again. clarence otis, i thought he'd be in there, i didn't think there would be any shakeups at darden which is red lobster and olive garden. now otis, chairman and ceo, is out. lots of good things can happen when activists pressure boards. this is one of them. i'd like to say there's a bull market et so >> tonight on the profit... i go inside skullduggery, a toy company that should be filled with imagination and fun. >> it was kind of, like, confusing. >> can you read? >> instead, i find two brothers struggling to make a profit on merchandise that kids don't want while falling short on creating new hit games and toys. >> it's our first game ever. it didn't do very well at market. >> the toy industry, while enormous, is a brutal and competitive game. >> these toys seem like they're already out there. >> and if the brothers can't learn to innovate and sell... >> steve, why do you think nascar's good for skullduggery? [laughing] >> they'll get shoved to the back of the closet with the other forgotten toys. you basically just said,

"[bleep] you, i'm just not gonna do it." 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, you're 'causing strife right now. >> and i back them up with my own cash. will you take a credit card? it's not always pretty... >> we don't 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] ♪ this is "the profit." skulduggery is now run by his two sons. >> we need to make this fast enough.

>> they won't be ready to ship until tomorrow. >> who have expanded the company into more traditional d'artois such as race cars. although skulduggery rocked up $1.6 million in sales, they still showed a net loss of $50,000. >> that's a big loss. >> and though the brothers are spending a lot of time and money launching new d'artois they still do it without testing and research. >> it's more like we come up with something that we think is fun and then we go without. >> if skulduggery doesn't find a way to generate sales. >> i don't know how we'll come out with a new line of products. >> and get into a big box retailer the debt is going to come crashing down on this. >> this is my whole [ bleep ] life. i love this company. >> we're getting to the point where we'll have to scramble. >> the toy business is very competitive, but it's not complicated. with the proper marketing and strategy in place i know i can make millions.

careful there, buddy. how are you? i'm marcus. >> marcus, i'm peter. >> nice to meet you. >> nice to meet you also. >> warehouse is big. >> 10,000 square feet if you include the offices. >> so what is your role here? >> i am the vice president. i am in charge of operations, logistics. >> marcus, i'm steve. >> nice to meet you. >> nice to meet you, too. >> steven, my brother, the president. >> i'm the boss. >> okay. >> i'm in charge of the company. i run the everyday business. i've designed pretty much everything, science kits, skulls, race cars, race sets. i wear many hats. >> when did the company start? >> 1988. >> my dad is the majority owner. was looking for a business to purchase. that's when it was all fossil replicas so we hadn't gotten into the toy part of it yet. >> all of this stuff. >> that's where skulduggery

comes from. >> saber tooth, humans, primates. >> i was wondering where the name came from because it's not so toy friendly. >> no. >> the skull line that the business started from, what percent of the business is skull business? >> less than 10%. >> why are you still in it? >> like to keep our guys busy in the slow season. >> i would like to see the d'artois. >> i'll give you a quick breakdown and then a tour of the factory. >> the first toy that we ever came out with casting kits. the casting came from the skull business so the kids take the material and mix it up with water, pour it in the molds, set in 30 minutes and air dry and paint the pieces. >> takes the mold making technology that we have. >> casting and painting molding shapes isn't my idea of a hit shape. >> the marble copter, the max tracks and the new tracers racers here which is the hottest item, kind of taking race with

the track and cars to the next level. >> and when they go over the glow in the dark track they leave traces. it's really cool. >> very cool. can i see how the car works. >> on the track. >> turn the lights off. >> i came up with a patent where the tracks connect side by side so the kids can race. >> cool. >> isn't that neat? >> i love this product. >> it's very awesome. >> what's your favorite toy in the whole play? >> aeroflicks. a disc throwing game, kind of like disc golf and when you hit the targets they shoot up in the air so the kids can flay frisbee golf. >> our first game ever. >> it's in market? >> it didn't do very well at market. >> how come? >> we're not sure. it just didn't sell, and i know it's a winner. >> all i essentially do is -- >> you got it. you got it.

>> we wanted it to be somewhat challenging, you know? >> almost got it. >> well, i don't get this game. it's not fun. there's no kid that wants to throw cardboard paper at a cardboard paper. >> what research do you do to understand the market before you just make aeroflicks? >> do you do any? >> not really. >> is this focus grouped with kids? how do you -- >> no, no. >> does that mean that you're the focus group. >> i don't need a focus group. i have a lot of experience in this business so my focus group is about 20 years of just toys. >> who do you normally sell your toys to? >> mom and pop type businesses, which is a shrinking business and that's one of the reasons why we feel we really need to get into some big box retailers. >> what marketing do you do, tv? >> don't run anything on tv. you're talking about a lot of capital. >> okay. so i think that the key to this business in a very crowded toy

space, where you're trying to get attention is a licensing play, because that's what's going to get some interest from the big box stores. >> the reason licensing deals work is you build on the brand that somebody else spends money on. you take the tracer racer virtually unknown and slap the nascar sticker on it and you've got a built-in fan base. >> can i see where the assembly line is? >> yeah, absolutely. >> who manufactured this? >> it's called j.b. plastics. they are an injection mold company over here in tustin. >> what does it cost to make this? >> about $119 to make. >> including the package. >> including all the packaging and everything. >> how good is your margin on that? >> 12 cents. >> these cars are a great toy, but they are only making 10% margin on them, that's way too

low. >> how many do they make at once? >> on one cycle it's four pieces. >> okay. the machine spits in the material, pops open, four pieces pop out. >> plastic manufacturing costs are all about time and efficiency because you're essentially renting the manufacturers equipment. the more you can make in a single run the lower your costs. if you lower your costs, you have better margins, better margins, more profit. >> i think you can take 10% out of this cost. in this game pennies count. so when you guys come up with ideas to launch a new toy, what's the process? we'll use the track just as an example? >> takes quite a while. have to come up with the pote type, and outsource the sculpting and it takes a couple of weeks to sculpt the piece and then we need to get the right angles and make sure the connectors fit. >> seems super inefficient. >> i worry about in this business or any business if i'm not quick who beats me to the

market, and they are there. >> before we are. >> i think that's the achilles' heel of this business is you've got to be -- you've got to be first. >> 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. >> that's almost 10% drop. >> right, right. >> we're going to have a bit of a loss this year. >> how much do you think you're going to lose this year? >> i think we'll be around a $50,000 loss. >> and how many debt is in the business? >> about $800,000. >> okay. >> how did you accumulate the debt? >> i think it's over 30 years. it's just kind of creeped up on us, you know. we've tried things and they haven't worked. >> mistakes. >> definitely mistakes. >> how much total inventory is in this warehouse? >> 365,000. >> and how many is aeroflicks? >> 60,000. >> $60,000 in aeroflicks. >> probably somewhere around there. we kind of went over the top

when we got into toys "r" us with that, and we thought it would fly out the door and that's part of the reason for the debt that we have, you know, being able to survive a $60,000 hit is tough for a business our size. >> what keeps you guys up at night? >> i don't know. i sleep really well. i love my job. >> to be honest with you, you know, it's $1.6 million miss and it doesn't make any money. >> right. >> so it should keep you up at money, the fact that it doesn't keep you up at night freaks me out a little. how about you? >> i put half my life into this thing. i mean, i took a second mortgage out on my house for skulduggery, over $200,000 more in debt than it should >> why do you sleep at night? >> i'd love to see the books and make sure everything checks out. >> you bet. >> of course. >> we put something together for you. >> this is all the debt. >> so i have it broken down. >> if you take all the debt together, including family debt, that's the debt right there. >> peter, this is you. >> 224. >> that's me. >> you have 1.1 million of debt,

not 800 and another $200,000 in pay ablz, so between payables and debt there's 1.3 million. how much is there in inven successfully. >> 360. >> of which i'll put 330 on it because i think some of it is not good and then receiverables are 474 so that's 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 infrastructure is here. we're organized and know what we're doing. we're very efficient with what we do. we're 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 startup because the tooling is there and there's some proprietary knowledge about the toy space. >> right. >> skulduggery seems like a good company, but they are 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 make millions. >> i came here because i like the toy business. it's fun and makes people smile, but this company is about 1.1 million in debt, and based on the earnings you've 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 challenge 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 don't want to focus on anything but cars. i think you believe in the whole car model. it doesn't work without licensing, because asgy through that aisle, i'm not paying attention unless i see a brand name that i know, so i want to license everything because that's how i think it stands out on the shelf and i want the company to be as debt-free as possible, but i think that the amount of equity that i want is going to be painful for you guys. >> we both have gone over this.

we all played you and asked questions we thought you would ask. i'm marcus lemonis. >> that's going to cost you. >> so here's the deal. so my offer is i'll pay off the 1.1 of debt and i'll provide another $1 million in a working capital line, and i want 50% of the business. >> that's not going to happen. >> why not? >> because we're not going to give you controlling interest in our company. >> because? >> it's part of who we are. >> skulduggery is me and it's my company. you don't spend 25 years. >> 1.6 million and you think giving up half of the business

is a bad deal? >> you're asking for our whole life and everything i've worked for. >> feels like a punch in the gut. >> i just offered to wipe out $1 million worth of debt and then give you $1 million in working capital and you're acting insulted about it. >> i am insulted. >> reporter: you think that i just pulled that out of my ass. >> you can pull whatever you want out of your ass. you have the money. >> i'd rather have you. >> coming up. the aeroflicks, it was kind of confusing. >> can you read? >> and later, we're going to pitch on licensing the nascar brand on one of our toys. >> i could give a [ bleep ] about nascar to tell you the truth.

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>> i'd rather be in more debt than have you running my company. >> should we get the [bleep] out of here? i'd rather be in more debt than have you running my company. >> get the blelet's get the [ b of here. >> he wants half our miss, and we just can't do that. this is not worth. it doesn't make sense. >> 25 is our line in the sand. that's a line in the cement. >> come in. >> you ready? >> hey. >> how guys doing? >> we're hanging in there. >> you wanna chat. >> sure. >> let's sit down at the table. >> these guys are not acting professional. you invite somebody into your business, you ask for help and

we sit down for a negotiation, you don't get up and 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 won't go. >> we have drawn some lines in the sand. i can't take that offer. >> to have to take such a reduced percentage of the company would be extremely painful. >> but a business that doesn't money today, to be debt-free and have working capital and that a $10 million, $15 million, $50 million business has to be worth something. >> 20%. >> to tell somebody if they provide all this stuff, they will share in one-fifth of it, it's a tough sell. >> i think the company is worth more than what you're saying. >> 36,000, 100,000 lost, 200,000 in payables, i mean, come on,

guys. you give me this line in the sand, so the way that's a good compromise for me is pay off the debt of 1.1 million but i'm not going to give you $1 million in working capital. all the debt on the balance sheet is cleared. i want 30% of the business and that's a test of whether you really are guys who compromise as opposed to everything is going to be a line in the sand. i'm down to a much smaller number, one that makes me wildly uncomfortable. >> nervous about having 30% of any business which means i'm not in control which makes my investment a lot more vulnerable. i want 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 don't want you taking on any debt or taking on any other partners without me being okay

with it. >> i think that's fair. what do you think, peter? >> you want to shake on it? >> do we need to run this by your dad? >> no, i don't think so. he trusts my judgment. if i had to ask him everything i did this place would slow to a halt. >> we have a deal. >> i feel good about it. >> that is $1.1 million check. >> i think marcus is lucky to deal with skulduggery. we have the most inowe rate issive and unique products out there. >> let's do it. >> we've got a deal. >> here's your money. >> oh, boy. >> it's time for a drink. >> hey, guys. we're going to 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 i'm going to become an investor and owner in this business and a lot of things are going to ce. i focus on people, process and product, and 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, and you have a lot of things that don't make a lot of sense. we're going to be narrowing our skews down for the one that does sell. >> a sku is a common term that describes a single piece of inventory. right now skulduggery has too many skus and many of them don't make any money. >> we'll eliminate the ones that customers don't want and get focuses on the ones they do, the cars. >> we need to get into the big box retailers and i believe the secret ingredient is licenses because the consumer 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 skulduggery has been a lengthy and expensive process. we're going to create a toy lab

so that the staff can bounce crazy ideas of a each other and come up with great car-oriented products, whether it's race tracks, self-propelled cars, whatever it may be. >> and once we have the prototypes i want to put it in front of a focus group in this lab and get feedback from people. i don't want to launch things without focus groups and research. it's bad business. >> and then the last thing is we're going to lower the cost of things that we make. it's my expectation that we double or triple this business in the next couple of years. thank you. we have a lot of work. let's get to work. >> guys, how are you? >> good. how is it going? >> i brought you here for a focus group research. going forward before we launch a product we're going to bring it to kids. we're going to find out what they like and what their parents like. all right. let's go inside. >> hi, everybody. >> hi. >> how are you? >> good. >> this is steven and peter.

now, they are asking for some help so what we want you to do is take something you think you'll like and then play with it and we'll ask you a bunch of questions. all right, ready, set, go. >> there's two decision-makers. there's the child and the parent. >> lunch it, lunch it. >> i think it's fun but -- >> mom, look it. >> if you were in a store, would you buy this? >> yes. >> you guys almost ready? how about you, laidies? >> well, i played with the aeroflicks. it is a kind of like confusing. >> can you read? >> for somebody who is 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 the cars in the bottom light up. >> i like it when it lights up.

>> that's pretty cool, right? >> yeah. >> all right. now would i like some feedback from the parents. >> today's market there's so many toys that are automatic and my daughter mentioned it, wished that it was already put together. >> these toys seem like they are already out there. >> not the racer, we have a patent on that and mattel, none of those guys can do that. >> steve's behavior is totally unacceptable. >> all these toys you can take them home. >> the importance of a focus group is having people tell you if you like your product before you launch it in the marketplace f.they had done it with aeroflicks they would have saved themselves a lot of money. these are the consumers going down the aisles. for this company to get profitable we've got to listen. i want these guys to understand that the consumer is telling us one thing. they like our cars but that's about it. so you have to focus on your core competency which is cars. we can do a lot better. all right. come on. let's go.

>> hey, guys. awesome news. they called the head guy and asked for the chief marketing officer and we have a meeting, so we're going to pitch him on licensing the nascar brand on one of our toys. >> really. >> any time you can have a chance to take your toy car and partner with somebody like nascar, well, that's a huge opportunity. we want these big box retailers to take us seriously and this give us that shot, and those 15 million nascar fans, they now become our customer base. >> i want to talk about getting into retailers, this is a game-changer. >> okay. 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 don't want anything to do with nascar, almost instantaneous. nascar is down a bit, and you if into the stores, walk into a walmart, how many nascar items do you see there? >> here's the two issues i have.

you say nascar is down. there's 75 million nascar fans in this country and we know when people think about cars in this country they think about nascar. you can't afford a market plan that allows us to put the brand on the map. >> if we don't get a licensing plan we don't get into big box retailers, so if you have another idea other than nascar, i'm all ears. >> i just talked to my toys "r" us rep about nascar, they said, no, nothing. >> we're going to base this whole decision on one company? >> i don't know, you tell me. >> 15 million people across this country, whether you're in tone can a, kansas or wherever you may be, every man and woman has heard of nascar and i want to bank on that. >> it doesn't matter. it doesn't do anything for me. >> we have a company here that does 1.6 million a year, and these guys think that they are too good for a company like nascar that's worth billions. i'm speechless. >> that's the person that goes to nas characters that drinks the beer, that does the nascar

stuff. >> 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. >> coming up. >> you absolutely embarrassed me. that will never happen again. >> tomorrow, what the [ bleep ] is this? >> it's horrible. >> a culinary dream team. >> break down how you're going to spend my $300 howe. >> put up their own money to launch the next great mesh restaurant. >> where the hell did it go? >> can this cooking couple succeed in spite of themselves? >> get out of kitchen. >> tuesday night is deal night all starting with "shark tank" at 8:00 and 9:00. ♪ the last four hours have seen... one child fail to get to the air sickness bag in time. another left his shoes on the plane... his shoes! and a third simply doesn't want to be here. ♪ until now...

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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 >> inform 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 it's nascar or the man on the [ bleep ] moon, what matters is that you don't have the money to be on tv, you don't have the money to do print ads so what i have to do is find the next best thing and the next thing is draft off nascar's marketing. >> drafting is when one car rides behind the other and they use the aerodynamics and the wind support of the others to pull themselves along. by attaching ourselves to a brand like nascar we gain instant credibility which allows to us draft off nascar's big

brand. that's free advertising, and that free advertising turns into sales for our company. >> i need you to not shoot things down before you give them a chance. >> we're going to new york. you guys are going to make the presentation. i'm going to help you if you sink because i'm not going to get embarrassed. now that we focus group tested the cars we'll laysner on that part of the business, and we're going to get rid of the things that aren't selling. >> is there anything here that's obsolete? >> aeroflicks stuff out here. >> want to bring that stuff down. >> aeroflicks is worthless to us. i'm going to sell this stuff on cents on dollar to turn it into cash. >> no, no, no. you're causing strife right now. >> why is that? >> i've sold all of this? >> you just got orders after this stuff is sitting here for years. >> got orders for all of it? >> magically in the last couple of hours it came together? >> it did. i got an offer. >> bull [ bleep ].

>> steve doesn't want to let go of his prized possession aeroflicks. no way he got rid of all that inventory. >> tell me why having this stuff sit here without moving on is a good thing. >> i think can i move that stuff. >> guess what, i've already sold it to the dollar store. >> it's go time. >> hi, marcus. >> you're from the dollar store. >> how you doing? >> come on in. >> this is the money. >> by clearing the inventory we have generated over $70,000 of cash for skulduggery. you're welcome, steve. >> appreciate it. >> thanks for your business. >> thank you. >> i'm taking steve and peter to j.b. plastics, the company that manufacturers their car parts so we can see if we can lower the cost of manufacturing each one of our cars. >> this is joe. >> know, the owner. >> i'm marcus. >> i came to see how we can save some money. >> and we can do that. a lot of ways we can do that.

>> how many of these will we sell on the year? >> 300,000. >> 25 cents for the car and a nick toll have them put all the stuff in them. >> for the labor. >> so it's 0 cents to our factory. >> here's where it comes out. >> how many are in the current mold today? >> right now it's four. >> what if i went to an eight or 12-car mold. >> you can knock off a minimum of 25%. >> down around 10 cents. >> probably. >> i'm going to need a new mold. >> no, no. >> that's more money we don't have. >> i understand that, but if you make us a 16-part mold, how much do you think that's going to cost approximately? >> 60,000. >> if i give that you commitment that i'll spent the 80,000 or 70,000 you'll get the cost down 20%. >> you've got a deal. >> last year skulduggery sold 100,000 cars and if you multiply that by the 20 cents per car we'd recoup the cost it took to make the initial investment in just over a year. over the next four years we would stand to improve our

profitability by almost a quarter million dollars. >> it takes money to make money. >> yes. >> that's a good example. >> hi, how are you? >> marcus lemonis for steve phel phelps. >> yes, come with me. >> i believe in utilizing resources and i wanted to give skulduggery a real big resource so i want ed ed to give peter a steve a chance to meet steve phelps, the marketing director for nascar. >> hi, marcus. how are you? >> i'm well. >> steve phelps. >> hey, steve, how are you? >> welcome to our new york office. >> marcus had asked me to take the meeting. that's a little bit unusual for us, but wanted to take the meeting and understand what it is about your company that you believe will help the nascar brand. >> let me go first. steve, why do you think nascar is good for skulduggery?

>> so, you know, we're in a real good spot at this particular point. the sport is growing. we're really trying to attract a much younger audience, more diverse audience. we're finding partners to invest with in stem. >> stem? >> science, technology, engineering and math. >> nascar is the technology-driven enterprise and it's awesome they want to attract kids through education. >> and the question is do you have something that you can focus on that, because that's an important area for us? >> i haven't -- i had some meetings -- i just met with toys "r" us, walgreens and kmart. >> yeah. >> and they didn't think nascar was a good idea. no interest at all. >> hearing the stuff that's coming out of steven's mouth is shocking. >> i don't know why, but he just didn't want anything to do with nascar. >> i am mortified. >> i got some real big pushback. >> probably assumed you would charge them more? >> no, i didn't. it was as stopper in the meeting so we moved on to something

else. >> i can't believe what i'm hearing. how does a guy with $1.5 million toy company tell a multi-billion dollar company that no one wants their product. who does steve think he is? >> so, you know, where do you go from that? >> coming up -- >> if you can come up with a good idea i'd love for to you do it. >> why do i need to come up with the idea? >> you're part of the company. >> i'm a minority shareholder that just paid off your debt. >> that's complete crap.

>> i just met with toys "r" us, walgreens, and k-mart... >> yep. >> and they didn't think nascar was a good idea. >> listen, the reason why you you gist met with toys "r" us, wall greens and kmart, and this didn't think nascar was a good idea. >> listen, the reason why you guys are here is because of this man. >> definitely. >> and marcus has had other businesses use nascar to move product and it works for them. >> steve is about to lose a multi-million dollar opportunity if he doesn't shut his mouth. >> i need to step in here or we'll get kicked out. >> there's 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 we're asking for is a shot. >> sure. >> to put a product together, to deliver on your expectations, we're going to get a lot of feedback and we're going to come

back to you in a couple of weeks and you'll tell us if we're off or not. >> thank you, guys. >> tried to keep my composure inside of nascar but i'm about to lose it t. >> you absolutely embarrassed me. the chief marketing officer of nascar does me a fair. you go up there and tell him that the big box retailers don't want him and you ask him why they should do business with you, are you kidding? what were you thinking? >> i was trying to get the idea of what they have, if they had anything knew that i could learn about. >> do the interrogatories as opposed to say why should we do business with you and when you talk you're a reflection of me and i don't operate that way. i don't want to go into meetings and be embarrassed. going forward i want you to listen and think before you talk. that's all i want from you. are we clear that that will never happen again? good. >> holy purple. >> that's the way our place

should look. >> those guys totally blew that nascar meeting, but my job is to make money and get focused on putting process in place so i'm heading to purple platypus to buy a 3-d printer. a 3-d printer allows us to build prototypes right on side. >> this is printed. >> layer by layer. >> by investing $270,000 in this 3-d print ter will give us the ability to create new toys, innovative toys. we'll see a big increase in sales. >> will you take a credit card. >> we'll take a credit card. >> we're excite. >> steve and peter have somehow convinced themselves that their company is wildly creative. at best it's dull and uninspiring. >> so this whole room is going to turn into a lab. >> the toy company is a place where people should be able to bounce crazy and fun ideas off the wall and the place to do is to build a very cool space.

>> this will be a creative lab. >> this will cost $200,000 to build and that's no big deal thinking about what kind of revenue i'll create. i'll achieve efficiency and won't have to send my prototypes away. >> i like the fact that you put color on that wall and color here. this looks awesome. >> it feels awesome. >> i'm very happy with it. >> so how do you guys use this space here? >> it's a play space, creative space. we have meetings here. >> i like the fact that you're using these boards and you know what you're doing with product and packaging, there's a real process in place. >> when a buyer comes here, show them product, lay things out and display things and how you walk ideas and builds their confidence, dramatically. >> i have to tell you, this looks fantastic. it feels open and feels like a real business.

>> hey. >> how are you? >> good. >> how are you? >> so, you know, we left that nascar meeting and we were going to come up with something. what ideas do you have? >> i've 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. >> we haven't even had time to sit down and brainstorm it. >> did you try anything out? >> steve, all i asked for was some ideas. the guy told us what he wanted to focus on. where are the story boards or sketches or something? >> i'm not a drawer. i can't draw. >> i know you're not an artist and not going to bend the plastic or whatever, but you literally have nothing. you didn't reach out to me one time about that. you didn't say to me, man, i'm stuck, i don't know what to do here. i don't even know what to say. i haven't asked you for

anything. i just don't think you want to do it. >> if you can come up a good idea would i love to do it. >> why do i have to come up with the company? >> you're a part of the company. >> i'm the minority shareholder that just paid off your debt. to be honest, i feel like you just said [ bleep ] you, i'm not going to do it. >> the deal points, if they are not ironed out, we won't have a deal. >> we don't like the fact that you can say no. >> go stand in the corner and shut the [ bleep ] up. so we're all set? yyyup. with xfinity internet your family can use all their devices at once. works anywhere in the house. even in the garage. max what's going on? we're doing a tech startup. we're streamlining an algorithm. we're going public! [cheering] the fastest in-home wifi for your entire family. the x-1 entertainment operating system. only from xfinity. the ca♪illac summer collection is here.

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my motheit's delicious. toffee in the world. so now we've turned her toffee into a business. my goal was to take an idea and make it happen. i'm janet long and i formed my toffee company through legalzoom. i never really thought i would make money doing what i love. we created legalzoom to help people start their business and launch their dreams. go to legalzoom.com today and make your business dream a reality. at legalzoom.com we put the law on your side. to do it. >> i-if 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 you're part of the

company. >> i'm a minority shareholder i just don't think you want to do it. >> 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? >> you're a part of the company. >> i'm a minority shareholder that just paid off your debt. >> these guys think i'm going to pay off their debt, transform their business -- >> this isn't -- all i asked you to do is one thing. i wrote a big check. i didn't ask you to do anything else other than come up with the toys. the lab, i'll do all these things. asked for one thing. >> i'm trying to figure out how to do it and where it's going to 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, that's totally unacceptable. >> when you don't want to do something, you just don't do it. >> i don't not want to do it, this is such bad timing. >> you have an excuse and an answer for anything. instead of just saying, you know

what, i dropped the ball. i didn't think it was that big a deal our don't agree -- >> 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, we're not. >> you just said that to me. >> that's [ bleep ]. that's complete crap. >> you guys are -- >> we're doing a lot of stuff. >> i know. >> we can only do so much. >> i know i'm busting my ass. >> i'm ready for that army of people to start helping. >> yeah, me, too. >> well, let me give him a call. >> hello. >> hello, marcus. it's peter and steven. we didn't like that ended. we'd like to get together with you and talk it out. >> you need to know where we

stand, and we really want to know exactly where you stand. >> i'd 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. i'm hoping that their father has convinced them that it's time to step it up. >> this is my father. >> how are you, sir. >> i'm marcus. >> so what is it that you guys wanted to talk about? >> you and i shook on the deal, i told you i didn't 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, you're in charge of our destiny. >> my deal with skulduggery 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 i'm hearing that they have a problem with some of my

deal points. >> the deal points are very simple. i don't want you guys to take on additional debt without my permission, and the reason i don't want it is i don't want to get back into the same position. >> i understand that. >> i don't want anybody to change their salaries without me knowing about it, because if the company starts making money and 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 didn't sit well with you, give me an example of something. what are you prevented from doing that you want to do? >> let's say i did want to pay myself 600,000. >> i would say no, you can't. >> i know you would. >> and i'm not going to budge on that. >> i'm not going to budge on the debt or the executive salaries. my motive is that if the company makes money, i don't want to find out that it's turning from profits to salary and bonus and i have no control of it, and as 30% owner i don't want to make up one day and find out all the money is going. >> ultimate veto power is hard to take. >> i think at the end of the day if i was just reading between the lines, honest to god, you

just don't want to have a partner. what you guys don't like is that you have to talk to somebody about it. >> we don't like the fact that you can say no. >> you're asking me to throw $1 million in and be subjected to whatever fate you decide and have nothing to say. go stand in the corner and shut the [ bleep ] up. that's what you're telling me what to do. >> i'm not a bank. this is not a loan. >> we're not going to iron out those deal points, no way. >> those deal points, if they are not going to be iron out, we're not going to have a deal. >> if your business is in trouble and you need hovel, logon to "the profitcasting.com. vo: this is the summer. the summer of this. the summer that summers from here on will be compared to.

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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." that's essentially what you're you're asking me to throw $1 million in and be subjected to whatever fate you decide and have nothing to say. go stand in the corner and shut the [ bleep ] up. that's essentially what you're telling me to do. i'm not a bank. this is not a loan. >> can i tell you right now we are not going to iron out those deal points, no way. >> those deal points, if they are not going to be ironed out, we're not going to have a deal. you don't make all the rules. i'm getting the money, too, so i get a little bit of a say. you're not the only decision-maker and i've spent money and now you tell me how things are going to go down. i believe in corporate governance and when i find a company who hasn't made money and has a lot of debt for me to put parameters on how to operate the business, i don't think it's unreasonable. if those kind of constraints don't work for this company, then that's it. these guys think i'm going to hand over $1 million check and they are not going to agree so some very basic and reasonable terms. there's no way i'm going through

with this deal. steve, honestly, you kind of [ bleep ] me all along the way. you did. i don't want to be a passive investor. i am an active shareholder, and -- and i don't see it working. i've already spent over $200,000 here, and i've put in a lot of energy fixing the process, but at this point, i'd rather cut my losses than risk losing $200,000. >> paying down the debt. >> then we can just if you want. >> it's easier for me to take my lumps because it's the cost of doing business and cut my losses. >> any time an entrepreneur goes into business they know that they are going to spend money, and sometimes the deal works out and sometimes it doesn't. that's the cost of doing business. all right? >> okay. >> i wish you well, and i'm sorry it didn't work out for both of us. >> okay. >> all right. >> thank you. >> too bad. >> i appreciate it though, appreciate it. >> thank you. >> you have to know when to fold your cards and put them on the table and walk away and make it up on the next hand.

>> next, marcus pops in on a company that seriously needs his help. >> where's the counting? >> she's counting. >> where's accounting? >> tonight on the profit... good morning, i'm marcus. >> nice to meet you. >> i go inside planet popcorn, a multimillion-dollar popcorn business with a huge disney contract. the problem is they don't have any real profits to show for it. you guys are in trouble. the balance sheet is hundreds of thousands of dollars wrong. mismanagement and sloppy accounting have forced the owner to ask her mother to take out a second mortgage on her home just to keep the doors open. obviously, you used the petty cash to buy lottery tickets. >> i did. >> the product is great, and if i can get sharla to listen long enough, i'll turn this unfocused organization into a national brand. my name is marcus lemonis, and i fix failing businesses. if you think that i can launch you in a direction to make you a