Subject: MGroup™ Makes Bold Entry in Public Area Architectural Millwork Segment and Notes on the new Industry Concern over Transshipping

Dear Hannah,

It has been an incredible year in the hospitality business! Thank you for your support and Happy New Year! We appreciate the opportunity to provide you the latest information on what is happening on the supply side of the hospitality world.

During the past year, MGroup™ has been engaged in pivoting a percentage of our production from a China-centric model to other overseas markets of high quality and low cost, to defray the concerns brought about by politically motivated tariffs and duties. Less than 24 months after the first announcements of anti-dumping tariffs on quartz countertops and continuing later in the year with announcements on additional tariffs on vanity bases and kitchen cabinets, MGroup™ has emerged as one of the big winners in this saga by providing our GC partners viable solutions and an uninterrupted supply chain for these products – at low or no duties!

Please be certain that we have done our homework and the solutions we are providing comply with the letter and the intent of the tariffs regulations. It has taken a lot of research to make sure that our products are being produced in countries that do not have high tariffs or duties.

Your properties will be asking you about potential savings with unknown or desperate vendors with what appears to be incredible savings, much like pricing before the anti-dumping regulations were announced. In many cases, these products are still being made in China and then transshipped through a third country. The unscrupulous resource is betting they won't get caught. But if they do . . . and chances are very high that they will . . . a fine of up to the value of the shipment can be levied. While this mostly effects the Importer of Record, if CBP investigates and find that other parties, like the owner or the GC were aware of this illegality, then fines could be levied on other parties involved in the matter.

We are seeing a lot of transshipping and other illegal methods used on products that have high anti-dumping duties like quartz countertops, vanity bases and kitchen countertops, most at levels of 300% duties or more, entering the US market. If these good are originating in China, but your importer says they are coming from a "safe" third country, make sure they have the legal paperwork. Not paying the duties is not paying the Federal Government their taxes, which we all know the government frowns on this. The charge of Defrauding the US Government can be charged at a fine equal to the value of the shipment.

For more information on Tariffs and Trade and their Impact on the Hospitality Industry, check out this presentation.

While engaged in this world-wide search to offer legitimate solutions to supply chain disruption, we found an ideal partner to produce Focused Service and Select Service architectural millwork in Eastern Europe - Evo Furniture + Design. Two great international companies, both leaders in hospitality, are joining forces for public area hospitality projects around the world. MGroup™ and Evo Furniture + Design, have announced a joint marketing agreement for the USA, Canada, and Mexico and also includes Europe and MENA (Middle East & North Africa) in the agreement.

Contact your MGroup™ Account Manager, Woody.Dobbs@mgroupcorp.com, for more information on this exciting announcement.

This union combines two of the programs most needed for construction and renovation from one source - architectural millwork for public areas and a high-volume producer of vanity bases and cabinet products for extended stay kitchens. Our focus is to be the supplier of brand standards programs throughout the world by offering solutions from multiple regions to create an uninterrupted supply chain. Our architectural millwork will be produced in Eastern Europe with our vanity bases produced in Malaysia and Poland. Because we offer both quartz countertops from Eastern Europe and Ultracera^® from Asia, we have a fabrication supply chain to meet almost any project need.

The characteristics of a public area project are very different than a typical guest room project. The public area is a “one off” specialty order, where the guest room order is a project that requires large capacity but enjoys common elements. Production of public area is a different mindset. Finding the right manufacturing partner is critical for a good result.

We will be providing public area architectural millwork in conjunction with orders for the guest room products to provide the GC and the Developer a true value.

It was a natural evolution to add architectural millwork to the MGroup™ program, and Evo has the resources to provide not only a better-quality product but a better value product. Evo had the experience in custom work from their long experience building architectural millwork for the cruise line industry. What we are doing in public area architectural millwork is very similar to Evo's pedigree in building products for the cruise line industry. Our focus on architectural millwork projects will start with Select Service and Focused Service brands that share common design elements.

Before rolling out this program globally, several projects were field-tested and certified, including a dual-brand Residence Inn/Courtyard in Colonie, NY and a TownePlace Suites in Medicine Hat, Alberta. Both projects were very well received. MGroup™ has a team of architectural millwork professionals and they agree that the attention to detail, the quality of finishes and the passionate commitment to on-time delivery that Evo brought to this market is unsurpassed. With our team of experienced Project Managers based in LaGrange, GA and focused on your project and Evo’s team of talented professionals exclusively engaged in your project, we believe your experience will be exceptional.

MGroup™ will be rolling out the joint marketing program in the USA and Europe starting in January 2020 with the first targets Focused Service and Select Service public areas. Later in the year, a program for other types of public area projects and high-end suites for the gaming and hospitality business will be introduced.

So, if you are ready for a high capacity, high volume specialty architectural millwork company, then look no further than a brand you already know, MGroup™. Combining countertops, guest room and public area millwork and shower kit orders makes great sense! Less purchase orders to process, less complexity and more reliance on a professional team committed to this industry.

Get it all at MGroup™.

For more information contact evomteriors@mgroupcorp.com or visit www.mgroupcorp.com or simply reply to my email.

Thanks again for your support!



Kindest Regards,

H. David Murray
President and CEO
MGroup™

Meridien House
203 N Lewis St
LaGrange, GA 30240

706-350-4300
706-298-6470 ph (direct)
706-837-0073 fx
770-361-0518 cell
www.mgroupcorp.com