PowerLinx Inc (PWNX)

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http://www.gonow.com/investor_services.html?ticker=sevu#


To our shareholders:

In April of this year, Seaview Video Technology, Inc. will celebrate its Five-year anniversary. This milestone, by most business experts’ opinions, beats the approximately 50/50 survival rate of a start-up company.

When I accepted the position of Chairman & CEO in February 2001, many of those experts advised a much different path for overcoming the obstacles left by former management. Ironically, had the new executive team followed that advice; the Company might not be in existence today. Instead, the new executive team used a process infused with commitment, determination, and perseverance, along with basic business acumen, to triumph over these obstacles. Now, we feel the Company is poised to step up, focus on significant sales growth, and achieve more acceptable financial results for our shareholders and investors.

The trend toward these objectives actually started in year 2002, as total sales revenue increased over the previous quarter in each of the first three quarters. Further, we expect this trend to continue through 2003, to generate the highest sales volume in Company history. Our plan for increased sales is grounded on increasing distribution of our best-selling products: SecureView “camera in a light bulb”; DC SecureView sets and systems; and SeaLite.

Until recently, our primary distribution for the SecureView “camera in a light bulb” has been through internet retailers, cataloguers, and a few small traditional dealer stores. This category includes: Supercircuits, Costco Wholesale Club, Home Security Store, Safe & Secure Systems, SmartHome.com, GSI Commerce and Odyctek. With the addition of Home Shopping Network as a customer late last year, we expanded into direct television retailing, which provided excellent sell-throughs. We anticipate returning to the HSN airwaves soon, and are also negotiating with two other direct television marketers to capitalize on our HSN success. This avenue of distribution also provides education to consumers on our leading-edge powerline communications technology, as Seaview is the only Company in the world whose product transmits secure real-time video over an existing powerline grid in a small office or home and conveyed in our slogan, “Powerline Peace of Mind.” Now that the overseas sourcing of our product allows us to provide competitive retails and gross profits for our customers, we have already started placing the product on the shelves of some additional traditional retailers, and expect to add more in 2003.

The DC SecureView and powerline communication products in the transportation market have the potential to provide the largest opportunity for sales growth for the Company in 2003. We started developing this market in January 2002, and launched the first product along with our distributor, The Tyman Group LLC, in August 2002. The Company is taking an OEM approach in this market by providing the technology to significantly improve the operation of their current products in the marketplace until additional products are developed, while providing additional benefits to the end-user through savings in installation and maintenance along with improved performance. The customers we are currently targeting include Intec, Clarion, SafetyVision, International-Navistar, Delphi, ASA Audiovox and Magna-Donnelly. The Tyman Group’s major customers include McNeilus who is a major manufacturer of waste hauling vehicles, and Allied the second largest hauler in the United States. Further, we will pursue taking both an OEM and retail approach in the after-market sector by offering OEM solutions to companies such as Delphi and Navistar-International, while attempting to wholesale directly to retailers such as AutoZone and Sears in the retail distribution channel. We anticipate shipping our initial orders for this product in the first quarter of this year.

The Company intends to rejuvenate sales in the original marine product line. Because of the greater sales opportunities and research expenditures in our powerline product line, the marine category might not have received an appropriate share of attention in the recent past. As with SecureView, our primary distribution for Seaview Marine Products has been through internet retailers, cataloguers, and a few small traditional dealer stores. In 2002 we added the Sportsman's Guide as a main catalog retailer of Seaview products, and we have been shipping a special SeaLite (SL-20) for merchandising in the marine plan-o-gram of approximately four hundred Wal-Mart stores.

Also, we have already implemented an independent-contractor approach to penetrating and growing sales through a consistent schedule of attendance at Marine, Fishing and Boat Shows. We are also in the course of hiring independent sales representatives and "rep groups" to concentrate specifically on our marine products, with special emphasis on the SeaLite, which has more appeal and use by our target consumers in the fishing, marine, and recreational boating markets.

In addition to sales growth, the other main item on the Company agenda is acquiring additional financing to support the Company's expected sales growth. The Company secured initial funding of $1,000,000 in September 2002 from a private investment group. The final tranche of $300,000 will be received in February 2003. The Company worked to reduce SG & A costs in the second half of last year, and expects to continue this inclination, making our breakeven sales point achievable. Any additional funds raised would be intended for (a) increasing inventories to generate additional sales, (b) increasing direct television marketing efforts, and (c) designing and developing additional powerline communication product form factors, as well as a digital powerline solution for the commercial security sector. Achieving the digital solution will allow rollout of our Secureview Parking Lot Surveillance System [SPLSS], which will remain in the beta test phase until that time.

Although we may wish to explore many other issues and items, our focus is on sales growth and financing, to insure the flow of products and technology are readily available to sustain sales growth for the foreseeable future. If the time and resources allow it, we expect to expand our internet marketing, improve our marine product line, and increase our research and development to empower the company to take full advantage our greatest assets: Our people; Our product patents; and Our licensed powerline communication technologies.

We thank our stockholders, our customers and our dedicated employees for their support and confidence in our fine Company as we enthusiastically work to grow sales and profits, so that we may celebrate 10-year and hopefully 20-year anniversaries in the future.

Sincerely,

George S. Bernardich III
Chairman & CEO