Dot Dot Smile has filed its Chapter 11 Plan.

The December 2nd submitting offers perception into how and why Dot Dot Smile collapsed.

In 2020 Dot Dot Smile (the “Debtor”) recorded $15 million in income. Then the COVID-19 pandemic occurred.

Sadly, stock shortages attributable to the COVID 19 pandemic impacted DDS’s skill to recruit and construct new groups underneath the MLM mannequin and, after unsuccessful makes an attempt and acquiring financing, the Debtor borrowed from Service provider Money Advance lenders and elevated its orders for product.

By the point the brand new stock arrived, demand underneath the MLM mannequin had waned, a results of the difficulties related to the MLM enterprise mannequin throughout the pandemic.

Tellingly, Dot Dot Smile doesn’t point out retail gross sales. As famous in BehindMLM’s July 2019 Dot Dot Smile assessment, distributors having to blindly buy product

is a horrible methodology of distribution for associates, because it assumes retail clients will purchase something.

As with LuLaRoe, Dot Dot Smile is incentivized to maintain this mannequin. It offers the corporate a handy out if a product line flops, versus must come clean with creating designs that no person desires.

You’ll be able to’t promote the random patterns we despatched you? Nicely clearly you’re simply not making an attempt laborious sufficient.

In an try to save lots of the enterprise, Dot Dot Smile canned its MLM alternative in Could 2022.

In the long run this didn’t pan out;

Because of these challenges within the retail clothes atmosphere, DDS’s money circulate was impacted leading to lawsuits and assortment efforts by the Service provider Money Lenders and an eviction lawsuit filed by the proprietor of the Debtor’s Riverside location.

Dot Dot Smile’s recorded gross income for 2021 was $16 million. That plummeted to simply $3 million in 2022.

Trying ahead, Dot Dot Smile claims it intends to settle its money owed by

transitioning a low over-head, on-line enterprise mannequin and can fund the Plan principally by way of on-line gross sales.

Jeffrey E. Thomson and Nicole Thompson shall stay the co-Managing Members of the Debtor.

Nicole (the founding father of the enterprise) will stay the president of DDS and shall earn a wage of $100,000 each year. Jeffrey will stay the Chief Government Officer of DDS and he’ll earn a wage of $100,000 each year.

Property held by Dot Dot Smile prime out at simply over $4 million.

The present market worth of the Debtor’s stock is $4,000,000 (if offered within the unusual course of the Debtor’s enterprise).

The Debtor estimates that the worth of its web site is $5,000 and estimates that the worth of its commerce identify Dot Dot Smile, LLC to be
$100,000.

If every thing goes in keeping with plan, right here’s Dot Dot Smile’s projected income over the subsequent few years: