** **

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C.  20549**

 

**FORM 10-Q**

 

| ý | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|--------|----------------------------------------------------------------------------------------------|

 

**For thequarterly period ended December 31, 2001**

** **

**OR**

 

| o | **TRANSITION REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|---|-----------------------------------------------------------------------------------------------|

 

**Forthe transition period from                    to                    **

 

**CommissionFile Number: 0-24556**

 

**MKRHOLDINGS**

(Exact name ofregistrant as specified in its charter)

 

| **Utah**                                                        |   | **87-0372759**                        |
|-----------------------------------------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of incorporation or organization) |   | (I.R.S. Employer  Identification No.) |
|                                                            |   |                                  |
| **1070  West 2300 South**                                       |
| **Salt  Lake City, Utah 84119**                                 |
| (Address of  principal executive offices)                       |
|                                                            |
| **(801) 972-2100**                                         |
| (Registrant’s  telephone number, including area code)      |

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filings requirements for thepast 90 days.

Yes   ý                  No   o

 

Indicate the number ofshares outstanding of each of the issuer’s classes of common stock, as of thelatest practicable date.

 

| **Class  of Common Stock**     |   | **Outstanding  at February 12, 2002** |
|--------------------------------|--------|---------------------------------------|
| Common Stock,  $0.01 par value |   | 11,102,077                            |

 

 

**MKR HOLDINGS**

 

**TABLE OF CONTENTS**

 
| **Part I - Financial  Information**                                                                                                                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                             |
| **Item 1.   Financial Statements**                                                                                                                                     |
|                                                                                                                                                                             |
| Statements of  Net Assets in Liquidation As of December 31, 2001 (Unaudited) and March 31,  2001                                                                                 |
|                                                                                                                                                                             |
| Statements  of Changes in Net Assets in Liquidation (Unaudited)For  the Three Months Ended December 31, 2001 and 2000 and   For the Nine Months Ended December 31, 2001 and 2000 |
|                                                                                                                                                                             |
| Note to the  Interim Financial Statements                                                                                                                                        |
|                                                                                                                                                                             |
| **Item  2.   Management’s  Discussion and Analysis of Financial Condition**                                                                                       |
|                                                                                                                                                                             |
| **Item  3.   Quantitative  and Qualitative Disclosures About Market Risk**                                                                                             |
|                                                                                                                                                                             |
| **Part II - Other Information**                                                                                                                                                  |
|                                                                                                                                                                             |
| **Item 6.  Exhibits and  Reports on Form 8-K**                                                                                                                         |
|                                                                                                                                                                             |
| **Signature**                                                                                                                                                                    |

 

2

----

 

**PART I - FINANCIAL INFORMATION**

 

**Item 1.  FinancialStatements**

MKRHOLDINGS

STATEMENTSOF NET ASSETS IN LIQUIDATION

(Dollarsin Thousands, Except Share and Per Share Amounts)

 
|                                                                                         |   | **December 31,** |   | **March 31,** |   |
|----------------------------------------------------------------------------------------------|--------|------------------|--------|---------------|--------|
|                                                                                         |   | **2001**         |   | **2001**      |   |
|                                                                                         |   | **(Unaudited)**  |   |          |   |
| Assets:                                                                                      |   |             |   |          |   |
| Cash  and cash equivalents                                                                   |   | $                | 7      |          | $      | 261 |   |
| Prepaid  insurance                                                                           |   | 50               |   | 29            |   |
| Investment  in Marker International GmbH                                                     |   | 2,480            |   | 2,480         |   |
| Total  assets in liquidation                                                                 |   | 2,537            |   | 2,770         |   |
|                                                                                         |   |             |   |          |   |
| Liabilities:                                                                                 |   |             |   |          |   |
| Accounts  payable and accrued liabilities                                                    |   | -                |   | 321           |   |
| Advances  payable to Marker International GmbH                                               |   | 697              |   | 365           |   |
| Total  liabilities in liquidation                                                            |   | 697              |   | 686           |   |
|                                                                                         |   |             |   |          |   |
| Net  assets in liquidation                                                                   |   | $                | 1,840  |          | $      | 2,084 |   |
|                                                                                         |   |             |   |          |   |
| Net  assets in liquidation per common share (based on 11,102,077 common shares  outstanding) |   | $                | .17    |          | $      | .19 |   |

 

The accompanying note to the interimfinancial statements is an integral part of these statements.

 

MKRHOLDINGS

STATEMENTS OF CHANGES INNET ASSETS IN LIQUIDATION

(Dollarsin Thousands)

 
|                                        |   | **For the Three Months   Ended December 31,** |   | **For the Nine Months  Ended December 31,** |   |
|---------------------------------------------|--------|-----------------------------------------------|--------|---------------------------------------------|--------|
|                                        |   | **2001**                                      |   | **2000**                                    |   | **2001** |   | **2000** |   |
|                                        |   | **(Unaudited)**                               |   | **(Unaudited)**                             |   | **(Unaudited)** |   | **(Unaudited)** |   |
|                                        |   |                                          |   |                                        |   |   |   |   |   |
| General  and administrative expenses        |   | 128                                           |   | 73                                          |   | 244 |   | 113 |   |
|                                        |   |                                          |   |                                        |   |   |   |   |   |
| Net  change in net assets for the periods   |   | 128                                           |   | 73                                          |   | 244 |   | 113 |   |
|                                        |   |                                          |   |                                        |   |   |   |   |   |
| Net  assets at the beginning of the periods |   | 1,968                                         |   | 2,628                                       |   | 2,084 |   | 2,668 |   |
|                                        |   |                                          |   |                                        |   |   |   |   |   |
| Net  assets at the end of the periods       |   | $                                             | 1,840  |                                        | $      | 2,555 |   | $ | 1,840 |   | $ | 2,555 |   |
|                                             |        |                                               |        |                                             |        |  |  |  |  |  |  |  |  |

 

The accompanying note to the interim financial statements is anintegral part of these statements.

 

3

----

 

**NOTE 1.  INTERIM FINANCIAL STATMENTS**

 

***Nature of Operations***

 

The accompanyingfinancial statements include the accounts of MKR Holdings (the “Company”).  The financial statements have been preparedpursuant to the rules and regulations of the Securities and Exchange Commission(the “SEC”).  Certain information andfootnote disclosures normally required in financial statements prepared inaccordance with generally accepted accounting principles have been omittedpursuant to such rules and regulations.

 

In the opinion ofmanagement, the accompanying financial statements include all normaladjustments considered necessary to present fairly the net assets inliquidation as of December 31, 2001 and March 31, 2001 and the changes in netassets in liquidation for the three months ended December 31, 2001 and 2000 andfor the nine months ended December 31, 2001 and 2000.

 

The statements ofchanges in net assets in liquidation for the three months ended December 31,2001 and 2000 and for the nine months ended December 31, 2001 and 2000 are notnecessarily indicative of the results for the full fiscal year.  It is suggested that these financialstatements be read in conjunction with the financial statements and notesthereto included in the Company’s last annual report on Form 10-K, as filedwith the SEC on July 16, 2001.

 

The Company is nolonger engaged in the conduct of business and operates for the sole purpose ofholding and subsequently liquidating its assets (which consist almost entirelyof its equity interest in Marker International GmbH (“Newco”)).  Prior to November 30, 1999, MKR Holdings,then Marker International, was a holding company which operated its businessthrough its subsidiaries, Marker Deutschland GmbH (“Marker Germany”), MarkerUSA, Inc. (“Marker USA”), Marker Ltd., Marker Japan Co. Ltd. (“Marker Japan”),Marker Austria GmbH (“Marker Austria”) and Marker Canada, Ltd. (“MarkerCanada”).

 

On November 30, 1999 (the “Closing Date”), the Company sold substantiallyall of its assets (including the equity securities of its subsidiaries) toMarker International GmbH, a GmbH organized under the laws of Switzerland(“Newco”), pursuant to an asset purchase agreement (as amended by the Amendmentto the Asset Purchase Agreement dated as of September 20, 1999; the “PurchaseAgreement”) between the Company and Newco. In exchange, Newco assumed substantially all of the liabilities of theCompany and the Company received a 15% equity interest in Newco.  The remaining 85% equity interest in Newcois held by CT Sports Holding AG (“CT”), a joint venture between Tecnica S.p.A.and H.D. Cleven, the principal shareholder of the Völkl Group.  Pursuant to the Purchase Agreement, CT wasrequired to contribute to Newco $15,000,000 in cash for its 85% equity interestin Newco.  After taking into accountCT’s purchase of 66.66% of Marker Canada in June 1999 for $1,025,501, CTcontributed $13,974,499 to Newco in a combination of debt and equity.

 

4

----

 

In connection with the Purchase Agreement, the Company and CT enteredinto an operating agreement which, among other things, granted CT an option(the “Option”) to purchase the Company’s 15% equity interest in Newco at any timeon or after November 30, 2001, at the then fair market value, subject toreduction in an amount equal to the sum of: (a) any indemnity obligations ofthe Company to Newco, (b) all unreimbursed advances from Newco for operatingand administrative expenses (currently estimated to be approximately $300,000per year) and costs of defending indemnifiable claims, if any, incurred byNewco, together with interest thereon, (c) all advances by Newco to the Companyto pay any income tax liability, together with interest thereon, plus (d)$775,000.  The Option became exercisableon November 30, 2001, but as of February 8, 2002, had not been exercised.  If CT exercises the Option and purchases theCompany’s 15% equity interest in Newco, the Company will be liquidated and thenet proceeds of the exercise of the Option will be distributed to theshareholders of the Company in liquidation. In determining fair market value, all of CT’s $15,000,000 contributionto Newco will be considered equity.

 

In connection with the Purchase Agreement, the Company reachedagreements-in-principle regarding the restructuring of its debt and thetreatment of such debt under a Plan of Reorganization with substantially all ofits creditors that were impaired under the Plan of Reorganization.  On August 19, 1999, the Company, DNR NorthAmerica, Inc. and DNR USA, Inc. (collectively, the “Debtors”) filed voluntarypetitions for relief under Chapter 11 of the United States Bankruptcy Code inthe United States Bankruptcy Court for the District of Delaware (the“Bankruptcy Court”).  On September 22,1999, the Debtors filed the First Amended Joint Chapter 11 Plan ofReorganization (as amended by the Amendment to the First Amended Joint Chapter11 Plan of Reorganization, dated as of October 25, 1999, the “Plan”) and arelated disclosure statement (the “Disclosure Statement”).  By order dated September 22, 1999, theBankruptcy Court approved the Disclosure Statement as containing adequateinformation.  The Disclosure Statementand the Plan were subsequently distributed to the Debtors’ creditors andshareholders for approval, which approval was subsequently obtained.  On October 27, 1999, the Plan was confirmedby order of the Bankruptcy Court (the “Confirmation Order”).  Pursuant to the Confirmation Order, theBankruptcy Court approved the Plan and the Purchase Agreement on October 27,1999.  The Company did not distributeany securities in connection with the Plan.

 

As a result of the events described above, the Company is no longerengaged in the conduct of business and operates for the sole purpose of holdingand subsequently liquidating its assets (which consist almost entirely of itsequity interest in Newco).  The Companyis required to dissolve and liquidate all of its assets no earlier than November30, 2002, and no later than November 30, 2004. If the Option is not exercised prior to liquidation, then uponliquidation and the payment of the Company’s outstanding obligations, theshareholders of the Company will receive an equity interest in Newco equal toeach shareholder’s pro rata share of the Company’s remaining equity interest inNewco.

 

5

----

 

Each year, Newco’s fairmarket value is estimated by an independent appraiser engaged by theCompany.  Based on the appraiser’svaluation of Newco, management then determines the liquidation value of theCompany by taking 15% of Newco’s fair market value and subtracting amountscomputed pursuant to items (a) through (d) set forth above.  As of March 31, 2001 (the last date Newcowas appraised), Newco was valued by the Company’s independent appraiser atapproximately $21.7 million.  Based onthis valuation, the Company’s 15% equity interest in Newco (the “Investment”) wasapproximately $3.255 million (i.e., 15% of Newco’s appraised fair marketvalue).  Management thus estimates thatas of March 31, 2001, the liquidation value of the Company was no more thanapproximately $2.115 million, or $3.255 million less $775,000 and the $365,000in funds advanced by Newco to the Company prior to March 31, 2001.  As of December 31, 2001, Newco had advanceda total of $667,000 to the Company.  Ifthe appraisal of Newco on March 31, 2001, $21.7 million, remained the same onDecember 31, 2001, then the liquidation value of the Company would be no morethan approximately $1.813 million (less the expenses of liquidation), or $3.255million less $775,000 and the $667,000 in funds advanced by Newco to theCompany as of December 31, 2001.  Theforegoing discussion of the Company’s liquidation value is set forth hereinonly as an estimate of such value.  Theactual liquidation value of the Company, when such liquidation occurs, maydiffer materially from the current estimated value contained herein.

 

The Companyadopted the liquidation basis of accounting effective December 1, 1999.  Under this basis of accounting, assets andliabilities are stated at their estimated net realizable value.

 

***New Accounting Pronouncements***

 

In June 2001, the Financial Accounting Standards Board (“FASB”) finalized FASB StatementsNo. 141, *Business Combinations*(SFAS 141)*,* and No. 142, *Goodwill and Other Intangible Assets* (SFAS142)*.*  SFAS 141 requires the use of the purchase method of accountingand prohibits the use of the pooling-of-interests method of accounting forbusiness combinations initiated after June 30, 2001.  SFAS 141 also requires that the Company recognize acquiredintangible assets apart from goodwill if the acquired intangible assets meetcertain criteria.  SFAS 141 applies toall business combinations initiated after June 30, 2001 and for purchasebusiness combinations completed on or after July 1, 2001.  It also requires, upon adoption of SFAS 142,that the Company reclassify the carrying amounts of intangible assets andgoodwill based on the criteria in SFAS 141.

 

SFAS 142 requires,among other things, that companies no longer amortize goodwill, but insteadtest goodwill for impairment at least annually.  In addition, SFAS 142 requires that the Company identifyreporting units for the purposes of assessing potential future impairments ofgoodwill, reassessing the useful lives of other existing recognized intangibleassets, and ceasing amortization of intangible assets with an indefinite usefullife.  An intangible asset with anindefinite useful life should be tested for impairment in accordance with theguidance in SFAS 142.  SFAS 142 isrequired to be applied in fiscal years beginning after December 15, 2001 to all

 

6

----

 

goodwill and other intangible assets recognized at that date,regardless of when those assets were initially recognized.  SFAS 142 requires the Company to complete atransitional goodwill impairment test six months from the date of adoption.  The Company is also required to reassess theuseful lives of other intangible assets within the first interim quarter afteradoption of SFAS 142.  We expect that the adoption by theCompany of SFAS 141 and SFAS 142 will have no impact on the Company’s financialposition in the future.

 

In October 2001,the FASB issued SFAS No. 144*, Accounting for the Impairment or Disposal ofLong-Lived Assets* (SFAS144).  SFAS 144 requires thatthose long-lived assets be measured at the lower of carrying amount or fairvalue less cost to sell, whether reported in continuing operations or indiscontinued operations. Therefore, discontinued operations will no longer bemeasured at net realizable value or include amounts for operating losses thathave not yet occurred. SFAS 144 is effective for financial statements issuedfor fiscal years beginning after December 15, 2001, and, generally, are to beapplied prospectively.  The Companybelieves the adoption of SFAS 144 will have no material impact on its financialstatements.

 

**Item2.  Management’s Discussion and Analysisof Financial Condition**

 

##### ***Overview***

 

Prior to November30, 1999, MKR Holdings, then Marker International (the “Company”) was a holdingcompany which operated its business through its subsidiaries, MarkerDeutschland GmbH (“Marker Germany”), Marker USA, Inc. (“Marker USA”), MarkerLtd., Marker Japan Co. Ltd. (“Marker Japan”), Marker Austria GmbH (“MarkerAustria”) and Marker Canada, Ltd. (“Marker Canada”).  The Company and its subsidiaries were a leading designer,developer, manufacturer and marketer of alpine ski bindings in North America,Europe and Asia.  Substantially all ofthe Company’s ski bindings were manufactured by Marker Germany, whichdistributed bindings in Germany to subsidiaries of the Company and toindependent distributors in countries where the Company did not have adistribution subsidiary.

 

On November 30, 1999 (the “Closing Date”), the Company sold substantiallyall of its assets (including the equity securities of its subsidiaries) toMarker International GmbH, a GmbH organized under the laws of Switzerland(“Newco”), pursuant to an asset purchase agreement (as amended by the Amendmentto the Asset Purchase Agreement dated as of September 20, 1999; the “PurchaseAgreement”) between the Company and Newco. In exchange, Newco assumed substantially all of the liabilities of theCompany and the Company received a 15% equity interest in Newco.  The remaining 85% equity interest in Newcois held by CT Sports Holding AG (“CT”), a joint venture between Tecnica S.p.A.and H.D. Cleven, the principal shareholder of the Völkl Group.  Pursuant to the Purchase Agreement, CT wasrequired to contribute to Newco $15,000,000 in cash for its 85% equity interestin Newco.  After taking into accountCT’s purchase of 66.66% of Marker Canada in June 1999 for $1,025,501, CTcontributed $13,974,499 to Newco in a combination of debt and equity.

 

7

----

 

In connection with the Purchase Agreement, the Company and CT enteredinto an operating agreement which, among other things, granted CT an option(the “Option”) to purchase the Company’s 15% equity interest in Newco at anytime on or after November 30, 2001, at the then fair market value, subject toreduction in an amount equal to the sum of: (a) any indemnity obligations ofthe Company to Newco, (b) all unreimbursed advances from Newco for operatingand administrative expenses (currently estimated to be approximately $300,000per year) and costs of defending indemnifiable claims, if any, incurred byNewco, together with interest thereon, (c) all advances by Newco to the Companyto pay any income tax liability, together with interest thereon, plus (d)$775,000.  The Option became exercisableon November 30, 2001, but as of February 8, 2002, had not been exercised.  If CT exercises the Option and purchases theCompany’s 15% equity interest in Newco, the Company will be liquidated and thenet proceeds of the exercise of the Option will be distributed to theshareholders of the Company in liquidation. In determining fair market value, all of CT’s $15,000,000 contributionto Newco will be considered equity.

 

In connection with the Purchase Agreement, the Company reachedagreements-in-principle regarding the restructuring of its debt and thetreatment of such debt under a Plan of Reorganization with substantially all ofits creditors that were impaired under the Plan of Reorganization.  On August 19, 1999, the Company, DNR NorthAmerica, Inc. and DNR USA, Inc. (collectively, the “Debtors”) filed voluntarypetitions for relief under Chapter 11 of the United States Bankruptcy Code inthe United States Bankruptcy Court for the District of Delaware (the“Bankruptcy Court”).  On September 22,1999, the Debtors filed the First Amended Joint Chapter 11 Plan ofReorganization (as amended by the Amendment to the First Amended Joint Chapter11 Plan of Reorganization, dated as of October 25, 1999, the “Plan”) and arelated disclosure statement (the “Disclosure Statement”).  By order dated September 22, 1999, theBankruptcy Court approved the Disclosure Statement as containing adequateinformation.  The Disclosure Statementand the Plan were subsequently distributed to the Debtors’ creditors andshareholders for approval, which approval was subsequently obtained.  On October 27, 1999, the Plan was confirmedby order of the Bankruptcy Court (the “Confirmation Order”).  Pursuant to the Confirmation Order, theBankruptcy Court approved the Plan and the Purchase Agreement on October 27,1999.  The Company did not distributeany securities in connection with the Plan.

 

As a result of the events described above, the Company is no longerengaged in the conduct of business and operates for the sole purpose of holdingand subsequently liquidating its assets (which consist almost entirely of itsequity interest in Newco).  The Companyis required to dissolve and liquidate all of its assets no earlier thanNovember 30, 2002, and no later than November 30, 2004.  If the Option is not exercised prior toliquidation, then upon liquidation and the payment of the Company’s outstandingobligations, the shareholders of the Company will receive an equity interest inNewco equal to each shareholder’s pro rata share of the Company’s remainingequity interest in Newco.

 

8

----

 

Each year, Newco’s fair market value is estimated byan independent appraiser engaged by the Company.  Based on the appraiser’s valuation of Newco, management thendetermines the liquidation value of the Company by taking 15% of Newco’s fairmarket value and subtracting amounts computed pursuant to items (a) through (d)set forth above.  As of March 31, 2001 (the last date Newco was appraised),Newco was valued by the Company’s independent appraiser at approximately $21.7million.  Based on this valuation, theCompany’s 15% equity interest in Newco (the “Investment”) was approximately$3.255 million (i.e., 15% of Newco’s appraised fair market value).  Managementthus estimates that as of March 31, 2001, the liquidation value of the Companywas no more than approximately $2.115 million, or $3.255 million less $775,000and the $365,000 in funds advanced by Newco to the Company prior to March 31,2001.  As of December 31, 2001, Newcohad advanced a total of $667,000 to the Company.  If the appraisal of Newco on March 31, 2001, $21.7 million,remained the same on December 31, 2001, then the liquidation value of theCompany would be no more than approximately $1.813 million (less the expensesof liquidation), or $3.255 million less $775,000 and the $667,000 in fundsadvanced by Newco to the Company as of December 31, 2001.  The foregoing discussion of the Company’sliquidation value is set forth herein only as an estimate of such value.  The actual liquidation value of the Company,when such liquidation occurs, may differ materially from the current estimatedvalue contained herein.  Thefinancial statements of Newco were filed on September 18, 2001 in an amendmentto the Company’s Form 10-K for the fiscal year ended March 31, 2001.

 

***Results ofOperations***

 

As discussed inNote 1 to the interim financial statements, the Company is no longer engaged inthe conduct of business and operates for the sole purpose of holding andsubsequently liquidating its assets. Since December 1, 1999, the Company’s financial statements have beenreported in accordance with the liquidation basis of accounting.

 

***Liquidity andCapital Resources***

 

The Company’s primary cash needs are for administrative expenses andprofessional fees incurred in preparing the Company’s monthly financial statementsand in connection with its required SEC filings.

 

The Company’s sole source of working capital isadvances from Newco.  Pursuant to thePurchase Agreement, Newco was obligated through November 30, 2001 to lend up to$300,000 annually to the Company for its operations and associated expenses, atan interest rate of 5%.  Although notrequired by the terms of the Purchase Agreement and the operating agreement ofNewco, Newco may continue to lend additional funds for such purposes subsequentto November 30, 2001, which to date Newco has continued to do.  The funds advanced from Newco to theCompany, plus the interest thereon, will reduce the amount to be received bythe Company upon the exercise of the Option, if the Option is exercised, on adollar for dollar basis.  If Newco doesnot continue to advance additional funds to the Company, the Company will beforced to obtain

 

9

----

 

capital to fund itsoperations from third parties other than Newco.  If the Company is unable to obtain financing from Newco or otherparties and the option is not exercised, the Company will not be able tosustain its operations and will be forced to liquidate its assets, pay its debts and distribute the balance of its assets tothe shareholders of the Company in liquidation.  It is possible in such a case, that theCompany will be required to distribute some or all of its assets in-kind.

 

# ***OtherMatters***

 

Pursuant to the Plan, the Company changed its name to MKR Holdings.  Pursuant to the Confirmation Order, theCompany amended its Articles of Incorporation and By-laws to satisfy theprovisions of the Purchase Agreement, the Plan and the Confirmation Order.

 

Pursuant to the Plan, since November 30, 1999, the business and affairsof the Company have been managed by, and under the direction of, a Board ofDirectors, which consists of Kevin Hardy, Henry E. Tauber and Louis M.Alpern.  Until September 15, 2000, in addition to being a director and anofficer of the Company, Mr. Hardy served as the Chief Financial Officer andSecretary and a director of Marker USA, a subsidiary of Newco.  Mr. Hardy currently serves as President andChief Financial Officer of the Company.

 

Since August 3,2000, the Company has operated under the ticker symbol MKRH.

 

**Item3.  Quantitative and QualitativeDisclosures About Market Risk**

 

The Company isexposed to market risk, including various foreign currency exchange rate andinterest rate risks.

 

***Foreign Currency Exchange Rate Risk*****—**The functional currency of Newco is theEuro.  As a result, the value of theCompany’s Investment in Newco is subject to foreign currency fluctuationsbetween the U.S. Dollar and the Euro, which could have a material impact on thefair value of the Company’s Investment**.**

*** ***

***Interest Rate Risk***-The Company no longer has any significant exposureto market risks for changes in interest rates since the Company’s borrowingsfrom Newco are at a fixed rate of 5%.

 

10

----

 

**PART II - OTHER INFORMATION**

 

**Item6.  Exhibits and Reports on Form 8-K**

 

a)       **Exhibits:**

 

99.1  Valuationof Marker International GmbH as of March 31, 2001. *

 

b)       **Reports filed on Form 8-K:**

 

None.

----

*              Filed previously on Form 10-K/A on September 18, 2001.

 

11

----

 

**SIGNATURE**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

 

 
|                            | MKR HOLDINGS                          |
|---------------------------------|---------------------------------------|
|                            | Registrant                            |
|                            |                                  |
| Dated:   February 13, 2002 | /s/  Kevin  Hardy                |
|                            | Kevin Hardy                           |
|                            | President and Chief Financial Officer |
|                                 |                                       |  |

 

12

----