Author Avatar

editor

0

Share post:

Dot Dot Smile has filed its Chapter 11 bankruptcy petition.

The filing on December 2nd sheds light on how and why Dot Dot Smile failed.

Dot Dot Smile (the “Debtor”) made $15 million in sales in 2020. Then came the COVID-19 epidemic.

Unfortunately, inventory constraints caused by the COVID 19 epidemic hampered DDS’s ability to recruit and create new teams under the MLM model, therefore the Debtor borrowed from Merchant Cash Advance lenders and boosted its product purchases.

Due to the problems involved with the MLM business model during the pandemic, demand under the MLM model had diminished by the time the new inventory arrived.

Dot Dot Smile makes no mention of retail sales, which is telling. According to BehindMLM’s July 2019 Dot Dot Smile review, distributors must purchase stuff blindly.

is a horrible way for affiliates to distribute since it believes retail buyers would buy anything.

Dot Dot Smile, like LuLaRoe, is incentivized to preserve this strategy. It allows the corporation to avoid having to admit to designing designs that no one likes if a product line fails.

You’re not able to sell the random designs we supplied you? Obviously, you’re not trying hard enough.

Dot Dot Smile canceled its MLM opportunity in May 2022 in an attempt to rescue the company.

This did not work out in the end;

DDS’s cash flow was damaged as a consequence of these issues in the retail apparel industry, resulting in litigation and collection actions by the Merchant Cash Lenders and an eviction case brought by the owner of the Debtor’s Riverside site.

The recorded gross revenue for Dot Dot Smile in 2021 was $16 million. In 2022, that figure will have dropped to $3 million.

Looking forward, Dot Dot Smile states it plans to pay off its obligations by

The Plan will be funded mostly from online sales as the company transitions to a low-overhead, online business model.

The Debtor’s co-Managing Members will continue to be Jeffrey E. Thomson and Nicole Thompson.

Nicole (the company’s creator) will continue to serve as president and will be paid $100,000 each year. Jeffrey will continue to be the Chief Executive Officer of DDS and will be paid $100,000 per year.

Dot Dot Smile’s assets are little over $4 million.

The Debtor’s inventory is currently worth $4,000,000 (if sold in the usual course of the Debtor’s company).

The Debtor believes the value of its website is $5,000 and the value of its trade name, Dot Dot Smile, LLC is $100,000.

If all goes as planned, the following is Dot Dot Smile’s predicted revenue over the next three years:

There is no set schedule, however Dot Dot Smile’s Plan will now be voted on.

The court will either approve or reject the plan depending on the outcome of that vote, which I expect will take place in Q1 2023.

BloxTec Review - Is a Fraud
Assure For Life Review - Is a Fraud

Leave a Comment

Your email address will not be published. Required fields are marked *