<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


     [x]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

                For the quarterly period ended December 31, 2000
                                       OR

     [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

             For the transition period from __________ to __________

                         Commission File Number: 0-24556


                                  MKR HOLDINGS
             (Exact name of registrant as specified in its charter)


            Utah                                          87-0372759
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


                              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 mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filings
requirements for the past 90 days.

               Yes /X/                           No / /

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

    Class of Common Stock                       Outstanding at February 14, 2001
    ---------------------                       --------------------------------
Common Stock, $0.01 par value                             11,102,077

<PAGE>

                                  MKR HOLDINGS

                                TABLE OF CONTENTS


                         PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
Item 1. Financial Statements                                                    Page
                                                                                ----
<S>                                                                             <C>
            Statements of Net Assets in Liquidation
               As of December 31, 2000 and March 31, 2000                         3

            Statements of Changes in Net Assets in Liquidation
               For the Three and Nine Months Ended December 31, 2000              3

            Condensed Consolidated Statements of Operations
               For the Three and Nine Months Ended December 31, 2000              4

            Condensed Consolidated Statement of Cash Flows
               For the Nine Months Ended December 31, 1999                        5

            Notes to Condensed Consolidated Financial Statements                  6

Item 2. Management's Discussion and Analysis of Consolidated Financial
        Condition and Results of Operations                                       9

Item 3. Quantitative and Qualitative Disclosures About Market Risk               11

                           PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K                                         12

Signatures                                                                       13

</TABLE>


                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

                                  MKR HOLDINGS
                     STATEMENTS OF NET ASSETS IN LIQUIDATION
     (Dollars in Thousands, Except Share and Per Share Amounts) (Unaudited)

<TABLE>
<CAPTION>
                                                        December 31,     March 31,
                                                           2000            2000
                                                        ------------     ---------
<S>                                                        <C>            <C>
Assets:
     Cash and cash equivalents                             $   86         $   66
     Prepaid expenses                                          41             --
     Investment in Marker International GmbH                2,840          2,840
                                                           ------         ------
Total assets in liquidation                                 2,967          2,906
                                                           ------         ------
Liabilities:
     Accounts payable and accrued liabilities                  22            183
     Advances payable to Marker International GmbH            390             55
                                                           ------         ------
Total liabilities in liquidation                              412            238
                                                           ------         ------
Net assets in liquidation                                  $2,555         $2,668
                                                           ======         ======
Net assets in liquidation per common share (based
     on 11,102,077 common shares outstanding)              $  .23         $  .24
                                                           ======         ======
</TABLE>

                                  MKR HOLDINGS
               STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION
                       (Dollars in Thousands) (Unaudited)

<TABLE>
<CAPTION>
                                                  For the Three       For the Nine
                                                  Months Ended        Months Ended
                                                  December 31,        December 31,
                                                      2000                2000
                                                  -------------       -------------
<S>                                               <C>                 <C>
Revenue:
     Other income                                    $     1             $     3

Costs and expenses:
     General and administrative expenses                  65                 107
     Interest expense                                      9                   9
                                                     -------             -------
Net change in net assets for the period                  (73)               (113)

Net assets at the beginning of the period              2,628               2,668
                                                     -------             -------
Net assets at the end of the period                  $ 2,555             $ 2,555
                                                     =======             =======
</TABLE>

      The accompanying notes to condensed consolidated financial statements
        are an integral part of these condensed consolidated statements.


                                       3
<PAGE>

                                  MKR HOLDINGS
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (Dollars in Thousands, Except Per Share Amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              For the Three        For the Nine
                                                              Months Ended         Months Ended
                                                              December 31,         December 31,
                                                                  1999                 1999
                                                              -------------        ------------
<S>                                                           <C>                  <C>
NET SALES                                                        $ 14,121             $ 34,140
COST OF SALES                                                       8,381               21,635
                                                                 --------             --------
GROSS PROFIT                                                        5,740               12,505
                                                                 --------             --------
OPERATING EXPENSES:
     Selling, general and administrative                            3,533               13,161
                                                                 --------             --------
OPERATING INCOME (LOSS)                                             2,207                 (656)
                                                                 --------             --------
OTHER INCOME (EXPENSE):
     Interest expense                                                (326)              (2,392)
     Other, net                                                       729                 (796)
                                                                 --------             --------
         Total other income (expense)                                 403               (3,188)
                                                                 --------             --------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
     REORGANIZATION ITEMS AND INCOME TAXES                          2,610               (3,844)
                                                                 --------             --------
REORGANIZATION ITEMS:
     Gain on sale of substantially all assets                      16,537               16,537
     Professional fees                                               (488)              (1,367)
     Other general and administrative expenses                        (84)                (119)
                                                                 --------             --------
         Total reorganization items                                15,965               15,051
                                                                 --------             --------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES              18,575               11,207
     PROVISION FOR INCOME TAXES                                       (23)                 (12)
                                                                 --------             --------
INCOME FROM CONTINUING OPERATIONS                                  18,552               11,195
                                                                 --------             --------
DISCONTINUED OPERATIONS:
     Loss from operations of discontinued snowboard
     business, net of income taxes                                     --                   --
     Gain on disposal of snowboard business                            --                1,634
                                                                 --------             --------
GAIN FROM DISCONTINUED OPERATIONS                                      --                1,634
                                                                 --------             --------
INCOME BEFORE EXTRAORDINARY ITEM                                   18,552               12,829
                                                                 --------             --------
EXTRAORDINARY ITEM - GAIN ON RESTRUCTURING OF DEBT
     (net of income tax benefit of $0)                             15,422               15,422
                                                                 --------             --------
NET INCOME                                                       $ 33,974             $ 28,251
                                                                 ========             ========
</TABLE>

      The accompanying notes to condensed consolidated financial statements
        are an integral part of these condensed consolidated statements.


                                       4
<PAGE>

                                  MKR HOLDINGS
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                             (Dollars in Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                             For the Nine
                                                                             Months Ended
                                                                             December 31,
                                                                                 1999
                                                                             ------------
<S>                                                                          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                                 $ 28,251
     Adjustments to reconcile net income to net cash
           used in operating activities:
        Extraordinary gain on debt restructuring                                 (15,422)
        Gain on sale of substantially all assets                                 (16,537)
        Loss on sale of property, plant and equipment                                 80
        Depreciation and amortization                                              2,488
        Change in assets and liabilities, net of the effects
               of disposition:
           Increase in accounts receivable, net                                  (20,891)
           Increase in inventories                                                  (124)
           Increase in prepaid and other assets                                      (45)
           Increase in accounts payable                                            1,157
           Increase in other current liabilities                                   3,461
                                                                                --------
NET CASH USED IN OPERATING ACTIVITIES                                            (17,582)
                                                                                --------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property, plant and equipment                                     (713)
     Proceeds from disposition of equipment                                          148
                                                                                --------
NET CASH USED IN INVESTING ACTIVITIES                                               (565)
                                                                                --------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Net borrowings on notes payable to banks                                     16,794
     Principal payments on long-term debt                                         (3,454)
                                                                                --------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                         13,340
                                                                                --------
Effect of foreign exchange rate changes on cash and cash equivalents                (706)
                                                                                --------
Net decrease in cash and cash equivalents                                         (5,513)
Cash and cash equivalents at beginning of period                                   5,547
                                                                                --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      $     34
                                                                                ========
Supplemental disclosure of cash flow information:
     Cash paid during the period for interest                                   $  1,966
     Cash paid for reorganization professional fees                                1,361
</TABLE>

      The accompanying notes to condensed consolidated financial statements
        are an integral part of these condensed consolidated statements.


                                       5
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1. INTERIM FINANCIAL STATMENTS

     The accompanying condensed consolidated financial statements include the
accounts of MKR Holdings (the "Company"). The condensed consolidated financial
statements have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC"). Certain information and footnote
disclosures normally required in financial statements prepared in accordance
with generally accepted accounting principles have been omitted pursuant to such
rules and regulations.

     The Company is no longer engaged in the conduct of business and operates
for the sole purpose of holding and subsequently liquidating its assets (which
consist almost entirely of its equity interest in Marker International GmbH
("Newco")). As a result, the Company's financial statements have been prepared
on a liquidation basis. Prior to November 30, 1999, MKR Holdings, then named
Marker International, was a holding company which operated through its
subsidiaries, Marker Deutschland GmbH, Marker USA, Inc., Marker Ltd., Marker
Japan Co. Ltd., Marker Austria GmbH and Marker Canada, Ltd.

     The statements of changes in net assets in liquidation for the period from
April 1, 2000 through December 31, 2000 is not necessarily indicative of the
results for the full fiscal year. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's most recent annual report
on Form 10-K, as amended, as filed with the SEC.

     On November 30, 1999 (the "Closing Date"), the Company sold substantially
all of its assets (including the equity securities of its subsidiaries) to
Newco, a GmbH organized under the laws of Switzerland, pursuant to an asset
purchase agreement (as amended by the Amendment to the Asset Purchase Agreement
dated as of September 20, 1999, the "Purchase Agreement") between the Company
and Newco. In exchange, Newco assumed substantially all of the liabilities of
the Company and the Company received a 15% equity interest in Newco. The
remaining 85% equity interest in Newco is held by CT Sports Holding AG ("CT"), a
joint venture between Tecnica S.p.A. and H.D. Cleven, the principal shareholder
of the Volkl Group. Pursuant to the Purchase Agreement, CT was required to
contribute to Newco $15,000,000 in cash for its 85% equity interest in Newco. As
a result of CT's purchase of 66.66% of Marker Canada, Ltd. in June 1999 for
$1,025,501, CT's actual contribution to Newco totaled $13,974,499.

     In connection with the Purchase Agreement, the Company and CT entered into
an operating agreement which, among other things, grants CT an option (the
"Option") to purchase the Company's 15% equity interest in Newco at any time on
or after November 30, 2001 at the then fair market value, subject to reduction
in an amount equal to the sum of: (a) any indemnity obligations of the Company
to Newco, (b) all unreimbursed advances from Newco for operating and
administrative expenses (currently estimated to be approximately $300,000 per
year) and costs of defending indemnifiable claims, if any, incurred by Newco,
together with interest thereon, (c) all advances by Newco to the Company to pay
any income tax liability, together with interest thereon, plus (d) $775,000.
Thereafter, the Company will be liquidated and the net proceeds of the exercise
of the Option will be distributed to the shareholders of the Company in

                                       6
<PAGE>

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


liquidation. In determining fair market value, all of CT's $15,000,000 transfer
has been considered equity.

     In connection with the Purchase Agreement, the Company reached
agreements-in-principle regarding the restructuring of its debt and the
treatment of such debt under a plan of reorganization with substantially all of
its creditors that were impaired under such plan. On August 19, 1999, the
Company, DNR North America, Inc. and DNR USA, Inc. (collectively, the "Debtors")
filed voluntary petitions for relief under Chapter 11 of the United States
Bankruptcy Code in the 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 of Reorganization (as amended by the
Amendment to the First Amended Joint Chapter 11 Plan of Reorganization, dated as
of October 25, 1999, the "Plan") and a related disclosure statement (the
"Disclosure Statement"). By order dated September 22, 1999, the Bankruptcy Court
approved the Disclosure Statement as containing adequate information. The
Disclosure Statement and the Plan were subsequently distributed to the Debtors'
creditors and shareholders for approval, which approval was subsequently
obtained. On October 27, 1999, the Plan was confirmed by order of the Bankruptcy
Court (the "Confirmation Order"). Pursuant to the Confirmation Order, the
Bankruptcy Court approved the Plan and the Purchase Agreement on October 27,
1999. The Company did not distribute any securities in connection with the Plan.

     As a result of the events described above, the Company is no longer engaged
in the conduct of business and operates for the sole purpose of holding and
subsequently liquidating its assets (which consist almost entirely of its equity
interest in Newco). The Company is required to dissolve and liquidate all of its
assets no earlier than November 30, 2002, and no later than November 30, 2004.
If the Option is not exercised prior to liquidation, then upon liquidation, the
shareholders of the Company will receive an equity interest in Newco equal to
each shareholder's pro rata share of the Company's 15% equity interest in Newco.

     The Company recognized a gain of $16.5 million from the sale to Newco of
substantially all of the Company's assets and the assumption by Newco of certain
of the Company's liabilities pursuant to the Purchase Agreement. The Company has
valued and accounted for its 15% equity interest in Newco (the "Investment")
based on the estimated liquidation value. Based upon the sales price of
substantially all of the assets, the initial liquidation value of the Investment
was approximately $1.9 million. Changes in liquidation value to date are
recorded as unrealized gains or losses in each period. As of March 31, 2000,
based on a report by an independent appraiser, the Investment was valued at
approximately $2.8 million ($3.6 million less the $775,000 that will be deducted
from the purchase price if CT exercises the Option). This appraisal of the value
of the Investment will be updated going forward on at least an annual basis and
the accounting for the Investment will be adjusted accordingly. The actual
liquidation value of the Company's Investment, when such liquidation occurs, may
differ materially from the estimated value herein recorded. In addition, the
liquidation value going forward will be reduced by the amount of general and
administrative expenses that have yet to be incurred by the Company. The
financial statements of Newco for the year ended March 31, 2000 were filed on
Form 10-K/A on September 29, 2000.


                                       7
<PAGE>

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


INVESTMENT IN MARKER INTERNATIONAL GmbH

     The following consolidated condensed financial information for Marker
International GmbH is unaudited and prepared in accordance with International
Accounting Standards. International Accounting Standards vary in certain
important respects from the accounting principles generally accepted in the
United States ("US GAAP"). The following financial information has not been
reconciled with US GAAP and the differences could be material. A discussion of
the differences and a reconciliation between the results reported under
International Accounting Standards ("IAS") and US Generally Accepted Accounting
Principles ("US GAAP") is included in Footnote 34 of Notes to the Consolidated
Financial Statements, as of and for the Year Ended March 31, 2000, of Marker
International GmbH filed with the SEC on Form 10-K/A by MKR Holdings on
September 29, 2000.

<TABLE>
<CAPTION>
                                                              For the nine
                                                              months ended
                                                              December 31,
                                                                  2000
                                                              ------------
<S>                                                           <C>
Selected Income Statement Data (Euros in thousands):
        Net Sales                                                55,908
        Gross Margin                                             20,960
        Operating Income                                          4,638
        Net Income                                                  289
</TABLE>

<TABLE>
<CAPTION>
                                                              December 31,
                                                                  2000
                                                              ------------
<S>                                                           <C>
Selected Balance Sheet Data (Euros in thousands):
        Total Assets                                             66,803
        Shareholder's Loan                                       13,326
        Total Liabilities                                        70,784
        Total Stockholders' Deficit                              (3,981)
</TABLE>

     When the shareholders of Newco originally capitalized Newco with $15
million, for US GAAP purposes, all $15 million was treated as equity. However,
Swiss accounting laws require that a portion must be reflected as a
Shareholder's Loan and included in total liabilities. That portion that must be
so treated is equivalent to 13.3 million Euros. For purposes of determining
Newco's fair market value, when the Option is exercised, if ever, by CT, the
entire 13.3 million Euros Shareholder's Loan will be treated as equity. A
further discussion of the Option is set forth in Note 1 herein.

     In connection with the sale of the Company's assets, the Company adopted
the liquidation basis of accounting effective December 1, 1999. Under this basis
of accounting, assets and liabilities are stated at their estimated net
realizable value. The Company's financial statements prior to December 1, 1999
were, and are, presented on a going concern basis.

                                       8
<PAGE>

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

OVERVIEW

     On November 30, 1999 (the "Closing Date"), the Company sold substantially
all of its assets (including the equity securities of its subsidiaries) to
Marker International GmbH, a GmbH organized under the laws of Switzerland
("Newco"), pursuant to an asset purchase agreement (as amended by the Amendment
to the Asset Purchase Agreement dated as of September 20, 1999, the "Purchase
Agreement") between the Company and Newco. In exchange, Newco assumed
substantially all of the liabilities of the Company and the Company received a
15% equity interest in Newco. The remaining 85% equity interest in Newco is held
by CT Sports Holding AG ("CT"), a joint venture between Tecnica S.p.A. and H.D.
Cleven, the principal shareholder of the Volkl Group. Pursuant to the Purchase
Agreement, CT was required to contribute to Newco $15,000,000 in cash for its
85% equity interest in Newco. As a result of CT's purchase of 66.66% of Marker
Canada, Ltd. in June 1999 for $1,025,501, CT's actual contribution to Newco
totaled $13,974,499.

     In connection with the Purchase Agreement, the Company and CT entered into
an operating agreement which, among other things, grants CT an option (the
"Option") to purchase the Company's 15% equity interest in Newco at any time on
or after November 30, 2001 at the then fair market value, subject to reduction
in an amount equal to the sum of: (a) any indemnity obligations of the Company
to Newco, (b) all unreimbursed advances from Newco for operating and
administrative expenses (currently estimated to be approximately $300,000 per
year) and costs of defending indemnifiable claims, if any, incurred by Newco,
together with interest thereon, (c) all advances by Newco to the Company to pay
any income tax liability, together with interest thereon, plus (d) $775,000.
Thereafter, the Company will be liquidated and the net proceeds of the exercise
of the Option will be distributed to the shareholders of the Company in
liquidation. In determining fair market value, all of CT's $15,000,000 transfer
has been considered equity.

     In connection with the Purchase Agreement, the Company reached
agreements-in-principle regarding the restructuring of its debt and the
treatment of such debt under a plan of reorganization with substantially all of
its creditors that were impaired under the plan of reorganization. On August 19,
1999, the Company, DNR North America, Inc. and DNR USA, Inc. (collectively, the
"Debtors") filed voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code in the 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 of Reorganization (as amended by the
Amendment to the First Amended Joint Chapter 11 Plan of Reorganization, dated as
of October 25, 1999, the "Plan") and a related disclosure statement (the
"Disclosure Statement"). By order dated September 22, 1999, the Bankruptcy Court
approved the Disclosure Statement as containing adequate information.

                                       9
<PAGE>

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)


The Disclosure Statement and the Plan were subsequently distributed to the
Debtors' creditors and shareholders for approval, which approval was
subsequently obtained. On October 27, 1999, the Plan was confirmed by order of
the Bankruptcy Court (the "Confirmation Order"). Pursuant to the Confirmation
Order, the Bankruptcy Court approved the Plan and the Purchase Agreement on
October 27, 1999. The Company realized an extraordinary gain of $15.4 million
from the restructuring of its debt under the Plan. The Company did not
distribute any securities in connection with the Plan.

     As a result of the events described above, the Company is no longer engaged
in the conduct of business and operates for the sole purpose of holding and
subsequently liquidating its assets (which consist almost entirely of its equity
interest in Newco). The Company is required to dissolve and liquidate all of its
assets no earlier than November 30, 2002, and no later than November 30, 2004.
If the Option is not exercised prior to liquidation, then upon liquidation, the
shareholders of the Company will receive an equity interest in Newco equal to
each shareholder's pro rata share of the Company's 15% equity interest in Newco.

     The Company recognized a gain of $16.5 million from the sale to Newco of
substantially all of the Company's assets and the assumption by Newco of certain
of the Company's liabilities pursuant to the Purchase Agreement. The Company has
valued and accounted for its 15% equity interest in Newco (the "Investment")
based on the estimated liquidation value. Based upon the sales price of
substantially all of the assets, Newco's initial liquidation value of the
Investment was approximately $1.9 million. Changes in liquidation value to date
are recorded as unrealized gains or losses in each period. As of March 31, 2000,
based on a report by an independent appraiser, the Investment was valued at
approximately $2.8 million ($3.6 million less the $775,000 that will be deducted
from the purchase price if CT exercises the Option). This appraisal of the value
of the Investment will be updated going forward on at least an annual basis and
the accounting for the Investment will be adjusted accordingly. The actual
liquidation value of the Company's Investment, when such liquidation occurs, may
differ materially from the estimated value recorded herein. The financial
statements of Newco for the year ended March 31, 2000 were filed on Form 10-K/A
on September 29, 2000.

RESULTS OF OPERATIONS

     Comparisons of operations for the three and nine months ended December 31,
2000, respectively, to the corresponding periods of the prior fiscal year are
not meaningful due to the consummation of the transactions contemplated in the
Purchase Agreement. As discussed in Note 1 to the financial statements, the
Company is no longer engaged in the conduct of business and operates for the
sole purpose of holding and subsequently liquidating its assets. Since December
1, 1999, the Company's financial statements have been reported in accordance
with the liquidation basis of accounting.


                                       10
<PAGE>

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)


LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary cash needs are for its payroll, professional fees
incurred in preparing the Company's monthly financial statements and in
connection with its required SEC filings and administrative expenses.

     The Company's sole source of working capital is monthly advances from
Newco. Pursuant to the Purchase Agreement, Newco is obliged to lend up to
$300,000 annually to the Company for its operations and associated expenses.
This obligation extends until November 30, 2001, the second anniversary of the
Closing Date. The Company currently has no commitments to fund its operations
subsequent to November 30, 2001. As of December 31, 2000, the Company had
received $390,000 in advances from Newco. The Company believes that $300,000
should be adequate to fund the required activities of the Company on an annual
basis until November 30, 2001, absent unanticipated or extraordinary
circumstances. The funds advanced from Newco to the Company will reduce the
value to be received by the Company upon its liquidation. The interest rate for
advances from Newco is 5%.

OTHER MATTERS

     Pursuant to the Plan, the Company changed its name to MKR Holdings.
Pursuant to the Confirmation Order, the Company amended its articles of
incorporation and by-laws to satisfy the provisions of the Purchase Agreement,
the Plan and the Confirmation Order.

     Pursuant to the Plan, as of November 30, 1999, the business and affairs of
the Company have been managed by, and under the direction of, a Board of
Directors, which consists of Kevin Hardy, Henry E. Tauber and Louis M. Alpern.

     Pursuant to NASDAQ's request that the Company should obtain a different
ticker symbol due to its name change, effective August 3, 2000, the Company's
ticker symbol was changed from MRKR to MKRH.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     The Company is exposed to market risk, including various interest rate and
foreign currency exchange rate risks.

     FOREIGN CURRENCY RISK - The functional currency of Newco is the Euro. As a
result, the value of the Company's Investment is subject to foreign currency
fluctuations between the U.S. Dollar and the Euro which could have a material
impact on the fair value of the Company's Investment.

     INTEREST RATE RISK - The Company no longer has any significant exposure to
market risks for changes in interest rates since the Company's borrowings from
Newco is at a fixed rate of 5%.

                                       11
<PAGE>

                           PART II - OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

     a)   EXHIBITS:

          None.

     b)   REPORTS FILED ON FORM 8-K:

          None.



                                       12
<PAGE>

                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       MKR HOLDINGS
                                       REGISTRANT


Dated: February 14, 2001               /s/  Kevin Hardy
                                       ---------------------------
                                       Kevin Hardy
                                       President and Chief Financial Officer


                                       13