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**SECURITIESAND 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  the quarterly period ended June 30, 2001**                                             |
|   |                                                                                          |
|   | **OR**                                                                                        |
|   |                                                                                          |
| o      | **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 incorporation or organization) | (I.R.S.  Employer Identification No.) |
|                                                            |                                  |
| **1070 West 2300 South**** ****Salt Lake City, Utah**      | **84119**                             |
| (Address  of principal executive offices)                       | (  zip code )                         |
|                                                            |                                  |
| **(801) 972-2100**                                         |
| (Registrant's  telephone number, including area code)           |

 

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

Yesý                            No o

Indicatethe number of shares outstanding of each of the issuer's classes of commonstock, as of the latest practicable date.

 

| Class  of Common Stock         | Outstanding  at August 9, 2001 |
|--------------------------------|--------------------------------|
|                                |                                |
| Common  Stock, $0.01 par value | 11,102,077                     |

 

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**MKR HOLDINGS**

**TABLE OFCONTENTS**

| **Part I - Financial  Information** |                                                                                  |
|-------------------------------------|---------------------------------------------------------------------------------------|
|                                |                                                                                  |   |
| Item  1                             |   Financial  Statements                                                     |   |
| .                                   |                                                                                  |   |
|                                | Statements of  Net Assets in Liquidation                                              |   |
|                                |      As of June 30, 2001 (Unaudited) and  March 31, 2001          |   |
|                                |                                                                                  |   |
|                                | Statements  of Changes in Net Assets in Liquidation (Unaudited)                       |   |
|                                |      For the Period from April 1, 2001  through June 30, 2001 and |   |
|                                |      For the Period from April 1, 2000  through June 30, 2000     |   |
|                                |                                                                                  |   |
|                                | Notes to  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                                                     |   |
|                                |                                                                                  |   |
| Signatures                          |                                                                                  |   |

 

**PART I - FINANCIAL INFORMATION**

** **

**Item1.  Financial Statements.**

 

| **MKR HOLDINGSSTATEMENTS OF NET ASSETS IN  LIQUIDATION**  (Dollars in Thousands, Except Share and Per Share Amounts)  |                                           |
|----------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|
|                                                                                                                            |                                           |
|                                                                                                                       |                                           |
|                                                                                                                       | June  30,                                      |   | March  31, |   |   |
|                                                                                                                       | 2001                                           |   | 2001 |   |   |
|                                                                                                                       |                                                |   |  |   |   |
|                                                                                                                       | (Unaudited)                                    |   |   |   |   |
| Assets:                                                                                                                    |                                           |   |   |   |   |
|                                                                                                                       | Cash and cash  equivalents                     | $ | 4 |   | $ | 261 |   |
|                                                                                                                       | Prepaid insurance                              | 18 |   | 29 |   |   |
|                                                                                                                       | Investment in Marker  International GmbH       | 2,480 |   | 2,480 |   |   |
|                                                                                                                       |                                           |  |   |  |   |   |
| Total assets in  liquidation                                                                                               | 2,502                                          |   | 2,770 |   |   |
|                                                                                                                       |                                                |   |  |   |   |
|                                                                                                                       |                                           |   |   |   |   |
| Liabilities:                                                                                                               |                                           |   |   |   |   |
|                                                                                                                       | Accounts payable and  accrued liabilities      | 78 |   | 321 |   |   |
|                                                                                                                       | Advances payable to  Marker International GmbH | 365 |   | 365 |   |   |
|                                                                                                                       |                                           |  |   |  |   |   |
| Total liabilities in  liquidation                                                                                          | 443                                            |   | 686 |   |   |
|                                                                                                                       |                                                |   |  |   |   |
|                                                                                                                       |                                           |   |   |   |   |
| Net assets in  liquidation                                                                                                 | $                                              | 2,059 |   | $ | 2,084 |   |
|                                                                                                                       |                                                |   |  |   |   |
|                                                                                                                       |                                           |   |   |   |   |
| Net assets in  liquidation per common share  (based  on 11,102,077 common shares outstanding)                         | $                                              | .19 |   | $ | .19 |   |
|                                                                                                                       |                                                |   |  |   |   |
| The  accompanying notes to financial statements are an integral part of these  statements.                                 |                                           |
|                                                                                                                            |                                                |  |  |  |  |  |  |  |  |  |  |

 

| **MKR HOLDINGSSTATEMENTS OF CHANGES IN NET  ASSETS IN LIQUIDATION**(Dollars in Thousands)  |                                       |
|--------------------------------------------------------------------------------------------|--------------------------------------------|
| ****                                                                                       |                                       |
|                                                                                       |                                       |
|                                                                                       | Period  From April 1 through June 30, 2001 |   | Period  From April 1 through June 30, 2000 |   |
|                                                                                       |                                            |   |  |   |
|                                                                                       | (Unaudited)                                |   | (Unaudited) |   |
|                                                                                       |                                       |   |   |   |
| General and  administrative expenses                                                       | $                                          | 25 |   | $ | 6 |   |
|                                                                                       |                                            |   |  |   |
|                                                                                       |                                       |   |   |   |
| Net change in net  assets for the period                                                   | 25                                         |   | 6 |   |
|                                                                                       |                                       |   |   |   |
| Net assets at March  31, 2001 and 2000, respectively                                       | 2,084                                      |   | 2,668 |   |
|                                                                                       |                                            |   |  |   |
|                                                                                       |                                       |   |   |   |
| Net assets at June 30,  2001 and 2000, respectively                                        | $                                          | 2,059 |   | $ | 2,662 |   |
|                                                                                       |                                            |   |  |   |
| The  accompanying notes to financial statements are an integral part of these  statements. |
|                                                                                            |                                            |  |  |  |  |  |  |  |

** **

** ****NOTE 1.  INTERIMFINANCIAL STATEMENTS**

***Nature ofOperations***

             Theaccompanying financial statements include the accounts of MKR Holdings (the“Company”).  The financial statementshave been prepared pursuant to the rules and regulations of the Securities andExchange Commission (the “SEC”). Certain information and footnote disclosures normally required infinancial statements prepared in accordance with generally accepted accountingprinciples have been omitted pursuant to such rules and regulations. 

             Inthe opinion of management, the accompanying financial statements include allnormal adjustments considered necessary to present fairly the net assets inliquidation as of June 30, 2001 and the net change in net assets for the periodfrom April 1, 2001 through June 30, 2001. 

             Thestatements of changes in net assets in liquidation for the period from April 1,2001 through June 30, 2001 and for the period from April 1, 2000 through June30, 2000 are not necessarily indicative of the results for the full fiscalyears.  It is suggested that thesefinancial statements be read in conjunction with the financial statements andnotes thereto included in the Company’s last annual report on Form 10-K, asfiled with the SEC on July 16, 2001. 

             TheCompany is no longer engaged in the conduct of business and operates for thesole purpose of holding and subsequently liquidating its assets (which consistalmost entirely of its equity interest in Marker International GmbH(“Newco”)).  Prior to November 30, 1999,MKR Holdings, then Marker International, was a holding company which operatedits business through its subsidiaries, Marker Deutschland GmbH (“MarkerGermany”), Marker USA, Inc. (“Marker USA”), Marker Ltd., Marker Japan Co. Ltd.(“Marker Japan”), Marker Austria GmbH (“Marker Austria”) and Marker Canada,Ltd. (“Marker Canada”). 

             OnNovember 30, 1999 (the “Closing Date”), the Company sold substantially all ofits assets (including the equity securities of its subsidiaries) to MarkerInternational GmbH, a GmbH organized under the laws of Switzerland (“Newco”),pursuant to an asset purchase agreement (as amended by the Amendment to theAsset 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 Newco isheld by CT Sports Holding AG (“CT”), a joint venture between Tecnica S.p.A. andH.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.              
             Inconnection with the Purchase Agreement, the Company and CT entered into anoperating agreement which, among other things, grants CT an option (the“Option”) to purchase the Company’s 15% equity interest in Newco at any time onor after November 30, 2001, at the then fair market value, subject to reductionin an amount equal to the sum of: (a) any indemnity obligations of the Companyto Newco, (b) all unreimbursed advances from Newco for operating andadministrative expenses (currently estimated to be approximately $300,000 peryear) and costs of defending indemnifiable claims, if any, incurred by Newco,together with interest thereon, (c) all advances by Newco to the Company to payany income tax liability, together with interest thereon, plus (d) $775,000.  Thereafter, the Company will be liquidatedand the net 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 contributionhas been considered equity. 

             Inconnection 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 adequate information.  The Disclosure Statement and the Plan weresubsequently distributed to the Debtors’ creditors and shareholders forapproval, which approval was subsequently obtained.  On October 27, 1999, the Plan was confirmed by order of theBankruptcy Court (the “Confirmation Order”). Pursuant to the Confirmation Order, the Bankruptcy Court approved thePlan and the Purchase Agreement on October 27, 1999.  The Company did not distribute any securities in connection withthe Plan. 

             Asa result of the events described above, the Company is no longer engaged in theconduct of business and operates for the sole purpose of holding andsubsequently 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.
             Eachyear, Newco’s fair market value is estimated by an independent appraiserengaged by the Company.  Based on theappraiser’s valuation of Newco, management then determines the liquidationvalue of the Company by taking 15% of Newco’s fair market value and subtractingamounts computed pursuant to items (a) through (d) set forth above.  As of March 31, 2001, Newco was valued bythe Company’s independent appraiser at approximately $21.7 million.  Based on this valuation, the Company’s 15%equity interest in Newco (the “Investment”) is approximately $3.255 million(i.e., 15% of Newco’s appraised fair market value).  Management thus estimates that as of March 31, 2001, theliquidation value of the Company was no more than approximately $2.115 million,or $3.255 million less $775,000 and the $365,000 in funds previously advancedby Newco to the Company.  If Newcoadvances additional sums to the Company, or if the appraisal of Newco changesin a subsequent annual valuation, the liquidation value of the Company will bechanged accordingly.  The foregoingdiscussion is set forth herein as an estimate only.  The actual liquidation value of the Company, when suchliquidation occurs, may differ materially from the current estimated valuecontained herein.

             TheCompany 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 toDecember 1, 1999 were, and are, presented on a going-concern basis.

***NewAccounting Pronouncements***  

             In June 2001, the FinancialAccounting Standards Board (“FASB”) finalized FASB Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and Other Intangible Assets(SFAS 142).  SFAS 141 requires the use of the purchasemethod of accounting and prohibits the use of the pooling-of-interests methodof accounting for business combinations initiated after June 30, 2001.  SFAS 141 also requires that the Companyrecognize acquired intangible assets apart from goodwill if the acquiredintangible assets meet certain criteria. SFAS 141 applies to all business combinations initiated after June 30,2001 and for purchase business combinations completed on or after July 1,2001.  It also requires, upon adoptionof SFAS 142, that the Company reclassify the carrying amounts of intangibleassets and goodwill based on the criteria in SFAS 141.
             SFAS142 requires, among other things, that companies no longer amortize goodwill,but instead test goodwill for impairment at least annually.  In addition, SFAS 142 requires that theCompany identify reporting units for the purposes of assessing potential futureimpairments of goodwill, reassessing the useful lives of other existingrecognized intangible assets, and ceasing amortization of intangible assetswith an indefinite useful life.  Anintangible asset with an indefinite useful life should be tested for impairmentin accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in fiscal years beginning afterDecember 15, 2001 to all goodwill and other intangible assets recognized atthat 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 ofadoption.  The Company is also requiredto reassess the useful lives of other intangible assets within the firstinterim quarter after adoption 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.****Item2.  Management’s Discussion and Analysisof Financial Condition.**

***Overview***

             Priorto November 30, 1999, MKR Holdings, then Marker International (the “Company”)was a holding company which operated its business through its subsidiaries,Marker Deutschland GmbH (“Marker Germany”), Marker USA, Inc. (“Marker USA”),Marker Ltd., Marker Japan Co. Ltd. (“Marker Japan”), Marker Austria GmbH(“Marker Austria”) and Marker Canada, Ltd. (“Marker Canada”).  The Company and its subsidiaries were aleading designer, developer, manufacturer and marketer of alpine ski bindingsin North America, Europe and Asia. Substantially all of the Company’s ski bindings were manufactured byMarker Germany, which distributed bindings in Germany, to subsidiaries of theCompany and to independent distributors in countries where the Company did nothave a distribution subsidiary. 

             OnNovember 30, 1999 (the “Closing Date”), the Company sold substantially all ofits assets (including the equity securities of its subsidiaries) to MarkerInternational GmbH, a GmbH organized under the laws of Switzerland (“Newco”),pursuant to an asset purchase agreement (as amended by the Amendment to theAsset 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. andH.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, CT contributed$13,974,499 to Newco in a combination of debt and equity. 

             Inconnection with the Purchase Agreement, the Company and CT entered into anoperating agreement which, among other things, grants CT an option (the“Option”) to purchase the Company’s 15% equity interest in Newco at any time onor after November 30, 2001, at the then fair market value, subject to reductionin an amount equal to the sum of: (a) any indemnity obligations of the Companyto Newco, (b) all unreimbursed advances from Newco for operating andadministrative expenses (currently estimated to be approximately $300,000 peryear) and costs of defending indemnifiable claims, if any, incurred by Newco,together with interest thereon, (c) all advances by Newco to the Company to payany income tax liability, together with interest thereon, plus (d)$775,000.  Thereafter, the Company willbe liquidated and the net proceeds of the exercise of the Option will bedistributed to the shareholders of the Company in liquidation.  In determining fair market value, all ofCT's $15,000,000 contribution has been considered equity.          
             Inconnection 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. 

             Asa result of the events described above, the Company is no longer engaged in theconduct of business and operates for the sole purpose of holding andsubsequently liquidating its assets (which consist almost entirely of its equityinterest in Newco).  The Company isrequired 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. 

             Eachyear, Newco’s fair market value is estimated by an independent appraiserengaged by the Company.  Based on theappraiser’s valuation of Newco, management then determines the liquidationvalue of the Company by taking 15% of Newco’s fair market value and subtractingamounts computed pursuant to items (a) through (d) set forth above.  As of March 31, 2001, Newco was valued bythe Company’s independent appraiser at approximately $21.7 million.  Based on this valuation, the Company’s 15%equity interest in Newco (the “Investment”) is approximately $3.255 million(i.e., 15% of Newco’s appraised fair market value).  Management thus estimates that as of March 31, 2001, theliquidation value of the Company was no more than approximately $2.115 million,or $3.255 million less $775,000 and the $365,000 in funds previously advancedby Newco to the Company.  If Newcoadvances additional sums to the Company, or if the appraisal of Newco changesin a subsequent annual valuation, the liquidation value of the Company will bechanged accordingly.  The foregoing discussionis set forth herein as an estimate only. The actual liquidation value of the Company, when such liquidationoccurs, may differ materially from the current estimated value containedherein.  The financial statements ofNewco will be filed by an amendment to our Form 10-K (filed on July 16, 2001)within 180 days of March 31, 2001.******Results ofOperations***

             Asdiscussed in Note 1 to the financial statements, the Company is no longerengaged in the conduct of business and operates for the sole purpose of holdingand subsequently 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***

             TheCompany’s primary cash needs are for the professional fees incurred inpreparing the Company’s monthly financial statements and in connection with itsrequired SEC filings. 

             TheCompany’s sole source of working capital is advances from Newco.  Pursuant to the Purchase Agreement, Newco isobliged to lend up to $300,000 annually to the Company for its operations andassociated expenses, at an interest rate of 5%.  This obligation extends until November 30, 2001, the secondanniversary of the Closing Date.  As ofJune 30, 2001, the Company had received $365,000 in advances from Newco.  The Company believes that it will haveadequate financing to fund the required activities of the Company on an annualbasis until November 30, 2001, absent unanticipated or extraordinarycircumstances.  The funds advanced fromNewco to the Company will reduce the amount to be received by the Company uponthe exercise of the Option, if the Option is exercised.  The Company currently has no commitmentsfrom any other party to fund the Company’s operations after November 30,2001.  If CT does not exercise itsOption on November 30, 2001, or shortly thereafter, the Company will be forcedto obtain capital to fund its operations from third parties other than Newco.  The Company may not be able to obtain therequired funds on as favorable terms as Newco’s, or at all.  If the Company is unable to obtainfinancing, there is no guarantee it will be able to sustain its operations.

***Other Matters***

             Pursuantto 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. 

             Pursuantto the Plan, since November 30, 1999, the business and affairs of the Companyhave been managed by, and under the direction of, a Board of Directors, whichconsists of Kevin Hardy, Henry E. Tauber and Louis M. Alpern.  Until September 15, 2000, in addition to being a director and an officer of theCompany, Mr. Hardy served as the Chief Financial Officer and Secretary and adirector of Marker USA, a subsidiary of Newco. Mr. Hardy currently serves as President and Chief Financial Officer ofthe Company.

             TheCompany was notified last year by NASDAQ that it should obtain a differentticker symbol due to the Company’s name change.  Pursuant to such request, effective August 3, 2000, the Company’sticker symbol changed from MRKR to MKRH.****Item3.  Quantitative and QualitativeDisclosures about Market Risk.**

             TheCompany is exposed to market risk, including various foreign currency exchangerate and interest 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 hasany significant exposure to market risks for changes in interest rates sincethe Company’s borrowings from Newco are at a fixed rate of 5%.

** **

**PartII - Other Information**

**Item 6.  Exhibits andReports on Form 8-K.**

             a)          **Exhibits:**

                            99.1  Valuation of MarkerInternational GmbH as of March 31, 2001.* 

             b)          **Reportsfiled on Form 8-K:**

**                          ** Current report on Form 8-K filed on April 27,2001, reporting change in Company’s independent auditors.______________________              * Filed herewith. 

 

             Pursuantto the requirements of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized. 

 
 MKR  HOLDINGS    Registrant     Dated:  August 13, 2001 /s/  Kevin Hardy    Kevin Hardy  President and Chief  Financial Officer
 *******