E-mail received from the company:
Some news on the very first pick for the TBBB. Originally profiled on May
3, 1999 at $.8125, the stock peaked within a few days at $1.4375, or a
gain of 77%. Shortly thereafter the company had a subtle name change
requiring a new CUSIP to be issued, the company had to tack on a "D" on
the symbol for 30 days to signify this, and the stock hasn't been the same
since.
Here is an e-mail I received from the company answering some of my
questions. Note the comments by the President about the stock price and
the manipulation that took place. I feel confident that the company is
back on the right track. Enjoy the read, it's pretty informative. A lot
of similiarities between CCGR and FNLN as far as business niche. FNLN
will be more volative due to the very low float. Current price is .34 x
.50.
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Dear FineLine Properties.com, Inc. Shareholder
The attached information has been prepared to update you on corporate
developments.
Investor Relations Department
SHAREHOLDER LETTER
8/16/99
Dear Shareholder:
I would like to take this opportunity to update our shareholders on
thestatus of developments at your Company.
While the recent lull in news announcement might seem to indicate a
slackening in activities, quiet the contrary is the case;
1. Reporting Company Status:
Management, has prepared the final draft of the required SEC Form 10SB
which is undergoing review by our Securities Attorney prior to submission
of this document in accordance with compliance regulations. A copy of this
document will be made available to any shareholder, and of course
interested party, requesting same after September 15, 1999. Please direct
your requests to our corporate e-mail at -
fineline@finelineproperties.com, or you may leave a telephone request at
(330) 678-5558.
2. International Licensing and Merchandisers Association (LIMA):
The Company has become a member of LIMA, the largest licensing and
merchandising association in the world, whose membership includes - Walt
Disney Company, Warner Brothers Consumer Products, The National Football
League Players Association, The National Hockey League, Major League
Baseball Properties, Mattel, Inc., MTV Music Television and others.
3. Fierst & Pucci, LLP:
FineLine, has entered into a licensing representation agreement with the
renowned licensing firm of Fierst & Pucci, LLP of Northhampton,
Massachusetts. Mr. Frederick Fierst has participated such globally known
successes as The Teenage Mutant Ninja Turtles, among others.
4. E-Commerce Signature Store:
The Company, has redesigned the Signature Store web site to group cartoon
characters and thus make the site less cumbersome to navigate. The
resulting Store, thus permits shoppers to view all of the apparel
categories instantly for the character group they are interested in which
management calculates will increase order flow.
The Company is in the process of further re-design of this site in terms
of background layout and other areas. The indicated total design upgrade
regarding background and related aspects, is scheduled for completion by
the end of September. New designs based upon character groups not
currently represented in apparel lines appearing on the Signature Store
web site, are being meshed into the redesign format to increase the number
and types. The e-commerce web site as well as corporate web sites are also
in the process of translation into French, Spanish and German as part of
the internationalizing of the Company's licensing, merchandising and
direct sale activity programs. This process also involves the re-editing
of copy content to fit the nuances associated in language conversion. This
project is scheduled for completion in time for the upcoming Holiday
selling season.
5. Europe:
With a population of 507,000,000 people the European region exceeds the
North American population count of 301,000,000 by 206,000,000 people,
representing a prime merchandising and licensing arena. The Company is
conducting market research in Madrid, Spain with its character groups by
virtue of a promotional venue arranged with a local retailed to gauge
market reaction(s) in preparation for the Company's programs to be
implemented for the upcoming Christmas selling season.
6. Stock Price:
You, as is the Company, are concerned regarding the recent trend of the
stock in view of the progress made in May, which saw it rise to $1.43 on
May 7, 1999. Management here at FineLine understands that there will be
profit taking when any stock rises from over $1.00 in a period of 9
trading days with a combined volume of 570,400. Correspondingly, the stock
tailed off from this price, to $0.375 on June 14, 1999 on a volume of just
330,100. The company has recorded and noted that the unusual nature of
shorting activity on its stock does not have any bearing on the Company's
progress, news, trading volume or other developments. More interestingly,
is that the total shares outstanding, have not changed during this period
- meaning, there has been no sales of stock by the Company or management.
One telling aspect of this shorting activity is demonstrated by the fact
that the Company's stock price retreated from a bid price of $0.37 to
$0.1875 on just 4,500 of volume on August 2, 1999, and then rose on the
bid by just under $0.10 to $0.2812 on August 6, 1999 on just 1,000 shares
traded. As management has been noting these development over a protracted
time frame, we have prepared documentation which is being submitted to The
National Association of Securities Dealers (The NASD), which is the
governing body for NASDAQ. Our telephone calls in the interim on this
matter, seems to have helped to curtail this activity somewhat, as the
stock closed at $0.50 on August 13, 1999.
Management here at FineLine, firmly understands that it has the obligation
to not only implement programs and business aspects which impact favorably
on corporate revenues and objectives, but to also protect and enhance
shareholder value in keeping with the rules and regulations of the SEC and
NASD, as well as ensuring that others do not bend or unitize these rules
and regulations in a manner inconsistent with policy. The Company will
report to shareholders the status and results of these efforts and will
maintain a diligent observation and recording of all facts and
transactions to cause a ceasing of unwarranted shorting activity
inconsistent with SEC
and NASD compliance statutes.
You may access the forgoing trading details by accessing Yahoo Quotes
forFNLN and click on Daily Tables, then click on Historical Quotes.
7. Licensing and Merchandising Negotiations:
Management, is engaged in a number of licensing and merchandising
negotiations with firms from the United States as well as Europe. The
current nature of these developments with respect to the stage they are
in, does not permit the Company to reveal any details nor to speculate on
their eventual outcome at this time.
Management has been working to build fundamentals, revenue and contractual
aspects and we are confident that these efforts will be reflected in
shareholder value in the near future. I invite inquiry from any
shareholder on any of the areas indicated.
Sincerely;
Robert Petry
President
RP/gd
Dear Shareholders
The following is a text version of the Company's Executive Summary for
your information;
I. Executive Summary:
This "Executive Summary" has been prepared to acquaint you with FineLine
Properties.com, Inc., current corporate developments, future plans and
allied details.
FineLine is an entertainment company engaged in the development and
creation of cartoon properties for licensing and or merchandising to
corporations under royalty rights agreements as well as for internal
Company merchandising and revenue programs. Listed on the NASDAQ Stock
Exchange under trading symbol FNLN since October 1998, the Company has
licensing agreements with The Marvel Entertainment Group, Inc. (Marvel
Comics), for three of its cartoon character groups (The Moodies, Tasties,
Hogstturrs), Boein Co. Ltd. (a subsidiary of Intersac) for Y2K and options
on other characters in the Asian Region, as well as negotiations underway
with major corporations for various licensing and merchandising rights for
varied character groups.
FineLine Properties maintains an aggressive Internet presence as part of
its overall marketing strategies through a comprehensive 75 page Corporate
Web Site which showcases the Company's 147 cartoon characters as well as
an e-commerce FineLine Signature Store that sells apparel items.
The Company's address is 3250 Market Street, Suite 302, Fairlawn, Ohio
44433, and its telephone number is (330) 678-5558. The Company's E-mail
address is fineline@finelineproperties.com. The Company also maintains an
Nevada address at 7631 Bermuda Road, Las Vegas, Nevada 89123 and a Studio
at 110 West Main Street, Kent, Ohio, telephone number (330) 678-4593.
The following sections, will provide a summarized insight concerning
Company operations, marketing, licensing / merchandising and new operating
Divisions.
II. The Industry:
The Company's niche in the Licensing and Merchandising Industry, operates
in the same manner as other cartoon companies such as Disney, Warner
Brothers, Steven Spielberg's Tiny Toons, etc., in that it permits
contracted companies to have the "rights" to use its copyrighted and
trademarked characters for a negotiated fee as well as an agreed upon
royalty payment based upon unit sales. The negotiated fee is generally 10
to 25% of the projected sales estimates of the venture over a combined
three year period, with the royalty payments generally in the range of
anywhere from 3% to 7% of net sales revenues as generated by the Licensee.
License rights are granted to corporations in varied industries and fields
and the characters are utilized in many different formats and variations.
A Licensee can use an image to adorn apparel items, packaging or in
conjunction with a logo, or the image might be utilized for toys, games,
dolls as well as in varied animated forms such as software games,
television commercials, television shows or feature length movies.
The Company, is a member of The International Licensing and Merchandisers
Association (LIMA), located in New York City, is the largest association
of its kind. All major licensing, merchandising and related firms belong
to LIMA, whose membership generates approximately 75% of all licensing and
merchandising revenues recorded in this industry.
III. The Products:
The Company's product is cartoons and such begins with the creation and
development of cartoon characters which are based either upon researched
formats and niches, or as a result of requests by corporations for cartoon
characters to be utilized in either brand identification, promotions or
product introductions. At present, the Company has 147 trademarked and
copyrighted cartoons which are in the following character groups: The
Moodies, The Tasties, The Hogstturrs, Soft, The Majors, The Icers, The
Hoopsters, Red Zone, The Kooties, The eKids, The Computoons, The
Internauts, The Milk Drops, The Healthy Dozen. The Company also maintains
an E-Commerce Internet Signature Store which sells FineLine branded
apparel and products, ranging from designer shirts and women's Jersey Tops
and dresses, to T-shirts.
The Company's cartoon characters are copyrighted and trademarked in
accordance with both United States and International treaties. FineLine
has an agreement with licensing attorney Mr. Frederick U. Fierst of Fierst
& Pucci LLP of Massachusetts, who has extensive contacts in the licensing
and merchandising industry and whose successes include the Teenage Mutuant
Ninja Turtles, among others.
IV. The Market:
The market for the Company's cartoon characters and character groups range
from children aged 4 - 8, preteens 9 - 12, teenagers 13-19, young adults
20 - 26, adults 27 - 44, and older age groups as well. This extremely wide
spread demographic profile is based upon the fact that the Company has 16
distinct character groups whose context and concepts were designed to
provide the Company with the widest spectrum of age profiles.
An additional market for the Company's products consist of corporations,
which are sold under contract for the rights to utilize the Company's
cartoon character images in various licensing and or merchandising
formats, as well as to consumers who purchase products as offered by the
Company from its e-commerce Internet Signature Store or other direct
selling techniques.
Generally, a licensing / merchandising agreement for the use of a cartoon
image averages between $100,000 to $175,000 per year with a similar fee
for some national licenses (countries in Europe, South America, Asia,
etc.), for general category utilization's such as caps, T-shirts, etc..
Toys, dolls and board games typically command license fees of between
$175,000 to $300,000 per annum. The inclusion of a deal for animation for
television multiplies the aforementioned figures 5 to 10 fold, with an
animation deal bringing in revenues for all merchandising, licensing and
broadcast rights in the areas of $15,000,000 to $50,000,000 per annum in
the United States for a moderate success and $7,000,000 to $25,000,000 for
Europe (England,
Germany, France, Belgium, Italy, Spain, Switzerland). An animation deal in
Europe, including the parameters as indicated, for one country can range
between $1,500,000 to $10,000,000+ depending upon the country, station,
population, merchandising and allied aspects.
With over 179 million on-line Internet subscribers and users world-wide
and over 80 million in the United States, the importance of the Internet
as a revenue medium is supported by the gross sales of over $14.7 billion
in 1998, with projections for that figure to exceed $36 billion on 1999.
The extremely high growth rate and importance of the World Wide Web has
been factored into the Company's immediate, as well as long range plans
for both marketing, promotion and sales. The Company maintains a corporate
web site at - www.finelineproperties.com - which also links directly to
the
Company's e-commerce Signature Store. The Company's understanding of this
electronic medium is reflected in the corporate name, which is also the
Company's web site address - FineLine Properties.com (Inc.).
V. Operations:
In addition to the aforestated, the Company is also in the process of
designing computer software games via its Software Games Division to sell
completed versions first over the Internet as download versions for trial
and then purchase. The Company is interviewing game designers, developers
and programmers for this new product segment with the schedule first game
targeted for the third quarter of 2000.
In keeping with its core business, FineLine Properties is also developing
scripts and storyboards for animated "shorts" (cartoons have a length of 5
to 8 minutes), for Spanish market sales. The second largest language
market globally, Spanish, has exceptionally few animated products
developed or designed for that market and culture save for those Spanish
firms engaged in this market segment. Furthermore, the vast majority of
animated products seen by children in the Spanish market are dubbed
versions of public domain cartoons developed for the U.S. or other markets
more than 20 years hence.
VI. Competition:
The Company's competition for its various cartoon characters includes such
companies as Disney, Warner Brothers, DIC Entertainment, Mainframe
Entertainment, Dreamworks and other internationally known cartoon firms in
the forefront of the industry. Due to the already established positioning
of these firms in the industry, as well as their established network
television, movie industry, licensing, merchandising arrangements and
consumer awareness, management at FineLine Properties.com, Inc. feels that
their established status does not represent actual direct competition for
the Company at this time. Management, based upon an analysis of past
industry trends with regard to newer cartoon character groups, feels that
the Company's competition stems from less well known cartoon character
companies with new cartoon introductions, as this is the theater where
direct competition for the Company's character lines will come from.
The popularity of cartoons as both an entertainment, marketing and revenue
medium has been demonstrated by the movie industry, the television
industry, toy and game industries, software industry and advertising. In
1998, more feature length animated movies are released than at any time in
the industries history. "Mulan", Out of Egypt", "Antz", "A Bug's Life",
"The Rug Rats Movie" are examples of Hollywood's understanding of the
universal audience appeal and entertainment value of cartoons.
The Company has understood the foregoing and developed cartoon character
groups designed to capitalize upon these variables. Rather than focus upon
a single age group segment, the Company has undertaken the development of
character group types which either address broad demographic profiles, or
attract segments of the market by virtue of the broad character group
profiles.
VII. Officers and Directors:
A list of the current officers and directors of the Company appears below.
The directors of the Company are elected annually by the shareholders.
The officers serve at the pleasure of the Board of Directors. The
directors do not presently receive fees or other remuneration for their
services.
Name Age
Position
--- -------
Robert Petry 53 President
- FineLine Properities.com, Inc.,
Chairman of the Board
Carl White 48 Vice
President, Director
Sidney Rudick 66 Vice
President, Board Secretary
VIII. Corporate Legal Proceedings:
There are no pending legal proceedings to which the Company is a party or
to which the property interests of the Company are subject.
IX. Miscellaneous Stock Details:
The Company's common stock is listed and trading on the NASDAQ Over The
Counter Bulletin Board under trading symbol FNLN. The Company's Market
Maker is National Capital, LLC, 2804 West Country Club Drive, Oklahoma
City, OK 73116.
The approval of proposals submitted to stockholders at a meeting other
than for the election of directors requires the favorable vote of a
majority of the shares voting, except in the case of certain fundamental
matters (such as certain amendments to the Certificate of Incorporation,
and certain mergers and reorganizations), in which cases California law
and the Company's By Laws require the favorable vote of at least a
majority of all outstanding shares. Stockholders are entitled to receive
such dividends as may be declared from time to time by the Board of
Directors out of funds legally available therefor, and in the event of
liquidation, dissolution or winding up of the Company to share ratably in
all assets remaining after payment of liabilities. The holders of shares
of Common Stock have no preemptive, conversion, subscription or cumulative
voting rights.
Holders of shares of regular Common Stock are entitled to one vote per
share on all matters submitted to a vote of the shareholders. Shares of
Common Stock do not have cumulative voting rights, which means that the
holders of a majority of the shareholder votes eligible to vote and voting
for the election of the Board of Directors can elect all members of the
Board of Directors.
X. Conclusion:
FineLine Properties.com, Inc.' domestic and international marketing,
licensing and merchandising programs utilizing LIMA (International
Licensing and Merchandisers Association), Corporate licensing Attorney
Frederick U. Fierst, the Internet and Company management, is geared to
promote and aggressively pursue agreements for its 147 cartoon family.
The internal product development programs (cartoon characters, software
games, animation and branded products), together with the aforementioned
activities will enable the Company to meet revenue and corporate
objectives as well as create additional shareholder value.
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TBBB |
