readen holdings corp.

Transcription

ANNUAL REPORT
PURSUANT TO
RULE 15C2-11(a)(5)
As of June 30, 2012
READEN HOLDING CORP.
Gijsbrecht van Amstelstraat
423A 1216CA
Hilversum,
The Netherlands
Telephone: +31(0)35 6299970
Federal Employer’s I.D. No. 06-1519079
CUSIP No. 755255 106
ISSUER’S EQUITY SECURITIES AUTHORIZED AS OF JUNE 30, 2012:
295,000,000 shares of common stock authorized, $.001 par value per share
5,000,000 shares of preferred stock authorized, $.001 par value per share
SHARES OF CAPITAL STOCK OUTSTANDING ON JUNE 30, 2012:
150,267,074 shares of common stock
766,667 shares of Series B Preferred Stock
We previously were a shell Company, therefore, the exemption offered pursuant to Rule 144 is not available.
Anyone who purchased securities directly or indirectly from us or any of our affiliates in a transaction or chain
of transactions not involving a public offering cannot sell such securities in an open market transaction.
September 26, 2012
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ANNUAL REPORT
AS OF JUNE 30, 2012
All information contained in this Initial Information and Disclosure Statement has been compiled to fulfill the
disclosure requirements of Rule 15c2-11(a)(5) promulgated by the Securities Exchange Act of 1934, as amended. The
enumerated items and captions contained herein correspond to the format set forth in the Rule.
PART A:
GENERAL COMPANY INFORMATION
Item I.
The exact name of the issuer and its predecessors (if any).
Our name is Readen Holding Corp., a Nevada corporation. We were originally incorporated in the state of
Idaho under the name of “Beacon Light Mining Company” in 1953. In 1997, we created a wholly-owned subsidiary
with the same name in the state of Nevada. We then merged into the Nevada subsidiary and became a Nevada
corporation. We were reincorporated in Nevada on November 19, 1997, under the name “Beacon Light Mining
Company.” On February 18, 1998, we changed our name to “Beacon Light Holding Corporation.” On August 3, 2001,
we changed our name to Wellux International, Inc. and operated under that name until May 5, 2005, when we changed
our name to Readen Holding Corp.
Item II.
The address of the issuer’s principal executive offices.
Our principal executive offices are located at:
Gijsbrecht van Amstelstraat
423A 1216CA
Hilversum,
The Netherlands
Telephone: +31(0)35 6299970
URLs: www.readeneurope.com
www.D5avenue.com
Item III.
The jurisdiction(s) and date of issuer’s incorporation or organization:
Readen Holding Corp. was reincorporated in the State of Nevada on November 19, 1997, under the name
“Beacon Light Mining Company” and underwent names changes to what is now “Readen Holding Corp.” and will be
referred to herein sometimes as “Issuer,” “Company” or “Readen Holding.”
PART B:
SHARE STRUCTURE
Item IV.
The exact title and class of securities outstanding
Common Stock:
CUSIP: 755255 106
Trading Symbol: RHCO
Series B Preferred Stock
CUSIP: None
Trading Symbol: None
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Item V.
Par or stated value and description of the security.
A.
Par Value:
Common Stock, $.001 par value per share
Series B Convertible Preferred Stock, $.001 par value per share
B.
Common and Preferred Stock:
Currently, the Company is authorized by its Articles of Incorporation (as amended) to issue an
aggregate of 295,000,000 shares of Common Stock ($.001 par value per share) and 5,000,000 shares
of Preferred Stock ($.001 par value per share). As of the date of this filing, there were 766,667 shares
of Series B Convertible Preferred Stock issued and outstanding. As of the date of this filing, there
were 150,267,074 shares of Common Stock outstanding. The Company does not have any other
shares outstanding. The following description of our class of outstanding securities is a summary and
is qualified in its entirety by the provisions of the Company’s Articles of Incorporation (as amended),
Certificates of Designation and Bylaws.
Common Stock
The holders of our common stock:




have equal ratable rights to dividends from funds legally available for payment of dividends when,
as and if declared by the board of the directors;
are entitled to share ratably in all of the assets available for distribution to holders of common
stock (after any distributions due the holders of our Preferred Stock) upon liquidation, dissolution
or winding up our affairs;
do not have preemptive, subscription or conversion rights, or redemption rights or access to any
sinking fund; and
are entitled to one non-cumulative vote per share on all matters submitted to shareholders for a
vote at any meeting of shareholders.
Preferred Stock
We are authorized to issue up to 5,000,000 shares of Preferred Stock with designations, rights and
preferences determined from time to time by our Board of Directors. Accordingly, our Board of Directors is
empowered, without shareholder approval, to issue Preferred Stock with dividend, liquidation, conversion,
voting or other rights that could adversely affect the voting power or other rights of the holders of our Common
Stock. In the event of issuance, the Preferred Stock could be used under certain circumstances as a method of
discouraging, delaying, thwarting or preventing a change of control of the Company.
Series B Convertible Preferred Stock
On or about November 15, 1999, the Company designated 5,000,000 shares of Preferred Stock as
“Series B Convertible Preferred Stock” and on November 18, 1999, the Company issued 766,667 shares of
Series B Preferred Stock.
Each share of Series B Convertible Preferred Stock has (i) a liquidation preference of $.15 per share;
(ii) a right to receive annual dividends of 8.5% of the stated value of $.15 per share; and (iii) the right to
convert into one share of Common Stock. The Series B Convertible Preferred Stock has no voting rights.
Although we have no present intention to create another series of Preferred Stock or issue any other
shares in our authorized series of Preferred Stock, there can be no assurance that the Company will not do so in
the future.
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C.
Describe any other material rights of common or preferred stockholders.
None, except as disclosed above under the caption “Series B Convertible Preferred Stock.”
Item VI.
The number of shares or total amount of the securities outstanding for each class of securities
authorized:
The following table provides the information for each class of securities authorized (i) as of the end of
the Company’s most recent fiscal quarter and (ii) as of the end of the Company’s last two fiscal years.
Class of Stock
Fiscal Year Ended
June 30, 2012
Fiscal Year Ended
June 30, 2011
Common Stock:
Number of Shares Authorized: (1)
Number of Shares Outstanding
Freely Tradable Shares (public float):
Total Number of Beneficial Share Holders:
Total Number of Shareholders of Record:
295,000,000
150,267,074
26,653,922
Unknown
673
45,000,000
26,653,922
26,653,922
Unknown
673
Series B Convertible Preferred Stock
Number of Shares Authorized:
Number of Shares Outstanding
Freely Tradable Shares (public float):
Total Number of Beneficial Share Holders:
Total Number of Shareholders of Record:
5,000,000
766,667
0
1
1
5,000,000
766,667
0
1
1
(1) As of June 30, 2011, we had 45,000,000 shares of Common Stock authorized and 5,000,000 shares of Preferred Stock authorized. In July 2011,
we amended our Articles of Incorporation to increase the total number of authorized shares of Common Stock to 295,000,000 and kept the total
number of authorized shares of Preferred Stock at 5,000,000.
PART C
BUSINESS INFORMATION
Item VII.
The name and address of the Company’s transfer agent is:
Jersey Transfer & Trust Co.
201 Bloomfield Avenue
Verona, New Jersey 07044
Telephone: (973) 239-2712
http://jerseytransfer.com
Our transfer agent confirmed to us that it is registered with the Securities and Exchange Commission.
Item VIII.
The nature of the issuer’s business.
A.
Business Development
1. and 2. Form of Organization and Year of Organization
Our name is Readen Holding Corp., a Nevada corporation. We were originally incorporated in the state of
Idaho under the name of “Beacon Light Mining Company” in 1953. In 1997, we created a wholly-owned subsidiary
with the same name in the state of Nevada. We then merged into the Nevada subsidiary and became a Nevada
corporation. We were reincorporated in Nevada on November 19, 1997, under the name “Beacon Light Mining
Company.” On February 18, 1998, we changed our name to “Beacon Light Holding Corporation.” On August 3, 2001,
we changed our name to Wellux International, Inc. and operated under that name until May 5, 2005, when we changed
our name to Readen Holding Corp.
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3. Fiscal Year End Date
Our fiscal year end date is June 30.
4. Involvement in Bankruptcy or Receivership Proceedings.
The Company has not been involved in a bankruptcy or receivership proceeding.
5. Material Classifications, Mergers, Consolidations or Purchases or Sales of a Significant Amount of Assets
We were a party to a merger described in answer to Item VIII. A. 1. and 2. above. We also acquired Readen
Industries Ltd. on July 25, 2011.
6. Defaults of the Terms of Any Note, Loan, Lease or Other Indebtedness or Financing Arrangement requiring
the Company to Make Payments
The Company is not aware of any default of the terms of any note, loan, lease or other indebtedness or
financing arrangement requiring the Company to make payments.
7. Change of Control
On June 17, 2011, the Company underwent a change of control when it elected its new officers and its director
and shareholders authorized (i) the issuance of a substantial number (12,703,152) of shares to G. R Steenbergen due to
him for accrued, but unpaid, dividends and interest due him as the holder of 766,667 shares of our Series B Preferred
Stock; and (ii) approved the acquisition of Readen Holding Ltd. in which Mr. Steenbergen and his wife held a
substantial interest. As a result of these transactions, which increased his holdings in the Company, G.R. Steenbergen is
the beneficial owner of 39,703,152 or 26.6% of the Company’s issued and outstanding shares of Common stock. In
addition, Mr. Steenbergen is the owner of 766,667 shares of our Series B Convertible Preferred Stock.
8. Increases of 10% or More of the Same Class of Outstanding Equity Securities
As discussed under “Change of Control,” above, the Company issued 100,000,000 shares of Common Stock on
July 25, 2011, to a total of 14 shareholders pursuant to a Share Exchange Agreement when the Company acquired 100%
of Readen Industries Ltd., a company organized under the laws of Hong Kong, Peoples Republic of China; (ii) the
Company issued 12,703,152 shares to G. R. Steenbergen as dividend and interest due on his 766,667 shares of Series B
Preferred Stock; and (iii) the Company issued 1,400,000 shares of Common Stock as compensation to its management.
9. Past, Pending or Anticipated Stock Splits, Stock Dividends, Recapitalizations, Mergers, Acquisitions, Spinoffs or Reorganizations.
Not applicable.
10.
Delisting of the Company’s Securities By Any Securities Exchange or Deletion from the OTC Bulletin
Board
Not applicable.
11. Current, Past, Pending or Threatened Legal Proceedings or Administrative Actions Either By or Against the
Company That Could Have a Material Effect on the Company’s Business, Financial Condition or Operations
and any Current, Past or Pending Suspensions by a Securities Regulator.
Not applicable.
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B.
Business of Issuer.
1. The Company’s Primary and Secondary SIC Codes
The Company’s primary SIC code is 4813 and does not have a secondary SIC code.
2. If the Issuer Has Never Conducted Operations, Is in the Development Stage or Is Currently Conducting
Operations
The Company is currently conducting operations.
3.
At least once since inception, the Company has been a “shell company” as defined by Securities Act Rule 405.
4. The Names of Any Parent, Subsidiary or Affiliate of the Issuer, and Its Business Purpose, its Method of
Operation, Its Ownership, and Whether It Is Included in the Financial Statements Attached to this Disclosure
Statement.
The organization chart below shows our affiliated companies with Readen Holding Corp. being the parent
company with varying levels of subsidiaries:
Readen Holding Corp.
(a Nevada corporation)
Parent Corporation
Readen Industries Ltd.
(a Hong Kong company)
Wholly-owned Subsidiary
Moho Telecom Ltd
(a Netherlands company)
100%
D5 Mobile SARL
(a French company)
51%
D5 Mobile BV
100%
D5 Avenue Ltd.
The financial numbers of the subsidiaries are included in the consolidated financial statements presented at the
end of this document. Our fiscal year ends presented are June 30, 2012 and 2011; our subsidiaries were acquired during
July 2011.
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The Effect of Existing or Probable Government Regulations on Our Business
Our business is subject to numerous governmental regulations that impact our business at the parent and
subsidiary levels. These regulations are discussed below.
Governmental Regulations That Impact Us at the Parent Level:
Section 15(g) of the Securities Exchange Act of 1934
Our shares are covered by Section 15(g) of the Securities Exchange Act of 1934 (“Exchange Acat”) and Rules
15g-1 through 15g-6 promulgated thereunder. They impose additional sales practice requirements on broker-dealers
who sell our securities to persons other that established customers and accredited investors (generally institutions with
assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouses).
Rule 15g-1 exempts a number of specific transactions from the scope of the penny stock rules (but is not
applicable to us).
Rule 15g-2 declares unlawful broker-dealer transactions in penny stocks unless the broker-dealer has first
provided to the customer a standardized disclosure document.
Rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a penny stock transaction unless the
broker-dealer first discloses and subsequently confirms to its customers current quotation prices or similar market
information concerning the penny stock in question.
Rule 15g-4 prohibits broker-dealers from completing penny stock transactions for a customer unless the
broker-dealer first discloses to the customer the amount of compensation or other remuneration received as a result of
the penny stock transaction.
Rule 15g-5 requires that a broker-dealer executing a penny stock transaction, other than one exempt under Rule
15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales person’s
compensation and the compensation of any associated person of the broker-dealer.
Rule 15g-6 requires broker-dealers selling penny stocks to provide their customers with monthly account
statements.
Rule 3a51-1 of the Exchange Act establishes the definition of a “penny stock” for purposes relevant to us, as
any equity security that has a minimum bid price of less than $5.00 per share, subject to a limited number of exceptions.
It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. For any
transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a
person’s account for transactions in penny stocks an the broker or dealer receive from the investor a written agreement
to the transaction setting forth the identity and quantity of the penny stock to be purchase.
In order to approve a person’s account for transactions in penny stocks, the broker or dealer must obtain
financial information and investment experience and objectives of the person and make a reasonable determination that
the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared
by the SEC relating to the penny stock market, which, in highlight form, sets forth:

the basis on which the broker or dealer made the suitability determination; and

that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in
secondary trading and commissions’ payable to both the broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock
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transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in
the account and information on the limited market in penny stocks.
The above-referenced requirements may create a lack of liquidity, making trading difficult or impossible, and
accordingly, shareholders may find it difficult to dispose of our shares.
6.
Research and Development Activities
During 2011 and 2012, and through the date of this Initial Disclosure Statement, the Company has not been
engaged in any research and development activities.
7.
Cost and Effects of Compliance with Environmental Laws
We have not incurred any material costs or realized and material effects related to compliance with
environmental laws.
8.
Employees
The Company and our subsidiary, and our subsidiary’s subsidiaries currently have nine full time and two part
time employees.
Item IX.
The nature of the products or services offered.
Introduction
Readen Holding Corp. is the parent company of Readen Industries Ltd., a company organized under the laws
of Hong Kong, PRC. Readen Holding Corp. is the management unit. Readen Industries Ltd. has additional subsidiaries
shown on the organization chart on the following page. These companies will oftentimes be referred to herein as the
Group” or “Group Companies.”
The organization chart below shows our affiliated companies with Readen Holding Corp. being the parent
company with varying levels of subsidiaries:
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Readen Holding Corp.
(a Nevada corporation)
Parent Corporation
Readen Industries Ltd.
(a Hong Kong company)
Wholly-owned Subsidiary
Moho Telecom Ltd
100%
D5 Mobile SARL
(a French company)
51%
D5 Mobile BV
100%
D5 Avenue Ltd.
The following discussion has been excerpted from our Business Plan and presents excellent and informative
information about our various companies, products and business.
Group Companies and Product Lines
Three companies, D5 Mobile BV, D5 Mobile Sarl and D5 Avenue Ltd, have been incorporated for the sales
and distribution of different main lines of telecom products in Europe. Various agreements have been signed covering
development, marketing and distribution of specific telecom and telecom related product. These exclusive agreements
secure continuity in supply, innovation and factory support. The vision of the Group is to make mobile communication
services affordable for everybody. The services contain communication and entertainment, which are available any time,
everywhere and personally. In order to reach their vision of a full service telecom organization the following tasks have
been defined for the following companies:

D5 Mobile BV and D5 Mobile Sarl are responsible for providing mobile phones from China, which must
fulfill the wishes and needs of EU users. One of the key values of D5 Mobile is to insure high standards
for design, quality and functionalities of mobile phones. Product specifications will be 100% suitable for
the market needs of target customers such as teenagers, business professionals, elderly, non-native and
fashion/gadget buyers within the EU markets. In the 4th quarter of 2011, D5 Mobile started with a B2B
market approach offering devices in combination with postpaid subscriptions.

D5 Avenue is responsible for website sales to consumers and retailers. Readen Industries acts as the
buying office and looks after supply and innovation. Cost effectiveness is a key success factor of the
Group. Expertise and management are the unique skills within the Group. The production technologies in
China will be applied in the business. The Group will not invest in the production of mobile phones; D5
Mobile will manage the suppliers and optimize the production process and capabilities of its partners in
China. Customization in mobile phones on requests of corporate partners is possible, which insures the
sustainable competitiveness of D5 Mobile in the business market without large investment. D5 Mobile
already has exclusive development and distribution agreements with suppliers in China.
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Group Mission Statement
Becoming a valuable partner for corporate customers in terms of technical flexibility, prices and complete
value chain (Sim cards, mobile phones and applications).
D5 Mobile BV & Readen
Product line one is based on hardware sales (mobile phone handsets) including operating software products and
accessories for OEM clients and under the Company’s own brand “D5.” The exclusive agreements between D5 Mobile
and the Chinese suppliers of mobile phone handsets, named Hong Tai Xun Industrial Co. Ltd. and Readen Industries
Ltd, appointed D5 Mobile as sole distributor for Europe. The Readen name is respected for its coherence to strong value
and business ethics. Readen’s management and shareholders have over 30 years of solid trading and manufacturing
experience. Readen Industries, based in Hong Kong and Schenzen China, was acquired by Readen Holding Corp in July
2011.
D5 Expertise and Network
D5 and Readen staff have without exception wide experience in trading with the emphasis on fast moving
consumer goods. All aspects of the import-export business such as sourcing, purchasing, designing, quality inspection,
shipping, custom clearing, sales, local distribution and accounts are in the capable hands of these senior professionals.
D5 has a network of retailers and importers who are keen on developing telecom business with the support of the
Company.
In addition to in-house general knowledge of Far East trading, the Company succeeded in complementing our
team by hiring free lance staff that will assist in developing specific telecom and IT expertise. The sourcing and
production professionals involved in both Readen and D5 Mobile have a joint track record in building up similar
businesses. Since the early eighties, the team has successfully introduced, for example, various product lines: audiovideo, magnetic products, household appliances and power tools under OEM brands.
The telecom business originates from a participation of Readen Industries management in a Chinese plastic
molding factory. This factory has for several years produced plastic casings for products such as video, vacuum cleaners,
coffeemakers, power tools, portable audio, etc. In early 2010, this factory was selected by a group of telecom handset
manufacturers to become their sole supplier of plastic casings for mobile phones. Being aware of Readen’s and D5’s
European sales potential, our Company was invited to become sole agent for the sale of finished product in Europe. The
Company is also planning to start operating in the USA by the end of 2012.
D5 Mobile product strategy Yo2Go►
Combining efficient Asian manufacturing and European design skills have resulted in many successful product
lines. The needs of the most demanding retail buyers can be fulfilled when it comes to pricing, packaging, features,
configurations, guarantees and repair procedures, rack jobbing, customer support and logistics.
For a range of premium bar phones (single – and dual sim), a concept has been developed under the name
Yo2Go►. Deliveries to retailers commenced August 2011. Tailor made propositions can be made to retailers varying
from one meter hanging wall presentations up to four meters. The use of standardized blister packaging enables D5 to
customize the presentation in a way that at low cost the D5 branding can be changed to OEM customers’ artwork.
D5 will add to their existing product range basic accessories like chargers, batteries, covers, speakers, memory
cards etc. resulting in a one stop service shop for telecom needs.
Operating Systems
Currently the mobile phones markets are dominated by the following leading Operating
Systems:
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Iphone, which is using its own Operating Systems and Chipsets.
BlackBerry using its own Operating system and Chipsets too
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Windows Mobile supported by many smart phones like HTC and LG
Symbian for Nokia products
Android is a relatively new operating system, used by Samsung, LG, HTC and several other mobile
phones makers among whom are D5´s preferred suppliers. The Android Operating Systems and mobile
phones are gaining market share in a high pace, not only within EU but worldwide.
Source Canalys 4Q 2010
D5 uses MTK (android compatible)
The biggest growing markets for mobile phones at this stage are within China and India. MTK is the most
common chipset used in the mobile phones, which are produced and sold in China. The MTK mobile phones can be run
on its Operating System and now they are also compatible with Android, which means that Android Apps can also be
used in MTK mobile phones. The strength of the MTK is that the production prices are very low. A premium MTK
mobile phone can be offered to end users at an average price of 10 Euro. A similar smart phone with one of the other
operating systems will start selling for 50 Euro.
The strategy of D5 Mobile is to introduce mobile phones based on the MTK technologies to EU. Of course, D5
Mobile will import other smart phones, as well. The focus is primarily on the MTK handsets, which will provide D5
Mobile good market position in terms of pricing, as well as profitable margins.
Electronic Tablets
Android’s popularity will be extra boosted by the increasing popularity of electronic tablets. The next
generation of tablets that D5 will be offering to its customers will without exception be Android based.
Application Implementation and Development
D5 Mobile will integrate a wide range of applications for use in combination with their mobile and tablet
devices. This approach is a must taking in account market development as stated below:
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Smart phones accounted for almost 25% of worldwide handset shipments during 2010
Download mobile apps is expected to peak in 2014 with over 15 billion expected downloads
Returns on mobile exceed significantly that of Internet returns
1 Billion people will access financial services by mobile by 2015
There are 5.3 billion mobile subscribers (77% of the world population)
Almost one in 5 global mobile subscribers has access to fast mobile Internet
Gartner expects spending on mobile advertising to reach US$7.5 billion in 2012 from US$530.2 million in
2008
M-commerce is predicted to reach US$119 billion in 2015.
60% of handsets shipped in 2009 can browse the mobile Web, rising to approximately 80% in 2013.
Therefore, the mobile Web will be a key part of most corporate B2C mobile strategies
Gartner thinks users really desire Mobile IM, especially in developing markets. This presents an
opportunity for mobile advertising and social networking.
Access to mobile networks available to over 90% of world population.
143 Countries offer 3G services enabling high-speed Internet on mobile phones up from 95 countries in
2007
D5 Avenue Ltd.
As an important integrated tool to service our B2B and retail customers, creating brand awareness and direct
sales, the D5 Avenue Ltd. will handle online sales. The Company’s renewed website went live on the web in August
2011. The selection of product for website sales will not be limited to D5 products only, but will also include special
offers of brand name manufacturers for new and refurbished products. The web master’s approach when it comes to
promoting sales and creating traffic will actively include the use of social media like You Tube, Facebook, Hyves,
Twitter, etc. Specific weekly offers have been created to put D5 Avenue in the top ranks of the consumer review sites.
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D5 mobile and D5 Avenue are registered trademarks of D5 Mobile BV.
D5 Mobile B2B
D5 started a B2B campaign in the 4th quarter of 2011 offering clients a combination of new devices, postpaid
subscriptions and business applications. Users can benefit from reduced tariffs (up to 43%) when changing to a pre
selected carrier. As a bonus, customers will receive free phones and/or tablets for employees in combination with
applications modified in the look and feel of the company. D5 has bought several white label applications that will be
offered to specific target groups. For the introduction phase, the focus was on:


mobile working hours registration that can be integrated in all major accounting software programs
mobile health worker workflow registration
Telecom Scan
A free telecom scan will be offered to potential B2B clients analyzing their telecom costs. In cooperation with
EspritXB and 6G mobile, alternative solutions can be offered, resulting in reductions for mobile, data, voip and isdn up
to 43%.
Average Outcome Telecom Scan
Based on recent experience, a positive cost reduction proposition can be presented to 60-70% of all potential
B2B clients. Resulting in an average savings as stated below:
D5 Mobile Sarl (France)
In cooperation with Chen Trading of Hong Kong, D5 Mobile opened its office in Aubervilliers, France in
August 2011. Chen Trading is a valued customer of Readen Industries and has access to a large customer base in France.
Working out of Aubervilliers with a majority of Chinese staff members opens up possibilities for the so called Asian
niche market. This group of potential customers is not specifically addressed right now, but they are characterized as
frequent users. Chinese, Vietnamese, Cambodian, Malaysian and Singapore nationals living in France have been
serviced for years by local Asian stores, who are already in business with Chen Trading for other product lines. The
Chen Trading Network will also be able to benefit from Readen’s knowledge of the French market. Since the early
eighties, Readen has been supplying fast moving consumer goods to among others, Auchan and Carref.
First Reactions
The first reactions to the D5 market approach have been very promising and have resulted in cooperation
possibilities with Well Best Industries (China based R&D Company). Practically all leading providers and retailers have
shown interest in D5 products, the business results for the first months of operation are satisfactory.
Order Portfolio
A test run of 46,000 mobile phone units (5 models) and 3,000 Dpads electronic organizer tablets (2 models)
have been delivered to resellers in the Netherlands and Germany. The responses of both end users and resellers are in
line with the expectations. Both the companies order portfolio and the number of inquiries for new offers are showing a
healthy growth. In particular, the demand for community phones is surprisingly good. Through re-import channels, D5
has also started offering refurbished products to the market. Refurbished phones are used phones that have been
inspected, tested and restored to full working condition at a factory or authorized service center. They may feature new
housings or other new parts, or they may simply be used phones that have been tested and certified. Among others,
Blackberry refurbished contracts have been signed for the delivery of 17,000 units (order value € 2.240.000).
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Synergy
It goes without saying that strong marketing advantages can be achieved by benefiting from synergy between
the different entities and divisions. Products will subsequently be sold and distributed in combination. D5 Mobile BV
D5 Mobile Sarl supply the Group with the hardware as telephone sets, smart phone sets, Dpads and other premium
articles. D5 Avenue Ltd. handles web sales to end users.
Readen Holding Corp. handles investor relations at the holding company level for the publicly traded entity.
Readen Industries monitors production and innovation.
SWOT Analysis
Our management team has reviewed all aspects of the market and has committed themselves to capitalize the
Group’s strength and opportunities. The points of attention (weakness/threats) will be addressed in a way that the
Group’s results will not be negatively affected.
Strengths
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Excellent R&D input
Access to Asian based A1 manufacturers
Exclusive distribution rights for selected models
Experienced marketing , manufacturing and logistic staff
Flexible organization network in place which enables the Group to distribute fast
Workable creative ideas in production phase
Short production lead-time => average 14 days
Logistic easy to handle. All merchandise shipped by Air. Form origin to destination=> average 4 days
Products
D5 Mobile is responsible for sourcing and supplying the best and up to date models, which will suit the end
users needs. For the introduction up through December 2011, among others, the models featured below had been
developed and tested:
A.
Principal products or services and their markets:
See discussion under Introduction, above.
B.
Distribution methods of our products and services:
See discussion under Introduction, above
C.
Competitive business conditions, the issuer’s competitive position in the industry and methods of
competition:
The mobile telephone industry is highly competitive, has undergone a period of consolidation and requires
capital resources. Some of the markets in which we compete or will likely compete are served by, or adjacent to markets
served by, one or more of the large national or multinational mobile telephone companies, as well as numerous regional
and local solid waste companies. Most of our competitors have significantly greater financial and other resources than
we do.
D.
Sources and availability of raw materials and the names of principal suppliers:
We believe that our raw materials are generally available from a number of suppliers. See discussion under
Introduction.
13
E.
Dependence on one or a few major customers:
We are not dependent on one or a few major customers.
F.
Dependence on one or a few major customers:
Our business is not dependent on one or a few major customers.
G.
The need for any government approval of principal products or services and the status of any requested
government approvals:
We do not require government approval of our products or services, thus we have not requested any approvals.
Item X.
The nature and extent of the issuer’s facilities.
Our office and showroom in The Netherlands are located in a modern office premises at Gijsbrecht van
Amstelstraat, 423A 1216A, Hilversum, The Netherlands. We are leasing this office from a non-affiliated party through
January 2, 2013. We are paying 1,500 Euros per month as base rent for this 160 square meter facility. In addition, we
pay additional fees for T-1 access, phone, copies, fax service, conference room use and postage.
Our office and showroom in Hong Kong is located in the South Seas Centre, 75 Mody Road, room 302, Tower
1, Tsim Sha Tsui, Kowloon, Hong Kong. This is a 120 square meter facility that we lease for 17,000 Hong Kong
dollars per month.
We also have an office and showroom in France located at 8385 Avenue Victor Hugo 93300, Aubervilliers,
Paris, France. This is a 120 square meter office and showroom facility and a 60 square meter warehouse facility for
which we pay 1,500 Euros per month.
RISK FACTORS
An investment in our securities involves a high degree of risk. Prospective investors should carefully consider
the following risk factors and the other information in this disclosure statement before investing in our securities. Our
business and results of operations could be seriously harmed by any of the following risks. The risks and uncertainties
described below are those that our management currently believes may significantly affect us. If any of the following
risks actually occurs, our business, financial condition and results of operations could be harmed and investors in our
securities could lose part or all of their investment in our securities
PLEASE CONSIDER THE FOLLOWING RISK FACTORS BEFORE DECIDING TO INVEST IN OUR
SECURITIES.
RISKS RELATED TO OUR COMPANY
We have a history of significant net operating losses and may never achieve profitability.
We have a history of significant net operating losses. We cannot assure you that we will ever achieve
profitability. Even if we do achieve profitability, we cannot assure you that we will be able to sustain or increase
profitability on a quarterly or annual basis in the future. Revenues and profits, if any, will depend upon various factors,
including whether we will be able to successfully implement our sales, marketing, and advertising strategies. We may
not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us. In
addition, an inability to achieve profitability could have a detrimental effect on the long term capital appreciation of our
common stock.
14
If we are unable to attract and retain qualified personnel with experience in our industries, our business could suffer
Our current and future success depends in part on our ability to identify, attract, assimilate, hire, train and
motivate professional, highly-skilled scientific and technical personnel for our research, development efforts, as well as
managerial, sales and marketing personnel with experience in our industry. If we fail to attract and retain the necessary
professional, highly-skilled scientific, technical, managerial, sales and marketing personnel, we may not develop a
sufficient array of products or establish a large enough customer base to adequately develop our proposed operations,
and, as a result, could have a material adverse effect on our company.
We may not be able to effectively compete in the highly competitive industry.
The mobile telephone industry is highly competitive, has undergone a period of consolidation and requires
capital resources. Some of the markets in which we compete or will likely compete are served by, or adjacent to markets
served by, one or more of the large national or multinational mobile telephone companies, as well as numerous regional
and local solid waste companies. Most of our competitors have significantly greater financial and other resources than
we do.
Current economic conditions may adversely affect our revenues and our operating margin.
Our business may be affected by changes in economic conditions that are outside of our control, including
reductions in business and consumer activity generally.
We may need additional financing and may not be able to raise funding on favorable terms or at all, which could
increase our costs, limit our ability to operate or grow our business and dilute the ownership interests of existing
stockholders.
We require substantial working capital to fund our business. We believe that our current working capital,
including our existing cash balance, together with our future cash flows from operations and available financing
capacity, will be adequate to support our current operating plans for at least the next year. If necessary, we would seek
such future financing from sources of public or private debt and equity. There can be no assurance such financings will
be available on terms favorable to us or at all.
To the extent any future financings involve the issuance of equity securities, existing stockholders could suffer
significant dilution. If we raise additional financing through the issuance of equity, equity-related or debt securities,
those securities may have rights, preferences or privileges senior to those of the rights of our common stock or may be
convertible into or exchangeable for a significant amount of our common stock, and thus our existing stockholders may
experience substantial dilution of their ownership interests as a result of such additional financing.
Our success depends on our management team.
Our company's operations are dependent on the continued efforts of our Board of Directors and our executive
officers. If any of these individuals becomes unwilling or unable to continue their employment or association with us,
our business could be affected materially and adversely. Furthermore, there can be no assurance that our management
team will be successful in managing the operations of the company or be able to effectively implement our business
strategy. Failure of our management group to successfully manage the operation of our company or to effectively
implement our business strategy could have a material adverse effect on our company's financial condition and results
of operations. We have no key man life insurance on any of our executives.
We do not have an independent audit or compensation committee, the absence of which could lead to conflicts of
interest of our officers and directors and work as a detriment to our shareholders.
We do not have an independent audit or compensation committee. The absence of an independent audit and
compensation committee could lead to conflicts of interest of our officers and directors, which could work as a
detriment to our shareholders.
15
We do not have audited financial statements and our financial statements have not been reviewed by any regulatory
authority.
Our financial statements have been prepared by our management and have not been reviewed by any
independent third party auditing firm, by the Securities and Exchange Commission or by any state securities
administrators. Therefore, investors in our securities do not or will not have the comfort they might otherwise have if
our financial statements had been audited by an independent auditing firm.
Trading in our securities could be subject to extreme price fluctuations that could adversely affect your investment.
Historically speaking, the market prices for securities of small publicly traded companies have been highly
volatile. Publicized events and announcements may have a significant impact on the market price of our common stock.
In addition, the stock market from time to time experiences extreme price and volume fluctuations that
particularly affect the market prices for small publicly traded companies and which are often unrelated to the operating
performance of the affected companies.
We do not expect to pay dividends for the foreseeable future.
We will use any earnings generated from our operations to finance our business and will not pay any cash
dividends to our shareholders in the foreseeable future.
Having only one director limits our ability to establish effective independent corporate governance procedures and
increases the control of our management.
Having only one director limits our ability to establish effective independent corporate governance procedures
and increases the control of our management. Accordingly, we cannot establish board committees comprised of
independent members to oversee functions like compensation or audit issues until we are able to expand our board of
directors to include independent directors.
Until we have a larger board of directors that would include some independent members, there will be limited
oversight of our management’s decisions and activities and little ability for minority shareholders to challenge or
reverse those activities and decisions, even if they are not in the best interests of minority shareholders.
Our common stock is not currently traded on any stock exchange or quoted on the over-the-counter bulletin board.
Instead, our common stock is quoted on the pink sheets and is considered to be a “penny stock” and, as such, the
market for our common stock will be limited by certain SEC rules applicable to penny stocks.
As long as the price of our common stock remains below $5.00 per share, our shares of common stock are
likely to be subject to certain “penny stock” rules promulgated by the sec. Those rules impose certain sales practice
requirements brokers who sell penny stock to persons other than established customers and accredited investors
(generally, an institution with assets in excess of $5,000,000 or an individual with a net worth in excess of $1,000,000).
For transactions covered by the penny stock rules, the broker must make a special suitability determination for the
purchaser and receive the purchaser’s written consent to the transaction prior to the sale. Furthermore, the penny stock
rules generally require, among other things, that brokers engaged in secondary trading of penny stocks provide
customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the
bid and asked prices of penny stocks and disclosure of the compensation to the brokerage firm and disclosure of the
sales person working for the brokerage firm. These rules and regulations make it more difficult for brokers to sell
shares of our common stock and limit the liquidity of our shares.
Our stock trades on the OTC Pink Market which entails numerous risks.
Our stock trades on the OTC Pink Market which entails numerous risks, including but not limited to the
following: OTC Markets has experienced computer failures and malfunctions in the past, causing securities quoted there
to be misquoted or not quoted at all. OTC Markets has a system of rating companies and can rate our stock "Caveat
Emptor" for many reasons which are out of our control, or for no reason at all. OTC Markets can label us "Caveat
Emptor" or "Toxic" for the actions of others, such as short selling, or making unauthorized spam promotional
16
campaigns. There are no clear standards for being placed on Caveat Emptor and no clear standards for being removed.
Generally, stock buyers will avoid buying Caveat Emptor stocks and the stocks experience substantial market declines
after being so labeled.
The market for penny stocks has experienced numerous frauds and abuses which could adversely impact investors in
our stock.
Pink Sheets securities are frequent targets of fraud or market manipulation, both because of their generally low
prices and because reporting requirements are less stringent than those of the stock exchanges or NASDAQ. Patterns of
fraud and abuse include: (1) Control of the market for the security by one or a few broker-dealers that are often related
to the promoter or issuer; (2) Manipulation of prices through prearranged matching of purchases and sales and false and
misleading press releases; (3) "Boiler room" practices involving high pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (4) Excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and (5) Wholesale dumping of the same securities by promoters and broker-dealers after prices have
been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.
Our management is aware of the abuses that have occurred historically in the penny stock market.
THERE ARE RISKS ASSOCIATED WITH FORWARD LOOKING STATEMENTS
This disclosure statement contains certain forward looking statements regarding management’s plans and
objectives for future operations including plans and objectives relating to our planned marketing efforts and future
economic performance. The forward looking statements and associated risks set forth in this disclosure statement
include or relate to, among other things, (a) our projected sales and profitability, (b) our growth strategies, (c)
anticipated trends in our industry, (d) our ability to obtain and retain sufficient capital for future operations and (e) our
anticipated needs for working capital. These statements may be found throughout this disclosure statement, generally.
Actual events or results may differ materially from those discussed in forward looking statements as a result of various
factors, including, without limitation, the risks outlined under “Risk Factors” and matters described in this disclosure
statement, generally. In light of these risks and uncertainties, there can be no assurance that the forward looking
statements contained in this disclosure statement will, in fact, occur.
PART D.
MANAGEMENT STRUCTURE AND FINANCIAL INFORMATION:
Item XI.
The names of the chief executive officer, members of the board of directors, as well as control
persons.
A.
Officers and Directors:
Our directors will serve until their successors are elected and qualified. Our officers are elected by the board
of directors to a term of one year and serve until their successor is duly elected and qualified, or until they are removed
from office. Our board of directors has no nominating, auditing or compensation committees.
The names, addresses, ages and positions of our officers, directors and key employees are set forth below:
First Year
Name
Age
as Director
Position
Gerardus Ronald Steenbergen
48
1999
President, Chief Executive Officer and Director
Adrianus H. de Jongh
59
--
Chief Financial Officer and Treasurer
Hee-Loy Yuen
55
--
Chief Operating Officer
Tang Pak Hei
23
--
Corporate Secretary
The persons named above were elected to hold their offices until the next annual meeting of our stockholders.
17
G. R. Steenbergen, President, Chief Executive Officer and Director of Readen Holding Corp.
Mr. Steenbergen became the Company’s Chairman of the Board, President and Chief Executive Officer on
May 15, 2005. He was elected to the Board of Directors February 1999. He is responsible for carrying out traditional
chief executive officer duties for our Company and will help management identify merger and acquisition candidates,
oversee and evaluate our management team and insure the Company’s compliance with SEC reporting obligations once
it begins filing reports with the SEC under the Securities Exchange Act of 1934. Mr. Steenbergen began his career in his
family business, Kwantum Hallen (a company engaged in the business of “do it yourself” building materials and
products). Following the sale of Kwantum Hallen, Mr. Steenbergen became Managing Director of Casin Magnetic, the
largest producer of video tapes is Asia. From 1984 until 2004, he lived and worked in Hong Kong and China as
President of Readen Ltd., a trading company that specialized in non-food products. From 2000 until 2004, Mr.
Steenbergen concentrated his efforts on IPOs and reverse mergers of Asian companies on the European and American
Stock Exchange. In 2006, he founded Wah King BV, a Dutch company that invested in Asian and European properties.
Adrianus H. de Jongh, Chief Financial Officer and Treasurer of Readen Holding Corp.
Mr. de Jongh became the Company’s Chief Financial Officer and Treasurer on June 1, 2011. He is responsible
for managing financial risks, financial planning, data analysis and record keeping for the Company and providing
financial information to our Board of Directors. Prior to joining our Company, Mr. de Jongh worked in the food
franchising business for more than 20 years, where he insured and checked the profitability of the business within
established guidelines and requirements for sales growth, cost, labor and controllable costs. He also coordinated and
implemented operations, plans, company initiatives and store marketing in a profitable and timely manner. He also was
responsible for conducting and providing proper staffing of the businesses with qualified personnel and conducted
training and facilitated programs to develop business personnel.
Hee-Loy Yuen, Chief Operating Officer of Readen Holding Corp.
Mr. Yuen became the Company’s Chief Operating Officer on June 1, 2011. His responsibilities with our
Company include business development, prospecting for customers for our business and helping steer our Company’s
success. Mr. Yuen began his career in 1979 as owner of the Buddha restaurant in Hilversum, The Netherlands. He was
also the founder and Chairman of the Fine Eastern Restaurants foundation, whose mission was and is to promote
Oriental cuisine in Western Europe. The Foundation represents the top Chinese restaurants in Holland, London, New
York and other major cities. Mr. Yuen also founded the Chinese Employers Association in The Netherlands. From
1997 until 2006, Mr. Yuen served as President of a food company producing Chinese ready meals and was the owner of
several Japanese restaurants, which e sold in 2006.
Tang Pak Hei, Corporate Secretary of Readen Holding Corp.
Mr. Tang Pak Hei started his career as administrative assistant in the garment industry. In June 2009, he joined
Philip International Trading Company Limited as bookkeeper. Philip International Trading Company Limited’s
majority shareholder is Mr. Philip Lam, who was a shareholder of Readen Industries Ltd. and is a shareholder of the
Company as a result of our acquisition of Readen Industries. He was then appointed as the Secretary of Readen
Holding Corp. on June 1, 2011. Mr. Tang Pak Hei is an accounting officer with the Company.
Robert H. van der Mast, Chairman of Advisory Board of Readen Holding Corp.
Mr. van der Mast became the Chairman of our Advisory Board on June 1, 2011. He assists our Company in
the areas of business development, prospecting for customers and business contacts and help steer our Company’s
success. Since 2008, he has served as Managing Director of Kairos Asset Management B.V. in The Netherlands and is
a partner of Mo Holding Ltd. He has been active in investing in property funds and limited partnerships since 2003. He
also has over 20 years of experience in various executive positions in the banking world. He also worked for Nedlloyd
in New York and Johannesburg, South Africa and joined IMC Corp. in 1997 as Sales Manager for its far East
operations. Mr. van der Mast studied economics in Amsterdam.
18
EXECUTIVE COMPENSATION.
During 2010, we did not compensate any of our officers or our Director. In July 2011, the Company issued
500,000 shares of the Company’s Common Stock to each of Messrs. Steenbergen and van der Mast, and 200,000 shares
each to Messrs. Yuen and ad Jongh, and agreed to providing them each with a monthly expense allowance of U.S. $500
per month, as base compensation for their services for the two year period from June 1, 2011, until May 31, 2013.
B.
Legal/Disciplinary History.
During the past ten years, no present director, executive officer or person nominated to become a director or an
executive officer of the Company:
C.
1.
was a general partner or executive officer of any business against which any bankruptcy petition was filed,
either at the time of the bankruptcy or two years prior to that time;
2.
was convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses);
3.
was subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking activities; or
4.
was found by a court of competent jurisdiction (in a civil action), the Securities and Exchange
Commission or the Commodity Futures Trading Commission to have violated a Federal or state securities
or commodities law, and the judgment has not been reversed, suspended or vacated.
Family Relationships
No family relationship exists between or among any the officers and directors of Readen Holding Corp.
D.
Disclosure of Related Party Transactions.
On July 25, 2011, Readen Holding Corp. acquired Readen Industries Ltd. pursuant to a Share Exchange
Agreement. Readen Industries Ltd. was owned by 14 shareholders, including Mr. Steenbergen, who are also
shareholders of Readen Holding Corp.
E.
Disclosure of Conflicts of Interest
Although we have not adopted formal procedures for the review, approval or ratification of transactions with
related persons, we adhere to a general policy that such transactions should only be entered into if they are on terms that,
on the whole, are no more favorable, or no less favorable, than those available from unaffiliated third parties and their
approval is in accordance with applicable law. Such transactions require the approval of our board of directors.
Item XII.
Financial Information for the issuer’s most recent fiscal period:
The unaudited consolidated financial statements of the Company for the year ended June 30, 2012 are attached
at the end of this filing beginning on page F-1 and are incorporated herein by reference.
Item XIII.
Similar financial information for such part of the two preceding fiscal years as the issuer or its
predecessor has been in existence:
The unaudited consolidated financial statements of the Company for the years ended June 30, 2012 and 2011
are attached at the end of this filing beginning on page F-1 and are incorporated herein by reference.
19
Item XIV.
Beneficial Owners
The following persons beneficially own more than five percent (5%) of any class of the issuer’s
equity securities:
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To our knowledge, the following table sets forth, as of September 26, 2012, information regarding the
ownership of our common stock by:


Persons who own more than 5% of our common stock; and
our director and Chief Executive Office
Each person has sole voting and investment power with respect to the shares shown, except as otherwise noted.
Name
of Beneficial Owner
Amount and Nature
of Beneficial Ownership
Number (1)
Percent (1)
39,703,152 (2)
26.42%
21,000,000
13.98%
21,000,000
13.98%
G.R. Steenbergen, President and a Director
Phillip Lam Kwok Kwong
Patrick Chia Hung Ching
1.
The numbers and percentages set forth in these columns are based on 150,267,074 shares of common stock outstanding as of September 26,
2012. The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934,
and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any
shares as to which the selling security holder has sole or shared voting power or investment power and also any shares, which the selling security
holder has the right to acquire within 60 days.
2.
Includes 5,000,000 held of record by the wife of G.R. Steenbergen over which he has voting control. G.R. Steenbergen also owns 766,667
(or 100% of) shares of our Series B Convertible Preferred Stock.
Item XV.
The name, address, telephone number and email address of each of the following outside
providers that advise the issuer on matters relating to the operations, business development and
disclosure:
Investment Banker:
None
Promoters:
None
Legal Counsel:
David E. Wise, Esq.
9901 IH-10 West
Suite 800
San Antonio, Texas 78230
Phone: (210) 323-6074
Fax:
(210) 579-1775
E-mail: wiselaw@gvtc.com
20
Accounting Firm/Auditors:
Drs. J.A. Vos
De Savornin Lohmanlaan 30
1272 HG HUIZEN
Vleuten, The Netherlands
Phone: 035-5266116
Drsjavos@tiscali.nl
Public Relations Consultant:
None.
Investor Relations Consultant:
None.
Other Advisors/Financing and Business Consulting:
None
Item XVI.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
CAUTIONARY FORWARD – LOOKING STATEMENT
The following discussion should be read in conjunction with our financial statements and related notes.
Certain matters discussed herein may contain forward-looking statements that are subject to risks and
uncertainties. Such risks and uncertainties include, but are not limited to, the following:






the volatile and competitive nature of our industry,
the uncertainties surrounding the rapidly evolving markets in which we compete,
our dependence on its intellectual property rights,
the success of marketing efforts by third parties,
the changing demands of customers and
the arrangements with present and future customers and third parties.
Should one or more of these risks or uncertainties materialize or should any of the underlying assumptions
prove incorrect, actual results of current and future operations may vary materially from those anticipated.
OVERVIEW
Readen Holding Corp., a Nevada corporation, was originally incorporated in the state of Idaho under the name
of “Beacon Light Mining Company” in 1953. In 1997, we created a wholly-owned subsidiary with the same name in
the state of Nevada. We then merged into the Nevada subsidiary and became a Nevada corporation. We were
reincorporated in Nevada on November 19, 1997, under the name “Beacon Light Mining Company.” On February 18,
1998, we changed our name to “Beacon Light Holding Corporation.” On August 3, 2001, we changed our name to
Wellux International, Inc. and operated under that name until May 5, 2005, when we changed our name to Readen
Holding Corp.
The Company is engaged in the business of identifying and acquiring privately held equity holdings in various
entities worldwide.
21
On June 1, 2011, the Company underwent a change of control when it elected its new officers.
On July 25, 2011, the Company entered into a Share Exchange Agreement with Readen Industries Ltd.
pursuant to which we acquired 100% of the outstanding shares of common stock of Readen Industries Ltd. in exchange
for 100,000,000 shares of our Common Stock. Readen Industries and our subsidiaries are engaged in the retail sale of
mobile phones, prepaid phone cards and Sim cards.
Readen Holding Corp. is the parent company of Readen Industries Ltd., a company organized under the laws
of Hong Kong, PRC. Readen Holding Corp. is the management unit. Readen Industries Ltd. has additional subsidiaries
shown on the organization chart on the following page. These companies will oftentimes be referred to herein as the
Group” or “Group Companies.”
The following narrative offers an overview and informative information about our various companies,
products and business.
Group Companies and Product Lines
Three companies, D5 Mobile BV, D5 Mobile Sarl and D5 Avenue Ltd, have been incorporated for the sales
and distribution of different main lines of telecom products in Europe. Various agreements have been signed covering
development, marketing and distribution of specific telecom and telecom related product. These exclusive agreements
secure continuity in supply, innovation and factory support. The vision of the Group is to make mobile communication
services affordable for everybody. The services contain communication and entertainment, which are available any time,
everywhere and personally. In order to reach their vision of a full service telecom organization the following tasks have
been defined for the following companies:

D5 Mobile BV and D5 Mobile Sarl are responsible for providing mobile phones from China, which must
fulfill the wishes and needs of EU users. One of the key values of D5 Mobile is to insure high standards
for design, quality and functionalities of mobile phones. Product specifications will be 100% suitable for
the market needs of target customers such as teenagers, business professionals, elderly, non-native and
fashion/gadget buyers within the EU markets. In the 4th quarter of 2011, D5 Mobile started with a B2B
market approach offering devices in combination with postpaid subscriptions.

D5 Avenue is responsible for website sales to consumers and retailers. Readen Industries acts as the
buying office and looks after supply and innovation. Cost effectiveness is a key success factor of the
Group. Expertise and management are the unique skills within the Group. The production technologies in
China will be applied in the business. The Group will not invest in the production of mobile phones; D5
Mobile will manage the suppliers and optimize the production process and capabilities of its partners in
China. Customization in mobile phones on requests of corporate partners is possible, which insures the
sustainable competitiveness of D5 Mobile in the business market without large investment. D5 Mobile
already has exclusive development and distribution agreements with suppliers in China.
Group Mission Statement
Becoming a valuable partner for corporate customers in terms of technical flexibility, prices and complete
value chain (Sim cards, mobile phones and applications).
22
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In September 2011, the FASB issued amended guidance related to Intangibles—Goodwill and Other: Testing
Goodwill for Impairment. The amendment is intended to simplify how entities test goodwill for impairment. The
amendment permits an entity to first assess qualitative factors to determine whether it is more-likely-than-not that the
fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to
perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of
more than 50%. This amendment is effective for annual and interim goodwill impairment tests performed for fiscal
years beginning after December 15, 2011, with early adoption permitted. We do not believe that this guidance will have
a material impact on our consolidated financial condition or results of operations.
In June 2011, the FASB issued ASU 2011-05, which revises the manner in which entities present comprehensive
income in their financial statements. The new guidance removes the presentation options in ASC 220 and requires
entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income
or (2) two separate but consecutive statements. Under the two-statement approach, the first statement would include
components of net income, which is consistent with the income statement format used today, and the second statement
would include components of other comprehensive income (“OCI”). The ASU does not change the items that must be
reported in OCI. For public entities, the ASU’s amendments are effective for fiscal years, and interim periods within
those years, beginning after December 15, 2011. We are currently evaluating the impact of adopting this guidance,
which may result in changes in the presentation of our financial statements.
RESULTS OF OPERATIONS OF THE COMPANY
COMPARISON OF THE YEARS ENDED JUNE 30, 2012 AND 2011
The Company has had revenue and operations for the year ended June 30, 2012 and had no revenue and
minimal operations for the year ended June 30, 2011.
As a result of acquiring Readen Industries Ltd. in July 2011, the Company has been operating the subsidiaries
owned by Readen Industries, Ltd.
For the year ended June 30, 2012, the Company had revenue of $3,100,136, cost of goods sold of $894,265 and
gross profit of $772,471, compared with no revenue, cost of goods sold or gross profit for the previous year.
The operating expenses for the year ended June 30, 2012 were $715,030 compared with $22,251 for the year
ended June 30, 2011
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS - FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
Net cash used in operating activities was $4,570,919 and for the year ended June 30, 2012 and 0 for the year
ended June 30, 2011 due to the net losses and changes in operating assets and liabilities having a net effect of zero.
Net cash used in investing activities was $4,888,341 and for the year ended June 30, 2012 and 0 for the year
ended June 30, 2011.
Net cash provided by financing activities was $344,457 for the year ended June 30, 2012 as a result of an
increase in loans payable and 0 for the year ended June 30, 2011.
23
PART E.
ISSUANCE HISTORY
Item XVII
List of securities offerings and shares issued for services in the past two years and through the
date of disclosure statement.
Detailed below are all events, in chronological order, that resulted in changes in total shares of Common Stock
for the Company within the two-year period ending on the last day of our most recent fiscal years ended on June 30, 2012
and 2011:

On June 1, 2011, the Company underwent a change of control when it elected its new officers and its
director and shareholders authorized (i) the issuance of a substantial number (12,703,152) of common
stock shares to G. R Steenbergen due to him for $113,200 of accrued, but unpaid, dividends and interest
due him as the holder of 766,667 shares of our Series B Preferred Stock; and (ii) approved the acquisition
of Readen Holding Ltd. in which Mr. Steenbergen and his wife held a substantial interest. As a result of
these transactions, which increased his holdings in the Company, G.R. Steenbergen is the beneficial owner
of 41,203,152 or 27.6% of the Company’s issued and outstanding shares of Common stock. In addition,
Mr. Steenbergen is the owner of 766,667 shares of our Series B Convertible Preferred Stock.

On July 25, 2011, we entered into a Share Exchange Agreement with Readen Industries Ltd. pursuant to
which we acquired 100% of the outstanding shares of common stock of Readen Industries Ltd. in
exchange for 100,000,000 shares of our Common Stock. Readen Industries and our subsidiaries are
engaged in the retail sale of mobile phones, prepaid phone cards and Sim cards.
24
Date
Issued
July 2011
July 2011
July 2011
July 2011
July 2011
July 2011
July 2011
July 2011
(1)
(2)
(3)
(4)
Stock Issued
To:
Hans Lodders
G.R. Steenbergen
G.R. Steenbergen
G.R. Steenbergen
Hee-Loy Yuen
Ad H. de Jongh
Robert van der
Mast
Listed below are
14 shareholders
who received
shares of the
Company in the
Acquisition of
Readen
Industries Ltd.
(4)
G.R. Steenbergen
Lam Kwok
Kweng
Chia Hung Ching
Joop Steenbergen
Benitez Tabares
Carlos Alberto
Simon Siu Hung
Tang
Tang Jay
Chan Wing Lam
Sara
Chan Hoi Wah
Ruby
Ho King Ho
Terry
Ma Yuk King
Andre Geiling
Robert van der
Mast
Hans Lodder
Jurisdiction
Where
Offering was
Qualified
Total # of Shares
Issued
China
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
500,000(1)
500,000(1)
500,000(2)
12,703,152(3)
200,000(2)
200,000(2)
Netherlands
500,000(2)
Netherlands
19,000,000
China
19,000,000
China
Netherlands
19,000,000
5,000,000
Netherlands
5,000,000
China
5,000,000
China
5,000,000
China
5,000,000
China
5,000,000
China
5,000,000
Netherlands
Netherlands
5,000,000
1,000,000
Netherlands
1,000,000
China
1,000,000
Value
Per
Share
Amount
Paid To
Issuer
Trading
Status
R=Restricted
F=Free
Trading
Total
Stock
Value Sold
$.05
$.05
$.03
$.009
$.03
$.03
$.03
-0-0-0-0-0-0-
R
R
R
R
R
R
$25,000
$25,000
$15,000
$113,200
$6,000
$6,000
-0-
R
$15,000
$0.05
$0.05
-0-0-
R
$950,000
$950,000
$0.05
-0-
$0.05
$0.05
-0-0-
R
R
$0.05
-0-
$0.05
$0.05
-0-0-
$0.05
-0-
$0.05
-0-
$0.05
$0.05
-0-0-
$0.05
-0-
$0.05
-0-
R
R
R
R
R
R
R
R
R
R
R
$950,000
$250,000
$250,000
$250,000
$250,000
$250,000
$250,000
$250,000
$250,000
$50,000
$50,000
$50,000
These shares were issued to Messrs. Lodders and Steenbergen because the Company failed to issue the shares to them on January 2, 2000,
pursuant to their employment agreements. The shares were valued at $0.05 per share.
These shares were issued as compensation to the four management members and were valued at $0.03 per share.
These shares were issued to Mr. Steenbergen, the holder of 766,667 shares of Series B Convertible Preferred Stock, for $113,200 of accrued,
but unpaid, dividends and interest due to the holder of such Preferred Stock.
On July 25, 2011, the Company acquired 100% of the outstanding shares of capital stock of Readen Industries from the below listed
individuals who were shareholders of Readen Industries. These individuals received 10,000 shares of our Common Stock for each share of
capital stock they owned in Readen Industries. For accounting purposes, the Company booked $0.05 per share for each share issued in the
acquisition.
Management believes that the above share issuances were exempt from the registration requirements of the
Securities Act of 1933, as amended (“33 Act”), by virtue of the exemptions from registration contained in Section 4(2) of
the Act and Regulation S promulgated under the 33 Act.
25
26
READEN HOLDINGS CORP.
Page
------Index to Financial Statements
F-1
Consolidated Balance Sheets at June 30, 2012 and 2011 (unaudited)
F-2
Consolidated Statements of Operations for the Years Ended June 30,
2012 and 2011 (unaudited)
F-3
Statement of Changes in Stockholders' Equity for the Period from
June 30, 2009 to June 30, 2012 (unaudited)
F-4
Statements of Cash Flows for the Years Ended June 30, 2012 and 2011
(unaudited)
F-5
Notes to Consolidated Financial Statements (unaudited)
F-6
Page F-1
27
CONSOLIDATED BALANCE SHEETS
AT JUNE 30, 2012 and 2011
(unaudited)
June 30,
2012
2011
ASSETS
Current assets
Cash and cash equivalents
Accounts receivable
Inventory
Note receivable - related party
Other current assets
Total current assets
$
Other assets
Property and equipment, net
Goodwill
Deferred compensation
Intangible assets
Total other assets
27,125 $
293,441
704,989
168,750
460,139
1,654,444
161,250
161,250
89,411
5,000,000
19,250
4,688
5,113,349
Total assets
$
6,767,793 $
$
417,004
10,129
151,136
432,663
1,010,932
40,250
40,250
201,500
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
Interest payable
Advances payable - related parties
Director fees payable
Other current liabilities
Total current liabilities
$
28,585
2,353
30,938
Other liabilities
Loans payable, net of current portion
Total liabilities
344,547
-
1,355,479
30,938
767
767
150,267
6,514,559
-
35,164
1,253,247
205,200
(1,253,279)
(1,323,816)
5,412,314
169,795
Stockholders' Equity
Capital stock
Series B Convertible Preferred Stock: $.001 par value, 5,000,000 shares authorized,
766,667 shares issued and outstanding as of June 30, 2012 and 2011, respectively
Common Stock: $.001 par value, 295,000,000 shares authorized, 150,267,074 and
35,163,922 shares issued and outstanding as of June 30, 2012 and 2011, respectively
Additional paid-in capital
Common stock to be issued
Accumulated deficit
Total stockholders' equity
Total liabilities and stockholders' equity
Page F-2
$
6,767,793
See accompanying notes to financial statements
28
$
201,500
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 2012 and 2011
(unaudited)
For the Years Ended
June 30,
2012
2011
$
Revenue
3,100,136
$
-
Cost of goods sold
894,265
-
Gross profit
772,471
-
715,030
22,251
(715,030)
(22,251)
57,441
(22,251)
Interest expense
(2,276)
(2,275)
Commission income
50,076
-
(33,718)
-
(986)
-
13,096
(2,275)
Operating expenses
General and administrative expenses
Total operating expenses
Income (loss) from operations
Other income / (expense)
Income tax
Foreign exchange loss
Total other income / (expense)
Net income (loss)
$
70,537
$
(24,526)
Basic and diluted income (loss) per share
$
0.00
$
(0.00)
$
150,267,074
$
35,163,922
Weighted average shares
used in per share calculation
Page F-3
29
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM JUNE 30, 2009 TO JUNE 30, 2012
(unaudited)
Preferred Stock
Series D
Common Stock
Par
Par
Shares Value
Shares
Value
Balance June 30, 2009
Net Loss Year Ended June 30, 2010
Common shares to be issued
for interest
Common shares to be issued
for compensation
Net Loss Year Ended June 30, 2011
35,163,922 $
Additional
Paid-In
Capital
Shares To
Be Issued
35,164 $ 1,253,247 $ 50,000
Accumulated
Deficit
Total
Equity
766,667
$ 767
$ (1,286,931) $
5 2,247
-
-
-
-
-
-
(12,359)
(12,359)
766,667
767
35,163,922
35,164
1,253,247
50,000
(1,299,290)
39,888
-
-
-
-
-
113,200
-
113,200
-
-
-
-
-
42,000
-
(24,526)
42,000
(24,526)
766,667
767
35,163,922
35,164
1,253,247
205,200
(1,323,816)
170,562
-
-
12,703,152
12,703
100,497 (113,200)
-
-
-
-
1,400,000
1,400
40,600
(42,000)
-
-
-
-
1,000,000
1,000
49,000
(50,000)
-
-
-
-
100,000,000
100,000
4,900,000
-
-
5,000,000
-
-
-
-
153,240
-
-
153,240
-
-
-
-
17,975
-
-
17,975
-
-
-
-
-
-
70,537
70,537
766,667
$ 767
Common shares issued for
interest @ $.0089/ share
compensation @ $.03/share
compensation @ $.05/share
acquisition @ $.05/share
Conversion of debt to
additional paid-in capital
Acquisition related adjustment
to additional paid-in capital
Net Income Year Ended June 30, 2012
Page F-4
150,267,074 $ 150,267 $ 6,514,559 $
30
-
$ (1,253,279) $ 5,412,314
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
(unaudited)
For the Years Ended
June 30,
2012
2011
Cash flows from operating activities
Net income (loss)
Adjustments to reconcile net income to net cash used by
operating activities:
Common stock issued for acquisitions
Depreciation
Changes in operating assets and liabilities:
Increase in accounts receivable
Increase in note receivable - related party
Increase in inventory
Increase in other assets
Increase (decrease) in deferred compensation
Increase in accounts payable
Increase in advances payable - related parties
Increase in director fees payable
Increase in interest payable - related party
Increase in other current liabilities
$
70,537 $
(17,069)
5,000,000
23,547
-
(293,441)
(7,500)
(704,989)
(460,139)
(21,000)
357,349
(8,000)
151,136
7,776
455,733
(1,875))
5,250
9,250
18,501
2,444
2,000
4,570,919
-
(89,411)
(5,000,000)
(4,688)
27,900
177,858
(4,888,341)
-
344,547
344,547
27,125
-
-
-
Net cash provided by (used in) operating activities
Cash flows from investing activities
Acquisition of property and equipment
Acquisition of goodwill
Acquisition of other tangible assets
Acquisition of accumulated deficit
Acquisition of additional paid in capital
Net cash used in investing activities
Cash flows from financing activities
Increase in loans payable
Net cash provided by financing activities
Net change in cash and cash equivalent
Cash and cash equivalent at beginning of period
Cash and cash equivalent at end of period
Supplemental disclosure of cash flow information
Cash paid for interest
Cash paid for income taxes
Non-cash investing and financing activities
Common stock issued for services or interest
Page F-5
$
27,125 $
-
$
$
- $
- $
-
$
- $
-
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Background
Readen Holding Corp., a Nevada corporation. was originally incorporated in the state of Idaho under the name of
“Beacon Light Mining Company” in 1953. In 1997, we created a wholly-owned subsidiary with the same name in the state of
Nevada. We then merged into the Nevada subsidiary and became a Nevada corporation. We were reincorporated in Nevada on
November 19, 1997, under the name “Beacon Light Mining Company.” On February 18, 1998, we changed our name to
“Beacon Light Holding Corporation.” On August 3, 2001, we changed our name to Wellux International, Inc. and operated under
that name until May 5, 2005, when we changed our name to Readen Holding Corp.
The Company is engaged in the business of identifying and acquiring privately held equity holdings in various entities worldwide.
On June 1, 2011, the Company underwent a change of control when it elected its new officers.
On July 25, 2011, the Company entered into a Share Exchange Agreement with Readen Industries Ltd. pursuant to
which we acquired 100% of the outstanding shares of common stock of Readen Industries Ltd. in exchange for 100,000,000
shares of our Common Stock. Readen Industries and our subsidiaries are engaged in the retail sale of mobile phones, prepaid
phone cards and Sim cards.
Readen Holding Corp. is the parent company of Readen Industries Ltd., a company organized under the laws of Hong Kong,
PRC. Readen Holding Corp. is the management unit. Readen Industries Ltd. has the following subsidiary: Moho Telecom Ltd.,
which owns or controls the following subsidiaries: D5 Mobile BV, D5 Mobile Sarl and D5 Avenue Ltd.
The following narrative offers an overview about our various companies:
Three companies, D5 Mobile BV, D5 Mobile Sarl and D5 Avenue Ltd, have been incorporated for the sales and
distribution of different main lines of telecom products in Europe. Various agreements have been signed covering development,
marketing and distribution of specific telecom and telecom related product. These exclusive agreements secure continuity in
supply, innovation and factory support. The vision of the Group is to make mobile communication services affordable for
everybody. The services contain communication and entertainment, which are available any time, everywhere and personally. In
order to reach their vision of a full service telecom organization the following tasks have been defined for the following
companies:

D5 Mobile BV and D5 Mobile Sarl are responsible for providing mobile phones from China, which must fulfill the
wishes and needs of EU users. One of the key values of D5 Mobile is to insure high standards for design, quality and
functionalities of mobile phones. Product specifications will be 100% suitable for the market needs of target customers
such as teenagers, business professionals, elderly, non-native and fashion/gadget buyers within the EU markets. In the
4th quarter of 2011, D5 Mobile will start with a B2B market approach offering devices in combination with postpaid
subscriptions.

D5 Avenue is responsible for website sales to consumers and retailers. Readen Industries acts as the buying office and
looks after supply and innovation. Cost effectiveness is a key success factor of the Group. Expertise and management
are the unique skills within the Group. The production technologies in China will be applied in the business. The Group
will not invest in the production of mobile phones; D5 Mobile will manage the suppliers and optimize the production
process and capabilities of its partners in China. Customization in mobile phones on requests of corporate partners is
possible, which insures the sustainable competitiveness of D5 Mobile in the business market without large investment.
D5 Mobile already has exclusive development and distribution agreements with suppliers in China.
Page F-6
32
(unaudited)
1. Background (continued)

On April 17, 2012, the Company announced that Readen Holding Corp expanded points of sales of YohoMobile
subsidiary’s vending machines by securing exclusive distribution rights to multi-function vending machines via
terminals placed in retail stores, starting in The Netherlands.
2. Basis of Presentation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary,
Readen Industries Ltd and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America and in management's opinion, reflect all adjustments, including normal
recurring adjustments, necessary to present fairly the Company's financial position at June 30, 2012 and 2011, and the results
of operations and cash flows for the years ended June 30, 2012 and 2011. The results of operations for the years ended June
30, 2012 and 2011 are not necessarily indicative of the results that the Company will have for any subsequent fiscal quarter.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
3. Liquidity and Operations:
The Company had net income of $70,537 for the year ended June 30 2012 and a net loss of $24,526 for the year ended
June 30 2011.
As of June 30, 2012, the Company had cash of $27,125, accounts receivable of $293,441, inventory of $704,989 and
accounts payable of $417,004. The Company’s management is confident that they will be able to satisfy the Company's short
term working capital needs for operating expenses. At the Company’s discretion, they may decide to raise additional capital in
the future through equity or debt financing.
4. Summary of Significant Accounting Policies
Cash and Cash Equivalents - The Company considers all highly liquid debt instruments with original maturities of
three months or less to be cash equivalents.
Revenue Recognition - The Company recognizes revenue from product sales when persuasive evidence of an
arrangement exists, shipment has occurred, the seller's price to the buyer is fixed or determinable and collectability is
reasonably assured.
Research and Development Expenses - Research and development expenses are charged to operations in the period
incurred
Selling and Marketing Expenses - Selling and marketing expenses are expensed as incurred.
Page F-7
33
(unaudited)
4. Summary of Significant Accounting Policies (continued)
General and Administrative Expenses - General and administrative expenses are expensed as incurred. These expenses
were $715,030 and $22,251 for the years ended June 30, 2012 and 2011, respectively.
Concentrations of Credit Risk - Credit risk represents the accounting loss that would be recognized at the reporting date
if counterparties failed completely to perform as contracted. Concentrations of credit risk (whether on or off balance sheet) that
arise from financial instruments exist for groups of customers or counterparties when they have similar economic
characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic
or other conditions.
Use of Estimates - The preparation of the financial statements in conformity with accounting principles generally
accepted in the United States of America 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 balance sheet and the
reported amounts of revenue and expenses during the reporting period. Significant estimates include the Company's debt
discount, and share-based compensation expense. Actual results could differ from these estimates.
Stock-Based Compensation - The Company accounts for stock-based compensation under the provisions of FASB
ASC 718 (Statement of Financial Accounting Standards No. 123 (revised 2004), "SHARE-BASED PAYMENT"), which
requires the Company to measure the stock-base compensation costs of share-based compensation arrangements based on the
grant date fair value and generally recognizes the costs in the financial statements over the employee's requisite service period.
Stock-based compensation expense for all stock-based compensation awards granted was based on the grant date fair value
estimated in accordance with the provisions of FASB ASC 718.
The Company measures compensation expense for its non-employee stock-based compensation under FASB ASC 50510 and 50, "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services". The fair value of the option issued is used to measure the transaction, as this is more reliable than
the fair value of the services received. The fair value is measured at the value of the Company's common stock on the date that
the commitment for performance by the counterparty has been reached or the counter party's performance is complete. The fair
value of the equity instrument is charged directly to compensation expense and additional paid-in capital.
By recording employee stock-based compensation using the fair value recognition provisions of Accounting Standards
Codification ("ASC") Topic 718 ("ASC 718") using the modified prospective transition method, and recording non-employee
stock-based compensation expense in accordance with ASC Topic 505, the Company did not recognize any stock
compensation expenses for the years ended June 30, 2011and 2010.
Income Taxes - The Company accounts for its income taxes under the provisions of FASB-ASC-10 "Accounting for
Income Taxes." This statement requires the use of the asset and liability method of accounting for deferred income taxes.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax reporting purposes, at the applicable enacted tax rates. The
Company provides a valuation allowance against its deferred tax assets when the future realizability of the assets is no longer
considered to be more likely than not.
Convertible Notes Payable - The Company accounts for any convertible notes payable under the provisions of FASB
ASC 470 (Staff Position No. APB 14-1"Accounting for Convertible Debt Instruments that may be Settled in Cash upon
Conversion (including partial cash settlement"). FASB ASC 470 clarifies that convertible debt instruments that may be
settled in cash upon conversion (including partial cash settlement) are not addressed by FASB ASC 470-20-65-1 (paragraph 12
of APB Opinion No. 14, "Accounting for Convertible Debt Instruments”.
Page F-8
34
(unaudited)
4. Summary of Significant Accounting Policies (continued)
Debt and Debt Issued with Stock Purchase Warrants"). Additionally, FASB ASC 470 specifies that issuers of such instruments
should separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt
borrowing rate when interest cost is recognized in subsequent periods.
The Company accounts for uncertain tax positions in accordance with FASB ASC 740-10, 30 and 270,
"Accounting for Uncertainty in Income Taxes." The application of income tax law is inherently complex. As such, the
Company is required to make certain assumptions and judgments regarding its income tax positions and the likelihood whether
such tax positions would be sustained if challenged. Interest and penalties related to uncertain tax provisions are recorded as a
component of the provision for income taxes. Interpretations and guidance surrounding income tax laws and regulations change
over time. As such, changes in the Company's assumptions and judgments can materially affect amounts recognized in the
Company's consolidated balance sheets and statement of operations.
5. Balance Sheet Information
Note receivable - related party - As of June 30, 2011, the Company held a note receivable from the former President of
the Company, Jerry Gruenbaum, with an original balance of $75,000. This note accrued interest at an annual rate of 10% from
the effective date of January 2, 2000.
The balance of the note at June 30, 2012 was $168,750, which includes accrued interest of $93,750.
Property and equipment - As of June 30, 2012, the Company owned office equipment with a net value of $89,411.
Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance
and repairs are expensed as incurred; additions, renewals and betterments are capitalized. Depreciation of property and
equipment is provided using the straight-line method with estimated lives ranging from 3 to 5 years as follows:
Furniture, plant and equipment
Less Accumulated depreciation
Total Property and equipment, net
$ 112,868
-------------(23,457)
-------------$ 89,411
=========
Depreciation expense for the year ended June 30, 2012 was $23,457 and was recorded as a general and
administrative expense.
Goodwill - As of June 30, 2012, goodwill in the amount of $5,000,000 was recorded in relation to the acquisition of
Readen Industries Ltd. Management has evaluated the valuation related to the goodwill and does not believe any impairment of
the amount exists as of June 30, 2012.
Other assets at June 30, 2012 consist of deferred compensation of $19,500 and other various assets. In July
2011, the Company issued a total of 1,400,000 shares of its common stock, with an aggregate value of $45,000, to four officers
and directors, as base compensation for their services for the two year period from June 1, 2011, until May 31, 2013. The
deferred compensation of $19,250 represents the period for their services subsequent to June 30, 2012.
Page F-9
35
(unaudited)
5. Balance Sheet Information (continued)
Advances Payable - related parties - During the years ended June 30, 2012, 2011 and 2010, Ronald Steenbergen and
Philip Lam advanced the Company a total of $32,585 to pay operating expenses. The advances are short term and non-interest
bearing. The advances payable amounts were $0 and $28,585 at June 30, 2012 and 2011, respectively.
Interest Payable - The 766,667 Series B Preferred Shares bear dividends at a rate of 8.5% of their stated value of $0.15
per share. The $10,129 interest payable at June 30, 2012, represents the interest for the period from June 18, 2011 to June 30,
2012. On June 17, 2011, the Company resolved to convert interest payable in the amount of $113,200 into 12,703,152 common
stock shares at the request of the current preferred stock shareholder, Ronald Steenbergen.
Director fees payable - As of June 30, 2012, $151,136. is owed by the Company to Mr. Lam Kwok Kwong, a director
of the Company.
Other current liabilities - As of June 30, 2012, the Company owes $432,663 to various companies.
Shares to be issued – The $205,200 amount recorded at June 30, 2011 was comprised of $50,000 relating to two
employment agreements from January 2, 2000 for which 1,000,000 common stock shares were issued, $42,000 relating to four
employment agreements from June 1, 2011 for which 1,400,000 common stock shares were issued and $113,200 relating to the
conversion of the accrued interest related to the Series B Preferred Shares outstanding for which 12,703,152 common stock
shares were issued.
6. Stockholders' Equity
DESCRIPTION OF SECURITIES:
The Company is authorized to issue up to 295,000,000 shares of common stock (1), par value $.001 per share, of which
150,267,074 shares were issued and outstanding as of June 30, 2012. The Company is also authorized to issue up to 5,000,000
shares of preferred convertible stock, par value $.001 per share, of which 766,667 shares were issued and outstanding as of June
30, 2012.
(1) As of June 30, 2011, we had 45,000,000 shares of Common Stock authorized and 5,000,000 shares of Preferred Stock
authorized. In July 2011, we amended our Articles of Incorporation to increase the total number of authorized shares of Common
Stock to 295,000,000 and kept the total number of authorized shares of Preferred Stock at 5,000,000.
Common stock:
The Company is authorized to issue up to 295,000,000 shares of common stock, par value $.001 per share, of which
150,267,074 shares were issued and outstanding as of March 31, 2012. The Company is also authorized to issue up to 5,000,000
shares of preferred convertible stock, par value $.001 per share, of which 766,667 shares were issued and outstanding as of
March 31, 2012.
Each shareholder is entitled to one vote for each share of common stock owned of record. The holders of shares of
common stock do not posses cumulative voting rights, which means that the holders of more than 50% of the outstanding shares
voting for the election of directors can elect all of the directors, and in such event the holders of the remaining shares will be
unable to elect any of our directors. Holders of outstanding shares of common stock are entitled to receive dividends out of assets
legally available at such times and in such amounts as our Board of Directors may determine. Upon our liquidation, dissolution,
or winding, the assets legally available for distribution to our shareholders will be distributable ratably among the holders of the
shares outstanding at the time. Holders of
Page F-10
36
(unaudited)
6. Stockholders' Equity (continued)
our shares of common stock have no preemptive, conversion, or subscription rights, and our shares of common stock are not
subject to redemption. All our shares of common stock are fully paid and non-assessable.
Preferred stock:
The Company is authorized to issue 5,000,000 shares of Series B Preferred Stock at a par value of $0.001 per share. The
Company had 766,667 issued and outstanding Series B Preferred Stock shares as of June 30, 2012.
The Series B Preferred Shares have no voting rights, may each be converted into one share of common stock and bear
dividends at a rate of 8.5% of their stated value per annum, which are cumulative and accrue daily from the date they are issued
at an interest rate of 1.5% per month.
7. Stock Options and Warrants:
As of June 30, 2012, the Company had not issued any options or warrants.
8. Commitments and Contingencies:
Employment agreements - The Company has recorded all commitments as of June 30, 2012.
Offices:
Our new office and showroom in The Netherlands are located in a modern office premises at Gijsbrecht van
Amstelstraat, 423A 1216A, Hilversum, The Netherlands. We are leasing this office from a non-affiliated party through January 2,
2013. We are paying 1,500 Euros per month as base rent for this 160 square meter facility. In addition, we pay additional fees
for T-1 access, phone, copies, fax service, conference room use and postage.
Our office and showroom in Hong Kong is located in the South Seas Centre, 75 Mody Road, room 302, Tower 1, Tsim
Sha Tsui, Kowloon, Hong Kong. This is a 120 square meter facility that we lease for 17,000 Hong Kong dollars per month.
We also have an office and showroom in France located at 8385 Avenue Victor Hugo 93300, Aubervilliers, Paris,
France. This is a 120 square meter office and showroom facility and a 60 square meter warehouse facility for which we pay
1,500 Euros per month.
The Company, as of June 30, 2012 has no additional financial commitments that would represent long term commitments on
behalf of the Company.
9. Related Party Transactions:
As described in Note 5, above, the Company has a note receivable – related party, advances payable – related parties,
director fees payable and interest payment commitments with certain related individuals.
Page F-11
37
(unaudited)
10. Share Based Compensation
As described in Note 5, above, the Company compensates its officers, directors and management with common stock
shares pursuant to the terms of the employment agreements.
11. Legal Matters
The Company is not aware of any legal matters that would have a financial impact on the Company’s present financial
condition as of the filing date of these financial statements.
12. Subsequent Events
The Company is not aware of any subsequent matters requiring disclosure except as noted below.
On June 4, 2012, the Company announced that Readen Industries Limited (HKG) a 100% owned subsidiary of Readen
Holding Corp. Planned to purchase 100% of the shares of Beemster Vastgoed B.V. in the Netherlands. Beemster Vastgoed B.V.
is active within the real estate market of the Netherlands, predominantly in the self storage industry. Within this industry,
Beemster Vastgoed is responsible for the building, implementing and operation of the self storage company’s in the Netherlands
region. Drachten Storage Holding B.V. (DSH), a 100% owned subsidiary of Beemster Vastgoed, is also the owner and operator
of City Box in the town of Drachten. DSH has a franchise contract with City Box, in which they provide self-storage services
for households and businesses in the Netherlands.
City Box Drachten contains gross 3,000 m of storage space totaling over 350 units. 60% of the units are rented as self
storage units and the remaining 40% will be used as a new distribution center and warehouse for RHCO's subsidiary D5 Mobile.
The building is ideally located in the northern area of the Netherlands. Anticipating the acquisition, Beemster Vastgoed was
renamed Readen Real Estate B.V. In addition to the storage projects, Readen Real Estate B.V. is planning to acquire real estate
properties which would add value to the total business of Readen Holding Corp. and its subsidiaries.
On June 5, 2012, the Company announced that Readen Real Estate signed a letter of intent for the purchase of the
castle estate Altembrouck, in Gravenvoeren, Belgium. Subsequent to June 30, 2012, Readen Real Estate purchased 55 acres of
land and the 60.000 sq ft property Altembrouck for the amount of $8,500,000. and 7 million new issued (rule 144) common
shares of RHCO and another 6 million shares (rule 144) for the operational company Altembrouck BVBA which includes the
goodwill, furniture, interior and live stock (Wagyu cattle, Magalitza hogs and Korohitsu lambs). The 2011 appraisal report
valued the castle estate at $16,500,000. A mortgage arrangement, with the Triodos Bank in the Netherlands, for the $8,500,000.,
was utilized to close this transaction.
Readen Real Estate committed to invest a further $2,000,000. to finish the development of the estate as well as the
completion of the new wing of the hotel, which will include an additional 20 rooms and a wellness centre. Readen Real Estate’s
projects, Altembrouck and Beemster Vastgoed, will contribute an estimated $4,500,000. to the group revenue in the next 12
months. Presently, Altembrouck, is a truly multifunctional estate. The castle area on the estate can be rented in its entirety on an
exclusive basis for business purposes or receptions for all kinds of festive occasions, where privacy is guaranteed. Altembrouck
offers an unparalleled setting for seminars, product presentations, receptions, weddings, dinners and private dining. Luminous
spaces are available for small and larger groups.
Page F-12
38

readen holdings corp.

Transcription

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