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No more rumours! Facts only!

11th February 2015

Dear All,

Considering the rumours going around internet forums and in the windsurfing public about MauiSails, I feel that there is a need to explain why we did not renew the sponsorship agreements with our sponsored racers, and to clarify the situation of the company, and its future.

No more rumors! Facts only!

Towards the end of last year, our sails production cycle was modified; from ordering and manufacturing sails on a monthly basis, we had to move to ordering and manufacturing on a quarterly basis, as requested by the factory in China. This happened at short notice, and at the worst possible moment, i.e. the time of year when our production reaches its peak. This meant that we had to place one single order for 45% of our yearly production, and therefore, we had to finance 45% of our yearly purchase of sails from the factory at one go. Even someone who is not very knowledgeable about financial matters, can understand that such a change would put a significant, but only temporary, strain on the cash flow of any company that needs to finance suddenly 45% of its yearly production. The reason why this strain is only temporary (and to understand this, you might need a slightly better understanding of financial issues) is that as soon as the sails have been sold to the importers (and paid by them), the cash flow is back to normal, and on a long-term basis. The strain occurs only the first time that the change in the ordering/production cycle happens. Meanwhile, this change has also had the effect of delaying the delivery of the sails, a situation for which I do apologize to all those affected by it.

No more rumors! Facts only!

Faced with this situation, we had to find some ways to restore our cash flow, through costs savings, and make some tough choices. I never envisaged using cheaper materials to reduce the cost of manufacturing the sails, an option that other companies might have chosen. Unfortunately and regrettably, the company was not in a position to renew the yearly sponsorship agreements of our team riders, and for now, we subcontract the sail design process on a need-to basis, under my strict guidance.

No more rumors! Facts only!

These changes are painful, but beneficial to the company, as it is now in a much better financial situation. For those who might doubt it, here is hard evidence: I have just purchased Barry Spanier's shares in the company, and reimbursed over two thirds of the bank loans of the company. If I had the slightest concern about the future of MauiSails, I would not have invested so significantly into it. Finally, I will personally be capitalizing the company further over the next 12 months as needed.

2015 Race sails - TR-XI

The first TR-XIs and other 2015 sails are leaving the factory in the next few days and weeks. Our new K series masts with Kevlar incorporated in the structure have been very well received in the market in 2014, and are proving practically bomb proof with under half a per cent (0.5%) of warranties, which is a stunning turnaround from previous years. Our carbon booms continue to lead the market. Of course, we continue to honour warranties (which is all the more easy, as there are very few claims) and service all customers. We are starting development of the 2016 sails. And in time, we may resume the sponsorship of international racers.

I do hope that this clarifies the current situation and future of MauiSails, and I thank all of our dealers, importers and faithful customers for their tremendous loyalty over the years.

Aloha
Phil McGain
President, Synergy Sports, Inc. /MauiSails

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