ParaFin Corporation (PFNO)

[$UPERMAN]

Reply from ERGOKONZEPT regarding Listing, 2015 business plans...


I've just received the Ergokonzept management report to the shareholders for 2014 which should bring you up to date on the listing and give you a brief overview of the company’s activities as well. Here's a word for word translation of the section dealing with the listing:

“The most important project for this year, the listing of the Ergokonzept PLC shares, was not accomplished. The reason is easily explained: We were poorly advised during the preparation and execution of the listing process. As a consequence of this faulty advice we are now suing the advisor in the district court of Potsdam.

The founding of the ERGOKONZEPT PLC and the registration of the shares were fraught with problems and delays but were eventually accomplished. The choice of the GXG Exchange in London as the trading platform turned out, in fact, to be an obstacle with respect to raising capital. In order to insure the liquidity of the shares we have thus decided to place our stock on the market in Germany. Our choice here fell on the Hamburg-Hannover Stock Exchange that is operated by the BÖAG Börsen AG. We are currently working intensely toward the goal of being accepted for a listing as soon as possible with the technical advice and assistance of the Advantec Management AG. Our experience has shown that the basic prerequisites for a listing have to be accomplished first. This applies especially to the scope and completeness of the balance sheets as well as the net assets of the operating companies.

We are being advised by the Treukonzept Steuerberatungsgesellschaft PartG (an accounting firm) in Berlin with respect to the evaluation of the company's book value. The net assets of the ERGOKONZEPT Aktiengesellschaft have been increased in two steps from 51.130 EUROS, which represented contributions from shareholders, to 1,1 million EUROS. The foundation has thus been laid to apply for a listing by taking the consolidated corporate balance sheet results as of December 31, 2014, which will be available in February 2015. The investments in real estate as well as furniture and office equipment should be reflected for the listing in the appropriate balance sheet positions at the end of the year. It therefore made sense to take the year end as the reporting date to be used in applying for the listing.”


The year-end summary continues by giving a brief status report on the various participations which are already know to investors. Below, I've made brief summaries of only those companies that have undergone significant changes:

VETTERLEIN GmbH & Co. KG - Ergokonzept AG has decided not to take over the partnership shares in this company. Merchandising services will be concentrated under the CHIMERA MERCHANDISING GmbH while the development of the Online Shops is viewed as less attractive.

The QUINTENSA Energiesanierung GmbH has had a successful year and expects an increase in new construction and renovation projects in the coming year. The new construction division will be spun off and become a part of the Bergmühle Bau GmbH. QUINTESA will continue with the renovation projects.

The MONGRELS IN COMMON fashion house will be integrated into the newly-formed ERGOfashion GmbH which will be a 100% subsidiary of the Ergo AG. The appropriate documents are to be finished in January 2015.

The LOI partner owning the rights to the EVERLAST Energy-Drinks did not fulfill the requirements for the agreement. The rights to the brand EVERLAST were not in the proper form for the development of the business.

A similar situation has developed with the name for the 700-year-old beer brand "Garley." Clear title to the brand is not available so the project is not currently being pursued.

The ERGOKONZEPT has not been standing still with its project development and has brought valuable new investments into their portfolio that have quality and profit expectations far in excess of the current assets and that could lead to significantly higher stock prices. The ERGOKONZEPT AG signed 3 separate LOIs on December 15, 2014 with new strategic partners each having enormous growth and profit potential. A new basis in the form of a high-tech building in the Technologiepark Ostbrandenburg in Frankfurt an der Oder was purchased on December 19, 2014 which was the former production site of the ODERSUN AG, a manufacturer of thin-film solar cells and modules. The purchase price as well as all closing costs have been fully paid and ERGOKONZEPT will take possession in January 2015. The property encompasses 6050 m² with 2.250 m² of floor space including a clean room for production which was built by ODERSUN at a cost of 5 Mio EURO.


A brief description of the 3 investment projects follows:


SCHOENING Pharma

Ergokonzept AG is an equal partner with the Schoening Pharma International Ltd. in the newly formed SCHOENING Pharma Berlin AG – Neue Novopin Fabrik. Drawing on decades of business experience and market presence the new SCHOENEN Pharma Berlin AG has acquired numerous pharmaceutical brand and license rights. The company is one of the leading suppliers internationally of homeopathic medications with a palette of over 70 different homeopathic products which cover almost all relevant therapy areas. The company has developed a potent vitamin spray which replaces many pills, capsules and syrups. In cooperation with international partners the company is working on the development of phyto (plant)-based stem cell applications for the booming anti-aging market. SCHOENING Pharma Berlin intends to be an international supplier in Eastern Europe and Asia where a large demand exists for German generic pharmaceuticals.


HydroMoTec

In cooperation with the NEWPHARM INVEST LTD and the Dr. Göbel Unternehmensberatung UG the Ergokonzept AG has developed a water hydrolysis system that can be retro fitted to existing vehicles to reduce the motor fuel consumption and carbon emissions for internal combustion engines in automobiles and other motorized devices. Development began in 2006 on various system strategies to split the water molecule into hydrogen and HHO or “knall gas” which is also called Brown’s gas. It is a “hydrogen on demand” system with no requirement for storage tanks and is produced with electricity from the vehicle’s generator. Numerous tests in 2012 certified fuel savings of at least 18% in automobile motors. Diesel motors were certified by a semi-governmental testing agency in 2014. Product development at present is concentrated on the market segment transport and logistic due to the large number of miles driven annually and the large potential savings per vehicle. Savings of up to 30.000 € per year are realistic for trucks with an annual mileage of 300.000 km.


REPACell®

ERGOKONZEPT AG and the Schoening Pharma International Ltd. are equal partners in the newly founded REPAcell® Aktiengesellschaft. REPAcell® will move into the Technologiepark in Frankfurt a.d. Oder. Innovative applications for stem-cell therapies are becoming increasingly popular to repair or replace damaged cells and organs in the body. Between 2011 and 2013 the market in the USA grew at an average rate of about 45%. New developments in stem-cell technology allow the cells to be harvested from a simple blood or connective tissue probe. The blood is immediately tested for AIDS as well as Hepatitis B & C. REPAcell® has secured this “gathering” technology and is working on a “biological life insurance.” The client’s stem-cells have already been secured and in case of an illness a patient-specific bio-therapeutic agent can be produced within 30 hours to treat the effects of a stroke or heart attack, for example, and significantly increase the client’s survival chances. Similarly, stem-cell gels or bandages greatly reduce the healing time for chronic wounds and even burns while reducing the incidence of extensive scarring. Contact has already been established with various medical associations and insurers to discuss marketing strategies.

The report, of course, goes into more detail but I’ve given you an exact translation of the intended listing procedures and summarized the remainder of the report. You should now have a much better picture of the Ergokonzept AG which is the operating subsidiary of the Ergokonzept PLC. The application for listing for the PLC will be submitted once the year-end financial statements have been completed.

I would like to take this opportunity to thank you for your support during the past year to extend my best wishes to your and your family for the holiday season.


Best regards

Terry