah. I just want to make sure that we're understanding that dynamic. But yes, there are several dentists that I know that at some point in time did make that flip. And I also know dentists that I've sat across the table and they've told me the sob story where they decided, I know a dentist in particular who took nothing at closing. I know that guy too. Reinvested everything. Yeah. Do I know that guy as well guys? I think so. I had dinner with him in Vegas. And they collapsed. Yes. 100%. And they're back in the game starting new dental practices and doing it. So yes, I mean like with everything, there's going to be the whole gambit on it. There's no doubt about it. So yeah, I think the interesting thing, the takeaway here is, right, because everyone kind of throws around bites of the apple. And I think the takeaway is just like, if it works, it can work really well, but there's no guarantee. And I think I know, I would probably say from my own evidence, I know probably equal amounts of success stories and equal amounts of the failures like Dwight just alluded to. And so it's a 50-50, right? And some of it is based on macroeconomic events that you can't predict the COVIDs and the downturns and interest rates, like you just never know. Same with your earn out money, same with your contingent money.

Peter Boulden
0:36:30
You just never know.

Dwight Pecorra
0:36:31
I think it has a whole lot more to partnership selection.

Craig Spodak
0:36:35
But the game, let me say one last thing. Bites of apples only happen when said private equity group that bought you sells to another private equity group, a different horse. That's how it happens. And you potentially would have the ability to have a third, which means that new private equity would say, hey, do you want to roll some of your stock or your money into the new one? And so, like, Dwight, you know, like, your story was like the rolling forward, the guy that just did $108 million, he's had five bites of the apple because there's been recapitalization events at every corner. And that's a liquidity event. Recapitalization equals liquidity. I know you guys know this, I'm not senior. No, that's great. That's great clarity. But again, I want to make sure that everyone, we slow down and we just assume nothing and we try to educate as much as possible. That's all. Do you guys want to shed some reality on this total consideration in return on rollover with the tax implications or does that come later? It's coming in the yield. Yeah, I'm kind of doing a yield breakdown, right? Where you start, where you start, like for instance, the doctor in this scenario, where the EBIT, like I said, I think I said it was three and a half million. You say, all right, well, that's probably close to, if this was a single operator, it's probably close to what this operator may be making, right? EBIT is essentially just owner benefit. Right. Right. So then you have to kind of evaluate, all right, this- Okay, so you're going there. I just want to make sure we're going to plug that in. Yeah. Yeah. Got it. Yeah. Yep. Okay. So now it takes you, now this one takes you to the partnership tenure opportunity. So what did we talk about? Stop, stop, stop. I want to say something. If I was a shareholder on this private equity, this is a basic pro forma. I get it. But if, if they still hold your company longer than five years?

Dwight Pecorra
0:38:27
I'm a pissed off shareholder.

Trey Tippit
0:38:28
It's a third byte, bud.

Craig Spodak
0:38:29
It's a third byte now. They've triggered it.

Trey Tippit
0:38:31
Yeah, Dwight, they're saying it's a third byte.

Dwight Pecorra
0:38:31
Pissed off shareholder, meaning this third byte is with somebody else, right?

Peter Boulden
0:38:35
Of course. This is not your- They're not trying to hide that.

Craig Spodak
0:38:37
They're not hiding that.

Dwight Pecorra
0:38:38
They're just using the basic pro forma.

Peter Boulden
0:38:40
They're saying, hey-

Craig Spodak
0:38:41
They're giving you the pro forma of the person who buys the company from the person who buys their company from. Dwight, it goes like this. Column one, first byte, we bought you. Column two, someone bought us. Column three, someone bought all of them, them and us. Right? Might as well go down the fourth byte because then it's alien to come down and they manufacture gold. But wealthy, wealthy aliens. It is possible, but I just want to make

Dwight Pecorra
0:39:06
sure that the deals aren't continually structured infinitum by the deal you made today, those deals will have to change, right?

Craig Spodak
0:39:16
Well, of course, that's why you want to fight for it. If you believe the trajectory is going to be this, then you want to fight for as much common, like I said in the beginning, as possible, because that's the only thing in these models

Peter Boulden
0:39:27
that we've seen that have been accretive to the multiple.

Dwight Pecorra
0:39:31
Yes. And it remains as capital gains.

Peter Boulden
0:39:33
Yes.

Craig Spodak
0:39:34
Yes.

Peter Boulden
0:39:35
By the way, this is-

Craig Spodak
0:39:36
Very good point, Dwight.

Dwight Pecorra
0:39:37
Very good point. Hold on.

Dwight Pecorra
0:39:39
We don't pay attention to that.

Peter Boulden
0:39:40
It's a stock situation, right? So you're paying cap gains, not ordinary income on that.

Craig Spodak
0:39:45
Very good, Dwight. Thank you. And you didn't need any of the cash or clothes to feed or clothe your family. You've just actually reinvested it. You've never had to take a dollar of it out. So- You better have the side hustles out yourself. Yeah. You have that, yeah. There's literally not depleted one single dollar of your- We're going to give you this and you can't touch any of the capital, nor can

Peter Boulden
0:40:05
you touch the interest from this guy.

Dwight Pecorra
0:40:06
Right.

Craig Spodak
0:40:07
But we've prearranged an agreement with the IRS that they don't tax you so long.

Dwight Pecorra
0:40:12
I thought you were going to prearrange an agreement with Etsy.

Craig Spodak
0:40:14
So you got a little, little side hustle.

Trey Tippit
0:40:16
Yeah.

Peter Boulden
0:40:16
Yeah.

Peter Boulden
0:40:17
So look when this is, of course, when you're, when you're, if you were presented with this, you're going to look in this page, it can be like, damn 10 years. And the top number you see is $106 million now, right? Potential. And so you can't unsee that regardless if they're full of shit or if it's just a pie in the sky pro forma, it's like, Whoa, it's an attention grabber. No.

Peter Boulden
0:40:41
Sure.

Craig Spodak
0:40:41
Of course.

Peter Boulden
0:40:41
Okay. So this just goes through the exact same. I want to jump over, but it gives you my assumptions. If you're listening to this, it's basically saying the buckets are growing and it's showing you how granted, like Craig said, it's a little bit, you

Craig Spodak
0:40:55
know, there's some artistic license going on in here, but, uh, all right. But it is, it is a grander illustration. I know with the mastermind, we're just coming off of financial freedom and wealth building. It is a, it is a good illustration for the effects of investing. You know, it does make it a compelling story for the law of compounding interest. And I mean, all of us on this call are in a significantly different place than we would have been or could have been had we not chosen to invest. It's not that our salaries have grown enormously, although we've experienced a good degree of luck and benefit there, but it's our investments. It's the fact that we bought buildings at blank and 10 years later, mortgage principles been reduced and appraisals have gone up. So it is, it is really cool. Just like you're saying, we did this in the mastermind and kind of shifting people away from like, well, how much do I make to how much am I worth?

Craig Spodak
0:41:47
Right. Right.

Craig Spodak
0:41:48
Because that's the ultimate KPI. If you're talking about your financial freedom, KPI is what am I worth? Not what do I make on a year? And so the best ways for aggregate wealth, right. Net worth. And we go through those exercises, right. And, and, and Randy helped kind of with some of that.

Peter Boulden
0:42:02
I agree, Greg, it's, it's, it is, this is a, this could be a shortcut to that.

Dwight Pecorra
0:42:06
Yeah.

Craig Spodak
0:42:06
And in many, I mean, not at the scale that it was just represented in the prior slide, but we've all experienced this type of growth because of investment. So they're just, they're making a really good and a fair assumption on investment, although the returns might be a little inflated, but keep going. So this is just a summary. This page is a summary. We're going to do the end of this document, the end of this pitch deck, essentially what it is. We've already gone through the compensation. We've already gone through the consideration, which is the terms of the deal, the financing. Basically, they're saying this transaction will be funded through a mix of DPO equity, co-investor equity, a modest amount of debt, and seller equity. Basically, you want to know how levered are you going to be in order to buy me? Because they put themselves in an over-leveraged situation to buy you, right? Massive amounts of debt. Then that's a predicament. What am I trying to say? That's a dangerous position for your rollover or your contingent payments, all the things after the cash had closed, is what I'm saying.

Dwight Pecorra
0:43:09
This is the component that individual who put everything in did not have clearly delineated as to, you know, the same way you would evaluate having a partner join your practice, someone buy into your practice, is the same way you should evaluate the individual who's buying you and you're still retaining equity. Because clearly you have a scenario here where they're saying a quote, modest amount of debt. Let me be very, very clear. Private equities are not putting money out, right? They are actually taking from their line of credit to buy your piece and they're moving on from there. That's all they're doing. That's how big what we're talking about here, right? And so their modest amount to their whole portfolio, yeah, it's a modest amount of debt, but how leveraged they are and how they have to approve that and delineate that they're not at risk for you to potentially lose your equity or your stock becomes penny stock is the piece that was not properly evaluated before. And honestly, it's because most of us dentists don't know any different. We don't know anything. I know a lot of people in particular, some people on this pod right now are not going to be a fan of a broker. This is where I think the broker can make their money, be worth their money, right? They have the ability to really evaluate more than one individual to buy you, see which one is the least leveraged versus others, those types of things. And this is the part where it really, I think the crux of it is in my personal opinion.

Peter Boulden
0:44:35
Yeah, so you want to have someone, right, Dwight, like you're saying, that you probably don't want to, you can't go through this alone. You need to have a deal doula or an iBanker or a broker, preferably someone who's going to act as the advocate in your behalf, and they're going to earn, like you said, Dwight, they're going to earn that,

Craig Spodak
0:44:51
Craig, what would you say the average rate is? Maybe five?

Dwight Pecorra
0:44:54
Seven to 10%.

Dwight Pecorra
0:44:55
Oh, okay.

Craig Spodak
0:44:56
On a broker? On a broker, yeah. iBankers probably aren't as much, but they may not have dental specificity. But there are, people can use attorneys and things like that, but don't, yeah, you definitely, at this level, you wouldn't go through it alone. You would need some, you would need no matter. Yeah. You would need someone who's done this all day, every day kind of thing. The, in this instance, there's 150, 150 mile non-compete. No, we moving countries.

Dwight Pecorra
0:45:25
First of all, I'm just going to, I'm jumping in. I'm sorry. I'm being too verbose, but I love this stuff and I read through it a lot, but I think in a city on max you would ever see in a in a high value even higher value than this an Absolute max I have ever seen is 25. Mm-hmm in a rural maybe 50 a hundred On arrival, but it's a future locations, right?

Craig Spodak
0:45:54
Right imagine so you're like, okay. I'm a hundred and fifty one miles from your nearest location I set up shop on the three chair facility. I've gone back to becoming a dentist because I just want to spend my time there. Like, Oh, we're really starting to inform you. We're putting a location there in 2034. Well, I got to get the fuck out.

Trey Tippit
0:46:12
All right.

Craig Spodak
0:46:12
You know, and this is of course like, right. They're trying to insulate their investment. Basically saying you can't do dentistry unless it's for us for the next X amount of years. That's kind of what they're saying, right? Well, how many years is it, guys?

Peter Boulden
0:46:26
It's a five year.

Dwight Pecorra
0:46:27
It's a five year. Okay. The non-solicit is fine. The non-compete is just egregious. It's kind of a middle finger.

Peter Boulden
0:46:32
Right.

Craig Spodak
0:46:33
Well, we all know about non-competes. They don't hold up for nothing. Yeah. But I'm sure this private equity has in-house attorneys. You really want to fuck with them. Yeah, just, you know, make your life miserable. You up with attorney fees on your end? Agreed. Okay. So the minute kind of is going to talk about like we're going to do this and you're going to do this, right? Like basically the go forward roles, it's basically, they're just saying. Is our, our expectations the same, right? You're going to continue to do this. We're going to do this. Um, I'm just trying to break down this, this document further guys. And then other key assumptions we're assuming for this offer for this LOI, we're assuming practice owner that you are debt-free and cash-free. If you're not, that has to be paid before, before we take ownership. Um, it assumes that we are going to keep an average level of working capital. So if you have in this instance, if the practice had a working balance of half a million dollars of working capital, that would be theirs at close. So you do not take the cash. You do not take your cash at close. They become your working capital. So they're taking. No, they take custodial custody. They take custody of your working capital. Yes. Yes. You hand over the keys to your bank account is what they mean. Sure. Yeah. Real estate. You get one hundred and seven million dollars. Yeah. So so what's a half a million bucks in cash? OK. Real estate basically saying that like that the the leases will be this person own their buildings. They would be renegotiated to market lease. And then there would be some there would be five years to the existing term and multiple tenant renewals. As we always talked about in real estate, renewal, the base rate is for them, the renewal options are for you, right? So, I've seen them where they say, hey, we'll do a five-year base with four five-year options, right? So, essentially, they're only on the hook for five years,

Peter Boulden
0:48:21
but they get the option to have a 25-year lease. Yep.

Craig Spodak
0:48:24
Okay, employees and, basically, employees and benefits transitions, non-clinical staff will become employees of the DPO. Okay. Easy. And then this last thing is I can't read it on my screen very well, but it's equity forfeiture. If you leave, if you leave this deal sooner than five years, if you bail at year four, you forfeit your equity. That's what?

Dwight Pecorra
0:48:49
That's psycho-lingual, first of all, no. That's dead on arrival deal. If you see this on there, this does not work, no matter what, because this is clear. Because it says, first of all, it says unfavorably. Okay, legally defined for me, unfavorably. Legally defined for me, any of this, you've got to get this striked. If you had a broker on this deal, anybody would look at this and be like, you've got to remove this to make any sense of this. Because if not, anybody can define a reason to make you exit. With all due respect, everybody's going to be working in that fourth year a way to kick you out. And so it has to be, there can be no equity forfeiture. This is stock.

Dwight Pecorra
0:49:32
It's stock.

Dwight Pecorra
0:49:32
It is what it is.

Craig Spodak
0:49:33
Reminds me of that movie Office Space. Remember when the like, the guy who was like, never really speaking. He's like, yeah, we're gonna have to move you to the basement and he like blows the whole place up.

Trey Tippit
0:49:42
Yeah.

Peter Boulden
0:49:43
But the stapler.

Dwight Pecorra
0:49:44
Where's my stapler?

Craig Spodak
0:49:46
Make sure, but I mean, listen, Dwight, I mean, you're talking pretty harsh, but $108 million over 10 years, you know what it is over 30? I love it when you go into this mode, bro.

Trey Tippit
0:49:57
100 million.

Peter Boulden
0:49:58
All right.

Dwight Pecorra
0:49:59
A 14th bite of the apple is seven.

Craig Spodak
0:50:00
Well, where's the tax implications?

Peter Boulden
0:50:03
Hold on.

Craig Spodak
0:50:03
God dang it.

Dwight Pecorra
0:50:05
You know?

Trey Tippit
0:50:06
He's really itching for taxes.

Craig Spodak
0:50:07
I know, but I just want to, I mean.

Peter Boulden
0:50:09
Where is all the shit you prepared, Bolton?

Dwight Pecorra
0:50:11
Jeez.

Craig Spodak
0:50:12
And by the way, it's probably, that was my favorite. It's probably not such a bad deal. $108 million over 10 years. OK. So this is just a very simple, I kind of just did some tax, napkin tax things, just so we could illustrate the point of EBITDA that you already own versus the cash flow you will get potentially. Okay. So in this instance, actually, they – I do know for a fact that they raised the cash offer to 20. Okay, so I put that in the model. And then – so if your cash at close is 20, you're going to have a $4 million – Capital gains. Capital gains from the federal government. You're going to have about a 1.15 from the state, and it differs per state. So landed in your account post money, post tax would be 14.8. In today's market where we have no risk, essentially treasury bills, I know we assume a 4 percent yield. That's a little anemic, but yeah.

Peter Boulden
0:51:06
Okay. All right. Just assuming.

Craig Spodak
0:51:08
A little bit higher. Okay, fine. If we take it – let's take it – you could even take it to seven. I can't control this document right now. I would say not higher than five. Yeah, five is fine. But Craig, but you get it. But at this phase, and I know this for a fact, you start getting into an abundant phase versus now you're just in a conservation phase. Once that money and you're thinking that's all the money I'm going to get. So you're not willing to risk it like you think you do now, but you're not in that abundant. I know you're going to say, give me a bunch of Treasury bills at four percent because I can't afford to lose this. I have no second act in this dentistry.

Dwight Pecorra
0:51:40
Great perspective. Great perspective.

Peter Boulden
0:51:41
Thank you.

Craig Spodak
0:51:42
And by the way, never mind the scarcity of the return and the risk of – or the fear of capital loss. Every time you go on a vacation, you're actually not just spending the money. You're spending the money that the money earns for you. Yeah, yeah, yeah. So it's not that you make decisions about how risky you're going to be.

Peter Boulden
0:51:59
But you thought you had a conundrum where you were gone from the operatory on vacation and weren't, you know, I can't leave the practice and take vacation because who's going to do the dentistry now? Like I can't take vacation because who's going to earn the yield on the money that I would have spent on vacation?

Craig Spodak
0:52:12
Yeah, that's that's the biggest kick is when you don't have cash coming in, you're very you're not inclined to want to spend any principal. OK, so again, this model is 600, 700 grand a year. Just OK, so can you say the rest of those numbers for people who are listening and not watching? Yes. So landed, that would be 14.8 at a 4% yield of 14.8, that would be $594,000 a year. Okay. Again, this assumes no basis of the money. So basis basically means like if you had $10 million of debt or something, you're not getting taxed on that aggregate amount. Okay. My point I pointed doing, and that was very napkin back in the napkin math guys.

Trey Tippit
0:52:51
But my point is that-

Dwight Pecorra
0:52:52
This is you not paying off debt, right?

Trey Tippit
0:52:53
Yeah, no debt.

Peter Boulden
0:52:54
This was you assuming you had zero debt on the practice. Assuming no debt service. Which is probably something of this size, like that's probably improbable.

Craig Spodak
0:53:02
You probably use some leverage to grow this.

Dwight Pecorra
0:53:04
Yeah.

Craig Spodak
0:53:05
So- And you have to also assume you've lost the tax advantages of owning your own business. And that four or 5% yield of 14.8 is taxed at ordinary income as well. So now-

Peter Boulden
0:53:16
Wait, say that again, Craig.

Craig Spodak
0:53:18
So it's also, you know, now you don't operate a business. So you've lost any tax advantages of your own business. Oh, 100%. And your-

Trey Tippit
0:53:27
You're W2.

Craig Spodak
0:53:28
You're W2, but the earnings, the money on your earnings is ordinary income. 100%.

Trey Tippit
0:53:34
So that-

Peter Boulden
0:53:35
You're yield, you're saying, right?

Craig Spodak
0:53:35
You're saying you yield on your bonds. Yeah. So what Randy always likes to say is like, when you're a business owner, you earn, you invest in your business, and then you pay tax on what's left over. When you're not a business owner, you earn, you pay tax, and then you invest what's left over from that. So it's just, you lose a lot of tax efficiency. But still, we're talking about ridiculously high numbers, but for the average practice, the average person, you really have to calculate whether or not it's worth it. If you love your work and you love your business and you feel like it's going to grow well, and you can't make more money on it passively as a net to sell the asset, it's worth it to keep it. Can you help me say that in a more clear way?

Dwight Pecorra
0:54:15
Yeah.

Peter Boulden
0:54:16
So the multiple, it basically is this an extension. What you're saying is like, look, in 10 years, you would have the same amount of money that they're going to give you.

Dwight Pecorra
0:54:23
Right.

Craig Spodak
0:54:23
And you could walk away from the practice. In that situation, yes, but the part that becomes compelling is the bites of the apple. Yes, of course, of course. And so in this scenario, this practice was going to be the platform of the DSO, which if it worked, it was going to work really well, but that's the highest risk scenario because the DSO could fold. My point is basically in this scenario of kind of showing the tax implications is that you become, you shift into, I got a check and now I need to get yield from that check. And you go into conservation mode because your life is now, and also your life may have been, your lifestyle could go down significantly. In this instance, we said that EBITDA was around three and a half million dollars, right? Which is quite different from a cashflow perspective, abundantly, vacations, investments, than the $600,000 of yield, which is still a tremendous amount of money. I say this to you guys, ready for the bombshell?

Dwight Pecorra
0:55:21
Because this was ours.

Craig Spodak
0:55:23
This was an actual live deal that I got. So this whole don't sell mentality that we've gone through is not bullshit. This was a real offer that was delivered to our group. And in all light of all this, going through all these permutations, all these emotional things I talked about, it still didn't make sense. Because I didn't want to lose control of the practice. I believed in the partners, I believed in the direction, and I believed that we weren't plateauing revenues. And I also knew that at the end of the day, I was going to be highly unfulfilled working for someone else for the next five years. For not having control. So were my partner doctors, right? So as a group, we just thought it was as great of an offer as it was. We felt like there was too much to risk, too much upside, and we were not gonna be as happy as we currently are.

Dwight Pecorra
0:56:15
I like your vulnerability, Pete.

Dwight Pecorra
0:56:17
I think that each of us should all do the deal and bring it to the table and show ourselves to be the type of people who are going to continue to break this down because I mean I see things now through it.

Craig Spodak
0:56:30
Well, I actually heard – thank you for that. Thank you for that comment. I don't want to be lost. Yeah, I'm hemmed and hauled about actually disclosing this because this podcast is very large now, as you guys know. It's grown, and so a lot of people are going to hear this. I'm not disclosing the private equity group on that, obviously, but I appreciate that. We had a comment once on YouTube or somewhere. I don't know where it was, Craig, and you'll remember this. Basically it was like, hey, Bolden and Craig talk about money a lot, but we don't even know if their practices make any money kind of thing. They never talk about finance. They never talk about – It's like why don't they disclose it? Why don't they disclose it? And I was like, okay, that's fair. But part of that thing how we started the podcast, Dwight, is like two ways in the snow. I didn't ever want something like this to be looking like a braggadocious thing like, look what I got and you didn't. But I think it also puts people off. I don't want to lose the relevance of to the, you know, listen, what Pete's built and I think what all of you guys have built, I guess all of us have built is something that's like really at a very, it's very rare for dentists to get that. It's just rare. We're in rare air. And I don't want people to look at that and be like, ah, damn it. I can't listen to this. Or like, I can't, I can't relate to it. So my fear, because I've, I've been to that altar three times and one time was, you know, these guys with what Pete was talking about, but before that we were even closer Pete to that other deal. That was closer and it was a great exercise to go through because. It hit me like a ton of bricks and I woke up and wrote an email at 3 in the morning and it was the most clear I've ever felt and I was so sure and the person that was trying to buy us, who's an iconic dental business person and Peter and I think the world of this guy, he's going to change dentistry. I literally, he said to us like, name your number and Peter and I both never named the number because we knew there was a really good chance that if he said, if we would have said, okay, pay us blank, there's a good chance he would have said, okay. So we actually never responded to him because we didn't, we were so, for me personally, it felt like a death, like my identity, my purpose, but knowing that you have the optionality that you're worth something that there's, that you don't have just a single track to run on, knowing that you can have the freedom of direction for your future is just the most beautiful thing ever. Because what you should really do in life is you should work as if you don't have to. And that's what this exercise does for you. Or a net worth analysis to say, okay, wow, I make blank passively because you built a money machine and you invested. And then you realize I only work because I want to, and that's the most beautiful place that you can get to. And you know, Craig, that was awesome. That was awesome, Craig.

Dwight Pecorra
0:59:18
Yeah.

Craig Spodak
0:59:19
I want to challenge it a little.

Dwight Pecorra
0:59:20
I want to challenge it a little. I love it because that's exactly what I believe. But you said there's no number.

Craig Spodak
0:59:26
I think freedom of direction. Well, there was no number for that situation.

Dwight Pecorra
0:59:29
I do think at some point in time, though, there's a number in which freedom of direction

22
0:59:33
can get forward.

Peter Boulden
0:59:34
Of course.

Dwight Pecorra
0:59:35
Of course.

Craig Spodak
0:59:36
Make sure there's a number. Well, no, there wasn't for me at that particular moment, though, Dwight. There was not. And I really believe I called Pete and it was late at night and I'm like, Pete, do you want to say your number? He's like, no, I don't. And I think we could have got it, the deal that was transacted that we were a part of within reason, right? Like we knew there was parameters. Give me one billion.

Peter Boulden
0:59:55
One billion, I'll do it.

Dwight Pecorra
0:59:56
No, but it was like the 100 million.

Peter Boulden
0:59:57
Right, right, right.

Craig Spodak
0:59:58
No, but I mean it. Within reason.

Dwight Pecorra
1:00:00
70 million.

Dwight Pecorra
1:00:01
Right.

Dwight Pecorra
1:00:01
Right.

Trey Tippit
1:00:02
Right. Right.

Craig Spodak
1:00:02
No, but I mean, within reason, 70 million, 75, I mean, this is where trade.

Dwight Pecorra
1:00:07
I don't know.

Dwight Pecorra
1:00:07
I don't know, Dwight.

Craig Spodak
1:00:08
I don't know. I don't know if I'd be, you know, like, listen, beyond there's three orders of wealth. There's like being able to pay your bills. There's being able to pay your bills and have the freedom to pay your bills. And then there's probably like, I could, within reason, I can go to any restaurant I want to, and never have to think about it and that type of thing. And then like I could travel how I want or where I want, maybe not how I want. And then beyond that, there is a law of diminishing returns. And I think we in Western, in America particularly, like we're not living as well as others are living. We're not as happy. And I have all these wealthy friends that are super stressed out about money. And I mean, there's legacy and stuff like that. But at the end of the day, you have to be happy as well. And with this particular- And that's the test, right? The rubber hits the road, Craig. You're saying like, you got put in a scenario where you have to like, okay, I backed up against the wall. What's the choice? And the consequences were not worth it for you. The deepest part of it was like, okay, am I being responsible for my family? All it came down to is a selfish thing. It was like, is this imprudent from my family? I'm being irresponsible because I love my life, not going, you know, thank God, but am I being irresponsible to my children without this money? Because if everything unzipped and I got hit by a bus, I don't know if the transaction would be as clean as this was going to be. And then I chose myself actually. Let me ask you this from the standpoint, Craig, you're a good person to ask this of, but, and this pivots a little bit from this conversation, but now that you've seen a number, any number, whether it be a Pete's deal or, you know, deal you've seen in the past, how do you, how has that changed your paradigm of what your goal is moving forward? To build, to all, what do you,

Trey Tippit
1:01:51
how do you think differently now that you've seen it?

Trey Tippit
1:01:54
Good question.

Craig Spodak
1:01:54
So are you asking like tactically or philosophically? Both, let's start with tactically. Tactically, I mean, growing right now because I'm not making, like, if I look at the numbers of the investment to grow my building and my practice right now, it doesn't purely make sense from that, from the straight line math to spend X millions of dollars to expect a growth of X return. But I do believe retail businesses are either like we always say, they're coasting or dying or growing. So I'd rather grow than die. And I believe there'll be numerous implications to the investment in the practice to keep it going forward. Philosophically, it lets me know that all the work, because when you're a dentist or a W2 worker, an employee of your own practice, all you see is the dollars you make, and those are the worst possible dollars. Like the Scott Galloways of the world who we've had on the podcast, they never made more than 120,000 in W2 earnings before in his life, but yet the guy's worth hundreds of millions of dollars. And what I mean by that is that the passive growth of our assets is what really frees us up. So philosophically seeing a number and knowing that as long as I grow, and even if multiples contract, it could be 20, 30% up or below that number, it gives you a sense of confidence or a sense of resilience that your business is not going to be flushed away. And as Randy always says, the minute you transact, you look at the money for a couple days in your bank account and you're saying, holy shit, I can't believe there's all that money and then you realize two things. One, I have to deploy that money because it's like holding melting ice and two, money was there all along. I always had it, I always had it. So if you- Does it desensitize you to a number? Do you now look at it and go, well, 10X, you know, 30 million. I mean, like, that's the thing about money. 12X and you went to 50 million.

Dwight Pecorra
1:03:41
Well, that's the thing about money.

Craig Spodak
1:03:42
Like, you know, I, I can still remember thinking to myself if I could just make $180,000 a year, if I could just make this, if I could just make that. And then you make that. And I think that now. What I'd like to do.

Peter Boulden
1:03:56
If then I will be right. Like, yeah, I can do that. Then I will be happy.

Craig Spodak
1:03:59
If I will, then I will be successful.

Peter Boulden
1:04:01
Right.

Peter Boulden
1:04:01
Is that what you're saying?

Craig Spodak
1:04:01
Yeah, that's exactly what I'm saying. But now where I'm at is like the things, money's not as, and I hate to say it, but it's just a life cycle, you know, at 52 years old and being at this for 25 years and investing in all that stuff, it's just not the driving factor. It's like that Maslow's hierarchy of needs. When you have no money, it is an existential problem. You can't fucking pay your bills. There's no more clear and present problem than money and then it's just the next level once you have money you want this or that Or maybe some people just love the game of making money But I do reference like Naval Ravikant in his book the almanac and what he said I actually said it to Patrick Bet David a week ago while he's in the in the office And I said to him like, you know, like for me, I'm just kind of I appreciate what you're doing You're trying to change the world you're gunning. He's trying to you know, turn, you know He's trying to turn his empire into something larger, but Naval said it best. Naval said in order to become wealthy, you have to be this type A gunner where you're constantly trying to turn 10 cents into $1.50. You're taking radical risks and you're trying to chase the inertia, to break the inertia to make money. He says at a certain point when you become wealthy, you're supposed to softly transition to a monk. So you have this gunner personality for the first half of your life. And yeah, so it's, and I do believe that for most people, what got them here, if they keep employing those tactics throughout their life and throughout their net worth growth, they become singular dimensional, become a little too aggressive. I don't know. I mean, that's just my bias too. And when I said that to Patrick, Patrick's like, Hey, listen, that's your bias because you know, I want to change the world and Tony's the same way. Like, you know, I wish Tony would have a beer and go to the beach and chill. And I say that to his wife sometimes. I'm like, I wish Tony would chill. And she's like, that's just your biases because his, his, his meaning of existence is to radically transform and spread his gifts to the world. And for a guys like me, that makes me feel like, oh damn, it maybe highlights my own shortcomings and it's the softener that I use. But for me personally, and that is a long-winded answer, I am content and I don't want to trade too much more energy for turning those dimes into dollars. I'd rather turn my dollars into a $1.10. And there's a time for big gambles and rolling the dice and pushing all your chips forward, and that's not the time for me now. I have enough capital to make passive on my capital. I don't want to go through that bellyache and heartache personally. Here's why I love you guys. Super segue. I'm listening to you talk. Trey is listening to you talk. Dwight, like, and I was trying to quickly do math. Over 85 years of dental experience on this podcast. Right? Totally different trajectories to get here. Somewhat always kind of agreeing on things. You know, plus or minus 20%. But directionally, we're the same. And our thesis is really to help people because we have stood on the shoulders of giants before all of us have mentors, even we have become mentors to each other. And so I love this as I'm looking at it from the context of other dental podcasts or other business podcasts or something. And I just really love the value add because it's not Trey plus Dwight plus Craig equals the mix. It's the exponential thing. And so, I don't know, if you guys got a lot of value from this, listening to this, I did. I mean, I just love hearing y'all's perspective.

Peter Boulden
1:07:30
And, you know.

Craig Spodak
1:07:31
Yeah, but post some comments. We love those.

Peter Boulden
1:07:33
So we know.

Craig Spodak
1:07:34
And one other thing too, just to add on a piece, and then Dwight, I want you to speak because I could tell you want to say something and I want you to say something. One thing is it's a little bit of a knock on some others. We've all done it. I've seen Dwight's operation. It's truly impressive. I've seen Trey's operation, truly impressive. Pete, I just got back from your place yesterday with your corporate office and all that. We've all done it.

Peter Boulden
1:07:57
Is it truly impressive?

Dwight Pecorra
1:07:58
It's truly impressive.

Craig Spodak
1:07:59
We've all done it. No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no,

Trey Tippit
1:08:01
no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no,

Craig Spodak
1:08:02
no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no,

Peter Boulden
1:08:03
no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no,

Craig Spodak
1:08:05
no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, something. Bring us home. I think this is a, we have the luxury being in a beautiful time and being in a beautiful industry and profession. And at the end of the day, you can get offered a lot of things, but it's very personal. And to be

Dwight Pecorra
1:08:24
able to stand up front in the driver's seat and decide what's best for you and your time in life, right? We know some incredible human beings, right? Even, you know, Scott Galloway, you're quoting him, but the way he's made all his money is through private equity sales, right? Clearly, you know, there are some massive individuals that have been on the podcast lately, even out of here in Texas, right? Who've just sold out, you know? That are moving to other things in their life. And that's okay. Mark Costas, great example of that. And he's sold multiple practices over a series of times, and now his focus is on other things. And if we're going to talk about the expanse and the direction of your own personal happiness, there is a transition between the speed at which you're running and the rate and the methodology of how you're running your business and what you're spending your time on in the first half of life, and how your crystallized intelligence transitions to the second half of life. And I do think that a lot of us get the honor of being able to say, well, maybe if you weren't teaching and training and masterminding and running podcasts and being affiliated with different things, at this stage in your practice, would you get as much out of it? And kind of owning a practice is kind of like the lab that we get to play in while we're also getting to do some of this. I think it's multifactorial, but it's very personal. And there's a lot of individuals who are listening to this, who are seeing this deal and they're like, yeah, I will reinvest that into other businesses and do different things. But at the end of the day, it's personal. And what I love is that we're pointing out the pitfalls. We're pointing out what to look out for because our industry deserves better, right? There's a lot that's on the chase.

Craig Spodak
1:10:26
Everyone chases the rabbit of the bag of coins at the end of the rainbow.

Trey Tippit
1:10:30
Right.

Craig Spodak
1:10:30
And so what Craig is saying is that when you get to the bag of the room and you see the coins, you're like, all right, then immediately your mind goes to what after this though, right.

Dwight Pecorra
1:10:39
And so what he's saying, and I think it's a dangerous place to be like, it's your purpose. Do not chase the dollar figure chase that area of fulfillment where you're going to end up.

Craig Spodak
1:10:52
And also the stage you're at too.

Dwight Pecorra
1:10:54
So I think getting- But I want to be honest with you, there's a good chance that a lot of us would end up in a deal that looks something like this and higher at some point in time where the timing might work.

Craig Spodak
1:11:06
Right. Oh yeah, yeah, of course, Dwight. And that's how I started that is like, just know where you are and just face all this head on knowing that like, hey, I need a second form of fulfillment after I check out. And after I sell, what are you going to do? That's a very important thing. How am I going to get yield? And what's my obligations? It's really, this was just educational so that it just brings awareness to the site so that people don't get caught with their,

Peter Boulden
1:11:27
you know, hands down. Chase your purpose.

Craig Spodak
1:11:29
And that's right. And if you're going to sell your business to Dwight, you have to figure out what are you going to do? Because next, because I see all these friends of mine, they have to do something. And there's an 80 year study that was just done a couple of years ago from Harvard. And it talked about, and you know, my staying for Harvard. So I'm expecting you to rag on me for this one. But talked about overall wellness, physical health, mental health, with social connection. And I know for many of us that are cutting crowns five days a week for 20 years and haven't taken a week off, it must be nice to be able to say this. But if you could take off a little bit of time, and maybe that's the move for you to do, so you don't have to swing this correction. We've said this many times. But for those that haven't heard it yet, don't make a long-term decision from an emotional standpoint. I don't care how bad it is, your practice could survive two or three weeks without you being there. It won't disappear. And once you're alone for three or four weeks, the

Dwight Pecorra
1:12:29
sipping champagne on the beach can get old real quick. What I want to be focused on though is that we're talking about ourselves and the majority of individuals who get these deals, who are answering the emails, it's because they

Craig Spodak
1:12:42
hate their team, they hate their business, they hate their life. Right, right. And I'm gonna throw it to Costas by the way too. I have tremendous respect for Costas as a dental educator. His practices were never what the four of us were. And it would have been a different situation to sell something that it was, I don't know if his practices were a reflection of his. He got distracted in a good way because he started his podcast and lecturing and all that. We started this after completing our practices. So we built our practices, we built them to the way we wanted it, produced the way we wanted to, and then we started

Dwight Pecorra
1:13:20
to speak about it. But his purpose is in a foundation and he wants to work charitable work for the rest of his life. That is a transition and there's a lot of ways. We just can't define what is an appropriate purpose for anybody and I

Craig Spodak
1:13:33
think that's what we should stay away from. Right and you can make your practice work for you too.

Dwight Pecorra
1:13:38
Timing plays a nice doing.

Peter Boulden
1:13:39
I mean, there's stats that go over this,

Craig Spodak
1:13:41
even for dentistry.

Dwight Pecorra
1:13:42
He's frozen.

Craig Spodak
1:13:44
He's coming back to us.

Dwight Pecorra
1:13:46
There he is, there he is. Saying that there's stats on the retirement.

Peter Boulden
1:13:48
If you don't have a next purpose to get yourself out of bed in the morning, you retire and then five years later you die. Yes, correct.

Craig Spodak
1:13:56
And so purpose is not just like, hey, warm fuzzy, it's actually incumbent upon you for longevity. Yeah, you have to.

Peter Boulden
1:14:05
Yeah, yeah.

Dwight Pecorra
1:14:06
And I know that one day, if I ever sell anything in dentistry, I will probably open another business within the next year. It may not be dentistry, right? It would be one of many other businesses I've done. That's just who we are, but everybody's purpose is different. We have the luxury of that in this profession.

Craig Spodak
1:14:21
People ask me all the time, Dwight. They ask like, what do you like to do for fun? And I'm like, well, my hobbies, like I kiteboard and I do business.

Peter Boulden
1:14:27
Like, business is a hobby.

Craig Spodak
1:14:28
I enjoy, I enjoy the process of it, right? It's not just running and kiteboarding and playing my kids. It's business too. I enjoy that. Yeah, that's the one of the most fulfilling areas of my whole life. Although, in my career, I'm selling something

Trey Tippit
1:14:42
that people want.

Dwight Pecorra
1:14:43
Yeah, I agree.

Peter Boulden
1:14:44
Sex, drugs, music.

Craig Spodak
1:14:46
Something where someone comes to me and goes, can I have some of that?

Peter Boulden
1:14:49
That's what I want.

Dwight Pecorra
1:14:49
Instead of doing-

Craig Spodak
1:14:50
Oh, you wanna get in that business, what you're saying?

Trey Tippit
1:14:52
No one's come to me and be like,

Craig Spodak
1:14:53
you know what, I want a two inch needle in my face.

Peter Boulden
1:14:55
Yeah, you need to buy liquor stores then, Trey.

Craig Spodak
1:14:58
I know, that's exactly right.

Peter Boulden
1:14:59
Good financial storage units.

Dwight Pecorra
1:15:01
You know?

Craig Spodak
1:15:02
All right, guys, we're at 120. It's a long pod. We are obviously in long format pods right now. So we are. And, you know, if you haven't been exposed to the summit by now by God land on the damn bullet summit.com Page and hit a last-minute ticket this one's gonna rock for sure. We've got some great speakers It's gonna be fun the energy and they're team So you always uh so you know by now if you haven't done it, and then you know I don't say but no do it Do it's not too late do it

Peter Boulden
1:15:32
And that's it guys beautiful day here. I'm going to enjoy the rest of the day, Trey, I got, I sent you pictures from my land today. I was on my land walking with my 50 pound ruck pack, my vest. Trey and I have a text challenge he's getting his, and he's been taunting me, dude, why can't you do two and a half miles? So today I sent him a picture of two and a half miles with a 50 pound bag.

Dwight Pecorra
1:15:55
That a boy.

Dwight Pecorra
1:15:56
It was laying down when he sent it.

Peter Boulden
1:15:57
I feel like Trey and I are going to kill each other. In like two months, it's going to be like, well, I did 10 mile.

Craig Spodak
1:16:05
I'm just going to pass out and die on one of these because I don't want to lose to him.

Dwight Pecorra
1:16:09
Well, I know what to do on the bike.

Craig Spodak
1:16:10
I'm going to jump out too.

Peter Boulden
1:16:14
I call dibs.

Dwight Pecorra
1:16:15
I'm like, how much for that practice? OK, with his gone, I think it's a lesser value.

Craig Spodak
1:16:20
Well, Pete's gone, so I'm calling discounts on this.

Peter Boulden
1:16:25
I'm calling 75% haircut on this one. All right, guys. Enjoyed it.

Craig Spodak
1:16:31
Over and out.

Trey Tippit
1:16:32
Thank you all. Thank you all.

Peter Boulden
1:16:33
Thanks, Peter.

Transcribed with Cockatoo