SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS UNDER THE 1934 ACT
STARUNI CORPORATION
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(Name of Small Business Issuer in Its Charter)
CALIFORNIA 95-2210753
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1642 Westwood Blvd., Los Angeles, California 90024
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(Address of Principal Executive Offices) (Zip Code)
(310)470-9358
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(Issuer's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Exchange Act: None
Securities to be registered under Section 12(g) of the Exchange Act:
Title of Each Class to be so registered:
Common Stock (No Par Value)
Name of Each Exchange on Which Each Class is to be Registered: N/A
This form is being filed with the Securities & Exchange Commission in order to
become a reporting company under the Exchange Act of 1934 and to obtain a
quotation on the OTC Bulletin Board in compliance with the National Association
of Securities Dealers, Inc. Rules 6530 and 6540 to limit quotations on the OTC
Bulletin Board to securities of companies that report their current financial
information to the SEC, banking, or insurance regulators.
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TABLE OF CONTENTS
Page No.
PART I
Item 1. Description of Business............................................1
Item 2. Management's Discussion and Analysis or Plan of Operation..........5
Item 3. Description of Property............................................8
Item 4. Security Ownership of Certain Beneficial Owners and Management.....8
Item 5. Directors, Executive Officers, Promoters and Control Persons.......9
Item 6. Executive Compensation.............................................9
Item 7. Certain Relationships and Related Transactions....................10
Item 8. Description of Securities.........................................10
PART II
Item 1. Market for Common Equity and Related Stockholder Matters..........11
Item 2. Legal Proceedings.................................................12
Item 3. Changes in and Disagreements with Accountants.....................12
Item 4. Recent Sales of Unregistered Securities...........................12
Item 5. Indemnification of Directors and Officers.........................16
PART F/S
Financial Statements for the periods ended September 30, 1999
and December 31, 1999.....................................................17
PART III
Item 1. Index to Exhibits.................................................18
Signatures....................................................................19
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
A. Corporate Organization
As used herein the term "Company" refers to Staruni Corporation, its
subsidiaries and predecessors, unless the context indicates otherwise. The
Company was incorporated in 1962 in California as Altius Corporation. The
Company was originally involved in the manufacture of freeway signs. In March
1997, the Company changed its name to Staruni Corporation to reflect the
acquisition of Starnet Universe Internet, Inc., a web developer and Internet
Service Provider ("ISP").
B. Business of the Company
The Company is an ISP with its main offices located in Los Angeles, California.
The Company provides a wide array of Internet services tailored to meet the
needs of individual and business customers, including customers with little or
no online experience. The Company does business mainly in southern California.
The Company presently has more than two thousand customers. The Company's growth
is attributable, in part, to the use of media advertising. The Company operates
its ISP business through its Cyberhotline Division, and advertises itself as
Cyberhotline.
Internet access and related value-added services ("Internet services") represent
growing segments of the telecommunications services marketplace. Declining
prices in the PC market, continuing improvements in Internet connectivity,
advancements in Internet navigation technology, and the proliferation of
services, applications, information and other content on the Internet continue
to attract a rapidly growing number of Internet users. The Company is seeking to
attract a portion of the growing number of Internet users as customers.
The Company provides a number of value-added services, such as dedicated
high-speed access, news access, Web hosting and server co-location. The Company
plans to evaluate and develop potential new value-added services, and will seek
to leverage its current sales, marketing and network capabilities in an attempt
to create additional revenue opportunities. The Company believes that a user
dense, regionally focused customer base will provide an excellent platform for
the introduction of new value-added services that can take advantage of brand
awareness and economies of scope and scale, potentially including Internet
telephony and video and audio programming distribution.
C. Description of Products and Services
The Company offers Internet services tailored to meet the needs of both
individual and business customers. The Company's primary service offering is
dial-up Internet access and value-added services for its individual customers.
The Company's business customers are able to take advantage of dedicated high
speed Internet access, Web hosting and other services. The Company's services
are offered in various prices and packages so that customers may customize their
subscription with services that meet their particular requirements.
The Company's current network provides customers with local dial-up access in
all the major areas of Southern California, as well as several smaller
communities. The Company's systems and network infrastructure are designed to
provide customers with reliability and speed. Reliability is primarily achieved
through redundancy
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in mission critical systems that minimize the number of single points of
failure. Speed is achieved through clustered systems, diverse network
architecture, multi-peered Internet backbone connections and aggressive load
balancing.
Internet Access. The Company's primary service is a dial-up Internet
access package, which includes unlimited Internet access and provides
various Internet applications such as World Wide Web, e-mail, file
transfer protocol and Usenet news access. The package costs $10.95 per
month.
High Speed Connectivity. In addition to offering dial-up and dedicated
analog access, the Company also offers its business customers dedicated
ISDN access and full and partial T-1 connectivity which can service
hundreds of users at once.
Web Services. The Company offers Web for businesses and other
organizations that wish to create their own World Wide Web sites
without maintaining their own Web servers and high-speed Internet
connections. With this "virtual Web server" service, Web hosting
customers can use their own domain names in their World Wide Web
addresses. Web hosting customers are responsible for building their own
Web sites and then uploading the pages to a Cyberhotline Web server.
The Company's Web hosting service features state-of-the-art Web servers
for high speed and reliability, a high-quality connection to the
Internet, specialized customer support and advanced services features
such as secure transactions and site usage reports. The Company
currently offers various price plans for Web hosting customers
beginning at $19.95 per month.
The majority of the Company's customers have month-to-month subscriptions. The
Company offers a 15-day money-back satisfaction guarantee for new customers.
Customers can subscribe by calling the 1-888-777- 7WEB phone number, or by
e-mailing the Company. The majority of customers are billed through automatic
charges to their credit cards or bank account. However, some customers are
invoiced. The Company offers discounts ranging from 10% to 20% on most of its
services for customers who prepay.
The Company strives to retain its customers by prioritizing fast response to
customer problems. Individuals accessing the Internet have many different
hardware configurations and varying levels of computer sophistication.
Consequently, the Company's customer care department must be able to effectively
address:
(i) problems affecting a variety of hardware systems;
(ii) start-up or other basic problems of new customers or new Internet
users; and (iii) more technical issues that may be encountered by
sophisticated users.
The Company strives to provide outstanding technical support in the industry,
especially for new users, while maintaining the ability to resolve the most
difficult problems that a sophisticated user may present. The Company attempts
to maintain a first-rate customer care operation. The Company's customer care
operation is designed to make every customer's Internet experience efficient,
productive and enjoyable, whether that customer is a novice or an experienced
Internet user. Customers can access customer support services through a local
telephone number or e-mail. The Company maintains on its Web site a
comprehensive description of its customer care services, as well as
troubleshooting tips and configuration information.
D. Marketing and Distribution.
The Company's marketing approach is designed to further its user density
business model, which focuses on
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rapid penetration of a given market to acquire sufficient customers to support
profitable operations. The Company's approach combines direct response with
extensive use of brand building television and radio advertising.
The marketing strategy is to offer a low-cost Internet service at $10.95/month,
or $99 per year. The advertising campaign targets members of American Online,
Earthlink and other more expensive ISP's, by offering a one- half price service.
The campaign has proven successful to date.
The Company's integrated marketing and sales approach includes direct response
television and radio advertising. The Company believes that broadcast is the
most effective and efficient way of reaching potential customers, particularly
disgruntled AOL users. Through a sophisticated and intensive broadcast and cable
television advertising campaign that emphasizes the quality and reliability of
the Company's Internet services and its responsiveness to customer needs and
problems, the Company has been able to elicit a strong response from potential
customers, who are asked to contact the Company through a telephone call to
1-888-777-7WEB. Broadcast advertising also helps to reinforce brand awareness of
Cyberhotline.
Once the Company's advertising has saturated a given market and the Company has
acquired a sufficient number of customers to allow profitable operation, the
Company then begins to reap the benefits of word of mouth communication. Such
communication not only has the potential to create a significant number of
referrals, but also may serve to reinforce brand awareness of Cyberhotline. At
this point, the Company's advertising expense per acquired customer begins to
decrease with each new customer acquired.
The Company's growth strategy focuses on:
(i) acquiring additional customers in its existing markets; and (ii)
deploying its user density business model in other selected markets.
The aim of the user density business model is to quickly build, in a given
market, a sufficient number of customers to allow the Company to support
profitable operations.
The Company attempts to continually evaluate the effectiveness of its marketing
methods, primarily by analyzing sales statistics such as call volumes, sales
volumes, media mix and incentive offer response, so that it can refine its
marketing campaign. The Company also uses input from focus groups and other
customer contacts to determine which marketing methods and incentives might be
most effective.
E. Competition
The market for the provision of Internet access to individuals is extremely
competitive and highly fragmented. There are no substantial barriers to entry,
and the Company expects that competition will continue to intensify. The Company
believes that the primary competitive factors determining success in this market
are a reputation for reliability and service, access speed, effective customer
support, pricing, creative marketing, easy-to-use software and geographic
coverage. Other important factors include the timing of introductions of new
products and services and industry and general economic trends. There can be no
assurance that the Company will be able to compete successfully against current
or future competitors or that competitive pressures faced by the Company will
not materially adversely affect its business, financial condition and results of
operations.
The Company's current and prospective competitors include many large companies
that have substantially greater market presence and financial, technical,
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marketing and other resources than the Company. The Company currently competes
or expects to compete with the following types of Internet access providers: (i)
national commercial providers, such as Verio, Inc., Mindspring Enterprises, Inc.
and EarthLink Network, Inc.; (ii) numerous regional and local commercial
providers, which vary widely in quality, service offerings and pricing such as
Website Services, Inc. and PDQ Net, Inc.; (iii) established online commercial
information service providers, such as America Online, Inc.; (iv) computer
hardware and software and other technology companies, such as International
Business Machines Corporation, Microsoft Corp. and Gateway, Inc.; (v) national
telecommunications providers, such as AT&T, MCI, Sprint and WinStar
Communications, Inc.; (vi) regional telecommunications providers, such as SBC
Communications and IXC Communications; (vii) cable operators, such as
Tele-Communications, Inc., Time Warner, Inc., TCA Cable, Inc. and Marcus Cable,
Inc.; (viii) wireless communications companies; (ix) satellite companies; and
(x) nonprofit or educational Internet access providers; (xi) Free access ISP's
such as Netzero, Freeinet and Alta Vista. The Company has recently announced
plans to implement a free access, ad-supported ISP in the year 2000. It has also
announced plans to implement a free high speed DSL Service, also in the year
2000.
There are more than 4,000 national, regional and local ISPs. Some of these ISPs
have chosen to focus on business customers, others on individual customers. Most
national ISPs have made a major investment in a network infrastructure in
anticipation of future high subscriber growth. As a result, many national ISPs
have been experiencing an extended period of losses as they work to build a
profitable base of customers in each of the many markets they serve. In addition
to such losses, some national ISPs are exposed to a high level of technological
obsolescence risk as Internet access technology continues to evolve. At the
other end of the spectrum, many regional and local ISPs, including the Company,
which have a much lower investment in a network infrastructure, may lack the
necessary marketing skills and resources necessary to build a sufficient
customer base to allow the Company to operate profitably.
In order to respond to expected changes in the competitive environment, the
Company may, from time to time, make price, service or marketing decisions or
make acquisitions that could possibly harm its business. Developing new
technologies may also increase competitive pressures on the Company by enabling
its competitors to offer a lower cost service.
F. Requirement of Government Approval
The Company is subject to the same federal, state and local laws as other
companies conducting business on the Internet. Today, there are relatively few
laws specifically directed toward online services. However, due to the
increasing popularity and use of the Internet and online services, it is
possible that laws and regulations may be adopted with respect to the Internet
or online services. These laws and regulations could cover issues such as online
contracts, user privacy, freedom of expression, pricing, fraud, content and
quality of products and services, taxation, advertising, intellectual property
rights and information security. Applicability to the Internet of existing laws
governing issues such as property ownership, copyrights and other intellectual
property issues, taxation, libel, obscenity and personal privacy are uncertain.
Several states have proposed legislation that would limit the uses of personal
user information gathered online or require online services to establish privacy
policies. One or more states may attempt to impose such regulations upon the
Company in the future, which could possibly harm the Company's business.
The Federal Trade Commission has recently begun a proceeding with one online
service regarding the manner in which personal information is collected from
users and provided to third parties. Changes to existing laws or the passage of
new laws intended to address such issues could possibly affect the way the
Company does business or might create uncertainty in the marketplace. This could
reduce demand for the services of the Company or possibly increase the cost of
doing business as a result of litigation costs or increased service delivery
costs, or might otherwise harm the Company's business.
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G. Regulatory Overview
Due to the increasing popularity and use of the Internet, it is possible that
additional laws and regulations may be adopted with respect to the Internet.
Such new laws or regulations may cover issues such as content, privacy, pricing,
encryption standards, consumer protection, electronic commerce, taxation,
copyright infringement and other intellectual property issues. The Company
cannot predict the impact, if any, that any future regulatory changes or
development may have on its business, financial condition and results of
operations. Changes in the regulatory environment relating to the Internet
access industry, including regulatory changes that directly or indirectly affect
telecommunication costs or increase the likelihood or scope of competition from
regional telephone companies or others, could have a material adverse effect on
the Company's business, financial condition and results of operations.
H. Employees
The Company has three full time employees. Part time employees are hired from
time to time depending on increased marketing or additional projects in which
the Company may be involved.
I. Reports to Security Holders
The Company's annual report will contain audited financial statements. The
Company is not required to deliver an annual report to security holders and will
not voluntarily deliver a copy of the annual report to the security holders. The
Company intends, from this date forward, to file all of its required information
with the Securities and Exchange Commission ("SEC"). Prior to this form being
filed there were not other forms filed. The Company plans to file its 10KSB,
10QSB, and all other forms that may be or become applicable to the Company with
the SEC.
The public may read and copy any materials that are filed by the Company with
the SEC at the SEC's public Reference Room at 450 Fifth St., NW, Washington,
D.C. 20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The statements and forms
filed by the Company with the SEC have also been filed electronically and are
available for viewing or copy on the SEC maintained Intent sites that contain
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC. The Internet address for this
site can be found at http://www.sec.gov Additional information can be found
concerning the Company on the Internet at http://www.staruni.com.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
General
The Company's major focus has been the creation and development of its ISP
business. As a by-product the Company has also been involved in the development
of its Web Hosting and Web Design business.
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Results of Operations
Six months ended March 31, 2000 & 1999. Years ended September 30, 1999 & 1998.
Sales
Sales for the six months ended March 31, 2000 increased to $128,089 from
$109,015 for the comparable period in 1999, an increase of 17%. The increases in
revenues were primarily attributable to an increase in the number of Internet
customers resulting from the Company's marketing efforts.
Sales for the year ended September 30, 1999 increased to $209,801 from $22,864
for the year ended September 30, 1998. The increase in revenues is primarily
attributable to a marketing campaign for the Company's ISP business.
Losses
Net losses for the six months ended March 31, 2000, were $48,170 down from a net
loss of $79,145 for the comparable period in 1999, a change of $30,975. The
decreases in losses were primarily attributable to a decrease in general and
administrative expenses and an increase in sales income.
Net Losses for the year ended September 30, 1999 increased to $304,756 from
$125,541 for the year ended September 30, 1998. The increase in losses is
primarily attributable to advertising costs during the fiscal year which were
spent as part of a marketing campaign for the Company's ISP business.
The Company expects that it may continue to incur losses at least through fiscal
2000 and there can be no assurance that the Company will achieve or maintain
profitability or that revenues will be generated or that growth can be sustained
in the future.
Expenses
Total Operating Expenses for the six months ended March 31, 2000, decreased to
$176,259 from $188,160 in the comparable period in 1998.
Computer and Internet related expenses increased to $91,306 for the six months
ended March 31, 2000 from $63,433 in the six months ended March 31, 2000. The
increase in Computer and Internet expenses is primarily attributable to the
increase in the Company's ISP business.
General and Administrative expenses, for the six month period ended March 31,
2000, decreased $39,774 from $124,727 at March 31, 1999 to $84,953 at March 31,
2000. The decrease in General and Administrative Expenses resulted from steps
undertaken to operate the Company more efficiently.
Total Operating Expenses for the year ended September 30, 1999 increased to
$514,557 from $148,405 for the year ended September 30, 1998.
Computer and Internet related expenses increased to $154,444 in the year ended
December 31, 1999 from $42,249 in the year ended December 31, 1998,. The
increase in Computer and Internet expenses is primarily attributable to the
increase in the Company's ISP business.
General and Administrative expenses increased to $360,113 in the year ended
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December 31, 1999 from $106,156 in the year ended December 31, 1998. The
increase in General and Administrative expenses was the result of the
substantial growth of the Company's ISP business.
B. Liquidity and Capital Resources
Six months ended March 31, 2000 & 1999. Years ended September 30, 1999 & 1998.
Cash flows used in operations were $49,444 for the six months ended March 31,
2000 as compared to cash flows used in operations of $77,827 for the comparable
period in 1999. Negative cash flows are primarily attributable to marketing
costs.
Cash flows generated from financing activities were $63,444 for the six months
ending March 31, 2000, as compared to $55,235 for the comparable period in 199.
The Company's financing activities have primarily consisted of private
placements of its common stock. The financing activities for the six months
ending March 31, 2000, were conducted outside the United States.
Cash flow used by operations was $206,375 for the year ended September 30, 1999,
as compared to cash flows used in operations of $110,644 for a comparable period
in 1998. Negative cash flows in 1999 are primarily attributable to marketing
costs.
Cash flow generated from financing activities was $345,550 for the year ending
September 30, 1999, as compared to $40,142 for the comparable period in 1998.
The Company's financing activities have primarily consisted of private
placements of its common stock. The financing activities for the year ending
September 30, 1999, were conducted outside the United States.
The Company has funded its cash needs over the periods covered by this Form 10SB
through the issuance of its common stock for cash. The Company intends, if
necessary, to cover some of its cash needs over the next twelve months through
sale of additional shares of its common stock pursuant to a registration
statement or an appropriate exemption from registration. However, there is no
guarantee that the Company will be able to raise additional funds from the sale
of its securities.
Furthermore, it is the Company's intention to attempt to meet its long-term
liquidity requirements by growing its business and increasing earnings. However,
in order to support existing operations and to fund any expansion of the
business, it may be necessary to obtain additional bank, private and/or equity
financing. There is no guarantee that the Company will be able to raise
additional funds through borrowing or equity financing.
Capital Expenditures
The Company made no significant capital expenditures on property or equipment
during either 1998 or 1999. The Company has no present plans for any significant
capital expenditures during the coming year.
Income Tax Expense (Benefit)
The Company may have an income tax benefit resulting from net operating losses
which may be used to offset operating profit.
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Impact of Inflation
The Company believes that inflation has had a negligible effect on operations
over the past three years. The Company believes that it can offset inflationary
increases by increasing sales and improving operating efficiencies.
Going Concern
The Company's auditors have expressed an opinion as to the Company's ability to
continue as a going concern. The Company's ability to continue as a going
concern is subject to the ability of the Company to obtain a profit and/or
obtaining the necessary funding from outside sources. Management's plan to
address the Company's ability to continue as a going concern, includes: (1)
Obtaining funding from the sale of the Company's securities; (2) Increasing
sales, and (3) Obtaining loans and grants from various financial institutions
where possible. Although management believes that it will be able to obtain the
necessary funding to allow the Company to remain a going concern through the
methods discussed above, there can be no assurances that such methods will prove
successful.
Impact of Year 2000
It is presently March 2000 and the Company has experienced no Y2K problems.
ITEM 3. PROPERTY
The Company is headquartered at1642 Westwood Blvd., Los Angeles, California
90024 where it rents office space on a month-to-month basis for $1,530 per
month. The Company has an equipment co-location which it rents on a
month-to-month basis at 4676 Admiralty Way, Marina Del Rey, Ca. 90272 for $2,500
per month. The Company believes that its current facilities are generally
suitable and adequate to accommodate its current operations and that such
facilities are adequately insured.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of January 31, 2000, there were 13,881,827 shares of common stock
outstanding. The following table sets forth certain information concerning the
ownership of the Company's Common Stock as of January 31, 2000, with respect to:
(i) each person known to the Company to be the beneficial owner of more than 5%
of the Company's Common Stock, (ii) all directors; and (iii) directors and
executive officers of the Company as a group. The notes accompanying the
information in the table below are necessary for a complete understanding of the
figures provided below.
<TABLE>
<CAPTION>
Title of Class Name and Address of Beneficial Amount and Nature of Percent of Class
Ownership Beneficial Ownership
<S> <C> <C> <C>
Common Bruce D. Stewart 2,234,444 16.0%
Stock, $.0001 1642 Westwood Blvd.
par value Los Angeles, CA 90024
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Common Michael Petrusis 660,000 4.7%
Stock, $.0001 1642 Westwood Blvd.
par value Los Angeles, CA 90024
Common All Executive Officers and 2,894,444 20.8%
Stock, $.0001 Directors as a Group (Two
par value Persons)
</TABLE>
Changes in Control
There are currently no arrangements in place that will result in a change of
control of the Company.
ITEM 5. DIRECTORS, OFFICERS, PROMOTERS, AND CONTROL PERSONS
The directors, executive officers, control persons, and significant employees of
the Company, their respective ages, and positions with the Company are as
follows:
Name Age Position
Bruce D. Stuart 52 Director, President, CEO
Michael Petrusis 31 Director, Vice-President
Bruce D. Stuart. Age 52. Mr. Stuart is a Director of the Company and serves as
President and CEO of the Company. Mr. Stuart graduated from U.C.L.A. in 1969
with a degree in political science, and in 1972 with a Juris Doctorate degree.
He has been a member of the California State Bar since 1973. From 1993 to 1997,
Mr. Stuart served as vice-president of PerfectData Corporation (NASDAQ). From
1984 to 1999 he served as Secretary and General Counsel of Flamemaster
Corporation (NASDAQ). Mr. Stuart was the creator of the Company's Internet
business in 1994 (Starnet Universe Internet, Inc.). Mr. Stuart has served as a
Director and Officer of the Company since its acquisition of Starnet Universe
Internet, Inc. in March of 1997. Mr. Stuart has been elected to serve as a
Director until the next annual meeting of the Company, or until such time as his
successor is duly elected and qualified. Mr. Stuart does not serve as a Director
of any other public Company.
Mike Petrusis. Age 31. Mr. Petrusis is a Director of the Company and serves as
vice-president of Information Technologies for the Company. Mr. Petrusis is a
graduate of U.C.L.A. with a degree in Electrical Engineering. From 1990 to 1993,
he worked at McDonnell Douglas creating computer simulation of missile systems.
From 1992 to 1995 he was a partner in Acorn Technologies. In 1995 he formed
Acutech, a Company specializing in systems integration and networking. Since
1995, Mr. Petrusis has served as the manager of Acutech. Mr. Petrusis has been
elected a Director of the Company to serve until the next annual meeting of the
Company, or until his replacement is duly elected and qualified. Mr. Petrusis
does not serve as a Director of any other public company.
ITEM 6. EXECUTIVE COMPENSATION
Compensation of Executives
The following table provides summary information for the years 1999, 1998 and
1997 concerning cash and
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non-cash compensation paid or accrued by the Company to or on behalf of the
president and the only other employees to receive compensation in excess of
$100,000.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensation
Awards Payout
Name and Year Salary Bonus Other Restricted Securities LTIP All Other
Principal ($) ($) Annual Stock Underlying Payout Compensation
Position Compensa Options ($) ($)
tion SARs (#)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bruce D. 1997 0 0 0 50,000 0 0 0
Stuart, 1998 0 0 0 100,000 0 0 0
CEO, 1999 $42,50 0 0 1,100,000 0 0 0
President 0
</TABLE>
Compensation of Directors
There is currently no plan in place to compensate Directors of the Company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the past two years the Company has not been a party to any transaction or
series of transactions, the value of which exceeds $60,000, with any Director or
Executive Officer of the Company, any nominee for election as a Director of the
Company or any beneficial owner of 5% or more of the Company's outstanding
common stock, nor is the Company involved in any such proposed transactions.
ITEM 8. DESCRIPTION OF SECURITIES
Common Stock.
The Company is presently authorized to issue 250,000,000 shares of no par value
Common Stock. The Company presently has 13,881,827 shares issued and
outstanding. The holders of common stock, and of shares issuable upon exercise
of any Warrants or Options, are entitled to equal dividends and distributions,
per share, with respect to the common stock when, as and if declared by the
Board of Directors from funds legally available therefore. No holder of any
shares of common stock has a pre-emptive right to subscribe for any securities
of the Company nor are any common shares subject to redemption or convertible
into other securities of the Company. Upon liquidation, dissolution or winding
up of the Company, and after payment of creditors and preferred stockholders, if
any, the assets will be divided pro-rata on a share-for-share basis among the
holders of the shares of common stock. All shares of common stock now
outstanding are fully paid, validly issued and non-assessable. Each share of
common stock is entitled to one vote with respect to the election of any
director or any other matter upon which shareholders are required or permitted
to vote. Holders of the Company's common stock do not have cumulative voting
rights, so that the holders of more than 50% of the combined shares voting for
the election of directors may elect all of the directors, if they choose to do
so and, in that event, the holders of the remaining shares will not be able to
elect any members to the Board of Directors.
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Preferred Stock.
The Company is presently authorized to issue 50,000,000 shares of no par value
Class B Preferred Stock. No shares of Preferred Stock are currently issued and
outstanding. Under the Company's Articles of Incorporation, the Board of
Directors has the power, without further action by the holders of the Common
Stock, to designate the relative rights and preferences of the preferred stock,
and issue the preferred stock in such one or more series as designated by the
Board of Directors. The designation of rights and preferences could include
preferences as to liquidation, redemption and conversion rights, voting rights,
dividends or other preferences, any of which may be dilutive of the interest of
the holders of the Common Stock or the Preferred Stock of any other series. The
issuance of Preferred Stock may have the effect of delaying or preventing a
change in control of the Company without further shareholder action and may
adversely affect the rights and powers, including voting rights, of the holders
of Common Stock. In certain circumstances, the issuance of preferred stock could
depress the market price of the Common Stock.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS
The Company's common stock is traded on Over the Counter Bulletin Board under
the symbol "SRUN." Pursuant to Rules adopted by the National Association of
Securities Dealers ("NASD") the Company's common stock will be dropped from the
Over the Counter Bulletin Board, and will no longer be quoted after April 30,
2000, unless this registration statement becomes effective by April 30, 2000. If
the Company's stock ceases to be quoted on the Over the Counter Bulletin Board,
the Company's stock will still be quoted in the Pink Sheets.
The table below sets forth the high and low sales prices for the Company's
Common Stock for each quarter of 1997, 1998 and the first three quarters of
1999. The quotations below reflect inter-dealer prices, without retail mark up,
mark down or commission and may not represent actual transactions:
Year Quarter Ending High Low
1997 March 31 $3.375 $1.50
June 30 $2.625 $2.25
September 30 $1.50 $0.50
December 31 $1.1875 $0.4375
1998 March 31 $1.125 $0.21875
June 30 $0.21875 $0.21875
September 30 $0.84375 $0.15625
December 31 $0.9375 $0.0625
11
<PAGE>
1999 March 31 $2.25 $0.50
June 30 $1.875 $0.29
September 30 $2.00 $0.875
December 31 $0.90625 $0.25
Record Holders.
As of January 31, 2000, there were approximately 1,064 shareholders of record
holding a total of 13,881,827 shares of Common Stock. The holders of the Common
Stock are entitled to one vote for each share held of record on all matters
submitted to a vote of stockholders. Holders of the Common Stock have no
preemptive rights and no right to convert their Common Stock into any other
securities. There are no redemption or sinking fund provisions applicable to the
Common Stock.
Dividends.
The Company has not declared any cash dividends since inception and does not
anticipate paying any dividends in the foreseeable future. The payment of
dividends is within the discretion of the Board of Directors and will depend on
the Company's earnings, capital requirements, financial condition, and other
relevant factors. There are no restrictions that currently limit the Company's
ability to pay dividends on its Common Stock other than those generally imposed
by applicable state law.
ITEM 2. LEGAL PROCEEDINGS
The Company is currently not a party to any pending material legal proceeding.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company has had no changes in or disagreements with its accountants in its
two most recent fiscal or any later interim period.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
The following is a list of all securities sold by the Company within the last
three years including, where applicable, the identity of the person who
purchased the securities, title of the securities, and the date sold are
outlined below.
In July 1997, the Company issued 30,000 shares of common stock to Mike Petrusis
and 50,000 shares of common stock to Bruce Stuart at $0.001 value per share for
services as Officers and Directors of the Company. The Company also issued
50,000 shares to Laurie Weinstock, 5,000 shares to Sandra Gonzales and 1,000
shares to Jesus Ortega, employees of the Company at $0.001 per share. All of the
shares were
12
<PAGE>
issued for services pursuant to section 4(2) of the Securities Act of 1933 in an
isolated private transaction by the Company which did not involve a public
offering. The Company made this offering based on the following factors: (1) The
issuance was an isolated private transaction by the Company which did not
involve a public offering; (2) there were only five offerees who were issued
stock for services; (3) the offerees did not resell the stock but continued to
hold it for at least two years; (4) there were no subsequent or contemporaneous
public offerings of the stock; (5) the stock was not broken down into smaller
denominations; and (6) the negotiations for the sale of the stock took place
directly between the offerees and the Company.
In July 1998, the Company issued 350,000 shares of common stock for cash at
$0.10 per share to the Bruce Stuart Pension Plan pursuant to section 4(2) of the
Securities Act of 1933 in an isolated private transaction by the Company which
did not involve a public offering. The Company made this offering based on the
following factors: (1) The issuance was an isolated private transaction by the
Company which did not involve a public offering, being made to the president of
the Company who also serves as a Director of the Company; (2) there was only one
offeree who was issued stock for cash; (3) the offeree did not resell the stock
but has continued to hold it for more than nineteen months; (4) there were no
subsequent or contemporaneous public offerings of the stock; (5) the stock was
not broken down into smaller denominations; and (6) the negotiations for the
sale of the stock took place directly between the offeree and the Company.
In November 1998, the Company issued 400,000 shares of common stock for cash at
$0.10 per share to the Bruce Stuart IRA pursuant to section 4(2) of the
Securities Act of 1933 in an isolated private transaction by the Company which
did not involve a public offering. The Company made this offering based on the
following factors: (1) The issuance was an isolated private transaction by the
Company which did not involve a public offering, being made to the president of
the Company who also serves as a Director of the Company; (2) there was only one
offeree who was issued stock for cash; (3) the offeree did not resell the stock
but has continued to hold it for more than fourteen months; (4) there were no
subsequent or contemporaneous public offerings of the stock; (5) the stock was
not broken down into smaller denominations; and (6) the negotiations for the
sale of the stock took place directly between the offeree and the Company.
In December 1998, the Company issued 100,000 shares of its common stock to Mike
Petrusis and 130,000 shares of its common stock to Bruce Stuart for services as
Officers and Directors of the Company at $0.001 value per share. The Company
also issued 100,000 shares to Laura Weinstock, 20,000 shares to Sandra Gonzales
and 20,000 shares to Robert Riecks, employees of the Company at $0.001 per
share. All of the shares were issued for services pursuant to section 4(2) of
the Securities Act of 1933 in an isolated private transaction by the Company
which did not involve a public offering. The Company made this offering based on
the following factors: (1) The issuance was an isolated private transaction by
the Company which did not involve a public offering; (2) there were only five
offerees who were issued stock for services; (3) the offerees did not resell the
stock but have continued to hold it for more than thirteen months; (4) there
were no subsequent or contemporaneous public offerings of the stock; (5) the
stock was not broken down into smaller denominations; and (6) the negotiations
for the sale of the stock took place directly between the offerees and the
Company.
In April 1999 the Company issued a total of 5,156,246 shares of its common stock
at $0.192 per share to the following individuals for cash pursuant to Rule 504
under Regulation D of the Securities Act of 1933:
13
<PAGE>
Name Number of Shares
Candlin Investments, Inc. 458,333
Karston Electronics, Inc. 458,333
World Financial Securities, Ltd. 458,333
Sequoia International 458,333
The China Connection 458,333
Lexington Sales Corp., Ltd. 458,333
Oriental Investments, Ltd. 458,333
Insignia Financial Services, Ltd. 458,333
Central Commercial Enterprises 458,333
East-West Trading Corp. 458,333
Leeward Consulting Group 458,333
Premier Sales Corp., Ltd. 114,583
The Company relied on the following facts in determining that Rule 504
Regulation D was available: (a) the Company was not subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act; (b) the Company was
engaged in the business of providing Internet services to private and business
customers and therefore was neither a development stage Company with no specific
business plan nor purpose nor a Company whose plan was to merge with an
unidentified Company; (c) the aggregate offering price did not exceed $1,000,000
and (d) the Company filed a Form D within 15 days of the first sale of the
shares subject to the offering.
On April 1, 1999, the Company issued 500,000 shares of common stock for services
at $0.01 per share to Perfect Data Corp., and 435,000 shares of common stock for
services at $0.01 per share to A-Z Oil Corporation pursuant to section 4(2) of
the Securities Act of 1933 in an isolated private transaction by the Company
which did not involve a public offering. The Company made this offering based on
the following factors: (1) The issuance was an isolated private transaction by
the Company which did not involve a public offering, being made to two
corporations for services rendered to the Company; (2) there were only two
offerees who were issued stock for services; (3) the offerees have not resold
the stock but have continued to hold it for more than eleven months; (4) there
were no subsequent or contemporaneous public offerings of the stock; (5) the
stock was not broken down into smaller denominations; and (6) the negotiations
for the sale of the stock took place directly between the offerees and the
Company.
From May 1999 through August 1999 the Company issued a total of 2,225,000 shares
of its common stock at $0.01 per share pursuant to the Staruni Corporation
employee benefit plan to the following individuals for Services to the Company
pursuant to Rule 701 under Regulation D of the Securities Act of 1933:
14
<PAGE>
Name Number of Shares
Bruce Stuart 1,100,000
Mike Petrusis 500,000
Laurie Weinstock 500,000
Wulferd Morris 100,000
Michael Griffin 5,000
Sandra Gonzales 5,000
Jesus Ortega 5,000
Sephlin Beatong 10,000
The Company relied on the following facts in determining that Rule 701 was
available: (a) the shares were issued pursuant to a written compensatory benefit
plan issued by the Company, (b) the individuals listed rendered bonafide
services not in connection with the offer or sale of securities in a capital
raising transaction, (c) the shares were issued pursuant to a written contract
relating to the issuance of shares paid as compensation for services rendered,
and (d) the amount of shares offered and sold in reliance on Rule 701 did not
exceed $500,000 and all securities sold in the last 12 months have not exceeded
$5,000,000
In August 1999 the Company issued a total of 1,200,000 shares of its common
stock at $0.001 per share to UTNS for Stock valued at $1,200 pursuant to section
4(2) of the Securities Act of 1933 in an isolated private transaction by the
Company which did not involve a public offering. The Company made this offering
based on the following factors: (1) The issuance was an isolated private
transaction by the Company which did not involve a public offering; (2) there
was only one offeree who was issued stock for stock; (3) the offeree did not
resell the stock, and represented that the stock was being acquired for
investment. The stock has been held by the offeree for more than six months; (4)
there were no subsequent or contemporaneous public offerings of the stock; (5)
the stock was not broken down into smaller denominations; and (6) the
negotiations for the sale of the stock took place directly between the offeree
and the Company.
From May 1999 through August 1999 the Company issued a total of 2,225,000 shares
of its common stock at $0.01 per share pursuant to the Staruni Corporation
employee benefit plan to the following individuals for Services to the Company
pursuant to Rule 701 under Regulation D of the Securities Act of 1933:From May
1999 through August 1999 the Company issued a total of 2,225,000 shares of its
common stock at $0.01 per share pursuant to the Staruni Corporation employee
benefit plan to the following individuals for Services to the Company pursuant
to Rule 701 under Regulation D of the Securities Act of 1933:
On May 8, 2000, the Company issued a total of 300,000 shares of its common stock
at $0.01 per share pursuant to the Staruni Corporation employee benefit plan to
the following individuals for Services to the Company pursuant to Rule 701 under
Regulation D of the Securities Act of 1933:
15
<PAGE>
Name Number of Shares
Richard D. Surber 270,000
Edward T. Wells 20,000
Julieanne Piirala 5,000
Allan Merrill 5,000
The Company relied on the following facts in determining that Rule 701 was
available: (a) the shares were issued pursuant to a written compensatory benefit
plan issued by the Company, (b) the individuals listed rendered bonafide
services not in connection with the offer or sale of securities in a capital
raising transaction, (c) the shares were issued pursuant to a written contract
relating to the issuance of shares paid as compensation for services rendered,
and (d) the amount of shares offered and sold in reliance on Rule 701 did not
exceed $500,000 and all securities sold in the last 12 months have not exceeded
$5,000,000
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 204(10) of the California General Corporation Law allows a Corporation,
in its Articles of Incorporation, to limit or eliminate the personal liability
of Directors for monetary damages in an action brought by or in the right of the
corporation for breach of a director's duties as set forth in Section 309 of the
California General Corporation Laws, provided, however, that such provisions may
not eliminate or limit the liability of directors for acts or omissions
involving intentional misconduct or a knowing and culpable violation of law,
acts or omissions a director believes to be contrary to the best interests of
the corporation or its shareholders, transactions wherein the director derived
an improper personal gift, acts or omissions that show a reckless disregard for
the director's duties to the corporation or its shareholders, acts or omissions
constituting an unexcused pattern of inattention amounting to an abdication of
duty.
Section 204(11) of the California General Corporation Law allows for
indemnification of a corporation's officers and directors in certain situations
where they might otherwise personally incur liability, judgments, penalties,
fines and expenses in connection with a proceeding or lawsuit to which they
might become parties because of their position with the Company.
In accordance with the provisions referenced above, the Company will indemnify
to the fullest extent permitted by its Articles and bylaws, and in the manner
permissible under the laws of the State of California, any person made, or
threatened to be made, a party to an action or proceeding, whether criminal,
civil, administrative or investigative, by reason of the fact that he is or was
a director or officer of the Company, or served any other enterprise as
director, officer or employee at the request of the Company. The Board of
Directors, in its discretion, will have the power on behalf of the Company to
indemnify any person, other than a director or officer, made a party to any
action, suit or proceeding by reason of the fact that he or she is or was an
employee of the Company.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company, the
Company has been advised that in the opinion of the Securities and
16
<PAGE>
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities ( other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceedings) is
asserted by such director, officer, or controlling person in connection with any
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issues.
PART F/S
The Company's financial statements for the fiscal year ended September 30, 1999
and the interim reports for March 31, 2000 are attached hereto as F-1 through
F-18
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
17
<PAGE>
STARUNI CORPORATION
INDEX TO FINANCIAL STATEMENTS
UNAUDITED FINANCIAL STATEMENTS
Unaudited Condensed Balance Sheets March 31, 1999............................F-2
Unaudited Condensed Statements of Operations March 31, 1999..................F-3
Unaudited Condensed Stockholders' Equity March 31, 1999......................F-4
Unaudited Condensed Statements of Cash Flows March 31, 1999..................F-5
Notes to Unaudited Financial Statements......................................F-6
AUDITED FINANCIAL STATEMENTS SEPTEMBER 30, 1999 & 1998
INDEPENDENT AUDITORS' REPORT........................................ ........F-9
FINANCIAL STATEMENTS:
Balance Sheets.....................................................F-10
Statements of Operations...........................................F-11
Statements of Stockholders' Equity.................................F-12
Statements of Cash Flows...........................................F-13
NOTES TO FINANCIAL STATEMENTS...............................................F-14
F-1
<PAGE>
<TABLE>
STARUNI CORPORATION
UNAUDITED CONDENSED BALANCE SHEETS
AS OF MARCH 31, 2000 AND MARCH 31, 1999
<CAPTION>
ASSETS
2000 1999
-------------- ----------
Current assets
<S> <C> <C>
Cash $ 166,400 $ (362)
Receivables 12,643 8,174
Advance to stockholder 79,000 -
----------- ----------
Total Current Assets 258,043 7,812
---------- ----------
Property and equipment, net of accumulated depreciation 10,665 3,922
Total Assets $ 268,708 $ 11,734
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 7,942 12,192
Accrued payables 1,045 1,399
----------- ----------
Total Current Liabilities 8,987 13,591
----------- ----------
Long-term liabilities
Loans from Officers 850 15,245
------------ ----------
Total long-term liabilities 850 15,245
------------ ----------
TOTAL LIABILITIES 9,837 28,836
----------- ----------
Shareholders' Equity
Class B Preferred Stock, no par value 5,000,000 authorized - -
shares, no shares issued and outstanding
Common Stock, no par value, 250,000,000 shares authorized, 1,163,963 212,372
13,881,827 shares issued and outstanding with 68,748 shares
held in treasury at 12/31/99
Common stock subscription (receivable) (401,837) -
Accumulated (deficit) (503,255) (299,474)
-------------- ----------
Net Stockholders' Equity 258,871 (17,102)
-------------- ----------
Total Liabilities and Stockholders' Equity $ 268,708 11,734
============== ==========
</TABLE>
See Accompanying Notes to Unaudited Financial Statements
F-2
<PAGE>
<TABLE>
STARUNI CORPORATION
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDING MARCH 31, 2000 AND 1999
<CAPTION>
Three Months Ended Six Months Ended
March 31 March 31
2000 1999 2000 1999
------------ ----------- ---------- --------
<S> <C> <C> <C> <C>
Income $ 69,434 $ 83,866 $ 128,089 $ 109,015
Computer and Internet related expenses 55,350 39,972 91,306 63,433
General and administration expenses 35,122 56,733 84,953 124,727
------------ --------- ---------- -----------
Total operating expenses 90,472 96,705 176,259 188,160
------------- --------- ----------- -----------
Income (loss) from operations before
provision for income taxes (21,038) (12,839) (48,170) (79,145)
Provision for income taxes - - - -
------------------------- -----------------------
Net (loss) $ (21,038) $ 12,839 $ (48,170) $ (79,145)
============= ========== ========== ==========
Income (loss) per weighted-average share
of common stock outstanding (0.00) (0.00) (0.00) (0.02)
========================== =======================
Weighted-average number of common
stock outstanding 13,881,827 3,595,576 13,881,827 3,595,576
------------ ---------- ------------ ----------
</TABLE>
See Accompanying Notes to Unaudited Financial Statements
F-3
<PAGE>
<TABLE>
STARUNI CORPORATION
UNAUDITED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDING MARCH 31, 2000
<CAPTION>
Class B
Preferred Stock Common Stock Common Stock
Subscription Accumulated Net
Shares Amount Shares Amount (Receivables) (Deficit) Equity
<S> <C> <C> <C> <C> <C> <C> <C>
Balance September 30, 1997 - $ - 3,245,576 $ 132,240 $ - $ (24,788) $ 107,452
Issuance of Shares - - 350,000 40,142 - - 40,142
Net (loss) - $ - - $ - $ - $ (125,541) $ (125,541)
------- --------- ------------ -------------- ----------- ----------- ------------
Balance September 30, 1998 - - 3,595,576 172,382 - (150,329) 22,053
Issuance of Shares - - 10,286,251 991,581 (513,281) - 478,300
Net (loss) - - - - - (304,756) (304,756)
------- ---------- ------------ -------------- ----------- ----------- -------------
Balance September 30, 1999 - $ - 13,881,827 $ 1,163,963 $ (513,281) $ (455,085) $ 195,597
Shares subscribed (paid) - - - - 29,444 - 29,444
Net (loss) - - - - - (27,132) (27,132)
------- ---------- ------------ -------------- ----------- ----------- --------------
Balance December 31, 1999 - $ - 13,881,827 $ 1,163,963 $ (483,837) $ (482,217) $ 197,909
------- --------- ------------ ------------ ----------- ----------- -------------
Payments on previous stock issued - - - 82,000 82,000
Net (loss) - three months - - - - - (21,038) -
Balance as of March 31, 2000 - $ - 13,881,963 $ 1,163,963 $ (401,837) (503,255) $ 258,871
======= ========= ============ =========== =========== =========== =============
</TABLE>
See Accompanying Notes to Unaudited Financial Statements
F-4
<PAGE>
<TABLE>
STARUNI CORPORATION
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDING MARCH 31, 2000 AND 1999
<CAPTION>
Six Months Ended
March 31
Unaudited
2000 1999
---------------- ---------------
<S> <C> <C>
Cash Flows From Operating Activities Net (loss) $ (48,170) $ (79,145)
--------------- ------------
Adjustments To Reconcile Net Loss To Net Cash
Used In Operating Activities
Depreciation - -
(Increase) decrease in receivables 252 (2,739)
Increase in accounts payable (1,500) 4,500
Increase (decrease) in accrued payables (26) (443)
--------------- -----------
Net Adjustment (1,274) 1,318
--------------- -----------
Net Cash (Used) In Operating Activities (49,444) (77,827)
--------------- -----------
Cash Flows From Investing Activities
Increase in property, plant, & equipment (8,491) -
--------------- -----------
Net Cash (Used) By Investing Activities (8,491) -
--------------- -----------
Cash Flows From Financing Activities
(Increase) in loans to stockholder/officer (net) (48,850) -
Proceeds from issuance of capital stock (Net) 111,444 39,990
Increase in long-term liabilities 850 15,245
--------------- -----------
Net Cash Provided By Financing Activities 63,444 55,235
--------------- -----------
Net (decrease) in cash 5,509 (22,592)
Cash-beginning 160,892 22,230
---------------- -----------
Cash-end $ 166,401 $ (362)
--------------- ===========
</TABLE>
F-5
<PAGE>
STARUNI CORPORATION
NOTES TO INTERIM FINANCIAL STATEMENTS
FOR THE PERIODS ENDED MARCH 31, 2000
NOTE 1 - BASIS OF PRESENTATION
The interim financial statements at March 31, 2000, and for the three and
six month periods ended March 31, 2000 and 1999 are unaudited, but include
all adjustments which the Company consider necessary for a fair
presentation. The September 30, 1999 balance sheet was derived from the
Company's audited financial statements.
The accompanying unaudited financial statements are for the interim
periods and do not include all disclosures normally provided in annual
financial statements, and should be read in conjunction with the Company's
Form 10-KSB for the year ended September 30, 1999. The accompanying
unaudited interim financial statements for the three and six month periods
ended March 31, 2000, are not necessarily indicative of the results which
can be expected for the entire year.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
NOTE 2 - INCOME TAXES
The Company accounts for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109"), which requires an asset and liability approach
to accounting for income taxes. Under SFAS 109, deferred tax assets or
liabilities are computed on the difference between the financial statement
and income tax bases of assets and liabilities ("temporary differences")
using the enacted marginal tax rate. Deferred income tax expenses or
benefits are based on the changes in the deferred tax asset or liability
from period to period.
NOTE 3 - YEAR 2000/2001 CONSIDERATIONS
Management has assessed the Company's exposure to date sensitive computer
software programs that may not be operative subsequent to 1999 and has
implemented a requisite course of action to minimize Year 2000/2001 risk
and ensure that neither significant costs nor disruption of normal
business operations are encountered. However, because there is no
guarantee that all systems of outside vendors or other entities affecting
the Company's operation will be 2000/2001 compliant, the Company remains
susceptible to consequences of the year 2000/2001 issue.
F-6
<PAGE>
STARUNI CORPORATION
-------------------
Audited Financial Statements
September 30, 1999 & 1998
F-7
<PAGE>
TABLE OF CONTENTS
September 30, 1999 & 1998
INDEPENDENT AUDITORS' REPORT ................................................F-9
FINANCIAL STATEMENTS:
Balance Sheets....................................................F-10
Statements of Operations...........................................F-11
Statements of Stockholders' Equity ................................F-12
Statements of Cash Flows..........................................F-13
NOTES TO FINANCIAL STATEMENTS...............................................F-14
F-8
<PAGE>
[Letterhead of Sellers & Associates P.C.]
Independent Auditors' Report
Board of Directors
STARUNI CORPORATION
Los Angeles, California
We have audited the accompanying balance sheets of Staruni Corporation, a
California corporation, as of September 30, 1999 and 1998 and the related
statements of operations, stockholders' equity, and cash flows for the two years
then ended. These financial statements are the responsibility of the Company's
Management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Staruni Corporation as of
September 30, 1999 and 1998 and the results of its operations and its cash flows
for the two years then ended in conformity with generally accepted accounting
principles.
/s/ Sellers & Associates P.C.
November 29, 1999
Ogden, Utah
F-9
<PAGE>
STARUNI CORPORATION
BALANCE SHEETS
AS OF SEPTEMBER 30, 1999 and 1998
1999 1998
=============== ===============
ASSETS
Current assets
Cash $ 160,892 $ 22,230
Receivables 12,895 5,795
Advance to stockholder / officer 30,150 -
------------ -------------
Total current assets 203,937 28,025
============ ============
Property and equipment, net of accumulated
depreciation 2,174 3,922
------------ -------------
Total assets $ 206,111 $ 31,947
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 9,442 $ 7,692
Accrued payables 1,072 2,202
------------ -------------
Total current liabilities 10,514 9,894
------------ -------------
Total liabilities 10,514 9,894
------------ -------------
Stockholders' equity
Class B Preferred Stock, no par value
authorized 5,000,000 shares, issued
and 0 outstanding - -
Common stock, no par value, 13,881,827
and 3,595,576 shares issued and outstanding
with 68,748 shares held in treasury at
9-30-99 and 9-30-98 respectively 1,163,963 172,382
Common stock subscription (receivable) (513,281) -
Accumulated (deficit) (455,085) (150,329)
------------- ------------
Net stockholders' equity 195,597 22,053
------------- ------------
Total liabilities and
stockholders' equity $ 206,111 $ 31,947
============= ============
See Accompanying Notes to Financial Statements
F-10
<PAGE>
STARUNI CORPORATION
STATEMENTS OF OPERATIONS
YEAR ENDING SEPTEMBER 30, 1999 and 1998
1999 1998
============= ===========
Income $ 209,801 $ 22,864
============= ===========
Computer and internet related expenses 154,444 42,249
General and administration expenses 360,113 106,156
Total operating expenses 514,557 148,405
============= ===========
Income (loss) from operations before provision
for income taxes (304,557) (125,541)
Provision for income taxes - -
============= ===========
Net (loss) $ (304,756) $ (125,541)
============= ===========
Income (loss) per weighted-average share of
common stock outstanding $ (0.039) $ (0.038)
============= ===========
Weighted-average number of common stock
outstanding 7,769,415 3,318,671
============= ===========
See Accompanying Notes to Financial Statements
F-11
<PAGE>
<TABLE>
STARUNI CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended September 30, 1999 and 1998
<CAPTION>
Class B
Preferred Stock Common Stock Common
===================== ============================ Stock
Subscription Accumulated Net
Shares Amount Shares Amount (Receivables) (Deficit) Equity
======= ======== =========== ============ ============== ============ ================
<S> <C> <C> <C> <C> <C> <C> <C>
Balance as of
September 30, 1997 - $ - 3,245,576 $ 132,240 $ - $ (24,788) $ 107,452
Issuance of Stock 350,000 40,142 40,142
Net (loss) (125,541) (125,541)
------- -------- ----------- ------------ ---------- ---------- ------------
Balance as of -
September 30, 1998 - 3,595,576 $ 172,382 $ - $ (150,329) $ 22,053
Issuance of Stock 10,286,251 991,581 (513,281) 478,300
Net (loss) (304,756) (304,756)
------- -------- ----------- ------------ ---------- ---------- ------------
Balance as of
September 30, 1999 - $ - 13,881,827 $ 1,163,963 $ (513,281) $ (455,085) $ 195,597
======= ======== =========== ============ ========== =========== ===========
</TABLE>
See Accompanying Notes to Financial Statements
F-12
<PAGE>
<TABLE>
STARUNI CORPORATION
STATEMENTS OF CASH FLOWS
YEARS ENDING SEPTEMBER 30, 1999 AND 1998
<CAPTION>
1999 1998
============== ===============
<S> <C> <C>
Cash Flows From Operating Activities
Net (loss) $ (304,756) $ (125,541)
-------------- ---------------
Adjustments To Reconcile Net Loss To Net Cash
Used In Operating Activities
Depreciation 2,261 9,530
(Increase) in receivables (7,100) (1,595)
Increase in accounts payable 1,750 4,760
Increase (decrease) in accrued payables (1,130) 2,202
Stock issued for services 51,300
-------------- ---------------
Net Adjustment 47,081 14,897
-------------- ---------------
Net Cash (Used) In Operating Activities (206,375) (110,644)
-------------- ---------------
Cash Flows From Investing Activities
Purchase of equipment (513) -
-------------- ---------------
Net Cash (Used) By Investing Activities (513) -
-------------- ---------------
Cash Flows From Financing Activities
(Increase) in loans to stockholder / officer -
(Net) (30,150)
Proceeds from issuance of capital stock (Net) 375,700 40,142
-------------- ---------------
Net Cash Provided By Financing
Activities 345,550 40,142
-------------- ---------------
Net (decrease) in cash 138,662 (70,502)
Cash - beginning 22,230 92,733
-------------- ---------------
Cash - end $ 160,892 $ 22,231
============== ===============
Other information:
Interest paid in cash $ - $ -
Stock issued for services in lieu of cash $ 51,300 $ -
</TABLE>
See Accompanying Notes to Financial Statements
F-13
<PAGE>
STARUNI CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 1 - Summary of Significant Accounting Policies
Basis of Presentation
Staruni Corporation, prepares its books and records on the accrual
basis for financial reporting and for income taxes. The accompanying
financial statement represents the transactions as of September 30,
1999.
Business Activity
The Company incorporated February 5, 1962 under the laws of the State
of California as Altius Corp. On March 24, 1997, the Company was
renamed to Staruni Corporation. Also, on March 24, 1997, the Company
spun off all its assets and liabilities. Left with no assets or
liabilities, the company reorganized its equity too, and reclassified
all equity accounts to zero. All activity is subsequent to the March
24, 1997 reclassification and reorganization. Immediately thereafter,
the Company acquired all of the stock of Starnet under an asset
purchase agreement.
The Company presently concentrates on developing and expanding itself
as an internet service provider, serving primarily in southern
California.
The Company is authorized to issue up to 15,000,000 shares of common
stock, no par value and 5,000,000 shares of class B preferred stock, no
par value. No class B preferred stock has been issued.
Property and Equipment
Property and equipment are valued at cost. Depreciation is provided by
use of the straight-line method over the estimated useful lives of the
assets. Useful lives of the respective assets are two to five years.
Fully depreciated assets are written off in the year after they are
fully depreciated.
Upon the sale or retirement of property and equipment the related cost
and accumulated depreciation are eliminated from the accounts and the
resulting gain or loss, if any, are recorded. Repairs and maintenance
expenditures that do not extend the useful lives are included in
expense during the period they are incurred.
Use of Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
See Accompanying Notes to Financial Statements
F-14
<PAGE>
STARUNI CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 1 - Summary of Significant Accounting Policies - Continued
Impairment of Long-Lived Assets
It is the Company's policy to periodically evaluate the economic
recover ability of all of its long-lived assets. In accordance with
that policy, when the Company determines that an asset has been
impaired, it recognizes the loss on the basis of the discounted future
cash flows expected from the asset.
Fair Value of Financial Instruments
The methods and assumptions used to estimate the fair value of each
class of financial instruments are as follows:
Cash and cash equivalents, receivables, accounts payable, accrued
payable, due to or from stockholders and officers:
The carrying amounts approximate fair value because of the
short maturity of these instruments.
Revenue Recognition
Revenue is recognized when the service provided has been performed.
Advertising
The Company expenses advertising as it occurs. The Company incurred
advertising expense of $134,515 and $15,066 for fiscal years ended
September 30, 1999 and 1998 respectively.
Income Taxes
The Company has adopted the provisions of statements of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," which
incorporates the use of the asset and liability approach of accounting
for income taxes. The asset and liability approach requires the
recognition of deferred tax assets and liability for the expected
future consequences of temporary differences between the financial
reporting basis and tax basis of assets and liabilities.
See Accompanying Notes to Financial Statements
F-15
<PAGE>
STARUNI CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 2 - Property and Equipment
Property and equipment consisted of the following at September 30, 1999
and 1998:
Estimated
1999 1998 Useful Lives
----------- --------- ------------
Computer & other equipment $16,817 $ 16,304 2-5 years
(Less) Accumulated Depreciation ( 14,643) (12,382)
-------- ----------
Net Property and Equipment $ 2,174 $ 3,922
========= =========
NOTE 3 - Related Party Transactions
Monies have been advanced by the Company to the Company's principal
shareholder / officer. All amounts due from the stockholder are from
short term borrowings remaining unpaid at September 30, 1999. No
interest is accrued as of September 30, 1999. The amount advanced at
September 30, 1999 is $30,150.
NOTE 4 - Common Stock
From November 1998 through August 1999, 10,286,251 shares of common
stock were issued for $991,581 under a Rule 504 Regulation D offering.
Of the $991,581 to be received for stock, $478,300 has been received,
$427,000 in cash and $51,300 in services rendered. As of September 30,
1999, $513,281 in subscribed stock is issued but remains unpaid. These
subscribed and issued, but unpaid shares are secured by stock in an
unrelated corporation under recourse promissory notes. The terms of
payment extend for two years from the date of issue, which was March
26, 1999, with a one year extension provision. The Notes bear interest
at 8% per annum until paid.
As of September 30, 1999, there were a total of 13,881,827 shares of
common stock issued with 68,748 shares held in the name of the Company.
NOTE 5 - Lease Commitments
The Company entered into three computer equipment and software lease
contracts payable over 24 months, all ending before December 31, 2000.
Lease commitments by year are:
September 30, 2000 $ 21,241
September 30, 2001 1,965
The Company rents office space on a month to month basis with no long
term commitment. Monthly rent is $2,154.
See Accompanying Notes to Financial Statements
F-16
<PAGE>
STARUNI CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 5 - Lease Commitments - Continued
Total lease and rental expense, including computer equipment and office
space, by year is:
General and
Computer & Internet Administrative
related expenses Expenses
(As computer leases) (As office rent)
--------------------- ----------------
September 30, 1999 $28,485 $17,985
September 30, 1998 3,227 6,005
NOTE 6 - Income Taxes
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
September 30 are:
1999 1998
------------ -------------
Deferred tax assets:
Net operating loss carryforward $ 85,000 $ 32,000
------------ -----------
Total gross deferred tax assets 85,000 32,000
(Less) valuation allowance (85,000) (32,000)
------------ -----------
Net deferred tax assets - -
------------ -----------
Deferred tax liabilities:
Total gross deferred tax liabilities - -
------------ -----------
Net deferred tax $ - $ -
============ ===========
As of September 30, 1999, the Company has available for income tax
purposes approximately $403,000 in federal net operating loss carry
forwards which may be used to offset future taxable income. These loss
carry forwards begin to expire in fiscal year 2013. Should the Company
undergo an ownership change as defined in Section 382 of the Internal
Revenue Code, the Company's tax net operating loss carry forwards
generated prior to the ownership change will be subject to an annual
limitation which could reduce, eliminate or defer the utilization of
these losses.
See Accompanying Notes to Financial Statements
F-17
<PAGE>
STARUNI CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
The Company has not filed any income tax returns since September 30,
1996. The estimated income tax effect upon filing these returns is
$3,300, mostly to the State of California. No provision has been
provided for this in these financial statements.
NOTE 7 - Year 2000 Considerations
Management has assessed the Company's exposure to date sensitive
computer software programs that may not be operative subsequent to 1999
and has implemented a requisite course of action to minimize Year 2000
risk and ensure that neither significant costs nor disruption of normal
business operations are encountered. However, because there is no
guarantee that all systems of outside vendors or other entities
affecting the company's operation will be 2000 compliant, the Company
remains susceptible to consequences of the year 2000 issue.
See Accompanying Notes to Financial Statements
F-18
<PAGE>
PART III
ITEM 1. EXHIBITS
(a) Exhibits. Exhibits required to be attached are listed in the Index to
Exhibits beginning on page 20 of this Form 10-SB under "Item 2. Description
of Exhibits."
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
18
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, this 9th day of May, 2000.
Staruni Corporation
/s/ Bruce D. Stuart
---------------------------
Bruce D. Stuart, Chief Executive Officer
19
<PAGE>
ITEM 2. DESCRIPTION OF EXHIBITS
INDEX TO EXHIBITS
Exhibit
No. Page No. Description
2(i) * Articles of Incorporation of Altius Corp. dated February 1, 1962
and filed February 5, 1962.
2(ii) * Certificate of Amendment of Articles of Incorporation of Altius
Corp. dated January 29, 1971 and filed April 9, 1971.
2(iii) * Certificate of Amendment of Articles of Incorporation of Altius
Corp. dated December 30,1996 and filed March 24, 1997 wherein
the name of the corporation was changed from Altius Corp. to
Staruni Corporation.
2(iv) * Certificate of Amendment of Articles of Incorporation of Staruni
Corporation dated June 15, 1999 and filed August 20, 1999.
2(v) * By-Laws of Altius Corp. (Staruni Corporation) dated February 8,
1962
10 21 Staruni Employee Benefit Plan dated March 15th, 1999
23 * Consent Letter of Auditor
27 25 Financial Data Schedule "CE"
* Incorporated by reference from Form 10-SB filed March 22, 2000.
20
STARUNI CORPORATION EMPLOYEE
BENEFIT PLAN
21
<PAGE>
THE EMPLOYEE BENEFIT PLAN OF STARUNI CORPORATION
Staruni Corporation, a California corporation (the "Company"), hereby
adopts The Employee Benefit Plan of Staruni Corporation (the "Plan") this 15th
day of March, 1999. Under the Plan, the Company may issue stock, or grant
options to acquire the Company's common stock, par value $0.01 (the "Stock"),
from time to time to employees of the Company or its subsidiaries, all on the
terms and conditions set forth herein ("Benefits"). In addition, at the
discretion of the Board of Directors, Benefits may from time to time be granted
under this Plan to other individuals, including consultants or advisors, who
contribute to the success of the Company or its subsidiaries but are not
employees of the Company or its subsidiaries, provided that bona fide services
shall be rendered by consultants and advisors and such services must not be in
connection with the offer or sale of securities in a capital-raising
transaction. No stock may be issued, or option granted under the benefit plan to
consultants, advisors, or other persons who directly or indirectly promote or
maintain a market for the Company's securities.
1. Purpose of the Plan. The Plan is intended to aid the Company in maintaining
and developing a management team, attracting qualified officers and employees
capable of assuring the future success of the Company, and rewarding those
individuals who have contributed to the success of the Company. The Company has
designed this Plan to aid it in retaining the services of executives and
employees and in attracting new personnel when needed for future operations and
growth and to provide such personnel with an incentive to remain employees of
the Company, to use their best efforts to promote the success of the Company's
business, and to provide them with an opportunity to obtain or increase a
proprietary interest in the Company. It is also designed to permit the Company
to reward those individuals who are not employees of the Company but who
management perceives to have contributed to the success of the Company or who
are important to the continued business and operations of the Company. The above
goals will be achieved through the granting of Benefits.
2. Administration of this Plan. Administration of this Plan shall be determined
by the Company's Board of Directors (the "Board"). Subject to compliance with
applicable provisions of the governing law, the Board may delegate
administration of this Plan or specific administrative duties with respect to
this Plan on such terms and to such committees of the Board as it deems proper
(hereinafter the Board or its authorized committee shall be referred to as "Plan
Administrators"). The interpretation and construction of the terms of this Plan
by the Plan Administrators thereof shall be final and binding on all
participants in this Plan absent a showing of demonstrable error. No member of
the Plan Administrators shall be liable for any action taken or determination
made in good faith with respect to this Plan. Any Benefit approved by a majority
vote of those Plan Administrators attending a duly and properly held meeting
shall be valid. Any Benefit approved by the Plan Administrators shall be
approved as specified by the Board at the time of delegation.
3. Shares of Stock Subject to this Plan. A total of three million (3,000,000)
shares of Stock may be subject to, or issued pursuant to, Benefits granted under
this Plan. If any right to acquire Stock granted under this Plan is exercised by
the delivery of shares of Stock or the relinquishment of rights to shares of
Stock, only the net shares of Stock issued (the shares of stock issued less the
shares of Stock surrendered) shall count against the total number of shares
reserved for issuance under the terms of this Plan.
4. Reservation of Stock on Granting of Option. At the time any Option is granted
under the terms of this Plan, the Company will reserve for issuance the number
of shares of Stock subject to such Option until it is exercised or expires. The
Company may reserve either authorized but unissued shares or issued shares
reacquired by the Company.
22
<PAGE>
5. Eligibility. The Plan Administrators may grant Benefits to employees,
officers, and directors of the Company and its subsidiaries, as may be existing
from time to time, and to other individuals who are not employees of the Company
or its subsidiaries, including consultants and advisors, provided that such
consultants and advisors render bona fide services to the Company or its
subsidiaries and such services are not rendered in connection with the offer or
sale of securities in a capital-raising transaction. In any case, the Plan
Administrators shall determine, based on the foregoing limitations and the
Company's best interests, which employees, officers, directors, consultants and
advisors are eligible to participate in this Plan. Benefits shall be in the
amounts, and shall have the rights and be subject to the restrictions, as may be
determined by the Plan Administrators, all as may be within the provisions of
this Plan.
6. Term of Options issued as Benefits and Certain Limitations on Right to
Exercise.
a. Each Option issued as a benefit hereunder ("Option") shall have its
term established by the Plan Administrators at the time the Option is
granted.
b. The term of the Option, once it is granted, may be reduced only as
provided for in this Plan and under the express written provisions of
the Option.
c. Unless otherwise specifically provided by the written provisions of
the Option or required by applicable disclosure or other legal
requirements promulgated by the Securities and Exchange Commission
("SEC"), no participant of this Plan or his or her legal
representative, legatee, or distributee will be, or shall be deemed to
be, a holder of any shares subject to an Option unless and until such
participant exercises his or her right to acquire all or a portion of
the Stock subject to the Option and delivers the required
consideration to the Company in accordance with the terms of this Plan
and then only as to the number of shares of Stock acquired. Except as
specifically provided in this Plan or as otherwise specifically
provided by the written provisions of the Option, no adjustment to the
exercise price or the number of shares of Stock subject to the Option
shall be made for dividends or other rights for which the record date
is prior to the date on which the Stock subject to the Option is
acquired by the holder.
d. Options shall vest and become exercisable at such time or times and
on such terms as the Plan Administrators may determine at the time of
the grant of the Option.
e. Options may contain such other provisions, including further lawful
restrictions on the vesting and exercise of the Options as the Plan
Administrators may deem advisable.
f. In no event may an Option be exercised after the expiration of its
term.
g. Options shall be non-transferable, except by the laws of descent
and distribution.
7. Exercise Price. The Plan Administrators shall establish the exercise price
payable to the Company for shares to be obtained pursuant to Options which
exercise price may be amended from time to time as the Plan Administrators shall
determine.
8. Payment of Exercise Price. The exercise of any Option shall be contingent on
receipt by the Company of the exercise price paid in either cash, certified or
personal check payable to the Company.
23
<PAGE>
9. Withholding. If the grant of a Benefit hereunder, or exercise of an Option
given as a Benefit is subject to withholding or other trust fund payment
requirements of the Internal Revenue Code of 1986, as amended (the "Code"), or
applicable state or local laws, the Company will initially pay the Optionee's
liability and will be reimbursed by Optionee no later than six months after such
liability arises and Optionee hereby agrees to such reimbursement terms.
10. Dilution or Other Adjustment. The shares of Common Stock subject to this
Plan and the exercise price of outstanding Options are subject to proportionate
adjustment in the event of a stock dividend on the Common Stock or a change in
the number of issued and outstanding shares of Common Stock as a result of a
stock split, consolidation, or other recapitalization. The Company, at its
option, may adjust the Options, issue replacements, or declare Options void.
11. Benefits to Foreign Nationals. The Plan Administrators may, in order to
fulfill the purpose of this Plan and without amending this Plan, grant Benefits
to foreign nationals or individuals residing in foreign countries that contain
provisions, restrictions, and limitations different from those set forth in this
Plan and the Benefits made to United States residents in order to recognize
differences among the countries in law, tax policy, and custom. Such grants
shall be made in an attempt to give such individuals essentially the same
benefits as contemplated by a grant to United States residents under the terms
of this Plan.
12. Listing and Registration of Shares. Each Option shall be subject to the
requirement that if at any time the Plan Administrators shall determine, in
their sole discretion, that it is necessary or desirable to list, register, or
qualify the shares covered thereby on any securities exchange or under any state
or federal law, or obtain the consent or approval of any governmental agency or
regulatory body as a condition of, or in connection with, the granting of such
Option or the issuance or purchase of shares thereunder, such Option may not be
exercised in whole or in part unless and until such listing, registration,
consent, or approval shall have been effected or obtained free of any conditions
not acceptable to the Plan Administrators.
13. Expiration and Termination of this Plan. This Plan may be abandoned or
terminated at any time by the Plan Administrators except with respect to any
Options then outstanding under this Plan. This Plan shall otherwise terminate on
the earlier of the date that is five years from the date first appearing in this
Plan or the date on which the 3 millionth share is issued hereunder.
14. Amendment of this Plan. This Plan may not be amended more than once during
any six month period, other than to comport with changes in the Code or the
Employee Retirement Income Security Act or the rules and regulations promulgated
thereunder. The Plan Administrators may modify and amend this Plan in any
respect; provided, however, that to the extent such amendment or modification
would cause this Plan to no longer comply with the applicable provisions of the
Code governing incentive stock benefits as they may be amended from time to
time, such amendment or modification shall also be approved by the shareholders
of the Company.
ATTEST:
/s/ Bruce Stuart
- -------------------------------
Bruce Stuart, President and CEO
24
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED AUDITED AND UNAUDITED FINANCIAL STATEMENTS FOR THE
PERIODS ENDED SEPTEMBER 30, 1999 AND MARCH 31, 2000 RESPECTIVELY, THAT
WERE FILED WITH THE COMPANY'S REPORT ON FORM 10-SB AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001084384
<NAME> Staruni Corporation
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 6-MOS
<FISCAL-YEAR-END> SEP-30-1999 SEP-30-2000
<PERIOD-START> OCT-1-1998 OCT-1-1999
<PERIOD-END> SEP-30-1999 MAR-31-2000
<EXCHANGE-RATE> 1 1
<CASH> 160,892 166,400
<SECURITIES> 0 0
<RECEIVABLES> 12,895 12,643
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 203,937 258,043
<PP&E> 2,174 10,665
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 206,111 268,708
<CURRENT-LIABILITIES> 10,514 8,987
<BONDS> 0 0
0 0
0 0
<COMMON> 1,163,963 1,163,963
<OTHER-SE> (968,366) (905,092)
<TOTAL-LIABILITY-AND-EQUITY> 206,111 268,708
<SALES> 0 0
<TOTAL-REVENUES> 209,801 128,089
<CGS> 0 0
<TOTAL-COSTS> 514,557 176,259
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (304,756) (48,170)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (304,756) (48,170)
<EPS-BASIC> 0 0
<EPS-DILUTED> (0.039) 0
</TABLE>
