June 28th, 2010
To our Shareholders, Customers and Partners:
From: CEO J. Michael Head
In March of 2010 our management team took control of Anything Brands Online (ANYT). A key element of the transaction was that previous management was required to file with FINRA to change the name of the company to MyFreightWorld Technologies Inc. and the trading symbol to MYFT. After receiving full approval, the next three months focused on spinning off all things related to Anything Brands (Anything Brands Online and Anything Green Online). We then implemented plans to become a fully reporting company and establish a credible flow of information between the company and its shareholders. All these things are important to the shareholders and were treated with the diligence they deserve, but now is the time to shift the dialogue from the past and on to the future. Therefore, I am happy to speak to our fundamental business model and the plans we are executing to grow shareholder value.
Business Model and Financial Results:
MYFT is a business process outsource provider that supplies the industry’s best customized software and support services to domestic and international shippers through third party logistics companies (3PLs). Over 100 3PLs use our private branded software supporting thousands of shippers worldwide. Manufacturers, distributors, and other entities needing to reposition goods or assets spend over $500 Billion Dollars domestically shipping commodities from one place to another. International shipping volume exceeds domestic volumes. Tens of thousands of carriers haul these commodities and yet no one carrier has a significant share of the entire market. Certain segments such as small-package have dominant players like FEDX and UPS but these segments are relatively small compared to the entire logistics market. Because of this overall fragmentation (as well as many other factors), a new industry was born in the 1980s called Multi-Modal Logistics Management and companies in this space are often referred to as Third Party Logistics Companies or 3PLs. I was the co-founder of one of the first such companies in the 1980s called Mark VII Inc. This company grew its revenues from zero to $700 Million before being sold in the 1990s. Prior to Mark VII, Inc., I was co-founder of another public company which was a 48 state, full truckload carrier. This company was sold to Swift Transportation in 1994. During 30 years of executive management experience, I have learned a great deal about the industry and its needs. This led to my vision to create myFreightWorld. The team of industry experts I assembled to carry out the MYFT vision understood that shippers need and use 3PLs for a variety of reasons but primarily because they need professional experts to take advantage of the multitude of options and strategies that are used to control distribution costs. MYFT is in a unique position to consolidate technology and services to respond to the inevitable change in the way the transportation industry does business in the “Information Age.” MYFT is at the forefront and taking the lead during this change in a segment of the industry (3PLs) that is growing much faster than the transportation industry or the economy (see EYEFORTRANSPORT 2009 Industry Report).
MYFT partners with many of the largest 3PLS in the business and provides them with customized software, web applications and a web portal that is branded with their name. The software allows information to be transferred to all interested parties throughout the entire shipment life cycle and can be customized to fit the needs of each shipper. We think of the software as an “Information Pipe” which can be used on standalone basis or backed up with personalized, real-time, customizable back office services that help 3PLs eliminate fixed costs and provide services outside of their areas of their core competency. Specific Mode Management, Freight Auditing, Rate Negotiation, Insurance Claims Administration, and Customer Service Support are examples of the services we can customize. Our customers can focus on what they do best and leave us the rest.
In a recession, the transportation industry always takes the first hit and is always one of the first to bounce back. Our shipment volume certainly reflects a bounce back considering we experienced a 54% increase from 1st Quarter of 2009 to 1st Quarter of 2010. Overall our first quarter results for 2010 were favorable despite expenses incurred related to the transition from ANYT to MYFT and costs for gearing up to accommodate significant expected growth for 2010.
Growth Strategy:
The world is emerging from one of the worst recessions in history. Understated unemployment rates have been in the double digit range. Those fearing unemployment exceeded 50%, in my opinion. Consumer spending came to a screeching halt. This resulted in top line revenues dropping an average of 40% throughout the transportation industry. We believe that this economic environment has forced companies to tighten their belts and look to strategies that will leverage their core competencies. In my opinion this translates into an increased use of IT and a trend toward consolidation. Evidence of this can be found in recent IPO’s for transportation entities that have aggressive acquisition plans backed by efficiency promoting IT platforms.
MYFT decided to become a public company in order to make growth through acquisition more tenable. We are currently in the final stages of negotiations with two significant and respected companies. Although we are bound to the terms of non-disclosure agreements, we have formed a joint venture with one of the entities which has been funded by both of us in addition to outside private investors. This joint venture is developing and executing the optimal structure or structures to pursue our acquisition strategy. I anticipate that annual revenues will exceed $250 million upon completion of the first stage of our joint effort.
Audit and Reporting Strategy:
I stated above that MYFT became a public company in order to accommodate an aggressive growth strategy and theoretically that makes it easier for a company to raise capital to grow by giving investors a greater amount of liquidity. My recommendation to our Board of Directors to become a Pink Sheet Company was based on the belief that we could avoid extensive regulatory costs until such time as the cost of compliance was a more appropriate percentage of revenue. In theory, this is a sound concept but I confess that I had no idea of the level of misinformation that circulates throughout the “Pink Sheet” marketplace, the lack of credibility of information, and the number of companies without substance that “play” in this space. This makes it difficult for real companies to belong here for very long. Therefore, I am extremely pleased to announce that our days as a non-reporting “Pink” will end as soon as possible. I have placed this goal as well as a move to the OTCBB (and ultimately to NASDAQ) at the very top of our capital strategy. Obviously we must contend with the constraints we have due to historic decisions and economic realities, but rest assured that my instructions to our Audit Team and everyone involved are that we will move as fast as possible with no delays. We are making real progress and I will provide specifics throughout the process.
Communications with Shareholders:
One of the things I have learned during my tenure as CEO of a public company is that, after excellence in execution, honest communication is the key to shareholder satisfaction. I have taken calls directly from some of you and some shareholders have even taken me up on my offer to visit our company in person. I have tried to answer every e-mail immediately and have been happy to do so. My commitment to each of you is that transparency and honesty will drive our Investor Relations policy. I believe that we can accomplish everything on our extensive agenda because of a strong management team, our devoted employees and outstanding partners. I have not always been, nor will I ever be, capable of predicting unforeseen delays, occasional roadblocks and situations beyond my control. My focus as a business leader has been, is, and always will be the prize at the end of the road. I intend to eliminate all other distractions that I possibly can. Be informed and stay connected. Thank you for your support.
J. Michael Head, CEO MyFreightWorld Technologies