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| 8-K - M LINE HOLDINGS INC | v170147_8k.htm |
| EX-99.1 - M LINE HOLDINGS INC | v170147_ex99-1.htm |
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2672
Dow Avenue, Tustin, CA 92780
tel:
714.630.6253 • fax: 949.722.2727
web site: www.mlineholdings.com
|
December
24, 2009
To the
Shareholders of M Line Holdings, Inc.
Dear
Shareholders,
Thank you
for your patient support while your company repositioned itself to prepare for
future growth and profitability opportunities. As you all know, the
Company’s common stock was deregistered and delisted some three years ago and
our management has worked diligently to get the Company relisted and back to the
status of a publicly-traded company. On November 19, 2009, we
obtained approval from FINRA, the Financial Industry Regulatory Authority
(www.finra.org), to relist our common stock on the OTC Bulletin Board
(“OTCBB”). As a result, we are pleased to report that shares of M
Line Holdings, Inc. have been relisted on the OTCBB under a new stock symbol:
MLHC.
Many of
you have seen this company through thick and thin and we want to take this
opportunity to thank you and update you with news about the Company and its
future prospects as a growing business. M Line Holdings, Inc. has a
new management team who are experienced in handling the difficulties that all
businesses face during these troubling economic times. In addition,
with the management change we appointed new accounting and tax auditors, kept
our existing securities law firm, and are integrating a new approach to
prospering in a challenging business environment. When a company is
not publicly-traded it is extremely difficult to get news to you, a situation
that frustrates both investors and the management of a company struggling to do
the right thing to preserve its enterprise value. A lot has happened
that we couldn't talk to you about until now but in the future we will do our
utmost to keep you fully informed. Our web site
(www.MLineHoldings.com) will be continually updated with timely press releases
announcing important news and you should also feel free to visit www.sec.gov to view
the Company’s public filings. Additionally, by calling our office
(714.630.6253), investors can also obtain publicly available information about
the Company.
Your
Company originally became public in 2001 when E.M. Tool Company was acquired by
Gourmet Gifts. The new entity was renamed Gateway International
Holdings, Inc., to reflect its new business model as a holding company operating
in two primary markets, the aerospace industry and machine tool
sales. Our management at that time believed opportunities existed to
establish a presence in those areas by expanding through
acquisition. Although Gateway made a number of acquisitions over the
years, most of these companies were either closed or divested. In
December 2008, in a private transaction, Money Line Capital, Inc. acquired a
controlling interest in M Line Holdings. Money Line Capital, Inc. is
a private company consisting of 12 subsidiaries in various businesses including
aerospace, technology, finance, real estate and beverages. The
Company currently shares common management and Board of Directors members with
Money Line Capital. In March 2009, the Company changed its name to M
Line Holdings, Inc., and in June 2009 we announced our
intention to merge with Money Line Capital, subject to audited financials and an
independent valuation as further detailed in a press release dated July 7, 2009,
and updated on November 6, 2009. Currently
M Line Holdings, Inc. has two subsidiaries, Eran Engineering, Inc. and EM Tool
Company, Inc., dba Elite Machine Tool. A few words about them may
help you to understand our go-to-market strategy.
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Eran
Engineering manufactures and assembles specialized precision components used in
the commercial aviation, medical, aerospace and defense
industries. Joseph Gledhill serves as Eran’s
President. He brings many years of experience in the industry, with a
reputation for manufacturing savvy and strong product knowledge, critical to
competing successfully in a difficult economy. Eran achieved sales of
$4,898,749 for the year ended June 30, 2009. Revenues were down
approximately 25% from 2008. We anticipate a profitability
improvement in the current year as the economy recovers from the recession and
as Eran's customers order and reorder with greater confidence.
E.M. Tool
Company, Inc. dba Elite Machine Tool, engages in the acquisition, refurbishment,
distribution and sale of pre-owned computer numerically controlled (“CNC”)
machine tools, selling to manufacturing customers across the United
States. Larry Consalvi serves as its President. His many years of
experience buying, refurbishing and selling used machine tools is invaluable at
any time but especially so in this economy where Elite’s revenues were down
approximately 40% from the prior year, coming in at $4,752,435 for the year
ended June 30, 2009. During this fiscal year Elite has reduced
expenses while retaining people with critical skills, so that it currently
anticipates a profitable year in 2010 in the slowly recovering, but still
substantial, U.S. machine tool market.
M Line
Holdings, Inc. has managed to bring itself back to a public company listed on
the OTCBB and still earned a small profit in 2009 during a very difficult
economic environment. This was possible only because Elite and Eran's
management responded appropriately to last year's financial collapse and
recession by reducing expenses to match substantially reduced revenues in time
to realize a modest profit for the year. Although business has slowed
significantly during the second half of 2009 we expect improvement in
2010.
We
believe that the new management team will capitalize on new profit opportunities
in growing markets where we can offer new products and services to
customers. We will of course keep you fully informed as to our
progress. Again, we want you to share our vision, recognizing the building
momentum as it unfolds before us.
As noted
above, in December 2008, privately held Money Line Capital, Inc., believing in
the future prospects of M Line Holdings, Inc., acquired voting rights to enough
shares of M Line Holdings to control more than 50% of the Company's outstanding
common stock. Over the last few months a new Board of Directors, Chief Executive
Officer, Chief Financial Officer and Secretary have been
appointed. The new management team has reduced overhead significantly
and closed one unprofitable subsidiary, All American CNC Sales, Inc., on June
30, 2009.
In March
2009, Money Line assumed certain loans of M Line Holdings, Inc. in exchange for
additional shares in M Line and also agreed to loan up to $500,000 to M Line
Holdings as needed. In June 2009, we agreed to acquire Money Line
Capital and its subsidiaries for a price to be determined by independent
valuation following an audit by an independent accountancy
firm. Money Line loaned us approximately $135,000 from March
2009 through June 2009.
We
initially expected to close the acquisition by January 29, 2010, but due to the
lengthy time necessary to complete the audits and independent valuations we now
expect the transaction to close by April 30, 2010.
Money
Line Capital, Inc. is the parent company of the subsidiaries briefly outlined
below. Money Line has raised considerable capital, primarily through
loans, to be used to fund its expansion and has found attractive acquisition
targets that are in need of the cash injection that Money Line can
provide. Money Line has taken advantage of the lower valuations
for private companies in this difficult economy to acquire companies with
excellent future business potential. Money Line also finances
accounts receivable transactions and equipment leases.
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Learn
more about Money Line Capital on its web site www.mlinecap.com. Here's
a brief description of its main subsidiaries:
M Line Capital,
Inc. (Arizona) (100% Owned)
M Line
Capital, Inc. (Arizona) currently funds asset based loan transactions. All
equity, factoring and equipment leasing transactions are funded by Money Line
Capital, Inc.
M
Line Business Credit, Inc. (100% Owned)
M Line
Business Credit places transactions with funding sources other than Money Line
Capital when the transaction does not fit Money Line’s credit criteria or size
constraints.
M
Line UK, Ltd. (100% Owned)
M Line UK
is a British company organized to provide funding from UK sources. It
is not yet active.
M
Line Holdings, Inc., formerly Gateway International Holdings, Inc. (currently
52% owned by Money Line Capital)
M Line
Holdings has two operating subsidiaries, Eran Engineering, Inc., and
EM Tool Company, Inc. dba Elite Machine Tool Company. It is controlled by
privately held Money Line Capital and is in the process of merging with the
company. M Line Holdings, Inc. will be the surviving entity and its
stock (Symbol MLHC) listed on the OTC Bulletin Board.
M
Line Aerospace, Inc. (100% Owned)
The
holding company for Money Line’s aerospace division. The aerospace
group's objective is to advance Money Line’s interests in this
industry.
M
Line Avionics, Inc. (100% Owned)
This new
company will be working with Nu Air Technologies, Inc., Aircraft Seal &
Gasket, Inc. and Eran Engineering, Inc. as the sales organization for the
aerospace group.
Aircraft
Seal and Gasket Corporation (57% Owned)
Aircraft
Seal & Gasket manufactures aerodynamic, custom molded seals , die cut
gaskets, custom extrusion profiles and calendared and molded sheets for the
commercial aviation, defense and other industries.
Nu Air Technologies,
Inc. (100%
owned) manages the sale and delivery of Cockpit and Cabin Digital Systems
(“CDSS”) for commercial aircraft. President Ricky Frick was the first
to launch the CDSS, a means by which pilots can monitor entry into the cockpit
by way of strategically placed cameras within the cabin area, providing security
surveillance over the forward cabin. The basic CDSS has been
developed into a fully integrated system known as the Electronic Flight Bag System
(“EFB”).
This new
and expanded CDSS provides a peerless cockpit system through the use of a touch
screen monitor with all navigation charts, manuals, digital video recording and
CDSS contained within an integrated server that has complete isolation from
fault with automatic switch over capabilities in the event of an aircraft system
failure. The development and funding of this system is
currently underway in conjunction with Thai Airways. Upon final certification
and production capabilities, Thai Airways intends to outfit it’s
entire fleet of 82 planes with the new EFB. FAA approval is
expected in the first quarter of 2010. Upon obtaining the
necessary certifications, Nu Air will have the only Class III EFB system in the
world (can be used for take-offs and landings) and will set itself apart from
our competitors.
In
addition, Nu Air, has recently obtained FAA approval on an analog/digital
in-flight entertainment system which includes video and audio for Boeing
737-600, 700, 800 and 900 series planes.
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This is
the first and only fixed center isle LCD flight entertainment system that has
been approved by the FAA for these particular planes. Nu Air
completed its first plane mid-Septemberfor Ethiopian Airways. There
are approximately 5000 Boeing 737-type planes flying, where Nu Air
believes it will have excellent marketing opportunities.
Surreal Medias (100%
Owned)
This
Company manages, designs and prepares fully integrated and operational web
sites. Key words and other factors are used to link the web sites to
social networking and other business-related sites. Surreal Medias
also produces computerized content for booths at trade shows, with the
capability of integrating movie and computer content to upload to TV screens at
retail outlets throughout the country.
Go
Live SMS (53% Owned)
Go Live
SMS provides a service that allows companies to use SMS text messaging systems
to get their message to consumers both easily and at a very reasonable
charge. The large customer base includes credit card companies,
credit collection companies and many other businesses. Its “free to
end user” platform is generating great excitement in the industry.
Fun
Quenchers, Inc. (51% Owned)
Fun
Quenchers is a vitamin water drink targeted at the under 12 kids
market. The drink is now sold in mass retailers Smart and Final and
Albertson’s.
Impact Entertainment, Inc. dba Tea
Zazz (owns less than 50%-will not be
consolidated)
Tea Zazz
is a sparkling ice tea drink that has been successfully marketed during the last
eighteen months. It is produced in six flavors: original,
peach, mint and lemon with two additional white tea flavors having recently been
introduced. TeaZazz can be found in many stores including Albertson's
and Ralphs.
Mediatronics
Inc. (owns less than 50%-will not be consolidated)
Mediatronics,
Inc. has designed and produced a media package for use in
automobiles. General Motors originally provided development funds in
order for Mediatronics to develop the original technology for a sophisticated
iPod and MP3 connection and control system for automobiles. This
original technology has been expanded to include navigation, blue tooth, voice
activation, satellite radio and the company will soon introduce web-based
service for automobiles. In addition to General Motors, Jaguar/Range
Rover will offer this package as original equipment in autos early next year.
During the first quarter of 2010, Mediatronics will introduce an after market
version for Mercedes, Chrysler, Ford and by mid year, Toyota and
Nissan. This version will also include a 100 gig hard drive and
USB interface and will be available for pre-2007 cars.
Our
management would like to take this opportunity to thank you for your continued
support as without it, your Company may not have survived these very difficult
times. We have learned very valuable lessons. Since
becoming Directors, the Board has worked diligently to fully comply with all
securities mandates and to establish systems to ensure best practices in
accounting, tax, legal and corporate governance. But we also
recognize that we owe you our best efforts for a return on your investment by
producing revenues, profitability and growth. We are confident that
the newly structured M Line Holdings, Inc. will do just
that. We look forward to meeting you at our next Annual Meeting
of Shareholders.
Sincerely,
George M.
Colin
Chief
Executive Officer
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