M Line Holdings, Inc. Issues Update Letter to Shareholders

M Line’s Unaudited Preliminary Results Reflect a Profit for the year ended June 30, 2015

ANAHEIM, CA / ACCESSWIRE / July 13, 2015 / M Line Holdings, Inc. (OTC: MLHC “M Line” or the “Company”). M Line has today issued an update letter to it’s shareholders that is attached hereto.

M Line’s products and services include the following:

– M Line is a leading provider of products, assemblies and services to the precision high tech segment of both the aerospace and medical industries as well as manufacturing new products utilizing our expertise in the precision metal manufacturing arena.
– M Line sells high end pre-owned Computer Numerically Controlled (“CNC”) Machine Tool Equipment and;
– M Line now provides business financial services to other Companies needing support and advice.

For more information on M Line, see our website at www.mlineholdings.com.

Safe Harbor and Informational Statement

This press release may contain forward-looking information within the meaning of Section 21E of the Security Exchange Act of 1934, as amended (the Exchange Act), including all statements that are not statement of historical fact regarding the intent, belief or current expectations of the company, its directors or its officers with respect to, among other things: (i) the company’s financing plans; (ii) trends affecting the company’s financial conditions or results of operations; (iii): the company’s growth strategy and operating strategy; and (iv) the declaration and payment of dividends.

The words “may,” “would,” “will,” “expect,” “estimate,” “anticipate,” “believe,” “intend,” and similar expressions and variations thereof are intend to identify forward-looking statements. Investors are cautioned that any such forward-looking statement are not a guarantee of future performance and involve risks and uncertainties, many of which are beyond the company’s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors including the risk disclosed in the company’s statements and reports filed with the OTC Markets. The Company claims the safe harbor provided by Section 21E(c) of the Exchange Act for all forward-looking statements.

For further information contact:
Tony Anish
tony@mlineholdings.com

July 13, 2015
Shareholder Letter

To begin we want to inform our shareholders of the exciting news that our preliminary unaudited results for the year ended 6/30/2015 reflect a profit and positive EBITDA. Although Revenues are lower than in 2014 as a result of our planned reduction in revenue from the machine sales division and our move, we reduced overhead significantly and coupled with earnings from our new business financial services division have given the Company a much improved position.

It is important that our shareholders know about our last eighteen months but before we begin our update on the progress the Company has made, we wanted to first thank all our shareholders for sticking with the Company during this transition to overall profitability.

As we all know, it has been an extremely difficult 12 to 18 months but we feel that we are now closing in on the completion of various transactions that will change the future of this Company.

First we are proud to say that our internal 12 point plan to profitability, mentioned in press releases, is close to completion and is described below:

12 Point Plan:

Step#1, We reinvigorated management and its employees so that a “new attitude” could emerge in M Line by taking away the “image” that the graveyard was not on the horizon and that this company, despite all of its problems, will be successful.

Step #2, Our Cash flow needed more focus and improvement, first by concentrating on regaining customer endorsement and support as well as by cutting overheads as much as possible. There is still work to be done to improve our cash flow but our plans are working and positive results are slowly coming through.

Step #3, Wereduced our reliance on any one customer by adding new customers and expanding revenues from current customers. We have also added new products and new industries that meet our manufacturing capabilities.

Step #4, Get the Company’s primary customer to do a “product quality” review, with the objective to say that our manufacturing quality was acceptable based on their standards, not ours. Now, we were able to focus on more orders and new primary customers which doubled in the first year.

So, with the first four steps accomplished, management then looked at our manufacturing facility as the next step in improving the Company.

Step #5, The next step was to consider a move from our Tustin location. The Tustin facility had a disorganized and uneconomical production flow line, with utilization running at 35% of capacity, and over-priced rent. We needed to relocate and we moved to a new facility in Anaheim in July, 2014, saving some $200,000 in rent, utilities and improved efficiencies annually.

Step #6, M Line had to repair its identity and attract new capital in order to broaden its overhead break-even coverage. Management achieved this by starting the following actions:

a. The Company contracted with a recognizable New York City investment-banking firm to provide us with a $30 million funding commitment. This funding was designed to be used to acquire other companies in the aerospace industry. As noted in our previous press releases we have identified five candidates and are close to closing the first two of those candidates. We continue to work closely with our investment bankers on this process.

b. Replace our current lender with lower cost financing. We have signed documentation for the first part of this funding which is due to commence as soon as we file our three outstanding 10-Qs.

c. Complete the refinance with another asset-based lender at a lower cost than our current lender. This has not been completed yet but is in process.

Step #7, Find acquisition candidates that add positive benefits to our current business. We found two key acquisitions, which could not only complement our existing business but also more than double our revenues, expand our key customer base and significantly increase our EBITDA. We know how important it is to show profitable growth so that we can gain the confidence of our shareholder base.

Step #8, Set up better communication with our shareholders. Although we are trying to keep our shareholders informed it is difficult to issue news when the shares have a “stop” sign. It also makes it difficult to close the acquisition transactions but we continue to work on completing our filings, which will solve this issue.

Step #9, Close the first 2 acquisition candidates. We did get delayed but we are working on closing these transactions now. We are also looking for additional targets.

Step #10, Complete the audit of the 2014 10-K, which has now been filed. Complete the reviews of the 10-Q’s as soon as possible which is currently in process.

Step# 11, Prepare and complete timely the audit of our 2015 10-K

Step #12, Translate the efforts from the past 18-months into true Shareholder Value!

Over the last six months we have reduced overhead significantly. Although our revenues have dropped, mainly due to the move of our manufacturing facility and the changes at Elite Machine Tool, overhead reductions have been significant.

New Products and Services:

a. New Products

We have added a new product line to our manufacturing facility and are now producing a “Vape Pipe” for a new customer. We anticipate that revenues for this product will exceed $250,000 per month by the end of September. We, together with our customer’s support, designed the “Pipe” and are now manufacturing our first order of 1000 units. We believe there is a very large market for these “Pipes” and we are already planning the next two generations of the product. We anticipate our ability to produce a high quality product with our technological manufacturing capabilities can put us at the forefront of this growth industry.

b. New Services

During this last year we formed and started providing services in our new business financial services company. We are expecting significant profits from this division over the next year. We closed our first transaction last year and we are currently negotiating with three new prospective clients and hope to continue to expand this financial services division. In the future we expect to include equipment financing for our customers as a part of this division’s activities, which will then add to our anticipated sales growth objectives. We have not added any staff to manage this division as the work is primarily managed by our CEO Bruce Barren and COO Tony Anish.

Our Move:

The move to our new facility has been very beneficial to the Company. Our corporate offices are located on the second level of the building with its own entrance. The facility for Precision includes sufficient office space, a large assembly area which is important for the assembly of our Vape Pipes and a manufacturing floor that has some room for expansion but is much more efficient space. Overall the building is smaller but with a much more useable “footprint.”

Refinancing:

The refinancing of our Company is still not complete. We have arranged financing for the take-out of approximately 50% of the amount due our current lender. We expect the additional financing to be finalized very shortly. This has been a long process. It has been made more difficult as working with our current lender is complex, however it has also been made more challenging due to the drop in revenues as a result of our move. Currently, we are working with a number of excellent sources and expect to close a transaction very shortly.

Conclusion:

At present we are working to complete the following:

1. Finalize and file our three outstanding 10-Qs and get the “Stop Sign” removed from our SEC listing.

2. Finalize the remaining finance necessary to pay off our current lender.

3. Continue with the closing of the first two acquisition targets previously disclosed.

a. Blue Star Machinery Inc. is a targeted acquisition that will enhance our machine sales division. We had planned to close this acquisition much earlier but due to the delays with our financial reporting we were unable to close as originally planned. We now expect to close as soon as the 10-Qs are filed.

b. The Byran Company, Inc. is a targeted acquisition that will increase and enhance our manufacturing capabilities. Byran is a very well run machine tool shop providing design, manufacturing and assembly services to the aerospace and medical industries. This was always going to be our second acquisition but we now plan to move it forward as fast as possible and to close soon after the 10-Qs are filed.

Bruce Barren, CEO and Tony Anish, COO of M Line commented; “We sincerely believe that the end result will be a stronger company with a stronger stock and much improved Shareholder Value. We are looking forward to the next twelve months. This has not been an easy year but we now see the “finish line” which will result in a more profitable group of companies with revenues in excess of $20 million and a strong EBITDA.”

Sincerely,

/s/ Bruce Barren
Bruce Barren
CEO

/s/ Tony Anish
Anthony Anish
COO

SOURCE: M Line Holdings, Inc.

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