U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
General form for registration of securities of small business
issuers Under Section 12(b) or (g) of the Securities
Exchange Act of 1934
Holter Technologies Holding, AG.
(Name of Small Business Issuer in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
84-1393541
(I.R.S. Employer Identification No.)
Principal Executive Offices
23548 Calabasas Road, Suite 203, Calabasas, California 91302
(Issuer's Telephone No.)
818 224 2145
Securities to be Registered under Section 12(b) of the Act: None
Securities to be Registered under Section 12(g) of the Act: Common Stock
(Title of Stock)
Total number of pages: 70
Index to Exhibits Appears on Page 45
<PAGE>
Item 1: Business of the Company
=================================
(a) Business Development
Holter Technologies Holdings, AG., (the "Company") was incorporated in the
State of Nevada on March 21, 1997 under the name of Lyon Mountain, Inc. On
February 10, 1998, the Articles of Incorporation was amended to change the
name of the Company to Falken Investment, AG. On January 21, 1999, the
Articles of Incorporation was amended to change the name of the Company to
Holter Technologies Holdings, AG. Georgios Stolte, the former President
should be considered a founder and promoter of the Company. Mr. Stotle
resigned his positions in connection with the following change in control.
In February, 1999, the Company acquired 100% of the Equity Interests of
Holter Sachsen DENATEC GmbH, a German Limited Liability Company from Prof.
Heinrich Holter, the Company's President, in consideration of twenty-six
million shares of restricted common stock. Holter Sachsen DENATEC GmbH
holds the exclusive rights to exploit Dr. Holter's patented inventions and
embodiments of denaturing heat exchangers and electrostatic filters having
a denaturing collector electrode.
Heinrich Holter GmbH is considered an affiliate and control person of the
Company. Professor Holter is the sole shareholder of twenty-six German
corporations or limited liability companies formed to exploit in excess of
3,000 patents owned or partially owned by Professor Holter (the Holter
Companies). The Company's subsidiary, Holter Sachsen DENATEC GmbH was one
such company. The Holter Companies are engaged in various existing and
planned operations involving: the generation of electricity and heat from
oil shale; disposal of municipal and industrial solid waste; mineral
processing and refinement; waste water treatment; sewer sludge reduction
and recycling; and pre-formed, polystyrene building materials.
(b) Narrative Description of Business
The Company is a development stage corporation which intends to develop and
market air filtration products which remove dust and other particulate
matter as well as kill bacteria, spores, moulds and other airborne allegens
from the treated air stream.
The Company's products are based upon two components relying upon the
Holter patents. The first is a highly efficient electrostatic precipitator
(ESP) which generates electrically charged air molecules or ions which
travel across the treated air stream form negatively charged ion spray
device or electrode to a positively charged collector electrode. The ions
attach to molecules of dust and particulate matter in the air stream
causing the dust and particulates to migrate to an attach to the collector
electrode. The Company believes that commercially available ESPs have a
dust and particulate removal efficiency of approximately ninety percent.
The Company believes that use of the patented ion spray and collector
electrodes will result in ninety nine percent dust and particulate removal
efficiency.
2
<PAGE>
The second component is a ph filter which is a three layered membrane
filter placed across the treated air stream next to the positively charged
collector electrode. The first layer of the filter carries a high acidic
value, the second layer is ph neutral and the third layer has a high
alkaline value. The Company believes that the ph filter will kill over
ninety percent of airborne bacteria, spores and moulds. The system will
include sensors to monitor system efficiency so as to indicate when the ph
filter should be changed to maintain efficiency.
Principal Products
------------------
The Company intends to market two air filtration products. The first
product will be an ESP ph filter (the Electrostatic Denaturating Outlet
Filter) which can be installed on existing air ducts in office and
commercial interiors, hospitals and medical clients, retail stores,
restaurants and nightclubs. The Company intends to internally produce the
ion spray and collector electrodes and the ph filters and contract the
manufacturing of assembled products designed to be retro-fitted to standard
size interior air vents. The Company intends to either license the sale of
the Electrostatic Denaturating Outlet Filter to heating and air conditioner
equipment suppliers or sell directly to end users through trade shows and
advertising. The Company also intends to license its technology to
manufacturers of heating and air conditioning equipment for incorporation
in the air treatment systems of new construction, particularly office
buildings. The Company also anticipates semi-annual or annual sales of
replacement filters to end users which will become increasingly significant
as the number of units in operation grows over time.
At the present time, the prototypes and the initial orders for the
Electrostatic Denaturating Outlet Filter are produced at manufacturing
facilities of Heinrich Holter GmbH in Gladbeck, Germany. Production
capacity in this facility is approximately one hundred units per day.
Markets
--------
The Company believes that the potential market for its products is very
large. Heating and air conditioning systems exist in practically all office
buildings, hospitals, commercial and retail locations, bars, nightclubs and
other non-residential, non-industrial and non-agricultural buildings in
virtual every nation with a modern economy. The Company's research
indicates that there are over 80,000,000 square meters air conditioned
interior space in the Federal Republic of Germany alone which is growing by
approximately 5,000,000 square meters per year. The Company estimates a
potential market of approximately 900,000 Electrostatic Denaturating Outlet
Filter units which is growing by approximately 40,000 units per year.
The Company further believes that demand for an air treatment system which
not only effectively removes particulate but also eliminates harmful
bacteria, spores, moulds and other airborne allegens is maturing. The
Company believes that this demand is due to increasing health consciousness
in modern society and awareness of so called "sick building syndrome". Sick
building syndrome is when occupants of a building complain of cold, flu and
allergic symptoms. The theory is that the subject building's heat and air
conditioning system, under certain heat and humidity conditions can breed
significant quantities of bacteria, spores, moulds and other airborne
allegens which are then circulated throughout the building by the air
treatment system and thereby cause the symptoms among the occupants.
The Company intends to focus its marketing efforts, particularly for the
Electrostatic Denaturating Outlet Filter to those end users the Company
believes would be particularly attracted to the elimination of bacteria,
spores, moulds and other airborne allegens as well as particulate removal.
These type of end users would be hospitals, medical offices and clients and
restaurants, bars and nightclubs.
3
<PAGE>
Competition
------------
The Company is not aware of any product which will compete with the Company
with respect to the elimination of bacteria, spores, moulds and other
airborne allegens. However, the Company is aware of other electrostatic
precipitators for removal of particulates. In addition, the Company will be
competing with the entire air conditioning industry. Most if not all of the
known competitors are well established companies with substantial market
share and name recognition. In addition, most if not all known competitors
are better financed and have greater resources for manufacturing and
marketing that the Company.
Regulation
-----------
The Company is only subject to the ordinary business regulation of an
employer in the Federal Republic of Germany. The Company does not
anticipate being subject to significant regulation as a result of its
business plans other than typical safety certifications for electrical
appliances and devices.
Employees
----------
At the present time the Company has no employees other than its executive
officers. The Company's subsidiary, Holter Sachen Denatec GmbH has 4
employees and 6 independent contractors.
Item 2. Management's Discussion and Analysis and Plan of Operation
=================================================================
Plan of Operations
------------------
As a company in its initial stages of development, the company has no
revenues from operations.
The Company has filed this Form 10SB Registration Statement in order to
establish itself as a fully reporting company under the Securities Exchange
Act of 1934. On the basis of the public information provided thereby, the
Company intends to seek a listing of its common stock on the National
Association of Securities Dealers, Inc., OTC Electronic Bulletin Board
Market. It is the Company's belief that an independent market for its
common stock will be advantageous to the Company by establishing an
objective measure of value for the common stock.
The Company's plan of operation for the next twelve months is to complete
the design and testing of the Company's products for incorporation into the
air treatment systems of new construction, particularly office buildings.
In addition, the Company intends to continue design and testing of the
Electrostatic Denaturating Outlet Filter to increase its efficiencies.
4
<PAGE>
The Company will simultaneously carry out a preliminary marketing plan for
the Electrostatic Denaturating Outlet Filter in its current design which
primarily responding to inquiries developed from presentation of the
technology at trade shows and technology fairs in Germany. Initial orders
for 110 units of the Electrostatic Denaturating Outlet Filter have been
received from a restaurant in Gladbeck, Germany (30 units) and from one of
the Heinrich Holter GmbH, affiliated companies, Holter Italia s.r.o., (80
units) for installation in toll booths in Italy. The Company anticipates
fulfilling these orders in December 1999 and that the orders will generate
approximately $ 25,000 in revenue.
The Company has also taken an order from the Bethanien Hospital in the city
of Moers, Germany to install one central Electrostatic Denaturating Outlet
Filter for its operating rooms. This installation is expected to be
completed in January 2000 and will result in $100,000 of revenue.
The Company has also entered into a Memorandum of Understanding dated May
31, 1999 with the Fushun Planning Commission of Liaoning, China for the
formation of a joint venture for the production and distribution of the
Electrostatic Denaturating Outlet Filter. The Memorandum of Understanding
calls for a joint venture agreement wherein the Company shall own 51% of
the joint venture company, provide its patented technology to the joint
venture company and the Fushun Planning Commission shall own the remaining
49% and provide the manufacturing facility and labor. The joint venture
company shall first conduct a feasibility study of the China and Asian
markets for the Electrostatic Denaturating Outlet Filter as well as the
projected production costs and sale prices. The sheet metal parts and
housing components are to be produced in Fushen and the electron spray,
collector electrodes and the denaturating filters to be produced in
Germany. Final assembly of the products will be in Fushen.
Liquidity and Capital Resources
--------------------------------
The company is not at present producing revenues and its main source of
funds has been loans from an affiliate and the sale of the Company's equity
securities. As a result the Company has enough present cash to meet its
needs for twelve months. The company will need to raise additional capital
to meet its ongoing overhead obligations and the contemplated development
program. Such funding may be obtained through the sale of additional
securities
The capital resources of the company are limited. At present the company is
not producing revenues and is not expected to produce revenues until
January 2000. The main source of funds for working capital at present is
the sale of the company's equity securities. Other possible sources of
funding are loans from financial institutions with the company's assets as
collateral. However, the collateral value of such leasehold interests is
limited.
5
<PAGE>
Result of Operations
---------------------
The Registrant is a development stage company that has recently commenced
operations. Since the business is just achieving its initial sales shortly,
there is no accounts receivable or inventory.
The Registrant's working capital resources during the year ended December
31, 1998 has been provided primarily from Private Placements and loans. In
October, 1998, the Company sold 2,400,000 shares of common stock to four
German investors pursuant to Regulation S and received proceeds of
$120,000. In June, 1999 the Company sold 45,210 shares of common stock to
twelve German Investors pursuant to Regulation S and received proceeds of
142,007.25 DEM ($79,117.50 US at 1.896 to 1 conversion rate).
Effect of Inflation
--------------------
The Company believes that inflation does not have a material affect on its
business.
Year 2000 Computer Problems
----------------------------
Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without
considering the impact of the upcoming change in the century. If not
corrected, many computer applications could fail or create erroneous
results by or at the Year 2000. The Year 2000 issue affects virtually all
companies and organizations.
Although many companies undertake major projects to address the Year 2000
issue, Management does not believe that its operations are highly dependent
upon computer programs. However, the Company has undertaken to ensure that
its associated computer fields were designed and constructed to receive and
manipulate four digit integers instead of only two. The Company's computer
system has been evaluated and found to adequately address the Year 2000
Issue . As a result, no additional costs are expected to be incurred. The
Company does not anticipate any material risk resulting from Year 2000
issues in that its computer programs are relatively simple word processing
and accounting programs which have been certified as Year 2000 ready. In
addition, the Company maintains physical files of all essential documents
and data.
Item 3. Description of Property
================================
The Company's U.S. office is approximately 600 square feet and is leased on a
month to month basis from Gateway Industries, Ltd., which Daniel Lezak is the
President at $1,050 per month. The Company's office in Dusseldorf, Germany is
approximately 80 square feet and is provided by Heinrich Holter, GmbH, at no
cost to the Company.
6
<PAGE>
Item 4. Security Ownership of Certain Beneficial Owners and Management
=======================================================================
(a) Security Ownership of Certain Beneficial Owners holding five percent or
greater of the 42,095,210 shares of common stock outstanding as of September 20,
1999:
Title of Class Name and Address Amount and Nature % of
of Beneficial Owner of Beneficial Owner Class
- --------------------------------------------------------------------------------
Common Heinrich Holter 28,000,000(1) 66.4%
Beisenstr. 39
45964 Gladbeck, Germany
- --------------------------------------------------------------------------------
(1) Includes 1,000,000 shares held by his son, Gerhard Holter, which Heinrich
Holter disclaims beneficial ownership.
(b) Security Ownership of Management
Title of Name and Address(1) Amount and Nature % of
Class of Beneficial Owner of Beneficial Owner Class
- --------------------------------------------------------------------------------
Common Heinrich Holter 28,000,000(1) 66.4%
Beisenstr. 39
45964 Gladbeck, Germany
Daniel Lezak (2) 1,000,000 2.4%
23548 Calabasas Rd, #203
Calabasas, CA 91302
Dennis Brovarone 50,000 0.1%
11249 W. 103rd Dr.
Westminster, CO 80021
- --------------------------------------------------------------------------------
All officers and Directors
as a Group (3 persons) 29,050,000 68.9%
- --------------------------------------------------------------------------------
(1) Includes 1,000,000 shares held by his son, Gerhard Holter, which Heinrich
Holter disclaims beneficial ownership.
(2) Indirectly held in the name of Gateway Industries, Ltd., of which Mr. Lezak
is a beneficial owner.
Changes in Control
- ------------------
There are no arrangements, which may result in a change in control of the
issuer.
7
<PAGE>
Item 5. Directors, Executive Officers, Promoters and Control Persons
====================================================================
(a) Directors and Executive Officers
Name Age Position Held Since
- --------------------------------------------------------------------------------
Heinrich Holter 69 President, Chairman of the Board 1999
Daniel Lezak 65 Secretary-Treasurer, Director 1999
Dennis Brovarone 43 Director, Legal Counsel 1999
Business Experience
- -------------------
Heinrich Holter - Professor Holter, 69, has spent the past fifteen years as the
principal officer, director and shareholder of the Heinrich Holter family
of companies which were reorganized under the name of Heinrich Holter GmbH
in 1995.
The Holter Family of Companies are as follows:
B.O.O.T. Beteiligungsgesellschaft fuer oekonomische u. oekologische
Technologien mbH
Holding company for research & development technologies
EFTAG AG Entstaubungs- und Foerdertechnik AG, Biel
Engaged in pollution control / air cleaning
EHT Escher & Hoelter Technik GmbH Engineering
FEP Hoelter Finanzvermittlung und Geschaeftsfuehrung GmbH & Co. KG
Financing of research of development
Heinrich Hoelter GmbH
Consulting of various companies in pollution control & engineering
HKP Grundstuecksgesellschaft GbR
Administrative company for lots & building sites
HMS Bergbau Agentur AG, Berlin
Trading company for raw materials
Hoelter Sachsen DENATEC GmbH
Airing- & climatic techniques, research & development
Hoelter Energie Technik
Engaged in development of projects for energy gains
Hoelter Italia s.r.I., Fano
Pollution control, air- & climatic techniques, Italy
8
<PAGE>
Hoelter-Systembau GmbH fuer oekologisch-oekonomisches Bauen
Construction, low energy buildings
Hoelter Technika spol., Prague
Marketing company for various Hoelter technologies in Czechoslovakia
Hoelter Technologies Holding AG
Holding company in USA
IBV Grundstuecksgesellschaft Bottrop mbH
Administrative company for lots & building sites
KSE Kohle, Stahl, Energie AG
Trading company for coal, steel energy
Liberecke Kotlarny Hoelter GmbH, Liberec, (Tschechien)
Pollution control, power station, services in Czechoslovakia
PHILAQUA Aufbereitungstechnik GmbH
Water recycling, sewage works
P.O.E.T. AG, Moscow
Pollution control in Russia
Projektgesellschaft Kohle-Muell-Systemtechnik Moscow
Project processing engineering in Russia
THG (Ost-West) Technologie- und Handelsgesellschaft mbH
Trading company
UFAG AG Umweltschutz und Foerdertechnik AG
Administrative company for various company holdings engaged in pollution
control
Professor holds over 3,500 patents in the area of environmental protection
technology. In 1985, he was appointed Chairman of the German Diesel Board
by the Society of Inventors. He has also been awarded the order of the
Federal Republic of Germany (Bundesverdienstkreuz) and the Diesel gold
medal for his scientific works. In 1993, with a number of like-minded
specialist colleagues he founded the Akademie Ost-West fur technische und
medizinische Wissenschaften (East-West Academy of Technical and Medical
Sciences) at the moated castle of Wittringen in Gladbeck. Numerous
university professors and scientists from Germany, Poland, the Czech
Republic, and Russia play an active role in the Academy. In 1993 he was
appointed titular professor, i.e. state professor, by the state of North
Rhine-Westphalia.
9
<PAGE>
In 1974 he developed a gas-scrubbing systems for use at power stations and
waste incinerators. The first flue-gas scrubber built according to the
Holter system was installed at a power station operated by Saarbergwerke AG
in the German state of Saarland in 1978 Saarberg-Holter-Umwelttechnik
(SHU), a company subsequently formed in conjunction with Saarbergwerke AG,
is Europe's leading producer of flue-gas desulphurization plants, enjoying
a world market share of 35% according to experts in the industry. Outside
Europe these plants have also been built in Russia, Poland, the Czech
Republic, Japan, and also in Italy, where in many cases electrostatic
filters have been integrated under a cooperation scheme with Lurgi and the
jointly-owned subsidiary, Saarberg-Holter-Lurgi.
In 1989 he developed a sewage treatment system. In 1990 together with the
Copenhagen-based company, Kruger, he established
Kruger-Holter-Wassertechnik, which now operates under the name of
Saarberg-Holter-Wassertechnik in the sewage treatment sector.
Daniel Lezak - Mr. Lezak, 65, has performed consulting services to financially
distressed public and private companies since 1965 establishing
reorganization plans through acquisition, sale or Chapter 11 Bankruptcy
Reorganization. He has provide such services to over sixty corporations and
over one hundred Limited and General Partnerships. Mr. Lezak holds a B.S.
Degree in Accounting from Roosevelt University in Chicago and is a
Certified Public Accountant. In addition to his position with the Company,
Mr. Lezak is presently an officer or director of General Residential Corp.,
owner of retirement homes in California, Royal Pacific Land Company, a land
company in Hawaii, Turbo, Inc., a publicly held company, formerly engaged
in gold mining in California, Sierra-Rockies Corporation a public company
presently in Chapter 11 Reorganization in California and Organik
Technology, Inc., a public company recently released from Chapter 11
proceedings and Gateway Industries Ltd., a consulting and holding company.
Dennis Brovarone - Mr. Brovarone, 43, has been practicing corporate and
securities law since 1986 and as a sole practitioner since 1990. He was
appointed to the Board in June 1999. Mr. Brovarone is and since December,
1997 has been the President and Chairman of the Board of Ethika
Corporation, a publicly held corporation with no current operations,
located in Westminster, Colorado. Prior to 1990, Mr. Brovarone served as
in-house counsel to R.B. Marich, Inc.; a Denver, Colorado based brokerage
firm. Mr. Brovarone served as President (Chairman) of the Board of
Directors of The Community Involved Charter School, from January 1995 to
March 1998, a four-year old K-12 independently chartered public school
located in Lakewood, Colorado. He also serves as a Director of the
following publicly held companies: Innovative Medical Services, San Diego,
California; Elgrande.com, Inc., Vancouver, British Columbia; and Ethika
Corporation, Westminster, Colorado.
(b) Significant Employees: None
10
<PAGE>
Item 6. Executive Compensation
==============================
(a) The Company has omitted the Summary Compensation Table as no cash
compensation has been paid and none is expected during the current fiscal year.
b) Option/SAR Grants in Last Fiscal Year (Individual Grants): The Company does
not have any stock option plan and no options to acquire stock have otherwise
been granted.
(c) Aggregated Option/SAR Exercises in Last Fiscal Year and FY-end Option/SAR
Values : None
(d) Long-term Incentive Plans -- Awards in Last Fiscal Year: None
The Company has not otherwise awarded any stock options, stock appreciation
rights or other form of derivative security or common stock or cash bonuses to
its executive officers and directors.
(e) Compensation of Directors
1. Standard Arrangements: The members of the Company's Board of Directors
are reimbursed for actual expenses incurred in attending Board meetings.
2. Other Arrangements: There are no other arrangements.
(f) Employment Contracts And Termination of Employment, And Change-in-control
Arrangements
Prof. Heinrich Holter and Daniel Lezak each provide services to the Company
pursuant to a Consulting Agreement dated as of March 1, 1999. Pursuant to the
terms thereof, each received 1,000,000 shares of restricted common stock. The
original term of the consulting agreements were six months. In September, 1999
the consulting agreements were extended indefinitely without further
compensation.
Item 7. Certain Relationships and Related Transactions
======================================================
In February, 1999, the Company acquired 100% of the Equity Interests of Holter
Sachsen DENATEC GmbH, a German Limited Liability Company from Prof. Heinrich
Holter, the father of the Company's President Gerhard Holter, in consideration
of twenty-six million shares of restricted common stock. Holter Sachsen DENATEC
GmbH holds the exclusive rights to exploit Dr. Holter's patented inventions and
embodiments of denaturing heat exchangers and electrostatic filters having a
denaturing collector electrode. Heinrich Holter GmbH is an affiliate and control
person of the Company.
On December 30, 1998, Prof. Holter executed a loan agreement for 67,564.17 DM
($35,635 @ 1.896DM to $1) in favor of the Company's subsidiary, Holter Sachsen
Denatec GmbH. The loan accrues interest at 6% per annum and is due on request
with 6 months notice. Also on December 30, 1998, The Company's subsidiary,
Holter Sachsen Denatec GmbH executed a loan agreement for 30,071.66 DM ($15,860)
in favor of Heinrich Holter, GmbH. The loan accrues interest at 6% per annum and
is due on request with 6 months notice. The Company's subsidiary, Holter Sachsen
Denatec GmbH also has an account payable to Heinrich Holter, GmbH in the amount
of 14,319.25 DM ($7,552).
11
<PAGE>
Item 8. Description of Securities
=================================
The authorized capital stock of Company consists of 200,000,000 shares of $.001
par value common stock and 10,000,000 shares of $.001 par value preferred stock.
No warrants to acquire common stock have been authorized. There are no
outstanding obligations of the Company to repurchase, redeem or otherwise
acquire any shares of the Company's common stock.
The common stock carry no preemptive rights, are not convertible, redeemable,
assessable or entitled to the benefits of any sinking fund. The common stock
affords the holders no cumulative voting rights, and the holders of a majority
of the shares voting for the election of the directors can elect all of the
directors if they should choose to do so.
The preferred stock may be issued in series whose rights and preferences can be
determined by the Company's Board of Directors. As of September 15, 1999 no
preferred stock has been issued and the Company has no present intention to
issue such shares.
12
<PAGE>
PART II
Item 1. Market Price of and Dividends on the Company's Common Equity and Other
Shareholder Matters
================================================================================
(a) Market Information
- ----------------------
The Company's stock is listed for trading on the OTC Electronic Bulletin Board
under the symbol "HOTK". Prior to March, 1999, the common stock traded under the
symbol "FALK". The following sets forth the high and low bids for the common
stock since listing reflecting inter-dealer prices without retail mark-up,
mark-down or commissions and may not represent actual transactions.
Qtr Ending High Bid Low Bid
- ----------------------------------------------------------------
Mar. 31, 1998 1.25 0.53125
Jun. 30, 1998 1.50 0.125
Sep. 30, 1998 1.125 0.0625
Dec. 31, 1998 0.3750 0.0625
Mar. 31, 1999 0.4688 0.3750
Jun. 30, 1999 3.25 0.3750
(b) Holders
- ------------
There are approximately 270 registered holders of the Company's Common Stock as
of September 20, 1999. There is 20 holders of restricted securities as defined
by Rule 144, which have not been held in excess of one year.
(c) Dividends
- -------------
The Company has paid no dividends to date on its Common Stock. The Company
reserves the right to declare a dividend when operations merit.
Item 2. Legal Proceedings
=========================
There is no action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending or, to the knowledge of the
Company, threatened, against or affecting the Company, or any of its properties,
business affairs or business prospects of the Company.
Item 3. Changes in and Disagreements with Accountants: None
===========================================================
13
<PAGE>
Item 4. Recent Sales of Unregistered Securities
===============================================
During the past three years, the Company sold securities, which were not
registered under the Securities Act of 1933, as amended, as set forth below.
Date Name # of shares issued Consideration
- --------------------------------------------------------------------------------
Organizational Services
4/25/97 Georgios Stolte 750,000 Services (1)
4/25/97 York K. Chandler 250,000 Services (1)
1,000,000
Rule 504 Sales (2)
4/25/97 Karin Adami 35,000 $ 700.00
4/25/97 Gert-Friendrich Ahlbo 15,000 $ 300.00
4/25/97 Edgar Arweiler 1,667 $ 33.34
4/25/97 Hartmut Baache 1,667 $ 33.34
4/25/97 Felix Bader 145,000 $ 2,900.00
4/25/97 Andre Baer 100 $ 2.00
4/25/97 Peter Bartsch 15,820 $ 316.40
4/25/97 Otto Bauer 3,501 $ 70.02
4/25/97 Michael Berrescheim 140,000 $ 2,800.00
4/25/97 Carsten Bertke 1,000 $ 20.00
4/25/97 Gerda Binder 1,000 $ 20.00
4/25/97 Rainer Binder 1,000 $ 20.00
4/25/97 Rainer Binder 1,000 $ 20.00
4/25/97 Regina Binder 1,000 $ 20.00
4/25/97 Christoph Birkholz 1,667 $ 33.34
4/25/97 Karl-Heinz Boege 3,500 $ 70.00
4/25/97 Matthias Boehm 3,334 $ 66.68
4/25/97 Steffen Boehm 1,334 $ 26.68
4/25/97 Manuela Borck &
Erhard Borck 2,000 $ 40.00
4/25/97 Klaus Michael Heinz 1,500 $ 30.00
4/25/97 Erna Braun 10,000 $ 200.00
4/25/97 Karl-Heinz Breitschw 5,000 $ 100.00
4/25/97 Wolfgang Buehler 1,000 $ 20.00
4/25/97 Ralph Burstedde 130,000 $ 2,600.00
4/25/97 Ralph Burstedde 10,000 $ 200.00
4/25/97 U Czarnojan-Seidens 1,000 $ 20.00
4/25/97 Kurt Dannenbauer 3,667 $ 73.34
4/25/97 Margit Decker &
Klaus Decker 8,334 $ 166.68
4/25/97 Michael Deckert 3,000 $ 60.00
4/25/97 Ralf Dietzel &
Kerstin Dietzel 2,500 $ 50.00
4/25/97 Helmut Dirring 41,981 $ 839.62
4/25/97 Irma Draeger &
Wolfram Draeger 3,000 $ 60.00
4/25/97 Dieter Drechsler 834 $ 16.68
4/25/97 Kerstin Drymalla 340 $ 6.80
4/25/97 Traude Ehtecami 6,000 $ 120.00
4/25/97 Ruth Ernst 126,712 $ 2,534.24
4/25/97 Joachim Fahrner 500 $ 10.00
4/25/97 Juergen Federwisch 3,500 $ 70.00
14
<PAGE>
4/25/97 Guenther Feirer 834 $ 16.68
4/25/97 Matthias Fieml 105,000 $ 2,100.00
4/25/97 Matthias Fieml 10,000 $ 200.00
4/25/97 Klaus Fischer &
Elke Fischer 4,167 $ 83.34
4/25/97 Peter Fischer &
Barbara Fischer 834 $ 16.68
4/25/97 Petra Friess 6,596 $ 131.92
4/25/97 Galerie Pieroth AG 1,000 $ 20.00
4/25/97 Klaus Gauterin 1,000 $ 20.00
4/25/97 Helga Goetz 20,834 $ 416.68
4/25/97 Katharina Goetz &
Guenter Goetz 3,334 $ 66.68
4/25/97 Beate Greiner 4,834 $ 96.68
4/25/97 Georg Gromeder 14,190 $ 283.80
4/25/97 Helga Groetzner 3,334 $ 66.68
4/25/97 Margot Gruenert 5,000 $ 100.00
4/25/97 Wilhelm Gundlach &
Ingrid Gundlach 2,000 $ 40.00
4/25/97 Gertrud Haag 1,167 $ 23.34
4/25/97 Martin Haegele 2,500 $ 50.00
4/25/97 Bernd Halfmann 500 $ 10.00
4/25/97 Erika Haenisch-Hansc 1,167 $ 23.34
4/25/97 Karl-Heinz Hanslik 16,116 $ 322.32
4/25/97 Wolfgang Happes 1,000 $ 20.00
4/25/97 Wolfgang Heidrich 3,334 $ 66.68
4/25/97 Paul Heinemann 20,834 $ 416.68
4/25/97 Karsten Heinig 2,500 $ 50.00
4/25/97 Gloria Hempel 4,167 $ 83.34
4/25/97 Hartmut Hempel 10,834 $ 216.68
4/25/97 Hartmut Hempel 2,468 $ 49.36
4/25/97 Vera Hempel 2,334 $ 46.68
4/25/97 Virginie Hempel 834 $ 16.68
4/25/97 Helfried Hering 3,334 $ 66.68
4/25/97 Franz Hermann 4,167 $ 83.34
4/25/97 Baerbel Herpich &
Juergen Herpich 1,667 $ 33.34
4/25/97 Heidrun Hochreuther 3,334 $ 66.68
4/25/97 Ralf Hoffmann 10,000 $ 200.00
4/25/97 Guenter Hoefling 1,167 $ 23.34
4/25/97 Wolfgang Hoelzl 500 $ 10.00
4/25/97 Ulrich Horn 1,000 $ 20.00
4/25/97 Manfred Horndasch 2,000 $ 40.00
4/25/97 Alexander Jina 2,500 $ 50.00
4/25/97 Heribert Joerg Jun. 2,000 $ 40.00
4/25/97 Klaus Jornitz 1,667 $ 33.34
4/25/97 Ingeborg Joschko 4,000 $ 80.00
4/25/97 Marc Kaisner Jun. 400 $ 8.00
4/25/97 Mohammad Ali Karagah 100 $ 2.00
4/25/97 Klaus Kehrberger 8,334 $ 166.68
4/25/97 Rolf Kemnitzer 600 $ 12.00
4/25/97 Aldis Kirmaier 5,000 $ 100.00
4/25/97 Marina Klaschka 1,667 $ 33.34
4/25/97 Elvira Kless 6,983 $ 139.66
4/25/97 Wolfgang Knauer 3,500 $ 70.00
15
<PAGE>
4/25/97 Ulf Knesebeck 500 $ 10.00
4/25/97 Matthias Koeber 1,000 $ 20.00
4/25/97 Herbert Koller 1,000 $ 20.00
4/25/97 Angelika Kurz 10,000 $ 200.00
4/25/97 Andreas Lammel 834 $ 16.68
4/25/97 Christian Lammel 834 $ 16.68
4/25/97 Raimond Lammel 834 $ 16.68
4/25/97 Ursula Lammel &
Jelmut Lammel 2,500 $ 50.00
4/25/97 Dieter Langer 4,167 $ 83.34
4/25/97 Reiner Langer 500 $ 10.00
4/25/97 Harald Laaessker 8,334 $ 166.68
4/25/97 Robert Lilly 1,334 $ 26.68
4/25/97 Manfred Lindberg 7,000 $ 140.00
4/25/97 Henner Loeffler 10,000 $ 200.00
4/25/97 Juergen Luellig 500 $ 10.00
4/25/97 Gerhard Madinger 1,667 $ 33.34
4/25/97 Christel Malz 1,667 $ 33.34
4/25/97 Axel Mardefeld 6,667 $ 133.34
4/25/97 Adolf Maurer 7,167 $ 143.34
4/25/97 Albert Meindl 2,000 $ 40.00
4/25/97 Josef Mentzen 5,000 $ 100.00
4/25/97 Marianne Meyer 1,667 $ 33.34
4/25/97 Wolf-Dietrich Molzow 3,000 $ 60.00
4/25/97 Helmut Mueller 1,667 $ 33.34
4/25/97 Karl Neher 400 $ 8.00
4/25/97 Uli Nellessen &
Peter Nellessen 40,000 $ 800.00
4/25/97 Holger Nielebock 834 $ 16.68
4/25/97 Winfried Nowack 2,167 $ 43.34
4/25/97 Gerold Oertel 9,667 $ 193.34
4/25/97 Mike Orlamuender 7,667 $ 153.34
4/25/97 Hans-Dieter Pechmann 1,667 $ 33.34
4/25/97 Sylvid Penzel 1,667 $ 33.34
4/25/97 Christa Pfeiffer 3,334 $ 66.68
4/25/97 Erich Pickel 2,667 $ 53.34
4/25/97 Hildegard Pohl 18,000 $ 360.00
4/25/97 Ulrich Pohl 3,334 $ 66.68
4/25/97 Renate Pollack 3,334 $ 66.68
4/25/97 Dietmar Poppe 2,834 $ 56.68
4/25/97 Dieter Porstein 1,000 $ 20.00
4/25/97 Klaus Prippenow 2,001 $ 40.02
4/25/97 Nadine Prippenow 1,334 $ 26.68
4/25/97 Hermann Prokob 1,667 $ 33.34
4/25/97 Thomas Rehart 50,000 $ 1,000.00
4/25/97 Marliese Reichert 5,000 $ 100.00
4/25/97 Diethelm Reinhold 1,645 $ 32.90
4/25/97 Diethelm Reinhold 1,667 $ 33.34
4/25/97 Otmar Remsberger 250 $ 5.00
4/25/97 Emma Reuter 6,500 $ 130.00
4/25/97 Horst Richter 8,224 $ 164.48
4/25/97 Horst Richter 8,334 $ 166.68
4/25/97 Jens Richter 1,000 $ 20.00
16
<PAGE>
4/25/97 Bernd Ritte 2,500 $ 50.00
4/25/97 Susan Ritte 1,667 $ 33.34
4/25/97 Uwe Rogoll & Beate Rogoll 7,027 $ 140.54
4/25/97 Klaus-Peter Romberg 1,280 $ 25.60
4/25/97 Gerhard Roth 1,000 $ 20.00
4/25/97 Thomas Ruether 1,000 $ 20.00
4/25/97 Gerhard Schaeble 8,334 $ 166.68
4/25/97 Ulrich Schaefer 1,667 $ 33.34
4/25/97 Dieter Scheel 2,000 $ 40.00
4/25/97 Juergen Scheich 100 $ 2.00
4/25/97 Michael Scheich 100 $ 2.00
4/25/97 Dieter & Ursula Scheidemantel 3,000 $ 60.00
4/25/97 Hartmut Schellong 2,167 $ 43.34
4/25/97 Rosemarie Schillinge 19,737 $ 394.74
4/25/97 Helga Schimming 1,667 $ 33.34
4/25/97 Richard Schmid & Liane Schmid 200 $ 4.00
4/25/97 Friedrich Schmidt 20,000 $ 400.00
4/25/97 Guenther Schmidt 9,450 $ 189.00
4/25/97 Ingrid Schmidt 2,667 $ 53.34
4/25/97 Helga Schmitt & Horst Schmitt 7,845 $ 156.90
4/25/97 Gerhard Schoeller 1,667 $ 33.34
4/25/97 Holger Schoengarth 3,000 $ 60.00
4/25/97 Dietmar Schroeder 1,667 $ 33.34
4/25/97 Guenter Schroeder &
Helene Schroeder 3,000 $ 60.00
4/25/97 Helene Schroeder 2,001 $ 40.02
4/25/97 Horst Schubert 1,000 $ 20.00
4/25/97 Babette Schuh & Hans Schuh 3,334 $ 66.68
4/25/97 Hans Schulte 26,295 $ 525.90
4/25/97 Stefan Schulz 2,000 $ 40.00
4/25/97 Johannes Schuster 5,334 $ 106.68
4/25/97 Istvan Seboek 2,500 $ 50.00
4/25/97 Karin Seboek 2,468 $ 49.36
4/25/97 Alfred Seek 50,000 $ 1,000.00
4/25/97 Christin Sichermann &
Herbert Sichermann 2,500 $ 50.00
4/25/97 Hans Siefert 3,334 $ 66.68
4/25/97 Thomas Simianer 1,000 $ 20.00
4/25/97 Georgios Stolte 5,000 $ 100.00
4/25/97 Rolf Skambraks 3,334 $ 66.68
4/25/97 Mayk Sommerfeld 1,300 $ 26.00
4/25/97 Werner Staab 1,500 $ 30.00
4/25/97 Emil Stangl 1,000 $ 20.00
4/25/97 Erika Stangl 1,000 $ 20.00
4/25/97 Wolfgang Stangl 1,000 $ 20.00
4/25/97 Sabine Steglich &
Rolf Steglich 3,667 $ 73.34
4/25/97 Friedrich Steingrube 5,000 $ 100.00
4/25/97 Karl-Heinz Steingrube 5,000 $ 100.00
4/25/97 Gerhard Strauss 8,334 $ 166.68
4/25/97 Heike Strauss &
Mathias Strauss 2,834 $ 56.68
4/25/97 Guenther Streit 5,000 $ 100.00
4/25/97 Bernd Sturm 1,667 $ 33.34
4/25/97 Evelyn Stuetzer 133,142 $ 2,662.84
17
<PAGE>
4/25/97 Gerhard Stuetzer 30,000 $ 600.00
4/25/97 Michael Stutzinger 500 $ 10.00
4/25/97 Ingrid Sustorf 5,001 $ 100.02
4/25/97 Joerg Tarras 1,500 $ 30.00
4/25/97 Elmar Terlutter 2,500 $ 50.00
4/25/97 Jens Umbeer 13,300 $ 266.00
4/25/97 Joachim Ungermann 834 $ 16.68
4/25/97 Annemarie Vogel 3,167 $ 63.34
4/25/97 Eberhard Weber 2,500 $ 50.00
4/25/97 Brigitte Wehringer 31,667 $ 633.34
4/25/97 Klaus-Dieter Wetzel 3,333 $ 66.66
4/25/97 Robert Wiedemann &
Carmen Wiedemann 6,667 $ 133.34
4/25/97 Karl Winkler 1,000 $ 20.00
4/25/97 Volker Wunder 5,837 $ 116.74
4/25/97 Wilhelmine Wunder 25,000 $ 500.00
4/25/97 Herbert Wuestefeld 10,000 $ 200.00
4/25/97 Herbert Zahn 834 $ 16.68
4/25/97 Heidi Zaepernick 2,139 $ 42.78
4/25/97 Ina Zaepernick 6,667 $ 133.34
4/25/97 Ina Zaepernick 1,645 $ 32.90
4/25/97 Peter Zeiler 1,500 $ 30.00
4/25/97 Elisabeth Zipfel 30,000 $ 600.00
4/25/97 Elisabeth Zipfel 115,000 $ 2,300.00
3,000,000.00 $ 40,000.00
Regulation S Sales (3)
10/13/98 Jurgen Gaurtier 600,000 $ 30,000.00
10/13/98 Thomas Thomas 600,000 $ 30,000.00
10/13/98 Ralph Burstedde 600,000 $ 30,000.00
10/13/98 Eberhard Horbach 600,000 $ 30,000.00
Reorganization Services (1)
4/16/99 Ing. Gerhard Hoelter 26,000,000 Share Exchange
4/16/99 La Salle Investments 2,600,000 Services
4/16/99 Daniela Brinkman 1,000,000 Services
4/16/99 Heinrich Hoelter 1,000,000 Services
4/16/99 Ing. Gerhard Hoelter 1,000,000 Services
4/16/99 La Salle Investments 1,000,000 Services
4/19/99 Gateway Industries Ltd 1,000,000 Services
4/19/99 Ralph Burstedde 500,000 Services
Regulation S Sales (3)
7/7/99 Walter Dreher 6,028 $ 1.75
7/7/99 Gretel Fischer 1,909 $ 1.75
7/7/99 Ute Fischer 3,014 $ 1.75
7/7/99 Katharina Giel 4,521 $ 1.75
7/7/99 Richard Kehrer 11,152 $ 1.75
7/7/99 Inge Pfeffer 1,808 $ 1.75
7/7/99 Rudi Reichert 5,425 $ 1.75
7/7/99 Emil Teufel 1,909 $ 1.75
7/7/99 Andreas Thomas 1,909 $ 1.75
18
<PAGE>
7/7/99 Erwin Ulrich 6,028 $ 1.75
7/7/99 Nedzad Redzepagic 1,507 $ 1.75
45,210 $ 79,117.50
Legal Services (1)
8/9/99 Dennis Brovarone 50,000 Services
(1) Shares Issued in Exchange or for Services: The Company relied upon the
exemption from registration set forth in section 4(2) of the Securities Act
of 1933 for all other issuances of shares for its acquisition of the Equity
Interest in Holter Sachen Denatec, GmbH and those issued for services. The
purchasers were either control persons of the issuer or consultants to the
issuer who were provided all material information regarding the Company.
The Company placed a restrictive legend upon the certificates issued to the
purchasers denoting the securities are "restricted securities" or held by a
control person of the Company and may only be sold in compliance with Rule
144. Thus the exemptions from registration afforded by Rule 4(2) and Rule
3(b) were available to the issuer. Gerhard Holter, was the President and a
director of the Company from February, 1999 to September 1999. Gateway
Enterprises, Ltd., is a personal holding company of Daniel Lezak, a
director. La Salle Investment, Ltd., is an Irish corporation which engaged
to provide consulting services to the issuer regarding the reorganization,
and capital markets in Europe and the United States. Daniela Brinkman is
the wife of Dirk Brinkman, an employee of Heinrich Holter, GmbH who is
providing consulting services to the issuer with respect to the business
plan of the issuer and to serve as liaison to Heinrich Holter, GmbH. Ralph
Burstedde is a consultant engaged to manage the Dusseldorf, Germany office
of the issuer. Dennis Brovarone is legal counsel to the Company and a
director.
(2) Sales Pursuant to Rule 504: The Company was not a reporting company
pursuant to the Securities Exchange Act of 1934 nor was it a development
stage company with no business plan. Thus it was eligible to rely upon Rule
504 as a safe harbor exemption from the registration requirements of the
Securities Act of 1933. Moreover, Rule 504 was available in that the
Company sold less than $1,000,000.00 worth of securities in the previous 12
month period and except for the Company s officers and directors, the
purchasers were unaffiliated investors. The Company relied upon the Rule
504 safe harbor exemption for the sales of securities for cash. These sales
were entirely private transactions pursuant to which all material
information as specified in Rule 502(b)(2) was made available to the
purchasers.
(3) Shares issued pursuant to Regulation S. The Offering was made solely to
European investors primarily in Germany pursuant to Rule 903 of Regulation
S. The certificates were issued with a restrictive legend as required by
Regulation S.
19
<PAGE>
Item 5. Indemnification of Directors and Officers
=================================================
Article V of the Company's Articles of Incorporation provides that no
shareholder or directors of the corporation shall be individually liable for the
debts of the corporation or for monetary damages arising from the conduct of the
corporation. Article 11 of the Company's Bylaws provides every person who was or
is a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or a person for whom he is the legal representative
is or was a director or officer of the corporation or is or was serving at the
request of the corporation or for its benefit as a director or officer of
another corporation, or as its representative in a partnership, joint venture,
trust or other enterprise, shall be indemnified and held harmless to the fullest
extent legally permissible under the General Corporation Law of the State of
Nevada against all expenses, liability and loss (including attorney's fees,
judgments, fines and amounts paid or to be paid in settlement) reasonably
incurred or suffered by him in connection therewith.
20
<PAGE>
FINANCIAL STATEMENTS
C O N T E N T S
FALKEN INVESTMENT, AG
(Formerly Lyon Mountain, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1998 and 1997
Independent Auditors' Report..........................................F- 3
Balance Sheets........................................................F- 4
Statements of Operations..............................................F- 5
Statement of Stockholders' Equity (Deficit)...........................F- 6
Statements of Cash Flows..............................................F- 7
Notes to the Financial Statements.....................................F- 8
Holter Sachen Denatec GmbH
FINANCIAL STATEMENTS
December 31, 1998
Independent Auditors' Report..........................................F- 10
Balance Sheet.........................................................F- 11
Statement of Operations...............................................F- 12
Statement of Stockholders' Equity.....................................F- 13
Statement of Cash Flows...............................................F- 14
Notes to the Financial Statements.....................................F- 15
ProForma Financial Statements.........................................F- 18
HOLTER TECHNOLOGIES HOLDING AG
(A Development Stage Company)
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999 and December 31, 1998
Balance Sheets........................................................F- 19
Consolidated Statements of Operations.................................F- 22
Consolidated Statements of Stockholders' Equity.......................F- 23
Consolidated Statements of Cash Flows.................................F- 24
Notes to the Consolidated Financial Statements........................F- 25
21
<PAGE>
JONES, JENSEN
& COMPANY, LLC
---------------
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
MCGLADREY NETWORK MEMBERS
An Independently Owned Member R. Gordon Jones, CPA
Worldwide Serices Mark F. Jensen, CPA
Through RSM International Franklin L. Hunt, CPA
Steve M. Hanni, CPA
American Institute of
Certified Public
Accountants
Utah Association of
Certified Public
Accountants
SEC Practice Section
Private Companies
Practice Section
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Falken Investment, AG
(Formerly Lyon Mountain, Inc.)
Duesseldorf, Germany
We have audited the accompanying balance sheets of Falken Investment, AG
(formerly Lyon Mountain, Inc.)(a development stage company) as of December 31,
1998 and 1997 and the related statements of operations, stockholders' equity
(deficit) and cash flows for the year ended December 31, 1998 and from inception
on March 21, 1997 through December 31, 1998 and 1997. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Falken Investment, AG (formerly
Lyon Mountain, Inc.) (a development stage company) as of December 31, 1998 and
1997 and the results of its operations and its cash flows for the year ended
December 31, 1998 and from inception on March 21, 1997 through December 31, 1998
and 1997 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company is a development stage company with no
significant operating revenues to date which together raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 3. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
January 19, 1999
50 South Main Street
Suite 1450
Salt Lake City, Utah 84144
Telephone (801) 328-4408
Facsimile (801) 328-4461
F-3
22
<PAGE>
FALKEN INVESTMENT, AG
(Formerly Lyon Mountain, Inc.)
(A Development Stage Company)
Balance Sheets
ASSETS
December 31,
1998 1997
----------- -----------
CURRENT ASSETS
Cash $ 813 $ 513
------ ------
Total Current Assets 813 513
------ ------
TOTAL ASSETS $ 813 $ 513
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 2,859 $ 2,033
Accrued expenses 333 -
Note payable - related party (Note 5) 5,000 -
------------ -----------
Total Current Liabilities 8,192 2,033
------------ -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock; $0.001 par value,
authorized
50,000,000 shares; 8,400,000 and
6,000,000 shares issued and
outstanding, respectively 8,400 6,000
Additional paid-in capital 151,600 34,000
Stock subscriptions receivable (120,000) -
Deficit accumulated during the
development stage (47,379) (41,520)
------------ -----------
Total Stockholders' Equity (Deficit) (7,379) (1,520)
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 813 $ 513
============ ===========
The accompanying notes are an integral part of these
financial statements.
F-4
23
<PAGE>
FALKEN INVESTMENT, AG
(Formerly Lyon Mountain, Inc.)
(A Development Stage Company)
Statements of Operations
From
Inception on
For the March 21, 1997
Year Ended Through
December 31, December 31,
1998 1997 1998
-----------------------------------------------------
REVENUE $ - $ - $ -
EXPENSES 5,859 41,520 47,379
------------ ---------- -----------
NET LOSS $ (5,859) $ (41,520) $ (47,379)
============ ========== ===========
BASIC LOSS PER SHARE $ (0.00) $ (0.01)
============ ==========
WEIGHTED NUMBER OF SHARES
OUTSTANDING 3,611,496 3,000,000
============ ==========
The accompanying notes are an integral part of these
financial statements.
F-5
24
<PAGE>
FALKEN INVESTMENT, AG
(Formerly Lyon Mountain, Inc.)
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
$Deficit
Additional Stock Accumulated
Common Stock Paid-in Subscription During the
Shares Amount Capital Receivable Development Stage
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Inception,
March 21, 1997 $ - $ - $ - $ - $ -
Common stock issued to
incorporators for cash at
$0.01 per share 2,000,000 2,000 8,000 - -
Common stock issued for
cash at $0.02 per share 4,000,000 4,000 36,000 - -
Stock offering costs - - (10,000) - -
Net loss from inception on
March 21, 1997 through
December 31, 1997 - - - - (41,520)
--------- ------------ -------------- -------------- -------------
Balance, December 31, 1997 6,000,000 6,000 34,000 - (41,520)
Common stock issued for
receivable at $0.05 per share 2,400,000 2,400 117,600 (120,000) -
Net loss for the year ended
December 31, 1998 - - - - (5,859)
--------- ------------ -------------- -------------- -------------
Balance, December 31, 1998 $8,400,000 $ 8,400 $ 151,600 $ (120,000) $ (47,379)
========= ============ =============== ============== =============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
F-6
25
<PAGE>
FALKEN INVESTMENT, AG
(Formerly Lyon Mountain, Inc.)
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
For the March 21, 1997
Year Ended Through
December 31, December 31,
1998 1997 1998
-----------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (5,859) $ (41,520) $(47,379)
Adjustments to reconcile net loss to net
cash used by operating activities:
Increase (decrease) in accrued expenses 333 - 333
Increase (decrease) in accounts payable 826 2,033 2,859
--------- ---------- ------------
Net Cash Provided (Used by
Operating Activities (4,700) (39,487) (44,187)
--------- ---------- ------------
CASH FLOWS FROM INVESTING
ACTIVITIES - - -
CASH FLOWS FROM FINANCING
ACTIVITIES
Stock issuance costs - (10,000) (10,000)
Proceeds from note payable - related party 5,000 - 5,000
Proceeds from issuance of common stock - 50,000 50,000
--------- ---------- ------------
Net Cash Provided (Used) by
Financing Activities 5,000 40,000 45,000
--------- ---------- ------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 300 513 813
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 513 - -
--------- ---------- ------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 813 $ 513 $ 813
========= ========== ============
Cash Paid For:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
</TABLE>
The accompanying notes are an integral part of these
financial statements.
F-7
26
<PAGE>
FALKEN INVESTMENT, AG
(Formerly Lyon Mountain, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
On March 21, 1997, the Company was incorporated under the laws of Nevada under
the name of Lyon Mountain, Inc. to place itself in a position to make an offer
to acquire a going business known as Fear the Groove, Inc. The Company has
subsequently determined to seek other business opportunities. On March 5, 1998,
the Company changed its name to Falken Investment, AG and forward split its
common stock on a two shares for one share basis. The accompanying financial
statements reflect the forward stock split on a retroactive basis.
The Company has authorized 50,000,000 shares of $0.001 par value common stock.
The Company has elected a calendar year end.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting.
b. Provision for Taxes
At December 31, 1998, the Company had a net operating loss carryforward of
approximately $47,000 which expires in 2013. The potential tax benefit of the
loss carryforward has been offset in full by a valuation allowance because
management believes that the loss carryover will more likely than not expire
unused.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
d. Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
F-8
27
<PAGE>
FALKEN INVESTMENT, AG
(Formerly Lyon Mountain, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally
acceptedaccounting principles applicable to a going concern which contemplates
the relation of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. The Company
intends to merge with an operating company which has an established source of
revenues. It is also the intent of the Company to complete a limited offering of
its common stock. In the interim, shareholders of the Company have committed to
meeting its minimal operating expenses.
NOTE 4 - STOCK ISSUANCE
The Company received $10,000 from the incorporators of the Company in exchange
for 1,000,000 shares of its common stock. The Company succeeded in a public
offering by which it issued 2,000,000 shares of its common stock at $0.02 per
share for $40,000 cash. The costs incurred in connection with the public
offering of $10,000 were offset against the proceeds of the offering.
NOTE 5 - NOTE PAYABLE - RELATED PARTY
On March 3, 1998, the Company signed an unsecured note payable to a related
party. The note carries an 8% per annum interest rate and is due on demand.
F-9
28
<PAGE>
JONES, JENSEN
& COMPANY, LLC
---------------
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
MCGLADREY NETWORK MEMBERS
An Independently Owned Member R. Gordon Jones, CPA
Worldwide Serices Mark F. Jensen, CPA
Through RSM International Franklin L. Hunt, CPA
Steve M. Hanni, CPA
American Institute of
Certified Public
Accountants
Utah Association of
Certified Public
Accountants
SEC Practice Section
Private Companies
Practice Section
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Holter Sachsen DENATEC GmbH
(A Development Stage Company)
Gladbeck, Germany
We have audited the accompanying balance sheet of Holter Sachsen DENATEC GmbH (a
development stage company) as of December 31, 1998 and the related statements of
operations, stockholders' equity and cash flows from inception on May 3, 1998
through December 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Holter Sachsen DENATEC GmbH (a
development stage company) as of December 31, 1998 and the results of its
operations and its cash flows from inception on May 3, 1998 through December 31,
1998 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company is a development stage company with no
significant operating revenues to date which together raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 3. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
August 25, 1999
50 South Main Street
Suite 1450
Salt Lake City, Utah 84144
Telephone (801) 328-4408
Facsimile (801) 328-4461
F-10
29
<PAGE>
HOLTER SACHSEN DENATEC GmbH
(A Development Stage Company)
Balance Sheet
ASSETS
December 31,
1998
CURRENT ASSETS
Cash $ 13,327
Refundable sales tax receivable 11,640
-------------
Total Current Assets 24,967
FIXED ASSETS (NET) (Note 4) 144,442
-------------
OTHER ASSETS
Patents (Note 7) -
Note receivable - related party (Note 5) 13,631
-------------
Total Other Assets 13,631
TOTAL ASSETS $ 183,040
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 157,730
Accrued expenses 15,972
------------
Total Liabilities 173,702
STOCKHOLDERS' EQUITY
Stated capital 58,824
Deficit accumulated during the
development stage (49,486)
Total Stockholders' Equity 9,338
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 183,040
============
The accompanying notes are an integral part of these
financial statements.
F-11
30
<PAGE>
HOLTER SACHSEN DENATEC GmbH
(A Development Stage Company)
Statement of Operations
From
Inception on
May 3, 1998
Through
December 31,
1998
REVENUES $ -
---------------
EXPENSES
General and administrative 50,951
Total Expenses 50,951
LOSS FROM OPERATIONS (50,951)
OTHER INCOME (EXPENSE)
Interest income 1,507
Interest expense (42)
Total Other Income (Expense) 1,465
NET LOSS $ (49,486)
===============
The accompanying notes are an integral part of these
financial statements.
F-12
31
<PAGE>
HOLTER SACHSEN DENATEC GmbH
(A Development Stage Company)
Statement of Stockholders' Equity
From Inception on May 3, 1998 Through December 31, 1998
Deficit
Accumulated
During the
Stated Development
Capital Stage
Inception on May 3, 1998 $ - $ -
Contribution of capital 58,824 -
Net loss from inception on
May 3, 1998 through
December 31, 1998 - (49,486)
-------------- ---------------
Balance, December 31, 1998 $ 58,824 $ (49,486)
============== ===============
The accompanying notes are an integral part of these
financial statements.
F-13
32
<PAGE>
HOLTER SACHSEN DENATEC GmbH
(A Development Stage Company)
Statement of Cash Flows
From
Inception on
May 3, 1998
Through
December 31,
1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (49,486)
Adjustments to reconcile net loss to net cash:
Depreciation expense 8,578
Changes in assets and liabilities:
(Increase) in refundable sales tax receivable (11,640)
Increase in accounts payable and accrued expens 173,702
Net Cash Provided by Operating Activities 121,154
-------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (153,020)
Net Cash Used by Investing Activities (153,020)
-------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on related party payable 26,112
Capital contribution 58,824
Proceeds to related party (39,743)
-------------
Net Cash Provided by Financing Activities 45,193
-------------
INCREASE IN CASH AND CASH EQUIVALENTS 13,327
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD -
-------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 13,327
=============
Cash Paid For:
Interest $ -
Income taxes $ -
The accompanying notes are an integral part of these
financial statements.
F-14
33
<PAGE>
HOLTER SACHSEN DENATEC GmbH
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
The Company was incorporated under the laws of Germany on May 3, 1998 for the
purpose of acquiring technology.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a December 31 year end.
b. Provision for Taxes
At the end of 1998, the Company had net operating loss carryforwards of
approximately $50,000. No tax expense or benefit has been reported in the
financial statements because management believes that there is a 50% or
greater chance the carryforwards will expire unused.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
d. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
e. Advertising
The Company follows the policy of charging the costs of advertising to
expense as incurred.
f. Foreign Currency Translation
Monetary assets and liabilities denominated in foreign currencies are
translated into United States dollars at the period end exchange rate.
Non-monetary assets are translated at the historical exchange rate and all
income and expenses are translated at the exchange rates prevailing during
the period. Foreign exchange currency translation adjustments will be
included in the stockholders' equity section.
F-15
34
<PAGE>
HOLTER SACHSEN DENATEC GmbH
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has not established revenues sufficient to cover its
operating costs and allow it to continue as a going concern. Management is
seeking a merger with a company with sufficient revenues to cover its operating
costs. Currently management is committed to cover all operating and other costs
until sufficient revenues are generated
NOTE 4 - FIXED ASSETS
The Company's fixed assets consisted of the following at December 31, 1998:
Office equipment $ 5,961
Machines 147,059
Less: accumulated depreciation (8,578)
------
Total Fixed Assets $ 144,442
============
The Company depreciates its fixed assets over the estimated useful lives of 3
years for office equipment and 10 years for machines using the straight-line
method. The Company recorded depreciation expense of $8,578 for the year ended
December 31, 1998.
NOTE 5 - RELATED PARTY RECEIVABLE
The Company has a receivable from a related party of $13,631. This amount is net
of a payable to the related party of $26,112. The receivable is unsecured, bears
interest at 6.00% and is due on demand.
F-16
35
<PAGE>
HOLTER SACHSEN DENATEC GmbH
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
NOTE 6 - SUBSEQUENT EVENT
Reorganization
In March 1999, the Company executed a plan and agreement of reorganization with
Falken Investment, AG (Falken), a Nevada corporation. Wherein the shareholders
of the Company would acquire 80% or more of the issued and outstanding shares of
Falken. It is expected that this reverse merger will qualify as a tax free
reorganization pursuant to Section 368(a)(1)(B) of the Internal Revenue Code for
1986.
The following is an unaudited proforma consolidated balance sheet and income
statement assuming the issuance of 33,600,000 shares of common stock by Falken
to acquire 100% of the outstanding shares of the Company. The acquisition of the
Company will be accounted for as a recapitalization of the Company because the
shareholders of the Company will control the Company after the acquisition.
Therefore, the Company is treated as the acquiring entity. There will be no
adjustment to the carrying value of the assets or liabilities.
NOTE 7- PATENTS
In accordance with Generally Accepting Accounting Principles, the cost to
research and develop and obtain the patents in the Company are expensed. The
acquisition by Falken created a reverse merger; therefore the value of the
patents must be handled as if they were developed and not purchased. Management
has determined that in the long range planning this is a more conservative
approach and eliminates the need of burdening future revenues with the
amortization costs that would arise.
F-17
36
<PAGE>
HOLTER SACHSEN DENATEC GmbH
(A Development Stage Company)
Consolidated Proforma Balance Sheet
December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Holter Proforma
Falken Sachsen Adjustments
Investments DENATEC Increase Proforma
AG GmbH (Decrease) Consolidated
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash $ 813 $ 13,327 $ - $ 14,140
Refundable sales tax - 11,640 - 11,640
----------- ------------- -------------- -------------
Total Current Assets 813 24,967 - 25,780
----------- ------------- -------------- -------------
FIXED ASSETS (NET) - 144,442 - 144,442
----------- ------------- -------------- -------------
OTHER ASSETS
Other assets - 13,631 - 13,631
----------- ------------- -------------- -------------
Total Other Assets - 13,631 - 13,631
----------- ------------- -------------- -------------
TOTAL ASSETS $ 813 $ 183,040 $ - $183,853
=========== ============= ============== =============
</TABLE>
F-18
37
<PAGE>
HOLTER SACHSEN DENATEC GmbH
(A Development Stage Company)
Consolidated Proforma Balance Sheet
December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
Holter Proforma
Falken Sachsen Adjustments
Investments DENATEC Increase Proforma
AG GmbH (Decrease) Consolidated
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
CURRENT LIABILITIES
Accounts payable and accrued
expenses $3,192 $173,702 $ 25,000 $ 201,894
Notes payable - related party 5,000 - - 5,000
----------- ------------- -------------- -------------
Total Current Liabilities 8,192 173,702 25,000 206,894
----------- ------------- -------------- -------------
Total Liabilities 8,192 173,702 25,000 206,894
----------- ------------- -------------- -------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: 50,000,000
shares authorized of $0.001
par value, 42,000,000 shares
issued and outstanding 8,400 58,824 (25,224) 42,000
Additional paid-in capital 151,600 - (47,155) 104,445
Stock subscription receivable (120,000) - - (120,000)
Accumulated (deficit) (47,379) (49,486) 47,379 (49,486)
----------- ------------- -------------- -------------
Total Stockholders' Equity
(Deficit) (7,379) 9,338 (25,000) (23,041)
----------- ------------- -------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
(DEFICIT) $ 813 $ 183,040 $ - $ 183,853
=========== ============= ============== =============
</TABLE>
F-19
38
<PAGE>
HOLTER SACHSEN DENATEC GmbH
(A Development Stage Company)
Consolidated Proforma Balance Sheet
December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Holter Proforma
Falken Sachsen Adjustments
Investments DENATEC Increase Proforma
AG GmbH (Decrease) Consolidated
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ -
----------- ------------- -------------- -------------
OPERATING EXPENSES
General and administrative 5,859 50,951 - 56,810
----------- ------------- -------------- -------------
Total Operating Expenses 5,859 50,951 - 56,810
----------- ------------- -------------- -------------
OPERATING LOSS (5,859) (50,951) - (56,810)
----------- ------------- -------------- -------------
OTHER INCOME (EXPENSES)
Interest income - 1,507 - 1,507
Interest expense - (42) - (42)
----------- ------------- -------------- -------------
Total Other Income
(Expense) - 1,465 - 1,465
----------- ------------- -------------- -------------
LOSS BEFORE INCOME TAXES (5,859) (49,486) - (55,345)
INCOME TAXES - - - -
----------- ------------- -------------- -------------
NET LOSS $(5,859) $(49,486) $ - $ (55,345)
=========== ============= ============== =============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
F-20
39
<PAGE>
HOLTER TECHNOLOGIES HOLDING AG
(A Development Stage Company)
Consolidated Balance Sheets
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
1999 1998
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 122,304 $ 13,327
Refundable sales tax receivable - 11,640
----------- -------------
Total Current Assets 122,304 24,967
----------- -------------
FIXED ASSETS (NET) 136,099 144,442
----------- -------------
OTHER ASSETS
Note receivable 50,565 13,631
----------- -------------
Total Other Assets 50,565 13,631
----------- -------------
TOTAL ASSETS $ 308,968 $ 183,040
=========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 85,547 $ 157,730
Accrued expenses 3,146 15,972
Note payable - related party 182,779 -
----------- -------------
Total Liabilities 271,472 173,702
----------- -------------
STOCKHOLDERS' EQUITY
Common stock: 50,000,000 shares authorized of
$0.001 par value; 42,000,000 and 33,600,000
shares issued and outstanding, respectively. 42,000 33,600
Additional paid-in capital 126,177 25,224
Other comprehensive income 10,268 -
Deficit accumulated during the development stage (140,949) (49,486)
----------- -------------
Total Stockholders' Equity 37,496 9,338
----------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $308,968 $ 183,040
=========== =============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
F-21
40
<PAGE>
HOLTER TECHNOLOGIES HOLDING AG
(A Development Stage Company)
Consolidated Statements of Operations
<TABLE>
<CAPTION>
From
For the Inception on
Six Months May 3, 1998
Ended Through
June 30, December 31, June 30,
1999 1998 1999
(Unaudited) (Unaudited)
-----------------------------------------------------------------
<S> <C> <C> <C>
REVENUES $ - $ - $ -
------------ ------------ --------------
EXPENSES
General and administrative 89,380 50,951 140,331
------------ ------------ --------------
Total Expenses 89,380 50,951 140,331
------------ ------------ --------------
LOSS FROM OPERATIONS (89,380) (50,951) (140,331)
------------ ------------ --------------
OTHER INCOME (EXPENSE)
Interest income - 1,507 1,507
Interest expense (2,083) (42) (2,125)
------------ ------------ --------------
Total Other Income (Expense) (2,083) 1,465 (618)
------------ ------------ --------------
NET LOSS $(91,463) $(49,486) $(140,949)
============ ============ ==============
BASIC LOSS PER SHARE $ 0.00) $ (0.00)
============ ============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
F-22
41
<PAGE>
HOLTER TECHNOLOGIES HOLDING AG
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
From Inception on May 3, 1998 Through June 30, 1999
<TABLE>
<CAPTION>
$Deficit
Additional Stock Accumulated
Common Stock Paid-in Subscription During the
Shares Amount Capital Receivable Development Stage
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at inception on
May 3, 1998 $ - $ - $ - $ - $ -
Issuance of common stock
for cash 33,600,000 33,600 25,224 - -
Net los from inception on
May 3, 1998 through
December 31, 1998 - - - - (49,486)
----------- ---------- -------------- ------------ ----------------
Balance, December 31, 1998 33,600,000 33,600 25,224 - (49,486)
Recapitalization (unaudited) 8,400,000 8,400 100,953 - -
Foreign currency translation
(unaudited) - - - 10,268 -
Net loss for the six months
ended June 30, 1999
(unaudited) - - - - (91,463)
----------- ---------- -------------- ------------ ----------------
Balance, June 30, 1999
(unaudited) $42,000,000 $42,000 $ 126,177 $ 10,268 $ (140,949)
=========== ========== ============== ============ ================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
F-23
42
<PAGE>
HOLTER TECHNOLOGIES HOLDING AG
(A Development Stage Company)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
From
For the Inception on
Six Months May 3, 1998
Ended Through
June 30, December 31, June 30,
1999 1998 1999
(Unaudited) (Unaudited)
------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (91,463) $ (49,486) $ (140,949)
Adjustments to reconcile net loss to net cash:
Depreciation expense 7,880 8,578 16,458
Changes in assets and liabilities:
(Increase) decrease in refundable sales tax receivable 11,640 (11,640) -
Increase in accounts payable and accrued expenses 25,722 173,702 199,424
---------------- ---------------- ----------------
Net Cash (Used) Provided by Operating Activities (46,221) 121,154 74,933
---------------- ---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets - (153,020) (153,020)
---------------- ---------------- ----------------
Net Cash (Used) by Investing Activities - (153,020) (153,020)
---------------- ---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments from related party 82,779 26,112 108,891
Common stock issued for cash 109,353 58,824 168,177
Proceeds from related party (36,934) (39,743) (76,677)
---------------- ---------------- ----------------
Net Cash Provided by Financing Activities 155,198 45,193 200,391
---------------- ---------------- ----------------
INCREASE IN CASH AND CASH EQUIVALENTS 108,977 13,327 122,304
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 13,327 - -
---------------- ---------------- ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 122,304 $ 13,327 $ 122,304
================ ================ ================
Cash Paid For:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
</TABLE>
F-24
43
<PAGE>
HOLTER TECHNOLOGIES HOLDING AG
(A Development Stage Company)
Notes to Consolidated Financial Statements
June 30, 1999 and December 31, 1998
NOTE 1 - CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at June 30, 1999 and
for all periods presented have been made.
Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with general accepted accounting
principles have been condensed or omitted. It is suggested that these
consolidated financial statements be read in conjunction with the financial
statement sand notes there included in the Company's December 31, 1998 audited
consolidated financial statements. The results of operations for the period
ended June 30 are not necessarily indicative of the operating results for the
full year.
The accompanying notes are an integral part of these
financial statements.
F-25
44
<PAGE>
PART III
Item 1. Index to Exhibits
==========================
3.1 Articles of Incorporation as Amended
3.2 Bylaws
10.1 Material Contracts: Acquisition Agreement of Hoelter Sachen Denatec GmbH
27 Financial Data Schedule
45
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Company caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
HOLTER TECHNOLOGIES HOLDINGS, AG
By:
/s/ Heinrich Holter
Heinrich Holter, President, Chairman of the Board of Directors
September 30, 1999
/s/Daniel Lezak
Daniel Lezak, Chief Financial Officer, Director
September 30, 1999
/s/Dennis Brovarone
Dennis Brovarone, Director
September 30, 1999
46
<PAGE>
FILED
The Office of the
Secretary of the
State of Nevada
SEP 28, 1999
No. C5971-97
/s/ Dean Heller,
Secretary of State
Certificate of Amendment to Articles of Incorporation
For Profit Nevada Corporations
(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock
-Remit in Duplicate-
1. Name of corporation: Holter Technologies Holdings, AG.
The Article has been amended as follows (provide article numbers if available)
ARTICLE FOURTH
The total authorized capitalization of this Corporation shall be and is the sum
of 200,000,000 shares of Common Stock at $0.001 par value and 100,000,000 shares
of Preferred Stock at $0.001 par value. The common stock shall carry full voting
power and the common stock shall be issued fully paid at such time as the Board
of Directors may designate in exchange for cash, property, or services, the
stock of other corporations or other values, rights, or things, and the
judgement of the Board of Directors as to the value thereof shall be conclusive.
The preferred stock may be issued in different series, the rights and
preferences thereof shall be determined by the Board of Directors. The vote by
which the stockholders holding shares in the corporation entitling them to
exercise at least a majority of the voting power, or such greater portion of the
voting power as may be required in the case of a vote by classes or series, or
as may be required by the provisions of the articles of incorporation have voted
in favor of the amendment is 21,047,606 shares. The holders of a total of
29,000,000 shares consented to the Amendments.
Signatures:
/s/Daniel Lezak
Daniel Lezak, Secretary
State of : California
County of: Los Angeles
This instrument was acknowledged before me on September 24, 1999 by Daniel
Lezak, known or proved to be the person executing the above instrument.
/s/BahramEftekhari
Notary Public
BAHRAM EFTEKHARI COMM#1089171
NOTARY PUBLIC-CALIFORNIA LOS ANGELES COUNTY
My Comm. Exp. Mar 3, 2000
47
<PAGE>
FILED
The Office of the
Secretary of the
State of Nevada
JAN 21 1999
No. C5971-97
/s/ Dean Heller,
Secretary of State
STATE OF NEVADA
OFFICE OF THE SECREATRY OF STATE
100 N. CARSON ST. STE 3
CARSON CITY, NEVADA 89701-1756
Certificate of Amendment of Articles of Incorporation
Telephone: 702-687-5203
For Profit Nevada Corporations Fax 762-687-3471
(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock) 71
Web site http://www.state.nev.gov
Remit in Duplicate - Filing Fee: $75
Name of Corporation: Falken Investment, AG.
The articles have been amended as follows(provide article numbers if available):
ARTICLE I - The name of the corporation, Falken Investment, AG, shall be changed
to: Holter Technologies Holding, AG.
The vote by which the stockholders holding shares in the corporation entitling
them to exercise at least a majority of the voting power, or such greater
proportion of the voting power as may be required in the case of a vote by
classes or series, or as may be required by the provisions of articles of
incorporation have voted in favor of the amendment(s) is: 72%*.
Signatures
/s/ Daniel Lezak, Vice President/Secretary /s/ Georgios Stolte
Daniel Lezak, Vice President/Secretary Georgios Stolte
(Acknowledgement required) (Acknowledgement set required)
State of California
County of Los Angeles
This instrument was acknowledged before me on
January 20, 1999, by
Daniel Lezak (Name of Patron)
as VICE PRESIDENT/Secretary
as designated to sign this certificate
Falken Investment, AG
(name on behalf of whom instrument was executed)
/s/ Bahram Eftekhan
Notary Public Signature
((Notary stamp))
* If any proposed amendment would alter or change any preference of any relative
or other right gives to any class or series of controlling shares then the
amendment must be approved by the vote in addition to the affirmative vote
otherwise required, of the holders of shares representing a majority of the
voting power of each class or series affected by the amendment regardless of
limitations or restrictions on the voting power thereof.
IMPORTANT: Failure to include any of the above information and remit the proper
fees may cause this filing to be rejected.
48
<PAGE>
FILED
The Office of the
Secretary of the
State of Nevada
FEB 10 1998
No. C5971-97 FEB 10 1998
/s/ Dean Heller, $75
Secretary of State
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
filed by: PM
(After Issuance of Stocks)
LYON MOUNTAIN, INC.
Name of Corporation
We the undersigned GEORGIOS STOLTE and
President/Vice President
YORK CHANDLER of LYON MOUNTIAN, INC.
(Secretary or Assistant Secretary) (Name of Corporation)
do hereby certify:
That the Board of Directors of said corporation at a meeting duly convened, held
on the 12th day of JANUARY 1998 adopted a resolution to amend the original
articles as follows:
Article 1 is hereby amended to read as follows:
THE NAME OF THE CORPORATION IS FALKEN INVESTMENT, AG.
The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation is 3,222,007 that the said change(s)
and amendments have been consented to and approved by a majority vote of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote thereon.
State of ___________________________ Provident Trust Ltd.
ss.
County of _________________________ Sachbearbeiter 19 JAN 1998
49
<PAGE>
ARTICLES OF INCORPORATION
OF
LYON MOUNTAIN, INC.
THE UNDERSINGED person, acting as incorporators under applicable provisions of
the Nevada Business Corporation Act, does hereby adopt the following Articles of
Incorporation for said corporation.
ARTICLE I
NAME
The name of the corporation is LYON MOUNTAIN, INC.
ARTICLE II
DURATION
The duration of the corporation is perpetual.
ARTICLE III
PURPOSES
The specific purpose for which the corporation is organized is to evaluate
privately held companies whose primary business is the manufacturing, marketing
and distribution of recreational products for leisure and sports with an
emphasis on snowboards and inline skates.
(a) To engage in any and all activities as may be reasonably related to the
foregoing and following purposes.
(b) To enter into leases, contracts and agreements, to open bank accounts
and to conduct financial transactions.
(c) To engage in any and all other lawful purposes, activities and
pursuits, which are substantially similar to the foregoing, or which would
contribute to accomplishment of the expressed purposes of the corporation.
(d) To change its primary business purpose from time to time as may be
deemed advisable by the Board of Directors.
(e) To engage in any other lawful business authorized by the laws of Nevada
or any other state or other jurisdiction in which the corporation may be
authorized to do business.
ARTICLE IV
CAPITAL
The corporation shall have authority to issue Fifty Million (50,000,000) common
shares, one mil (.001) par value. There shall be only one class of authorized
shares, to wit: common voting stock. The common stock shall have unlimited
voting rights provided in the Nevada Business Corporation Act. None of the
shares of the corporation shall carry with them the pre-emptive right to acquire
additional or other shares of the corporation. There shall be no cumulative
voting of shares.
ARTICLE V
INDEMNIFICATION AND NUMBER OF DIRECTORS
No shareholders or directors of the corporation shall be individually liable for
the debts of the corporation or for monetary damages arising from the conduct of
the corporation. The corporation shall consist of no less than two (2) officers
and directors and no more than seven (7) officers and directors.
ARTICLE VI
BY-LAWS
Provisions for the regulation of the internal affairs of the corporation not
provided for in these Articles of Incorporation shall be set forth in the
By-laws.
ARTICLE VII
RESIDENT OFFICE AND AGENT
The address of the corporation's initial resident office shall be 3230 East
Flamingo Road, Suite 156, Las Vegas, NV 89121. The corporation's initial
registered agent at such address shall be Gateway Enterprises, Inc. I hereby
acknowledge and accept appointment as corporation registered agent: Gateway
Enterprises, Inc.
By: /s/ Daniel Lezak
ARTICLE VIII
INCORPORATORS
The identity and address of the incorporators are:
Georgios Stolte (President)
HebbelstraBe 16
40237 Dusseldorf
Federal Republic of Germany
York Chandler (Secretary/Treasurer)
935 East Northcliff
Salt Lake City, Utah 84103
The aforesaid incorporators shall be the initial Directors of the corporation
and shall act
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as such until the coporation shall have conducted its
organizational meetign or until one or more succesors shall have been elected
and accepted their election as directors of the corporation.
/s/ Gerogios Stolte
Gerogios Stolte
/s/ York Chandler
York Chandler
IN WITNESS WHEREOF, Georgios Stolte and York Chandler, have executed these
Articles of Incorporation in duplicate this 12th day of November, 1996, and say:
That we are the incorporation herein; that we have read the above foregoing
Articles of Incorporation; that I know the contents thereof and that the same is
true to the best of our knowledge and belief, excepting as to matters herein
alleged on information and belief, and as to those matters we believe them to be
true.
/s/ Gerogios Stolte
Gerogios Stolte
/s/ York Chandler
York Chandler
((Notary Stamp))
/s/ Notary Signature
State of Utah)
ss
County of Salt Lake)
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Subscribed and sworn before me this 10th day of Februrary, 1997 by Georgios
Stolte and York Chandler
/s/ Lane Clissold
Notary Public
((Notary Seal))
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BYLAWS
OF
HOLTER TECHNOLOGIES HOLDINGS, AG
A Nevada Corporation
ARTICLE 1
Offices
Section 1. The registered office of this corporation shall be in the County of
Clark, State of Nevada.
Section 2. The corporation may also have offices at such other places both
within and without the State of Nevada as the Board of Directors may from
time to time determine or the business of the corporation may require.
ARTICLE 2
Meetings of Stockholders
Section 1. All annual meetings of the stockholders shall be held at the
registered office of the corporation or at such other place within or
without the State of Nevada as the Directors shall determine. Special
meetings of the stockholders may be held at such time and place within or
without the State of Nevada as shall be stated in the notice of the
meeting, or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of the stockholders, commencing with the year 1999
shall be held on the 2nd of April, each year if not a legal holiday and, if
a legal holiday, then on the next secular day following, or at such other
time as may be set by the Board of Directors from time to time, at which
the stockholders shall elect by vote a Board of Directors and transact such
other business as may properly be brought before the meeting.
Section 3. Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute or by the Articles of Incorporation,
may be called by the President or the Secretary by resolution of the Board
of Directors or at the request in writing of stockholders owning a majority
in amount of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Such request shall state the purpose of
the proposed meeting.
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Section 4. Notices of meetings shall be in writing and signed by the President
or Vice-President or the Secretary or an Assistant Secretary or by such
other person or persons as the Directors shall designate. Such notice shall
state the purpose or purposes for which the meeting is called and the time
and the place, which may be within or without this State, where it is to be
held. A copy of such notice shall be either delivered personally to or
shall be mailed, postage prepaid, to each stockholder of record entitled to
vote at such meeting not less than ten nor more than sixty days before such
meeting. If mailed, it shall be directed to a stockholder at his address as
it appears upon the records of the corporation and upon such mailing of any
such notice, the service thereof shall be complete and the time of the
notice shall begin to run from the date upon which such notice is deposited
in the mail for transmission to such stockholder. Personal delivery of any
such notice to any officer of a corporation or association, or to any
member of a partnership shall constitute delivery of such notice to such
corporation, association or partnership. In the event of the transfer of
stock after delivery of such notice of and prior to the holding of the
meeting it shall not be necessary to deliver or mail notice of the meeting
to the transferee.
Section 5. Business transacted at any special meeting of stockholders shall be
limited to the purposes stated in the notice.
Section 6. The holders of a 10% of the stock issued and outstanding and entitled
to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction
of business except as otherwise provided by statute or by the Articles of
Incorporation. If, however, such quorum shall not be present or represented
at any meeting of the stockholders, the stockholders entitled to vote there
at, present in person or represented by proxy, shall have power to adjourn
the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting
as originally notified. The Company may have more than one shareholder.
Section 7. When a quorum is present or represented at any meeting, the vote of
the holders of a 10% of the stock having voting power present in person or
represented by proxy shall be sufficient to elect directors or to decide
any question brought before such meeting, unless the question is one upon
which by express provision of the statutes or of the Articles of
Incorporation, a different vote shall govern and control the decision of
such question.
Section 8. Each stockholder of record of the corporation shall be entitled at
each meeting of stockholders to one vote for each share of stock standing
in his name of the books of the corporation. Upon the demand of any
stockholder, the vote for Directors and the vote upon any question before
the meeting shall be by ballot.
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Section 9. At any meeting of the stockholders any stockholder may be represented
and vote by a proxy or proxies appointed by an instrument in writing. In
the event that any such instrument in writing shall designate two or more
persons to act as proxies, a majority of such persons present at the
meeting, or, if only one shall be present, then that one shall have and may
exercise all of the powers conferred by such written instrument upon all of
the persons so designated unless the instrument shall otherwise provide. No
proxy or power of attorney to vote shall be used to vote at a meeting of
the stockholders unless it shall have been filed with the secretary of the
meeting when required by the inspectors of election. All questions
regarding the qualifications of voters, the validity of proxies and the
acceptance of or rejection of votes shall be decided by the inspectors of
election who shall be appointed by the Board of Directors, or if not so
appointed, then by the presiding officer of the meeting.
Section 10. Any action which may be taken by the vote of the stockholders at a
meeting may be taken without a meeting if authorised by the written consent
of stockholders holding at least a majority of the voting power, unless the
provisions of the statutes or of the Articles of Incorporation require a
greater proportion of voting power to authorise such action in which case
such greater proportion of written consents shall be required.
ARTICLE 3
Directors
Section 1. The business of the corporation shall be managed by it's Board of
Directors which may exercise all such powers of the corporation and do all
such lawful acts and things as are not by statute or by the Articles of
Incorporation or by these Bylaws directed or required to be exercised or
done by the stockholders.
Section 2. The number of Directors which shall constitute the whole board shall
be One. The number of Directors may from time to time be increased or
decreased to not less than one nor more than fifteen by action of the Board
of Directors. The Directors shall be elected at the annual meeting of the
stockholders and except as provided in section 2 of this Article, each
Director elected shall hold office until his successor is elected and
qualified. Directors need not be stockholders.
Section 3. Vacancies in the Board of Directors including those caused by an
increase in the number of directors, may be filled by a majority of the
remaining Directors, though less than a quorum, or by a sole remaining
Director, and each Director so elected shall hold office until his
successor is elected at an annual or a special meeting of the stockholders.
The holders of a two-thirds of the outstanding shares of stock entitled to
vote may at any time peremptorily terminate the term of office of all or
any of the Directors by vote at a meeting called for such purpose or by a
written statement filed with the secretary or , in his absence, with any
other officer. Such removal shall be effective immediately, even if
successors are not elected simultaneously and the vacancies on the Board of
Directors resulting therefrom shall only be filled from the stockholders.
A vacancy or vacancies in the Board of Directors shall be deemed to exist
in case of the death, resignation or removal of any Directors, or if the
authorised number of Directors be increased, or if the stockholders fail at
any annual or special meeting of stockholders at which any Director or
Directors are elected to elect the full authorised number of Directors to
be voted for at that meeting.
The stockholders may elect a Director or Directors at any time to fill any
vacancy or vacancies not filled by the Directors. If the Board of Directors
accepts the resignation of a Director tendered to take effect at a future
time, the Board or the stockholders shall have power to elect a successor
to take office when the resignation is to become effective.
No reduction of the authorised number of Directors shall have the effect of
removing any Director prior to the expiration of his term of office.
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ARTICLE 4
Meetings of the Board of Directors
Section 1. Regular meetings of the Board of Directors shall be held at any place
within or without the State which has been designated from time to time by
resolution of the Board or by written consent of all members of the Board.
In the absence of such designation regular meeting shall be held at the
registered office of the corporation. Special meetings of the Board may be
held either at a place so designated or at the registered office.
Section 2. The first meeting of each newly elected Board of Directors shall be
held immediately following the adjournment of the meeting of stockholders
and at the place thereof. No notice of such meeting shall be necessary to
the directors in order legally to constitute the meeting, provided a quorum
be present. In the event such meeting is not so held, the meeting may be
held at such time and place as shall be specified in a notice given
hereinafter provided for special meetings of the Board of Directors.
Section 3. Regular meetings of the Board of Directors may be held without call
or notice at such time and at such place as shall from time to time be
fixed and determined by the Board of Directors.
Section 4. Special meetings of the Board of Directors may be called by the
Chairman or the President or by the Vice-President or by any two directors.
Written notice of the time and place of special meetings shall be delivered
personally to each director, or sent to each director by mail or by other
form of written communication, charges prepaid, addressed to him at his
address as it is shown upon the records or if not readily ascertainable, at
the place in which the meetings of the directors are regularly held. In
case such notice is mailed or telegraphed, it shall be deposited in the
United States mail or delivered to the telegraph company at least
forty-eight (48) hours prior to the time of the holding of the meeting. In
case such notice is delivered as above provided, it shall be so delivered
at least twenty-four (24) hours prior to the time of the holding of the
meeting. Such mailing, telegraphing or delivery as above provided shall be
due, legal and personal notice to such director.
Section 5. Notice of the time and place of holding an adjourned meeting need not
be given to the absent directors if the time and place be fixed at the
meeting adjourned.
Section 6. The transaction of any meeting of the Board of Directors, however
called and noticed or wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice, if a quorum be present,
and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice, or a consent to holding such
meeting, or approvals of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
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Section 7. A majority of the authorised number of directors shall be necessary
to constitute a quorum for the transaction of business, except to adjourn
as hereinafter provided. Every act or decision done or made by a majority
of the directors present at a meeting duly held at which a quorum is
present shall be regarded as the act of the Board of Directors, unless a
greater number be required by law or by the Articles of Incorporation. Any
action of a majority, although not at a regularly called meeting, and the
record thereof, if assented to in writing by all of the other members of
the Board shall be as valid and effective in all respects as if passed by
the Board in regular meeting. In the event of a tie vote on any matter, the
Chairman of the Board shall cast the deciding vote.
Section 8. A quorum of the directors may adjourn any directors meeting to meet
again at stated day and hour; provided, however, that in the absence of a
quorum, a majority of the directors present at any directors meeting,
either regular or special, may adjourn from time to time until the time
fixed for the next regular meeting of the Board.
ARTICLE 5
Committees of Directors
Section 1. The Board of Directors may, by resolution adopted by a majority of
the whole Board, designate one or more committees of the Board of
Directors, each committee to consist of two or more of the directors of the
corporation which, to the extent provided in the resolution, shall and may
exercise the power of the Board of Directors in the management of the
business and affairs of the corporation and may have power to authorise the
seal of the corporation to be affixed to all papers which may require it.
Such committee or committees shall have such name or names as may be
determined from time to time by the Board of Directors. The members of any
such committee present at any meeting and not disqualified from voting may,
whether or not they constitute a quorum, unanimously appoint another member
of the Board of Directors to act at the meeting in the place of any absent
or disqualified member. At meetings of such committees, a majority of the
members or alternate members at any meeting at which there is a quorum
shall be the act of the committee.
Section 2. The committee shall keep regular minutes of their proceedings and
report the same to the Board of Directors.
Section 3. Any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a
meeting if a written consent thereto is signed by all members of the Board
of Directors or of such committee, as the case may be, and such written
consent is filed with the minutes of proceedings of the Board or committee.
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ARTICLE 6
Compensation of Directors
Section 1. The directors may be paid their expenses of attendance at each
meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like reimbursement
and compensation for attending committee meetings.
ARTICLE 7
Notices
Section 1. Notices to directors and stockholders shall be in writing and
delivered personally or mailed to the directors or stockholders at their
addresses appearing on the books of the corporation. Notice by mail shall
be deemed to be given at the time when the same shall be mailed. Notice to
directors may also be given by telegram.
Section 2. Whenever all parties entitled to vote at any meeting, whether of
directors or stockholders, consent, either by a writing on the records of
the meeting or filed with the secretary, or by presence at such meeting and
oral consent entered on the minutes, or by taking part in the deliberations
at such meeting without objection, the doings of such meeting shall be as
valid as if had at a meeting regularly called and noticed, and at such
meeting any business may be transacted which is not excepted from the
written consent to the consideration of which no object for want of notice
is made at the time, and if any meeting be irregular for want of notice or
of such consent, provided a quorum was present at such meeting, the
proceedings of said meeting may be ratified and approved and rendered
likewise valid and the irregularity or defect therein waived by a writing
signed by all parties having the right to vote at such meeting; and such
consent or approval of stockholders may be by proxy or attorney, but all
such proxies and powers of attorney must be in writing.
Section 3. Whenever any notice whatever is required to be given under the
provisions of the statutes, of the Articles of Incorporation or of these
Bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein,
shall be deemed equivalent thereto.
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ARTICLE 8
Officers
Section 1. The officers of the corporation shall be chosen by the Board of
Directors and shall be a President, a Secretary and a Treasurer. Any person
may hold two or more officers.
Section 2. The Board of Directors at it's first meeting after each annual
meeting of stockholders shall choose a Chairman of the Board who shall be a
director, and shall choose a President, a Secretary and a Treasurer, none
of whom need be directors.
Section 3. The Board of Directors may appoint a Vice-Chairman of the Board,
Vice-Presidents and one or more Assistant Secretaries and Assistant
Treasurers and such other officers and agents as it shall deem necessary
who shall hold their offices for such terms and shall exercise such powers
and perform such duties as shall be determined from time to time by the
Board of Directors.
Section 4. The salaries and compensation of all officers of the corporation
shall be fixed by the Board of Directors.
Section 5. The officers of the corporation shall hold office at the pleasure of
the Board of Directors. Any officer elected or appointed by the Board of
Directors may be removed any time by the Board of Directors. Any vacancy
occurring in any office of the corporation by death, resignation, removal
or otherwise shall be filled by the Board of Directors.
Section 6. The Chairman of the Board shall, preside at meetings of the
stockholders and the Board of Directors, and shall see that all orders and
resolutions of the Board of Directors are carried into effect.
Section 7. The Vice-Chairman shall, in the absence or disability of the Chairman
of the Board, perform the duties and exercise the powers of the Chairman of
the Board and shall perform other such duties as the Board of Directors may
from time to time prescribe.
Section 8. The President shall be the chief executive officer of the corporation
and shall have active management of the business of the corporation. He
shall execute on behalf of the corporation all instruments requiring such
execution except to the extent the signing and execution thereof shall be
expressly designated by the Board of Directors to some other officer or
agent of the corporation.
Section 9. The Vice-President shall act under the direction of the President and
in the absence or disability of the President shall perform the duties and
exercise the powers of the President. They shall perform such other duties
and have such other powers as the President or the Board of Directors may
from time to time prescribe. The Board of Directors may designate one or
more Executive Vice-Presidents or may otherwise specify the order of
seniority of the Vice Presidents. The duties and powers of the President
shall descend to the Vice-Presidents in such specified order of seniority.
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Section 10. The Secretary shall act under the direction of the President.
Subject to the direction of the President he shall attend all meetings of
the Board of Directors and all meetings of the stockholders and record the
proceedings. He shall perform like duties for the standing committees when
required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the Board of Directors, and will
perform other such duties as may be prescribed by the President or the
Board of Directors.
Section 11. The Assistant Secretaries shall act under the direction of the
President. In order of their seniority, unless otherwise determined by the
President or the Board of Directors, they shall, in the absence or
disability of the Secretary, perform the duties and exercise the powers of
the Secretary. They shall perform other such duties and have such other
powers as the President or the Board of Directors may from time to time
prescribe.
Section 12. The Treasurer shall act under the direction of the President.
Subject to the direction of the President he shall have custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all monies and other valuable effects in the name and to the credit
of the corporation in such depositories as may be designated by the Board
of Directors. He shall disburse the funds of the corporation as may be
ordered by the President or the Board of Directors, taking proper vouchers
for such disbursements, and shall render to the President and the Board of
Directors, at it's regular meetings, or when the Board of Directors so
requires, an account of all his transactions as Treasurer and of the
financial condition of the corporation.
Section 13. If required by the Board of Directors, he shall give the corporation
a bond in such sum and with such surety as shall be satisfactory to the
Board of Directors for the faithful performance of the duties of his office
and for the restoration to the corporation, in case of his death,
resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or
under his control belonging to the corporation.
Section 14. The Assistant Treasurer in the order of their seniority, unless
other wise determined by the President or the Board of Directors, shall, in
the absence or disability of the Treasurer, perform the duties and exercise
the powers of the Treasurer. They shall perform such other duties and have
such other powers as the President or the Board of Directors may from time
to time prescribe.
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ARTICLE 9
Certificates of Stock
Section 1. Every stockholder shall be entitled to have a certificate signed by
the President or a Vice-President and the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the corporation,
certifying the number of shares owned by him in the corporation. If the
corporation shall be authorised to issue more than one class of stock or
more than one series of any class, the designations, preferences and
relative, participating, optional or other special rights of the various
classes of stock or series thereof and the qualifications, limitations or
restrictions of such rights, shall be set forth in full or summarised on
the face or back of the certificate which the corporation shall issue to
represent such stock.
Section 2. If a certificate is signed (a) by a transfer agent other than the
corporation or it's employees or (b) by a registrar other than the
corporation or it's employees, the signatures of the officers of the
corporation may be facsimiles. In case any officer who has signed or whose
facsimile signature has been placed upon a certificate shall cease to be
such officer before such certificate is issued, such certificate may be
issued with the same effect as though the person had not ceased to be such
officer. The seal of the corporation, or a facsimile thereof, may, but need
not be, affixed to certificates of stock.
Section 3. The Board of Directors may direct a new certificate or certificates
to be issued in place of any certificate or certificates theretofore issued
by the corporation alleged to have been lost or destroyed upon the making
of an affidavit of that fact by the person claiming the certificate of
stock to be lost or destroyed. When authorising such issue of a new
certificate or certificates, the Board of Directors may, in it's discretion
and as a condition precedent to the issuance thereof, require the owner of
such lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require
and/or give the corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost or destroyed.
Section 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it
shall be the duty of the corporation, if it is satisfied that all
provisions of the laws and regulations applicable to the corporation
regarding transfer and ownership of shares have been complied with, to
issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon it's books.
Section 5. The Board of Directors may fix in advance a date not exceeding sixty
(60) days nor less than ten (10) days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the date for
the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection
with obtaining the consent of stockholders for any purpose, as a record
date for the termination of the stockholders entitled to notice of and to
vote at any such meeting, and any adjournment thereof, or entitled to
receive payment of any such dividend, or to give such consent, and in such
case, such stockholders, and only such stockholders as shall be
stockholders of record on the date so fixed, shall be entitled to notice of
and to vote at such meeting, or any adjournment thereof, or to receive such
payment of dividend, or to receive such allotment of rights, or to exercise
such rights, or to give such consent, as the case may be, notwithstanding
any transfer of any stock on the books of the corporation after any such
record date fixed as aforesaid.
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Section 6. The corporation shall be entitled to recognise the person registered
on it's books as the owner of shares to be the exclusive owner for all
purposes including voting and dividends, and the corporation shall not be
bound to recognise any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by the
laws of Nevada.
ARTICLE 10
General Provisions
Section 1. Dividends upon the capital stock of the corporation, subject to the
provisions of the Articles of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property or in shares of the capital
stock, subject to the provisions of the Articles of Incorporation.
Section 2. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as
a reserve or reserves to meet contingencies, or for equalising dividends or
for repairing or maintaining any property of the corporation or for such
other purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.
Section 3. All checks or demands for money and notes of the corporation shall be
signed by such officer or officers or such other person or persons as the
Board of Directors may from time to time designate.
Section 4. The fiscal year of the corporation shall be fixed by resolution of
the Board of Directors.
Section 5. The corporation may or may not have a corporate seal, as may be from
time to time be determined by resolution of the Board of Directors. If a
corporate seal is adopted, it shall have inscribed thereon the name of the
corporation and the words "Corporate Seal" and "Nevada". The seal may be
used by causing it or a facsimile thereof to be impressed or affixed or in
any manner reproduced.
ARTICLE 11
Indemnification
Every person who was or is a party or is a threatened to be made a party to or
is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or a person of
whom he is the legal representative is or was a director or officer of the
corporation or is or was serving at the request of the corporation or for it's
benefit as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest extent legally permissible under
General Corporation Law of the State of Nevada time to time against all
expenses, liability and loss (including attorney's fees, judgements, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in connection therewith. The expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. Such right of indemnification shall be a contract right which may
be enforced in any manner desired by such person. Such right of indemnification
shall not be exclusive of any other right which such directors, officers or
representatives may have or hereafter acquire and, without limiting the
generality of such statement, they shall be entitled to their respective rights
of indemnification under any bylaw, agreement, vote of stockholders, provision
of law or otherwise, as well as their rights under this Article.
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The Board of Directors may cause the corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, or as it's representative in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the corporation would have the power to indemnify
such person.
The Board of Directors may from time to time adopt further Bylaws with respect
to indemnification and amend these and such Bylaws to provide at all times the
fullest indemnification permitted by the General Corporation Law of the State of
Nevada.
ARTICLE 12
Amendments
Section 1. The Bylaws may be amended by a majority vote of all the stock issued
and outstanding and entitled to vote at any annual or special meeting of
the stockholders, provided notice of intention to amend shall have been
contained in the notice of the meeting.
Section 2. The Board of Directors by a majority vote of the whole Board at any
meeting may amend these Bylaws, including Bylaws adopted by the
stockholders, but the stockholders may from time to time specify particular
provisions of the Bylaws which shall not be amended by the Board of
Directors.
APPROVED AND ADOPTED this 29th day of September, 1999
/s/Daniel Lezak
Daniel Lezak, Secretary
63
<PAGE>
Notary's Document Register No. 116/1999
Doc. no. 02029011 Hi
((Certified photocopy))
((State Insignia))
Recorded
In Gladbeck/Westphalia on 26th February 1999
The following persons appeared today
Before the undersigned, the Notary Public
HUBERT GOVERT
Gladbeck (Westphalia)
who, at the request of the persons appearing before him, went to the offices at
Beisenstrasse 39-41, 45964 Gladbeck
Prof. Dr. Sc. Dr. Ing. Heinrich Holter, Beisenstrasse 39-41, 45964 Gladbeck
Mr. Georgios Stolte, Durerstrasse 25, 41466 Neuss, acting not on his own behalf
but rather in the capacity of Director of Holter Technologies Holding AG
(formerly Falken Investment AG) - hereinafter called "HTH", a Nevada Corporation
having its registered office at 23548 Calabasas Road, Suite 205, Calabasas,
California, 91302.
64
<PAGE>
Person 1. Is personally known to the Notary Public.
Person 2. Proved his identity by the presentation of his valid identity card.
The Notary Public asked whether there had been any prior involvement of the
Notary Public or his partner(s) in the affairs of the persons appearing as
defined at ss. 3 Para. 1 No. 7 of the Beurkundungsgesetz [Notarial Recording
Act] and explained the content thereof. The persons concerned confirmed there
had been no such prior involvement.
The persons appearing then declared that:
1.
Person 1. is the sole member and Geschaftsfuhrer [Managing Director], being
exempt from the restrictions of ss. 181 of the German Civil Code (BGB), of
Holter Sachsen DENATEC Gesellschaft mit beschrankter Haftung [limited liability
company], of Radebeul, Saxony
hereinafter called HSD -
entered in the Commercial Register under the number HR B 15866.
He has granted HSD the exclusive rights to exploit his own inventions and
embodiments of denaturing heat exchangers and electrostatic filters having a
denaturing collector electrode.
It is the intention of the parties that all shares in HSD, now furnished with
these licenses, shall be transferred to HTH in return for the issue of shares in
the Common Stock of HTH. The former Falken Investment AG has been renamed Holter
Technologies Holding AG. However, this change of name has yet to be entered in
the Commercial Register. On assignment of the HSD shares HTH is to issue
additional common shares by way of a private placement. The proceeds from this
issue are to be used through HSD for the further development of the
aforementioned technologies tot he production stage and the subsequent marketing
thereof. Third parties having funded research and development work are to be
reimbursed by way of license payments.
- 2 -
65
<PAGE>
2.
To this end the persons appearing agree the following:
2.1
Person 1. Undertakes to transfer all the shared in HSD to HTH AG.
2.2
Person 1. Herewith assigns all the shares in HSD to HTH AG.
2.3
HTH accepts the assignment of the shares in HSD.
2.4
In consideration for the above HTH undertakes to issue 26,000,000 (twenty-six
million) common shares to Person 1., who thus owns 75% of the voting stock.
These shares represent restricted securities in accordance with Rule 144 of the
USA Securities Act of 1933.
2.5
The persons appearing warrant only the legal validity of the shares transferred
and the common shares issued in each case; they do not guarantee and economic
value of the holdings or the associated corporations in any shape or form.
2.6
The common shares shall be issued to Person 1. according to the special
resolution agreed by the Directors of HTH.
3.
In his capacity of Managing Director of HSD Person 1. Agrees to the assignment
of the shares to HTH.
- 3 -
66
<PAGE>
4.
The costs of this Agreement shall be borne internally by HTH, represented by
Person 2.
The value of this Agreement is put at DM 100,000.
The above record of the proceedings was read to the persons appearing, who then
approved and signed it in their own hand as follows:
((Signatures of both parties plus the Notary Public))
67
<PAGE>
((Seal))
((Stamp)): I hereby certify that the wording of this photocopy is identical to
that of the original document. Gladbeck, February 26th 1999.
((Signature))
Notary Public
68
<PAGE>
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