Everybody, and thank you for joining us today. I'm here with the Chairman and CEO, Marcus Lemonis of the new Neighborhood Intelligence, formerly Bed Bath & Beyond. We got a great list of prepared questions that we're going to go through and learn a little bit more about the Neighborhood Intelligence story, what's driving the stock today, and how Marcus sees intrinsic value for his ultimate vision in the long term. Okay. Thank you again for coming today, Marcus. Very happy to have you. Appreciate you guys doing this. Yeah. No, of course. I want to address one of the most recent news items first. Yesterday, you guys announced that you were mutually terminating the agreement with F9 for that acquisition. Yeah. Can you expand more on what happened and also what does that mean for your strategy overall, specifically the home services pillar? Because forgive me, I think a lot of grants were coming from that too. Yeah. I think you have to back up and really understand what is the acquisition strategy and how are we thinking about bringing companies into the fold. Back in January, we clearly identified that we wanted to set up a three-pillar structure. Omnichannel businesses, which is largely led by our asset-light e-commerce business. Home services businesses, which are high margin, high recurring once you cross the threshold businesses. Then home ownership, which includes brokerage, mortgage, title, and all of the things that go along with that home ownership business. We've looked at a lot of transactions over the last, call it six or seven months. As we started to think about what that strategy would look like, it's important to know that the company isn't just buying businesses. It's not trying to go out and find what businesses are broken, what went bankrupt, what's in the home space, and what can we get for cheap. That isn't the strategy. The strategy is, it really started with the identification of a problem. The problem is, when you look at home ownership today and you read the headlines or you watch TV or you read a newspaper article, all you hear about from a political standpoint is affordability is a problem. Home affordability is a problem. Well, it's been a problem for decades. Sure. It is really a function of a supply and demand curve that is broken. You could argue today that Americans are short 10 million homes from what is actually needed. I started to unpack if there is an affordability issue, our company, any company, the federal government, or anybody else should come to the conclusion that it is going to be next to impossible to solve the affordability crisis as it relates to the price of a home. You are never going to be able to build enough homes fast enough with quality materials and a quality process and satisfy demand. If that is the case, the real problem is the expense of home ownership over a lifetime. The average American buys and stays in their home for about 11 years. Yep. It started with this 11-year problem. How does our company or any company stitch together all of the things that happen to a homeowner from the moment before they choose to buy the house, to the moment they sell the house w hat are all of those different pain points, those frictional things that happen to them that cause home ownership, not the price of a home, but home ownership to become unaffordable. Whether it starts with the brokerage side and all the noise that went around the cost of paying brokers and people being frustrated, consumers being frustrated, to the price of mortgages, which we know are driven by long-term treasuries. To the price of insurance, title, moving in, renovating, decorating, and all of those life events that happen along the way. Sure. When we laid that out on the whiteboard as a team, we said, "Do we believe that we could address all of those pain points by acquiring capabilities, specific capabilities that can address all of those points along the way? Yep. We already had a spectacular business in overstock.com and bedbathandbeyond.com. Company started as an asset-light e-commerce business, and it's had sort of an interesting past, I'll say the least. Had an interesting past. When I joined the business a little over a year and a half ago, almost two years, the company was in a real difficult situation. Yeah. It had already owned overstock.com. It bought the intellectual property only, just the intellectual property only for Bed Bath & Beyond. While Bed Bath & Beyond had an e-commerce business, it was largely a brick-and-mortar business. That's where the bulk of the revenue came from. When the company bought the business, I think it made a little bit of a fatal flaw mistake where it turned overstock.com off and it redid the whole website, and it opened back up as Bed Bath & Beyond. If you go back and you look at the quarterly reports back half of 2023, beginning of 2024, the company was losing $40 million-$50 million a quarter. Wow. It came out of two things i t came out of COVID, demand dropped. You made this change and taxonomy and the cost of marketing and the margins fell apart. Margins went from 27% to 17%. The cost of marketing went from 9% to 17%, and the revenue was all over the place. Yeah. We spent the first, call it 15 months in a, what I would say, a declining housing market, trying to figure out how to get this business to cash flow neutral or positive. What people were very unhappy about, rightfully so, is that in order to do that, you had to deconstruct the business, and you had to take it all the way down to the studs by eliminating vendors that didn't work eliminating products that didn't work, eliminating SG&A that didn't work. For a little bit of, we'll move on from here, but for a little bit of context, when I joined the business as a board member, not as an executive, when I joined as a board member, the company had 1,396 employees. Today, it has just over 200. Oh, wow. It's a significant shift. Yep. We believe there's an opportunity to consolidate even more, in particular areas where we see that technology is allowing us to be more innovative Yeah and not live on legacy systems. I'm happy to tell you that that portion of the business, what I would call our base business, has had eight quarters, nine quarters, 10 quarters of operating performance improvement. But to say that you suck less or lose less isn't really enough Yeah For me or for any shareholder. They want to know when is that base business going to stop losing money. Yeah. We knew that in order for that to happen, two things had to happen t he SG&A had to be right-sized f or context, the SG&A on an annualized basis for that business is $218 million less a year Wow Than what it was i t also had to have revenue growth. Yep. You can't cut your way to a profit. Sure. So we've had now reported two quarters of revenue growth, and we expect, based on how we're trending as we sit here today, a third quarter of revenue growth. What is most exciting is that third quarter of revenue growth, this quarter that we're in today, with margin stabilization and continual SG&A reduction, if it was reporting by itself, will scare or be at cash flow neutral to positive. Yeah for the first time in a long time, when you exclude all the merger synergies and legal costs that aren't, and all the one-time fees that are in there. Sure. The pure operating business. Yeah. What is driving it Bed Bath & Beyond is having nice growth Overstock is having significant double-digit quarter after quarter of top-line growth. Yeah Margin stabilization t hat, for me, is what we wanted to land the plane with first. Yeah. One clarification too, just so the audience is aware too, this growth that you have been seeing in this business has been organic, despite the fact that you are doing deals that is going to inorganically grow revenue. The growth that we're talking about is purely on the base business with no acquisitions included. Yeah. When we report numbers, it's important that when you see a 50% revenue growth for the quarter, the bulk of that is because of acquisitions n obody should get any credit for it. Yes. We're not asking for it w hat we're asking for acknowledgment of is the space business had mid-single-digit growth in Q1. Yeah. Had mid-single-digit growth in Q2, and we think it could have high single-digit growth here in Q3 with a nice margin profile t hat is what our team is most proud of right now. Yeah. Well, like you said, during the year and a half ago, sometimes if you got to turn a ship another way, it takes time to turn a vessel i t sounds like you have the solid foundation now in place. Yeah That is going to hopefully make it easier to continue growing going forward. Yeah. In January, I decided to retire from a business that I founded 25 years ago. Yeah. To do this full time e verybody, including my family and my friends, were like, "What are you doing?" Yeah. This other business is a great business i t's a $6 billion-$7 billion business, and now you're going to take on this really big challenge. There's reputational risk, there's financial risk, there's a lot of risk associated with it. Yeah. What I said to them is, there's risk if you don't live in the business every day and understand what we're doing Yeah If you're looking on the outside in t here's risk because the idea of creating a three-pillar strategy specifically around making home ownership simpler and more affordable Yeah It's ambitious. Yep. It's wildly ambitious i t required companies to be acquired i t required companies to be integrated i f I was looking at it from the outside in, I would acknowledge how ambitious it is. Yeah. I'm on the inside, and I can tell you, it's ambitious. Yep. Well, you've got skin in the game yourself too, so I believe that you do have a vision here and- Back to the F9. Yes. Yeah. We've looked at maybe a dozen transactions since January t he ones that people know about are we acquired Kirkland's. Yep. We acquired The Container Store w e acquired Elfa, which is an organization system out of Sweden. Yes. We acquired ClosetWorks, and we acquired SFV and Installed Right. Yes. They all fit into specific pillars. We were already in the home services business with Elfa, with ClosetWorks, with SFV. Yeah. It existed already. Yeah. It wasn't like a new idea t he F9 transaction was our attempt to address capabilities in the flooring and the kitchen space. Sure. With two good brands, Cabinets To Go and Lumber Liquidators. Lumber Liquidators has had its own challenges. It had formaldehyde issues a decade or so ago. It went public. It then filed bankruptcy. I think people's indictment of you just keep buying these broken, bankrupt brands, I guess, is technically correct, but it's philosophically incorrect because usually when they go through that process, they're cleansed and they're rebirthed and they're reborn. When we did the transaction with F9, we were very disciplined about the price. We were very disciplined about the closing conditions. Our willingness to modify or compromise on closing conditions is zero. We went through the same thing with TCS. We were buying it from the banks that foreclosed on it. Yeah And put it through bankruptcy o ur willingness to compromise on anything is zero because our shareholders expect that their equity and their capital is managed with an iron fist. Yeah. In all of those transactions, F9, TCS, and all of them included, they were all done at a significant premium to our current stock trading price. In most cases, they were done at $7. The F9 transaction was also done at that, which makes the imputed purchase price even lower. Yeah. Why did we do it with stock? People ask me that question all the time w e have done it with stock because we believe that when you buy the business at a premium of your price and you are able to get what we believe is a great transaction, you make those businesses partners with you. Part of the misnomer in making those acquisitions was why were we able to buy them so cheap? Yeah. I never told anybody, nor will I ever, that they were cheap. They were properly value priced for the circumstance and situation that they were in. In most cases, they were losing money. Yeah. In most cases, they lacked any working capital of any kind, which would be contributing to the fact that they were losing money. We went through the process with F9. We liked the management team, we liked the store staff. The owner and myself would go back and forth on the transaction over and over again. We got a little bit of deal fatigue, and at the end of the day, the closing conditions were not met. We were unwilling to modify or compromise. Yeah. During that period of very tense discussions, we determined for our shareholders, and that's all that matters, that we were able to either acquire or integrate those capabilities into our business in flooring and in kitchen without having to buy a business. Yeah. I wanted to do the transaction i t was $500 million of revenue t he company was losing money today. We felt like we could fix that, but I didn't want to compromise and then have to dig out of a hole. Yeah. If a business was making good money and I felt like the working capital was sufficient, maybe I would've compromised, but I don't think our shareholders want us doing any of that right now because they already see a lot on our plate. Sure. They already see integration risk. We terminated that transaction. We no longer have any responsibility to them nor them to us. Got it. No, it saves you some shares to be issued as well, which we will get to that in a- It saves us some shares, not necessarily to be issued. It saves us some shares from diluting our current holders- Yes Anymore because it is not something that they want done. It is not something that I want done to myself as well. Sure. I want to pivot topics a bit, but stay on current focus. Your earnings call a couple weeks ago, you had talked about the digital asset portfolio, and the process to unlock value there. Do you have any updates you could share with us today? The second part of my question, I think tZERO is the biggest or most notable asset of the portfolio. Yeah. Would love to know your view of that business itself. To give everybody a little bit of background, Overstock.com's founder, Patrick Byrne, was a wildly innovative guy. He was way ahead of his time. He saw things and while there's always controversy surrounding him as an individual, nobody should take anything away from him in terms of his creativity and innovation, particularly around blockchain and tokenization. He really understood that the market was playing games with stocks, and he wanted to have quick settlement on trades, and he wanted to have the ability to put records on paper, not literally, but records out there that allow people to know what exactly is happening with their asset. Very innovative. As the company continued to invest, and this is an important thing to know, almost $350 million in the previous 10 years to 2020, so between call it 2012 and 2021, 2022, almost $350 million of that company's capital was deployed into any kind of project. Big company, small company, companies they birthed, companies they invested in. Yeah Across that entire portfolio. Yep. It became what was known as the Medici portfolio. Yep. That was a name that they came up with, and all of those assets went into that, we'll call it entity, idea. Into that concept i t was separate from the online marketplace business. Yeah. Over time, as the online marketplace business started to pick up steam or started to lose steam, those assets sat and started to become, what I would say, undermanaged, undernourished. I think the company started to take those assets for granted t he management team, in my opinion, started to become exhausted by the necessity to manage the businesses, report the businesses. Yeah made the decision three and a half years ago to parse them off and to spin them out to an asset manager in Salt Lake City known as Pelion, where they entered into a partnership where our company would own 99% and they would own 1%. Then they would take over all the management decisions, removing our company from any SEC accounting consolidation Sure issues that could exist. I always look back at that transaction and become frustrated by it because the company hired this firm, and they're a well-run, reputable firm, and paid them $17.5 million of prepaid management fees over seven years and gave them north of $30 million of cash to invest in how they saw fit. Yeah. The company lost its rights to terminate that agreement. There were no performance metrics. What's important to know is, as we sit here today, our company has direct investments in tZERO and indirect through the Medici portfolio in Pelion, direct investments in GrainChain through a convertible note, and indirect investments through the Medici portfolio, and then a handful of other smaller companies that sit in the Medici portfolio. We believe that those assets that sit on our balance sheet are being given zero value. We believe that our holders want access to those assets. They want to have them in their hand. They want to own them directly in one form or another. The Pelion transaction does not necessarily give us the ability to do that as fluidly as we would like. Yeah. We have been putting a lot of pressure on tZERO over the last 12 months. The previous CEO that was put into the company by [Intercontinental Exchange], David Goone, and [Intercontinental Exchange] is a great partner to the company. They put $15 million into the business, and there was a number of other folks who invested in the business at the time as well. Put David Goone in there, and David did not necessarily deliver the results that our company wanted, that their board wanted. We pressured tZERO's board to make a change to an individual that we thought, that I thought would really put the company on the right path. David Goone was removed, and Alan was put in as the CEO i f you look at the last 12 months, we have been very pleased with the progress that Alan has made in that business. While the company does not generate the type of revenue that any of us want, Alan included, he really needed to rebuild the entire infrastructure. Yeah. Take out costs, and I always tease him he has not taken out enough costs, but he is working hard to do so. What really became apparent to me is that that business needed to see some sort of monetization moment, liquidity moment of some kind. We pressured the company into looking at going public. Yeah. Looking at coming up with some solution. Alan has been working his tail off to try to achieve that. He's looked at every idea under the sun, including shells and SPACs, et cetera, and it's a long process. Sure. We don't have patience for it anymore. Yeah, no. Our company has decided to hire an investment banker, which we've done, to put a special committee together, which we've done, to take the tZERO asset that we have, and between direct and indirect, we own 38.7% of that company. Yeah. To take our GrainChain asset, which we believe is actually a hidden gem, and to take the rest of it, put it together in a bucket, and to find a way to give our shareholders access to it sooner than later. Yeah. We are underway in a process that we think could achieve that t here's no guarantee that it'll happen. Sure. But there's a possibility a t the same time, tZERO is working feverishly to unlock the value for themselves as well. Yeah. The relationship's a little clunky right now. We're super fans of what Alan is doing. We are frustrated with the lack of revenue. They know that. They're frustrated, too. But our shareholders need access to that asset. The idea would be, what could we do with these assets? Could they be contributed to another public company? I want to be clear about this. They're not up for sale. Yeah. I want to be crystal clear. We are not looking to sell that asset to raise capital for our business because we think the embedded value is far greater than any transaction that we could execute today, and we're not looking to short sell something because we think we need capital, because we think that upside is way bigger. But we are looking to give access to our shareholders, that asset. And today, that's not happening. Well, it sounds like you have a disciplined strategy on that end, too l ike you were talking about with F9, there's no need to compromise when you believe in the intrinsic value of something. Correct. So kind of going back to some M&A integration and synergy realization, because that's where I get a lot of questions. Yeah. You mentioned, like we talked about, doing a lot of things at once. You closed on The Container Store, Elfa, ClosetWorks, Brand House Collective or Kirkland's. Yes. SFV, and it is signed but not closed Fathom yet. Does the termination of F9 have any impact on Fathom? I understand it is still pending stockholder approval and regulatory clearance and is expected to close at the end of this year. If there is any visibility into timing or any color you could provide to us on that deal. Look, we have, at the end of August, and this is a really important distinction because I think if you go across the marketplace, whether it is Bloomberg or CNBC or Yahoo or anything else out there, the current share count is wildly misunderstood. Yes On what it exactly is a s we sit here at the end of August, it is about 97 million shares. Okay. That includes the fold-in of Kirkland's, TCS, SFV Services. It includes all of those transactions. It does not include anything from F9 Brands, Inc. because that transaction is terminated. Yep. It doesn't include the contemplated closing of Fathom, which will be between 6 and 7 million shares. Yeah. We're starting from a base of about 97 million shares. As we look at the integration of these businesses, I think I mentioned this to you, I think the biggest challenge for me and where I did a very poor job of communicating is that these transactions were done at extremely favorable terms, but they were deficient of working capital. Yeah. The Container Store business is a fabulous business. It is beloved by customers. The tenure of the staff in the stores is an average of nine years. You don't find that in retail companies. You have people that have been there 30 years. The assets, the locations, are widely underused and undervalued. The reason that we did that transaction is we like the capability that storage and organization and closet and those types of things bring to our homeowners, and we like the fact that The Container Store would allow us to integrate bedding, kitchen, bath, and the traditional Bed Bath assets to bring together one retail experience without our company going out and signing new leases and spending a bunch of CapEx and doing a bunch of things. The challenge, what I learned during the diligence process of TCS, and know it to be true today, is that it doesn't have sufficient working capital. It doesn't have the right amount of inventory on the shelf. We tested that theory out in about a third of the stores by pushing more inventory and spending some of our cash. That's why you saw, if you looked at the last quarter, you saw our working capital go from all cash to cash and inventory. That happens in a business. Working capital is fungible. When we did that, we saw massive acceleration in the TCS business in those stores that we put inventory on the shelf, which meant the brand is still healthy. The customer's still healthy, but they can't buy what doesn't exist on the shelf. For sure. So it is a big challenge for us. So what we also learned through that process is that the Kirkland's business and The Container Store business, now Container Store Bed Bath business, is really one retail organization. To remind everybody, Kirkland's was a public company with a public board, with a public CEO, with all the public company costs and all of the wasted money that goes on with doing so. TCS was a public company, and at one point, not too long ago, three years ago, those two businesses had a combined market cap of more than $2.5 billion. That is a really important thing w e paid $137 million for the businesses combined. $137 million it is missing about $50 million worth of working capital. We would have paid $187 million and nobody would have been upset, but we didn't because it didn't have the working capital. We need to generate that working capital, and we will generate that by creating positive cash flow in our e-commerce business, but we are also going to generate it by raising capital. And I think people are angry with us that we need to raise capital, and I understand that maybe not being as clear about the deficiency in working capital, I will take full responsibility for. But that is the fact. We believe that that omni-channel business, combined with our e-commerce business, can become cash flow positive at a point in 2027 once we get the inventory on the shelf. And when we looked at this last weekend, which is Labor Day, TCS was up nicely in the stores that had inventory, and it was flat to slightly negative in the stores that did not. I don't need any more testing. I can see it. And as I visit stores that have inventory and don't have inventory, they have the same amount of traffic, but a different level of conversion. People are frustrated that we got into this. If you were an asset-light company and you didn't have all this infrastructure, at the end of the year, we will have consolidated our retail business entirely. We told the market, I think, 30 days ago or whenever we had our call, that we believe we could take out $50 million- $60 million of costs. I think that number is higher than we originally anticipated. We closed on the transaction for TCS 60 days ago. We closed on it on the 11th of July. We haven't owned it that long. And so what we are doing today, unfortunately, is we are collapsing supply chain. We are collapsing technology. We have already taken out close to $30 million between Kirkland's and TCS in annualized costs, and we think there is another $40 million- $50 million to come out. That is duplicate SaaS contracts and consultants. It is a variety of nonsensical things that the company took on, the company engaged in, that we just have to rid ourselves. The challenge is whether you are getting out of leases, and by December, we will have closed nine TCS stores. Nine. When the company went through bankruptcy, they closed one. It was the worst bankruptcy ever executed in the history of bankruptcy by TCS. They spent $40 million and ridded themselves of nothing. We will have closed nine. We believe that we will have rid ourselves of almost every location that is cash flow negative. In some cases, we were able to do blend and extends with certain landlords on other good properties. In other cases, we had to write big checks to terminate leases o f the $28 million of costs that we have gotten rid of, we have also had to write big severance checks just because we do not believe in dropping people on their head Initially, people that have worked there a long time we have had to purge ourselves of bad inventory, a lot of it. Over $30 million of the inventory between both those businesses had low GMROI. That is gross margin return on investment of less than one. Not acceptable. We have to really get disciplined around how we spend money marketing and how we do things. What I noticed in TCS that I was most disturbed by was the casualness around spending money on CapEx, spending money on staff, paying people in a non-meritocracy manner, and the amount of staff. Yeah. We are down 30% in headcount in that business in less than 60 days. Sadly, we are going to be down more. Yeah. We are going to continue to take costs out. What people saw me do in the e-commerce business by ripping out costs and ripping out these negative SKUs and ripping out negative vendors to get to break-even, we had to decline revenue. Yeah. In the retail business, I'm promising everybody today, we will rip out all of this cost, and we will grow revenue. Yeah. We don't need to go backwards to go forwards other than closing locations. Yeah. Which people would want us to. We don't need to be taking on that water. Well, again, it speaks to the discipline you have as a capital allocator, whether it's an acquisition, CapEx investment, whatever it may be. Yeah. I think you already hit on most of the points for my next question. I was going to just go over how integration has been with the recently closed deals. It has been a short window. Anything else have you learned about TCS or Kirkland's that would have an impact going forward? Again, I think you were pretty thorough before. I think Kirkland's is a very special business for me because it really understands global sourcing. Yeah. Global sourcing is a capability that we believe is necessary to remove friction for the consumer. If consumers have seen inflation year after year, administration after administration, no matter whatever your political view is, inflation has persisted since COVID, and it does not seem to be receding. If customers are feeling that pinch, we have to take that matter into our own hands, and we have to figure out how to remove SG&A, which allows pricing to come down. Yeah. How to remove supply chain costs, which allows pricing to come down. Kirkland's brings something that TCS and Bed Bath never had, which is a deep knowledge on design, sourcing, and supply chain. Kirkland's for years, prior to COVID, prior to after COVID, was always a wildly profitable business. Yeah. It brings something to the table, the softer side of Bed Bath. Funny story. I had a chance to meet and have lunch with a number of legacy executives from Bed Bath that were part of the greatest run in retail that most people had ever seen. One gentleman handed me a book from over a decade ago, and it was the Board of Directors Strategy for Growth book. This was when the business was at an all-time high, printing money. Yeah. The strategy for growth was, we want to acquire Kirkland's, and we want to acquire The Container Store. What it said was the same thing that we believe in, which is everybody brings a different capability, but the customer doesn't want to have to do all that work. Yeah. They want to be able to have all of that stitched together for them. Yeah. Take that from a retail standpoint and expand that out over home services and everything else. Yeah. That is our business. What we learned at TCS through this last process is that they didn't love product anymore. I love product. Two things that I love to do. I love to spend time in the stores, and I like to spend time with vendors and product developers because ultimately, when you go into a home, you're trying to solve problems, not just look pretty. Yeah. I think the company got away from that. Kirkland's did not, but TCS got away from that. It got away from understanding how to bring value to the customer, and it got away from understanding how to be innovative. The founders of TCS were some of the greatest merchants that ever existed in the home retail space. When they left, the magic left. I spend a lot of time, and Amy Sullivan, who's our leader, and I call her our chief merchant as well, spends a lot of time on product. A shocking amount of time we spend on product. I would encourage anybody today who's thinking about investing in the company to go visit a TCS. Yeah. You'll see Bed Bath in there. You'll see Kirkland's product in there. You should talk to the staff. You should ask them what's changed. You should ask them where the company went wrong. You should ask them how they feel about things today. They'll all be honest with you. Disguise yourself as a customer so they don't know what you're asking. Yeah. What you're going to find is they're motivated again to bring value to the customer. We believe that when you do that, you get back to profitability. We're $100 million short in the retail business from being profitable. Yeah. Just to give you context, the TCS business on a trailing 12, because I think people are probably doing their building math. The TCS business on a trailing 12 is about $580 million of trailing 12 revenue, including Elfa. Okay. That number is down from its peak 40%. Wow. From its peak. Yeah. A business where you can go out and look at the filings for TCS i t was a billion-dollar business. Yeah. We don't need it to be a billion-dollar business again to be profitable. Yeah. We're going to rip costs out w e do believe it needs to be a $680 million business. Yeah. By the way, that's $8 million a month t hat's $300,000 a store y ou can do the math t hat's a couple thousand dollars a day. Yeah. It's not a lot. We think the path to profitability is quick as long as two things happen w e rip out the costs, which we've proven we can do, and we get the working capital to put the product on the shelf. Those two things happen, it's at $680 million-$700 million business one year from today as we sit here. Got it. I want to tangent just a bit because you brought up path to profitability. Yeah. What I think drives the story, you have done a great job showing the revenue growth after, what was it, 19 quarters of declines. Yes. The next step is showing EBITDA profitability and then eventually cash flow positivity. Could you talk about how you view the timeline? I know you just said you expect more cost savings from the acquisitions you have done. Correct me if I am wrong, but when you originally put out the $50 million-$60 million number, that was including any cost synergies from F9 Brands, Inc. Now that that is off the table, you are getting more from what you have already acquired, if I am understanding correctly, or? The $50 million-$60 million did not include F9 Brands, Inc. Oh, it didn't? Okay. My apologies. No. When we finished our last quarter, F9, both the revenue projection that we gave for Q3, just for clarity, was $505 million- $525 million. Yeah. That's the range. We talked about the fact that in the quarter it would cost $25 million- $30 million to clean up all of the things that were out there. We were very transparent. Yeah. What we want to start to do is get to a point where we can start to provide forward-looking guidance. We think our shareholders not only demand it. Yeah but deserve it. Yeah. We have to understand what we have. Sure. We are going to continue to do that quarter by quarter until we get to 2027. Yeah. I believe that we have a great shot of being cash flow positive, EBITDA positive in 2027 if we can put the inventory on the shelf. Yeah. I'm not worried about us taking costs out. We're going to do it. There's not a question. In order to get to $680 million of revenue and then add another $200 million on for Kirkland's, we need to get inventory on the shelf. I don't want to keep belaboring the point. Yeah. Anytime anybody asks me about profitability, I'm always going to say, "If I have inventory, I will be profitable". Yeah. Because we're going to rip the SG&A out. Yeah. We're going to rip the SG&A out. The fact that the e-commerce business has arrived at that in the worst housing market that we believe has it been in 20 years. I don't know when the last time rates were this bad and 4 million homes were sold. We feel very proud that we've done it in a trough, and it's not going to be a trough forever. We think 2027 is still going to be a very rough housing market. We don't see any green shoots that tell us it's going to be different. We still think we can get there. So there's potential additional upside should the market work in your favor as well, too? Yes. Great. The answer is yes. Yeah. With the $505 million-$525 million for this quarter, we believe that we can be at the top end of that range, not the middle. I think the market believes we're going to be somewhere around $515 million. We believe we can be at the top end of the range of the $505 million-$525 million. We have a couple of weeks to go in September. Sure. We're going to try to bust through that number. We also told the market that we believe the margins could be 28%-30%, which would be the highest margins in the company's history. We can thank Kirkland's for the margin profile, and we think it's only going to get better. We think we'll be at the top end of that as well, between the 28% and 30%. So the top end of the revenue guide and the top end of the margin guide. Yeah. I think in my model, I have you guys flexing to EBITDA positively in the fourth quarter of this year, and then 2027 being the first full year at a low to mid-single digit margin, which implies the stock is trading at, if that's possible- Yeah 2 to 4 times EBITDA right now. Yeah. At a fractional revenue multiple. I think there is a shot that we get there in Q4, but we have to have inventory to get there. Got you. First quarter is always going to be rough. I want to be very careful to talk about full year profitability in 2027. Yeah. The company will lose money in Q1. Yeah. Because it is a typical retail company that will lose money t he e-commerce business is continuing to grow, as I mentioned, and we think that is going to buffer a lot of it. I want to get the locations closed. Yeah. The severances executed and some of the gnarly stuff out of the way between now and the end of the year. Yeah. Got it. Yeah. In our model, we have negative profitability in Q1 due to the seasonality too, but still, it picks up kind of throughout the year to have the year positive. Just to clarify. But we are not a retail business. Yeah. We are a data and technology business. Yeah. We will talk about that when we get into the name. I was going to say, why don't we just go there and spring tangent to it w hat inspired the new name, the ticker, the strategy i t seems like in addition to this being an all-in-one, one-stop shop for consumers throughout the home ownership life cycle, Yeah You are creating a massive amount of data too. Yeah. Maybe we could talk a little bit about what the rebranding is. I have never talked publicly about this, but I have been scorned with fun emails and love letters about our name changes. Yeah. Let's give a little history. Sure. It was Overstock before I got there. Yep. It became Beyond before I got there. Yeah. The previous CEO, who was a lawyer, not a marketer, not a product lover, decided that he didn't want to be associated with Overstock because he felt like it was a brand that was downmarket. He was wrong. Overstock is a fabulous brand that delivers real value with high premium products to customers. You can go on and see the site today. When he went to Beyond, nobody really knew what Beyond was. I think it was a misstep. When I changed the name from Beyond to Bed Bath & Beyond, I knew that there was a finite amount of time that I would do it. Yeah. Truth be told, we got over a quarter of a billion dollars of free marketing for the company because we changed the name. Yes. Because now The Wall Street Journal and every Good Morning America show, and everybody talked about the fact that Bed Bath & Beyond was back. We saw a change in our organic traffic to bedbathandbeyond.com. We saw an improvement in our conversion on our website, and we think that it contributed to the revenue growth of bedbathandbeyond.com because people were like, "Oh, it's back. Yeah. Okay? That's a really important distinction t he reason that I made that move is because I knew that it would get the kind of attention. Yeah. I'm a bit of a guerrilla marketer when it comes to stuff like that. Yeah. I knew that it would get the attention. When we put the three-pillar strategy together to buy Container Store, to buy Kirkland's, to buy Elfa, to be in the mortgage business and the brokerage business, nobody believes, largely me, that the consumer would ever get a mortgage or get their house renovated by Bed Bath & Beyond. Yeah. Bed Bath & Beyond had a very specific memory for people. You went to college, you registered for your baby, you registered for your wedding. Yeah You bought towels there, the gadget wall. People knew exactly what it was. We had already departed from that by selling furniture. Yeah. 80% of what bedbathandbeyond.com sells today is patio, rug, and furniture. Yeah. It never sold patio, rug, and furniture in its stores. Yeah. When we brought it back and we knew that we wanted to telegraph the return to brick-and-mortar, which gives us way more customer data. Sure It does it when you get paid by making money, we knew that it was a challenge. Secondarily, when we started buying other businesses, like we rolled in Kirkland's and we did the TCS deal, or we did the Fathom announcement, I remember going onto social and watching the real estate industry just sort of laugh. Can you believe this Bed Bath & Beyond's going to like, they're going to sell your home now, and they're going to do your title work. Yeah. I knew that was going to happen. Yeah. I knew people were going to say, "Oh, Bed Bath & Beyond's going to put my floors in?" They don't do that. We acquire capabilities, and those capabilities are driven by legacy brands that are subject matter experts in that space. Sure. TCS is storage and organization and closet. Yeah. Kirkland's is home decor F athom is brokerage. Yeah. Elfa is closets and kitchens and things of that nature. What started to happen was, externally, people were like, "Eh." Internally, when these companies would fold in, they would say, "So we're now owned by Bed Bath & Beyond? Are we not important?" I wanted to create brand parity and equality to say, "No, we're all part of one company." We happen to have Bed Bath in our pocket. We have Container Store in this pocket. We have brokerage in this pocket. We come to market two ways. We come to market in neighborhoods where we do business. We are not a national company that exists in 4,000 markets. We're not Target. That's not what we are as a company. Yeah. We're disparate subject matter experts that do business in a local market w hether that's Chicago or whether that's Omaha, Nebraska, we do business with these brands in local markets. Yeah. Neighborhoods t hat's where we do business t hat's why neighborhood is part of the first name. Yeah. We also wanted to soften the way we went to market w e say to our consumers, "Welcome to the neighborhood." People are buying homes, they're moving, and we wanted to disarm them with how they interacted with our brands, where it wasn't always commerce. Yeah. We provide information, factual information. We provide education, we provide inspiration, and we provide ideas. Yeah. We do that to allow the homeowner to best execute their journey. Yeah. We are announcing next week a credit union, which is going to be big. We are announcing a new savings and mortgage product that will be revolutionary. So rather than doing that with all these, like Bed Bath is doing it, this thing is doing it- Yeah We chose that th e second half of it is that the whole world is focusing on artificial intelligence. Sure. Seems like everybody wants to just say the word artificial and get a bump in their stock. Yeah. I was adamant. I said, "You use the word artificial, you're going to put money in the jar". Yeah. We use intelligence. Intelligence on how we hire. Yeah. Intelligence on how we merchandise I ntelligence on how we assort product. Intelligence on how we communicate with the customer. Intelligence around the consumer's data. So where that comes together is no matter what business or brand you do business with, you will ultimately operate through what's called a single sign-on. Yeah. Michael will have a single sign-on number. All of your interactions with our company across all of our businesses, across all of your behaviors, including just getting free information on the value of your house Yeah which we will provide. Yeah. Or a cash offer on your house, or a listing, or a mortgage, or a HELOC or a renovation, or whatever it may be, we will aggregate that data specifically for you. When we communicate with you going forward, because we need to lower our CAC costs and we need to lower our marketing costs, we will do so in a very curated and customized way as we build proprietary logic around prediction models. Yeah. If you buy X and buy Y, then Q could be true. We start to deliver an understanding to you and to us on what your socioeconomic level is Yeah where you live, what your design trends are, how you shop, how you like to pay, so that when we communicate with you in an email Yeah We're talking to you and not just spraying the market Yeah with 77 million emails Yeah Hoping that somebody opens them and they buy. Yeah. This is not 1985. Yeah. We use artificial intelligence to build some of the models. Yeah. I've been doing a lot of coding myself, building skills in Cloud and connecting them with our team. We brought in a lot of fresh and young talent that understands how to do those things, how to rip out legacy tech. Yeah. It doesn't mean that SaaS models are going away. Yeah. It doesn't mean that we're firing a bunch of people, but it does mean that we have to be intelligent about the way we aggregate data. Yeah The way we communicate it. The second piece around data is that while we hold the homeowner as one form of data. Yeah The home itself is the same. Yeah. I come from the auto business. Yeah. The auto business uses a term called VIN explosion. Okay. Every car in the windshield has a VIN number. Yep. It determines your insurance. It determines the make, model, the year, everything else. When insurance companies look at it, they explode the VIN. It is a term of dissecting the parts, pieces, make, model, manufacturer to understand the lineage Yeah and the status of the car. Yeah. It's why CARFAX got created. Sure. Insurance reports on the VIN, everything happens around the VIN. I believe that the VIN explosion on cars and the address explosion are one and the same. We want to get to the point where we are big sister, not big brother. Yeah. Where you walk into our store and you buy whatever. You go onto the website, and you buy whatever. You buy a home with one of our brokers. Yeah. You buy whatever. We should be able to, within milliseconds, understand more than anybody. Yes. If you come in and you buy something, I should be able to help you understand if your insurance is too expensive because I use a product like The Canopy Group with Brown & Brown. I should be able to understand if your mortgage is refinancable because I could see the market value of your house and your outstanding debt and what the comps are in the area, and I should be able to offer you a credit union deal. Yeah. I should be able to understand if what you bought means that you're having a baby, and do I want to use buybuy BABY as a way to get in? Yeah. I should know all those things. Yeah. In order to do that, you have to have thousands of data points come together. Yeah. That's why we do business in neighborhoods, and we use intelligence to understand how to grow profitability. That's what the name is. While everybody's frustrated that the name changed, I get it. Yeah. Bed Bath & Beyond, TCS, The Container Store, Kirkland's Home, buybuy BABY, Overstock, Fathom, Elfa, that's how we go to market with consumers. Yeah. It'll all be tied together with Neighborhood REWARDS. Interesting. That's it. Yeah. No, well, it sounds like a sound strategy for the three-pillar model that you're building. Should hopefully have a lot of cross-pillar revenue synergies as well associated with it. Drive costs down. Yeah. Drive revenue up. Yeah. That's the business. Yeah. No, that's good. Just to go back, you mentioned raising more capital. You used the fund working capital needs for some of these businesses. I noticed a couple of weeks ago an ATM offering. Any color you can provide the rationale on how the capital raise would be utilized? I know you said mostly working capital, but just the one thing that I've gotten questions on is the stock as a currency has been a meaningful part of how you've funded acquisitions. How should shareholders think about the ATM relative potential for future stock deals too? We thought about the acquisitions and using currency because we got a premium for our stock, and we forced people to become partners with us for the long term, so they have a vested interest. As I mentioned earlier, the working capital was sufficient. We have not used any of the $200 million ATM as we sit here today. We had a remaining ATM, the old one, which was about $14 million that was left. We've used about three. Okay. We have used three. Yeah. By the way, three doesn't drive the stock to this. So we've used it over the last couple of months, and we've done it in doses to try to raise some working capital because we need inventory. We will continue to be very responsible about the issuance of stock. Yeah and the use of the ATM, particularly at these levels. We're looking for alternative ways to raise capital that don't require us to use the ATM. Yeah. The ATM is dilutive for my holders. It's dilutive for me as an individual, even though I keep buying stock, and that's how I take most of my compensation. Most importantly, we will only use it when we need to if we can't find alternatives. Got it. I don't want to create any lack of transparency about it. Yeah. I think people believe that it's been used severely, and that's why the stock is the way it is. Yeah. The stock is the way it is, in my opinion, because we haven't reached a level of profitability and performance is all that matters. Sure. Period. Performance doesn't mean just revenue growth. Performance means don't lose money. Yeah. Buy businesses that are accretive. Yeah. Get them to profitability. That's one. Two, when we filed our last filing, we had to register 46.2 million shares that could be issued relating to any transaction that would be out there. Yeah. Including the convertible preferred that exists on TCS, that's at $9.10 seven years out. That's part of it as well. Yeah. What the SEC requires you to do is say, what could happen? What could be diluted out there? Got it. Bloomberg picked it up, and it said 46.2 million shares registered for insiders to sell. Yeah. Well, that would freak me out too. Yeah. That is not the case. We registered SFV. It is included in the 97. We registered TCS. It is included in the 97. We registered Kirkland's. It is included in the 97. We are not issuing the F9 transaction. That comes out. We are going to issue Fathom when we close. Yeah. So that 97 would go to 97 plus six or seven more, and then whatever the use of the ATM is. Yeah. That is a really important distinction. That makes sense. If I saw a $200 million ATM, I would think that you were just going to Put the gas pedal on. Put the gas pedal on t hat isn't the case t he company does need to raise working capital. Yeah. Because we have a business that we believe can be a billion-dollar retail business. We've seen the fruits of that. One other little thing, I'm grateful to all the vendors that sell to TCS and that want to be in business with Bed Bath. Bed Bath filed bankruptcy, not us, years ago, and a lot of people got burned. Yeah. TCS filed bankruptcy. Yeah. Nobody got burned. Every vendor was paid 100 cents on the dollar. Wow. That's a really important distinction. Not one vendor lost one penny when TCS went bankrupt. Not one. Yeah. A lot of the vendors, when we've gone to sort of restock the shelves, or we go to do an import program on towels or bedding or containers or whatever it may be, have said, "Marcus, we love you guys, and we love what you're doing, and we love TCS, and we're excited doing business with you, and we trust you. But the company has a history of going bankrupt. Even though it wasn't you- Yeah. -we want to be prepaid. Yeah. Or we want a big deposit. Yeah. You have a lack of inventory, and you have people asking for deposits. We have had to navigate around that. Yeah. Most of what has been used in the ATM is bringing in a towel program that is going to have 74% margins. Yeah. The return on capital is phenomenal. Yeah. It is really important for our holders to know that the return on capital that we are expecting is huge. The reason the F9 deal did not come together is because the return on capital, if we had to compromise what we would not compromise, would have not been good. Yeah. Which is why we said pass. Yeah. People should know that a high private equity-like return on capital is the expectation we have if we're calling for their money to be capital called, essentially. Yeah. No, that makes total sense. We're just about out of time, but I'll ask you one last question, and I think, again, you touched on a lot of these points in our discussion, but just to conclude for investors on the call. If we look out the next 12-18 months, say, revenue growth is obviously a key metric that we're monitoring, and it's great to see that that's been inflecting. We talked about EBITDA profitability, we talked about cash flow. What other kind of potential issuance of guidance, once you guys have a more stable footing on the quarterly basis, what else should investors look for that could be a catalyst for the story, for the stock? What, in your view, I guess, are timeline and marking points over the next, like I said, 12-18 months? I have been a really good listener of late on what the meaningful holders want and don't want out of the business. They don't want any more acquisitions after Fathom. They want us to digest what we have. We agree with that internally. That's one. Two, they expect to see massive revenue growth over the next 12-18 months. Massive means they don't want to hear about $2 billion as the target and the base. They want that to be the absolute minimum, bare minimum. They expect SG&A to be ripped out of the business. They expect tZERO to be monetized, and they expect profitability. $2 billion is the absolute floor as we're thinking about our business going forward. Yeah. I believe that if I go outside of 18 months, because I like to think Sure. what are we building. Yeah. Then I believe we have a $3 billion, $4 billion, $5 billion business, a lot of that coming from organic. When we reach profitability, investors can expect us to use our cash flow to buy profitable businesses, either through leverage or through cash, maybe a little bit of equity, to build and build and build onto the capabilities that touch all those 11 points. There will be no acquisitions of any materiality between now and the time we reach profitability other than the Fathom transaction. I think people have said, like, a lot of operational and executional and integration risk. Yeah. Rather than arguing with people, we work for the shareholders. We are going to acquiesce to their requests. I think a lot of people, I received a lot of notes yesterday, people saying, "Thank you for not doing the F9 deal. Yeah. We didn't do it not because people were asking us not to do it. We didn't do it because it didn't meet our standards. No, it didn't make sense anymore. We will continue to walk away from things that don't make sense. We will continue to shed ourselves of people or locations that don't contribute. We will continue to run in a meritocracy model, and the shareholders demand and expect results. Yeah. That's what we're here to deliver. No, my last quick follow-up. I agree with you completely in terms of thinking of a timeframe longer than 12-18 months, but as investors, they can be impatient. They want to look sooner catalysts as well. Our price target is based on a 2028 EBITDA estimate that I think I have a mid-single-digit margin. I know obviously you are not providing guidance right now, but if we think longer than 18 months out, what is a run rate margin or stable margin that this business could handle if you feel like giving a range? Yeah. There are two things that are important to really look at. One is what happens in a trough market and what happens in a mid-cycle market. If housing went from 4 million, which is a real low for this sector, Yeah to 5 million, we would expect to ride that wave. I would say that we believe we could be a low to mid-single digit margin EBITDA business in an economic environment that looks like this. Meaning housing is difficult, mortgage rates are in the sixes. Yeah. The market is not giving us any freedom to do that. We will cut our way and engineer our way to that number as quickly as we can. I like to think about what a mid-cycle looks like. If the housing market was decent, not on fire. If the mortgage rates were 5.9 and not 6.7, what would it look like? We think it is a mid to mid-high, 5%, 6%, 7% EBITDA margin business. Got it. That'll put off some nice cash flow. That cash flow will allow us to build our inventory, make other cash flow accretive, positive transactions. Yeah. Or buy shares back. Yeah. We still have a very robust share buyback program. Yeah. It is available to us. Yeah. While we are using dilution in the last 12 months to raise capital, we also know that at some point in time, we have to bring those back into treasury and give our shareholders back what they wanted. Got it. I almost think about it like a bridge. Yeah. We get to profitability, the stock will do its work. Yeah. The shareholders that exist today will enjoy three things. Access to their blockchain tZERO GrainChain assets. My goal would be to try to create an environment where we can put that asset on our balance sheet in a form and a way where we can create mini dividends to them, recurring dividends to them based on some formula. We haven't figured that out yet. We want to deliver them cash flow positivity, and we want them to know that the shareholder count and base is stable and not just going to accelerate for acceleration's sake. Well, that was a great response. I appreciate all the detail in our conversation today, and want to thank you again for our time. We are a little bit over, so I am going to conclude everything here. But again, Marcus Lemonis from Neighborhood Intelligence, thank you for being with us. We look forward to watching the story develop more. Thanks so much. All right, everybody, have a great rest of the morning and a good afternoon.