To all who have been waiting for a response from Mr. G. Krause, Chairman, Sara Hallitex Corp. This report is a reprint from the Sara Hallitex Website. I found it to be quite informative......
A Letter from the Chairman
(Garrett K. Krause)
May 6, 1999
The TruthSeeker Report
Introduction:
This report has been generated for our shareholders in response to a list of questions and allegations made towards Sara Hallitex Corporation (the Company), its operations and current business model.
I received a number of calls from concerned shareholders regarding information posted on the Raging Bull and Silicon Investor message boards by certain ‘clients' of these web boards. I have to admit, when reading these postings I laughed as I though about all the "enemies" I have in the world and wondered who would waste their time on 10-to-20 messages per day regarding our business operations. I take pride in knowing what started out as a small investment operation five years ago has grown into a successful OTC public company with a stock price around $9.00 per share. I must say we are well ahead of my original 30-year plan for this company.
Anyway, I will not waste any more time on this introduction and like you, would like to get to the heart of what this letter is all about.
What was the situation before Sara Hallitex Corporation was founded?
Long before founding Sara Hallitex Corporation, I had been a private investor, investment banker and consultant operating with many investments worldwide. Through my business dealings, I met a number of global investors interested in financing and building emerging growth companies with the eventual goal of taking these companies public. Through these relationships I arranged a deal to merge my private holdings and operations into a company operating as Sara Environmental, Inc. At the time, Sara Environmental had current debt over $1,000,000 and operations yielding approximately $1,400,000 in annual revenues. The company's only valuable asset was the patent on an environmentally friendly underground optical fiber vault system.
Completion of the merger with Sara Environmental allowed me to take my business operations public. Subsequently I, along with my investor group, acquired controlling interest in the new resulting company, Sara Hallitex Corporation.
Where did Sara Hallitex Corporation come from?
On November 27, 1996 Sara Environmental, Inc. formally became Sara Hallitex Corporation. Development of the Company's new corporate mission, business philosophy and focus as well as elimination of debt was necessary before much business could be accomplished. This phase took longer that expected as part of our plans to build a viable publicly traded company. Although Sara Hallitex could have begun trading on November 27, 1996, I elected to wait until all the necessary work was completed before launching the company on the OTC Bulletin Board.
Upon completion of reorganization and elimination of debt, Sara Hallitex Corporation officially opened for trading on the OTCBB on October 31, 1997 at around $1 per share, with a new CUSIP number and stock symbol from the NASD.
Question #1: If this was a stock scam whereby the insiders just wanted to unload stock why did it take until October 31, 1997 to open the stock on the market?
What is the Sara Hallitex Corporation business model?
In a nutshell: we are the "Deal Makers". Our methods may not always be conventional but they are thoroughly legal and deals are completed to the benefit of our shareholders.
Our business model is quite simple: We are in the business of acquiring, financing, incubating and executing a diversified portfolio of business opportunities presented to us on a global basis. In short we "do" deals, creating value for our shareholders. Each shareholder, including myself, is an insider and promoter on these deals and has the right to own some of the equity subject to the applicable limitations imposed by the securities laws.
What is the relationship between Sara Hallitex Corporation and the Wilmington Group of Companies?
The Wilmington Group of Companies was, and continues to be, one of the primary investors in Sara Hallitex Corporation long before the Company was even created. I previously served as Managing Director for the Wilmington Group of Companies the primary catalyst and forefront to Sara Hallitex, providing most of the early financing and organizational support for the Company during its formative stages. Wilmington Capital currently operates as the resident agent and incorporator for a number of new Nevada companies.
The Wilmington Group of Companies includes the following companies and investment partnerships:
Main Company:
-Wilmington Rexford, Inc. Principal Company
Subsidiary Companies and Partnerships:
-Wilmington Capital, LLC Resident Agent & Consulting for Nevada
-Wilmington Partners X, LLC. Investment Partnership 1
-Wilmington Partners XI, LLC Investment Partnership 2
-Financial Stock Marketing, Inc. Financial PR Company
-Gryphon & Associates, S.A. Investment Holding Company
-Dorf Enterprises, Inc. Investment Holding Company
Mr. Holmes Stoner, Jr. is President of Wilmington Rexford, Inc., a U.S.-based investment company that has invested in Sara Hallitex Corporation companies since 1995. Up until the middle of 1996 I was President of these companies acting on behalf of my investments and my international investor group. I resigned all positions with these companies in August of 1996. Mr. Stoner took over all day-to-day operations to represent the best interest of the shareholders of these companies and investment partnerships.
Today, Mr. Stoner is still active in the further investment of Sara Hallitex Corporation through the Wilmington Group of Companies. The Wilmington Group has supplied capital to fuel our expansion allowing us to be in the position we are in today. Mr. Stoner now assists the Investor Relations Department of Sara Hallitex Corporation.
I have great trust in our ongoing relationship with the Wilmington Group of Companies. As our expansion grows in the future we will rely on the Wilmington Group for financing and support for our projects. If you have any questions about the Wilmington Group of Companies you may contact Mr. Holmes Stoner, Jr. the president and U.S. Representative of this organization. Yes, this is the same Holmes Stoner, Jr. that continues to work for our Investor Relations department as an independent contractor.
What is with the FutureVest Stock Report?
Back when shareholders were asking for more information on Sara Hallitex Corporation, I asked Mr. Stoner of Wilmington Group of Companies to prepare a report giving the shareholders some facts on the Company. After supplying Mr Stoner with pertinent information, he then issued what is now the Famous FutureVest Stock Report from Financial Stock Marketing. This report was named FutureVest after a concept that had been worked on at the time with FutureVest America, LLC. Again, I am not the owner of FutureVest Stock Report of Financial Stock Marketing, Inc., but was the original incorporator of these companies through my original position with Wilmington Capital, LLC (Nevada Registered Agent.)
Why does your name show up as a contact for Wilmington Capital, LLC in the state of Nevada?
Before I resigned as Managing Director, my duties with Wilmington Capital, LLC included incorporating Nevada companies for our investors and client. I have been the incorporating agent for many Nevada Companies in the past. I also have done business with these companies in numerous capacities. At certain times, I have even sat on the Board of Directors or been an officer and director of some of these companies. Since taking over Sara Hallitex Corporation, I have resigned all positions with the Wilmington Group of Companies as well as other companies I have been involved with over the past four years.
I resigned from Wilmington Capital, LLC back in late 1996. After talking to the company's attorney, I learned that the new management of Wilmington Capital, LLC had not filed the 1997 or 1998 new Board of Directors notice. Consequently, my name still appears as the company contact according to the State of Nevada. Again, my resignation became effective on the books and records of the corporation on August 1996.
I remain the Director and Officer of each and every company that Sara Hallitex owns an equity stake in. Hence, you will find me listed as a director of the following Nevada companies:
Proterra, Inc.Sara Hallitex subsidiary
X-SELNET Technology Group, Inc.USLab.com, Inc. holding
USLab.com, Inc.Sara Hallitex holding
Tril-Media Entertainment, Inc. Formerly Trillium Communications, Ltd.
Trillium Management Group, Inc.Tril-MediaNet.com holding
Trillium Marketing, Inc.Tril-MediaNet.com holding
Why have you used existing shell companies to do your SaraIPO deals? And are you planning to continue this method in the future?
Quite simply, speed of execution. When you structure a "shell" deal correctly, eliminating outside promoters and all the cheap stock that is unpaid for, a company can be reorganized with the new assets into a very successful public entity. It is not the shell that creates a bad deal; rather it's the amount of cheap stock that the promoter keeps that is a mistake. I believe I have proved that you can create a solid company out of these kinds of mergers in a very quick time frame.
This fact was not hidden from anyone. The so-called "shell merger" is an acceptable, published method of bringing a private company public. Shell mergers are done every day from the biggest merger deals to the smallest OTC transactions. The transaction simply must be structured in a way where the private company does not get hurt by the stockholders of the public company after the merger and that fair value is given to the public shareholders after the merger. Sara Hallitex Corporation has been successful in this arena and will continue to transact some of its SaraIPO's using this technique.
Remember: it is not how you get the deal completed, it is the fact that the deal was completed in an acceptable and legal manner. Nothing that we have completed in any of our transaction including finding our investors has been completed otherwise.
In the recent Goldman Sachs IPO, the company handpicked investors for their IPO. This was done to guarantee minimal selling into their big opening price. As you could see, it worked!
As far as the answer to the second part of the question, The answer is YES, we do plan to keep using shell companies including OTC Bulletin Boards, Nasdaq NMS and Small Cap, NYSE and ASE companies for our dealmaking strategies. Each deal will have its own unique structure. Weather we use a merger or a traditional IPO structure the result will be the same - The deal gets funded and publicly traded on an acceptable stock exchange to provide liquidity for the Sara Hallitex shareholders.
What is the future of the SaraIPO?
The future is very simple: The future of Sara Hallitex Corporation is based on having a closed group of shareholders fund each and every deal that Sara undertakes. This allows our shareholders to have an inside opportunity and inside track on the market of taking companies public. In the real world of IPO's it is very difficult for anyone to get filled for any IPO. Most IPO buyers are the elite of the elite and they are handpicked to participate, as in the case of the Goldman Sachs IPO. Call it a closed-door approach, where all the "insiders" get in on a deal and then sell it to the public. Why is such a system not scrutinized by the Truthseekers of the world?
In the future Sara Hallitex and its SaraIPO program will be to take its new subsidiaries public via a traditional IPO. This is achieved through a formal SEC registration statement. Sara is currently negotiating with companies to use in its new SaraIPO program, whereby the Company registers a $5 Million minimum IPO with the SEC and gives our shareholders the right to fund these companies before they become available to the public for trading. This program is currently under development and will be the future of Sara Hallitex Corporation. This will be a welcome addition to the current Sara Hallitex methods of mergers, reverse mergers and acquisitions. Combine the entire strategy and you have a complete diversified Sara Hallitex Corporation offering its shareholders prime opportunities to participate.
With this new SaraIPO program, what happens to the dividends?
Our shareholders will still receive the dividends. The original restricted stock dividend program will stay in effect. This program has expanded to allow our shareholders to not only receive the restricted stock dividends, but also gives them the right to participate further in stock of the new company that we take public. This will give our shareholders a greater opportunity to get involved in the companies we "spin out".
Why are the dividends restricted?
Sara owns restricted shares in each deal for capital and services performed by its Venture Capital division. This is the same stock that we issue as dividends.
The stock that Sara owns is insider stock and thus it is restricted according to rule 144.
What is Dan Curran's background ?
You can find information on Mr. Curran's background at the USLab.com website, www.uslab.com. Mr. Curran has been heavily involved in the Internet industry since 1993. Mr. Curran founded and developed www.stockpicks.com and www.dietadvice.com over the last four years then sold these websites to X-SELNET Technology Group in late 1998.
Was Dan Curran a stock promoter?
Never. Mr. Curran has picked stocks for www.stockpicks.com and his record has been exceptional. Some of Mr. Curran's recommendations include:
stockpicks.com
Does Stockpicks.com get paid to feature stocks?
Stockpicks.com is in no way compensated to feature any of its picks. The company recommends stocks based on their fundamentals using a variation of analytical tools and formulas. Stockpicks.com has performed exceptionally in all of its picks to date, including Sara Hallitex (OTCBB: SHAL) and Janus International (OTCBB: JNUS).
What other stocks has Stockpicks.com featured?
Stockpicks.com currently picks stocks from the following areas: OTC bulletin board, NASDAQ Small Cap and NMS, NYSE and ASE stocks. We service the stock picks that we prefer and it remains the investor's responsibility to use other Internet tools available to analyze and verify the company's recommendations.
Was Stockpicks.com a part of Sara Hallitex when it originally featured SHAL and JNUS?
Sara Hallitex (SHAL) was first featured in Stockpicks.com in January 1998. Sara Hallitex then acquired Stockpicks.com from Mr. Curran in late 1998. Sara Hallitex Corporation has made any and all disclosures on the picks since the acquisition of Stockpicks.com.
What effect does it have on USLab.com shareholders that the company was merged into KRAB?
KRAB was a total reorganization project for Sara Hallitex Corporation. In November 1998, we acquired the subsidiary operating company of KRAB and merged it into Janus International, Inc. This operation is currently preparing to start its cash flow operations by relocating three large-trap fishing vessels from Canada to the waters of Mexico to begin the harvest of seafood.
After this transaction was complete a deal was struck with Mr. Pete Logan, President of KRAB to merger X-SELNET Technology Group, Inc. into KRAB. The end result was USLab.com, Inc. This strategy is consistent with our other transactions and business model.
The original KRAB shareholders received 50,000 shares of USLab.com as compensation. This included the original control block held by Mr. Logan.
What is the current status of Chasens Restaurant? Did it close down in 1995? Who are the current owners and what is their vision for the future?
The original Chasen's restaurant did close its doors in 1995 due to rising cost of its prime real estate location and the eventual sale of the property for development purposes. Chasen's was relocated and refinanced by a new group of investors and partners in 1996 and re-opened at its new location in Beverly Hills. The expansion of this restaurant includes the Jockey Club, a private club with over 600 members consisting of the "Who's Who" of Hollywood, Beverly Hills and the rest of California.
Chasen's is currently undergoing a $1 million renovation, adding a Martini bar and high-end private dining area for its celebrity clientele. The company currently earns annual revenues of over $5 million and once completed is projected to gross over $8 million per annum in its Beverly Hills location.
Chasen's was just featured in the March 1999 issue of Interior expressions magazine. This article will be available www.sarahallitex.com today. The operation is located at 246 N. Canon, Beverly Hills, California.
What happened to Triumph Foods? What was the timeline of events?
Triumph Foods International could not raise the capital needed to move its business plan forward. It was stuck until a merger was created between Triumph Foods and Janus International, Inc. Triumph is now well on its way to success as a division of Janus.
What is the Company's connection with Larry Ryckman and Archer Communications?
There has been no business relationship with Larry Ryckman since March 31, 1998. Mr. Ryckman was involved with the Company between October 1997 and March 31, 1998. He did receive stock from Wilmington Group of Companies to perform certain services. Any and all relationships with the Company were terminated March 31, 1998.
Neither Sara Hallitex Corporation nor any of its major shareholders had any prior association with Archer Communications.
What do you think is motivating the Truthseeker and his "band"? Do you believe it is a conspiracy?
I think that the recent article on a credible news site titled: ‘How to spot message board scammers' by Jeff Clabaugh answers this question. This article can be found on CBS.Marketwatch.com.
My only comment about the "Truthseekers" of the world is as follows:
"THEY ARE ABLE TO PROFIT FROM OUR SHAREHOLDERS' LOSSES AND THAT IS A CRIME."
This is plainly a smear campaign being propagated against the Company. All of their "data" is publicly accessible information. The problem is it's easy to twist the presentation in order to accomplish their agenda. Think of them as a different breed of "spin doctors". Essentially, they make money on stocks that go down in price. The more shareholders they persuade to sell a stock, the more the stock falls and bingo: TRUETHSEEKER and his buddies profit. It's all about the profit…their profit!
Remember Sara Hallitex is a company that will be around for a long time. We are two years into a 30-year corporate plan. That means that the stock will trade for another 28 years with Garrett K. Krause serving as head of the company. I am not really affected by the daily stock price of Sara Hallitex, as I will remain with this company for the long term. We are looking for the Warren Buffett-type of shareholder who understands our philosophy of building companies from the bottom up and receiving a participation in each company.
If Sara Hallitex transacts 10 deals per year for 28 years, we will then have equity in 280 public deals. What will the stock price of Sara Hallitex be worth at that time?
If some of day traders and nervous shareholders are scared then perhaps they should sell their positions. That would leave room for supporting shareholders to buy Company stock at a great price while we are still on the OTC Bulletin Board.
We are currently working on plans to elevate Sara Hallitex to the NASDAQ NMS. Although this transition would require us to complete our necessary filings with the SEC before this can happen. With this transition complete, long-term shareholders will benefit further as institutional investors look to acquire Sara Hallitex stock.
I cannot say if the Truthseekers group is a conspiracy or simply consists of some personal enemies. I am not perfect and in my 12 years in business I have made some mistakes. I have always taken a gamble on deals and at times things have not worked out. In my investment career, I have made tremendous amount of money and lost some as well. I have learned from my mistakes and have brought the proper guidance, experience and expertise to trying to make Sara Hallitex Corporation a solid public company.
For those shareholders that weather this personal and corporate attack on Sara Hallitex, we thank you for your loyalty. The fundamental truth is Sara Hallitex will remain strong and determined to carry out its corporate goals and we warmly welcome shareholders that join us in achieving those goals.
Will you keep shareholders updated as questions arise?
I'm in our corporate offices in Marina Del Rey, California every day at 6:00 AM Pacific and leave around 9:00 PM Pacific. Whenever possible, I personally take calls from shareholders, as some of you have found out in the past. At this time, Sara Hallitex is growing so rapidly that it is difficult to speak to each and every Company shareholder. However, our staff is growing and I am certain they will help you with any necessary information you may request.
I will be releasing pertinent informational reports in addition to SEC reporting requirements. With this information we will be keeping our shareholders informed. Please look for all Company updates at www.sarahallitex.com.
If any individual shareholder wishes to contact me directly, please email me at gkrause@sarahallitex.com.
Closing comment:
In closing, I would just like to mention a couple of small points. The Truthseekers of the world can take away market value from the Company: They can scare some good investors into selling their stock in a panic for their own profit. They can complete a smear campaign throughout the Web and get articles written about the twisted "truth" by some not-so-credible Web publications. I guess we at Sara Hallitex cannot stop this from happening. What they can't take away is the amazing dividends and future participation that we are issuing to our shareholders, nor can they take away the drive and persistence this company will have over the next 28 plus years. They are temporary hindrances to the company until they are unable to make any more money from our investors loses with their short selling technique. You the investor have to decide weather they are going to win this short-term battle.
Good Luck, to all and remember those who go short must cover sometime. I will always be here to make sure of that.
Most cordially,
Garrett K. Krause, CEO & Chairman of the Board
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