SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
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 maintain the Company's 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.
<PAGE>
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...........................15
PART F/S
Financial Statements for the periods ended September 30, 1999
and December 31, 1999...................................................16
PART III
Item 1. Index to Exhibits...................................................17
Signatures...................................................................18
<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
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through redundancy 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
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business model, which focuses on 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
Three months ended December 31, 1999 & 1998. Years ended September 30, 1999 &
1998.
Sales
Sales for the three months ended December 31, 1999 increased to $58,655 from
$25,174 for the comparable period in 1998, an increase of 133%. 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 three months ended December 31, 1999, was $27,132 down from a
net loss of $63,311 for the comparable period in 1998, a change of $36,179. The
decreases in losses were primarily attributable to a decrease in general and
administrative expenses of $18,163 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 three months ended December 31, 1999, decreased
to $85,787 from $91,485 in the comparable period in 1998.
Computer and Internet related expenses increased to $35,956 for the three months
ended December 31, 1999 from $23,461 in the three months 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, for the three month period ended December
31, 1999, decreased $18,163 from $67,994 at December 31, 1998 to $49,831 at
December 31, 1999. 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
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.
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B. Liquidity and Capital Resources
Three months ended December 31, 1999 & 1998. Years ended September 30, 1998 &
1997.
Cash flows used in operations were $71,462 for the three months ended December
31, 1999 as compared to cash flows used in operations of $66,477 for the
comparable period in 1998. Negative cash flows are primarily attributable to
marketing costs.
Cash flows generated from financing activities were $47,444 for the three months
ending December 31, 1999, as compared to $41,640 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 three months
ending December 31, 1999, were conducted outside the United States.
Cash flow used by operations was $206,275 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 1998 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 has an income tax benefit resulting from net operating losses which
can be used to offset operating profit.
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.
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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
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>
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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 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 $100,000.
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<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensation
Awards Payout
Name and Year Salary Bonus Other Restricted Securities LTIP All Other
Principal ($) ($) Annual Stock Underlying Payout Compensation
Position Compensation Options ($) ($)
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.
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
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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
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
11
<PAGE>
Record Holders.
As of January 31, 2000, there were approximately 1064 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 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
12
<PAGE>
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:
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
13
<PAGE>
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:
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
14
<PAGE>
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 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.
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.
15
<PAGE>
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 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 December 31, 1999 are attached hereto as F-1 through
F-19.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
16
<PAGE>
STARUNI CORPORATION
INDEX TO FINANCIAL STATEMENTS
UNAUDITED FINANCIAL STATEMENTS
Unaudited Condensed Balance Sheets Dec 31, 1999..............................F-2
Unaudited Condensed Statements of Oprerations Dec 31, 1999...................F-3
Unaudited Condensed Stockholders' Equity Dec 31, 1999........................F-4
Unaudited Condensed Statements of Cash Flows Dec 31, 1999....................F-5
Notes to Unaudited Financial Statements......................................F-6
AUDITED FINANCIAL STATEMENTS SEPTEMBER 30, 1999 & 1998
INDEPENDENT AUDITORS' REPORT ...............................................F-10
FINANCIAL STATEMENTS:
Balance Sheets....................................................F-11
Statements of Operations...........................................F-12
Statements of Stockholders' Equity ................................F-13
Statements of Cash Flows..........................................F-14
NOTES TO FINANCIAL STATEMENTS...............................................F-15
F-1
<PAGE>
STARUNI CORPORATION
UNAUDITED CONDENSED BALANCE SHEETS
FOR THE THREE MONTHS ENDING DECEMBER 31, 1999
ASSETS
Current assets 1999
----
Cash $ 136,874
Receivables 12,800
Advance to stockholder 12,150
Other assets 36,850
----------
Total Current Assets 198,674
Property and equipment, net of
accumulated depreciation 10,665
----------
Total Assets $ 209,339
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 8,692
Accrued payables 2,738
----------
Total Current liabilities 11,430
---------
Total Liabilities 11,430
---------
Stockholders' Equity
Class B Preferred Stock,
no par value 5,000,000 authorized shares, -
0 shares issued and outstanding
Common Stock, no par value, 250,000,000
shares authorized, 13,881,827 shares 1,163,963
issued and outstanding with 68,748
shares held in treasury at 12/31/99
Common stock subscription (receivable) (483,837)
Accumulated (deficit) (482,217)
----------
Net Stockholders' Equity 197,909
------------
Total Liabilities and Stockholders' Equity $ 209,339
============
See Accompanying Notes to Unaudited Financial Statements
F-2
<PAGE>
STARUNI CORPORATION
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDING DECEMBER 31, 1999 AND 1998
1999 1998
---------- ----------
Income $ 58,655 $ 25,174
----------- -------
Computer and Internet related expenses 35,956 23,461
General and administrative expenses 49,831 67,994
---------- ----------
Total operating expenses 85,787 91,485
---------- ----------
Income (loss) from operations before provision for $ (27,132) $ (63,311)
income taxes
Provision for income taxes - -
---------- ----------
Net (loss) $ (27,132) (63,311)
========== ==========
Income (loss) per weighted-average share of common
stock outstanding 0.00 0.02
----------- ----------
Weighted-average number of common shares
outstanding 13,881,827 3,995,576
=========== ==========
See Accompanying Notes to Unaudited Financial Statements
F-3
<PAGE>
<TABLE>
STARUNI CORPORATION
UNAUDITED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999
<CAPTION>
COMMON STOCK
CLASS B COMMON STOCK SUBSCRIPTION ACCUMULATED NET
PREFERRED STOCK (RECEIVABLES) (DEFICIT) EQUITY
Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C>
Balance September 0 $ - 3,245,576 $ 132,240 $ - $ (24,788) $ 107,452
30, 1997
Issuance of Shares - - 350,000 40,142 - - 40,142
Net (loss) - - - - - (125,541) (125,541)
------- ---------- ---------- ---------- ---------- ----------- -----------
Balance September - $ - 3,595,576 $ 172,382 $ - $ (150,329) $ 22,053
30, 1998
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 - - - - 29,444 - 29,444
(paid)
Net (loss) - - - - - (27,132) (27,132)
------- ---------- ---------- ---------- ---------- --------- ----------
Balance December - $ - 13,881,827 $1,163,963 $ (483,837) $(482,217) $ 197,909
31, 1999 ======= ========== ========== ========== ========== ========== ==========
</TABLE>
See Accompanying Notes to Unaudited Financial Statements
F-4
<PAGE>
STARUNI CORPORATION
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDING DECEMBER 31, 1999 AND 1998
1999 1998
---- ----
Cash Flows From Operating Activities Net (loss) $ (27,132) $ (66,311)
-------- --------
Adjustments To Reconcile Net Loss To Net Cash Used In
Operating Activities
Depreciation - -
(Increase) decrease in receivables 95 (1,183)
Increase in accounts payable (750) -
Increase (decrease) in accrued payables 1,666 (1,017)
Increase in other assets (45,341) -
-------- --------
Net Adjustment 44,330 (166)
-------- -------
Net Cash (Used) In Operating Activities 71,462 (66,477)
-------- --------
Cash Flows From Financing Activities
(Increase) in loans to stockholder/officer (net) 18,000 1,640
Proceeds from issuance of capital stock 29,444 40,000
------ ------
Net Cash Provided By Financing Activities 47,444 41,640
------ ------
Net (decrease) in cash (24,018) (24,837)
Cash-beginning 160,892 22,231
------- ------
Cash-end $ 136,874 $ (2,606)
======= =======
See Accompanying Notes to Unaudited Financial Statements
F-5
<PAGE>
STARUNI CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - BASIS OF PRESENTATION
The interim consolidated financial statements at December 31, 1999 for the three
month period ended December 31, 1999 are unaudited, but include all adjustments
which the Company considers necessary for the fair presentation.
The accompanying unaudited financial statements are for the interim period and
do not include all disclosures normally provided in annual financial statements,
and should be read in conjunction with the Company's Form 10-SB for the year
ended September 30, 1999. The accompanying unaudited interim financial
statements for the three months ended December 31, 1999 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 required 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 these estimates.
NOTE 2 - COMMITMENTS AND CONTINGENCIES
The Company is exposed to various legal matters encountered in normal course of
business. In the opinion of management, the resolution of these matters will not
have an adverse effect on the Company's consolidated financial position or
results of operations.
NOTE 3 - 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 required 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 and 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.
Management has net operating loss carryforwards and may not be able to realize
all tax benefits from available net operation loss carryforwards and has,
therefore, provided a valuation allowance of an equal amount. No income tax
expense is reflected in the Statement of Operations for the three months ended
December 31, 1999.
F-6
<PAGE>
STARUNI CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 4 - COMMON STOCK
From November 1998 through August 1999, 10,286,251 shares of common stock were
issued for $1,078,881. 5,156,246 of these shares were issued under a Rule 504
Regulation D offering for $991,581. Of the $991,581 to be received for the Rule
504 stock, $507,774 has been received as of December 31, 1999. Of the $507,774
received, $456,444 was in cash and $51,300 was for services rendered. As of
December 31, 1999, $483,837 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 December 31, 1999, there was a total of 13,881,827 shares of common stock
issued with 68,748 shares held in the name of the Company.
F-7
<PAGE>
STARUNI CORPORATION
Audited Financial Statements
September 30, 1999 & 1998
F-8
<PAGE>
STARUNI CORPORATION
TABLE OF CONTENTS
September 30, 1999 & 1998
INDEPENDENT AUDITORS' REPORT ...............................................F-10
FINANCIAL STATEMENTS:
Balance Sheets....................................................F-11
Statements of Operations...........................................F-12
Statements of Stockholders' Equity ................................F-13
Statements of Cash Flows..........................................F-14
NOTES TO FINANCIAL STATEMENTS...............................................F-15
F9
<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-10
<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, 250,000,000
shares authorized, 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-11
<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 (304,756) (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-12
<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-13
<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-14
<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.
F-15
<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.
F-16
<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 $1,078,881. 5,156,246 of these shares were
issued under a Rule 504 Regulation D offering for $991,581. Of the
$991,581 to be received for the Rule 504 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.
F-17
<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.
F-18
<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.
F-19
<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]
17
<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 8th day of March, 2000.
Staruni Corporation
/s/ Bruce D. Stuart
--------------------------
Bruce D. Stuart, Chief Executive Officer
18
<PAGE>
ITEM 2. DESCRIPTION OF EXHIBITS
INDEX TO EXHIBITS
Exhibit
No. Page No. Description
2(i) 20 Articles of Incorporation of Altius Corp. dated February 1,
1962 and filed February 5, 1962.
2(ii) 24 Certificate of Amendment of Articles of Incorporation of
Altius Corp. dated January 29, 1971 and filed April 9, 1971.
2(iii) 33 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) 34 Certificate of Amendment of Articles of Incorporation of
Staruni Corporation dated June 15, 1999 and filed August 20,
1999.
2(v) 35 By-Laws of Altius Corp. (Staruni Corporation) dated February
8, 1962.
46 Consent Letter of Auditors
15 47 Financial Data Schedule "CE"
19
ENDORSED
FILED
In the office of the Secretary
of State of California
Feb. 5, 1962
FRANK M. JORDAN, Secretary
of State
By James E. Harris
Deputy
ARTICLES OF INCORPORATION
OF
ALTIUS CORP.
KNOW ALL MEN BY THESE PRESENTS:
We, the undersigned, have this day voluntarily associated ourselves
together for the purpose of forming a corporation under the laws of the State of
California, and we do hereby certify:
FIRST: The name of the corporation shall be:
ALTIUS CORP.
SECOND: The purposes for which this corporation is formed are as follows:
(a) To initially engage in the primary business of buying and selling
manufactured steel products of every kind and description as principal,
manufacturer's representative or broker.
(b) To engage in the business of buying and selling manufactured
products of every kind and description as principal, manufacturer's
representative or broker.
(c) To engage in the business of buying, steel and selling the same.
(d) To engage in the business of buying steel and processing and
fabricating the same in the manufacture of steel products, and to sell products
so processed, fabricated and manufactured.
(e) To acquire, hold, lease, encumber, convey or otherwise dispose of
real and personal property within or without the State and to take real and/or
personal property by gift or bequest.
(f) To acquire by purchase or otherwise, and to hold, vote, sell,
guarantee, mortgage, pledge or otherwise dispose of corporate shares and stocks
of municipal corporations, public, quasi-public and private corporations, shares
of beneficial interest in trust or other interests in partnerships or companies
of every kind, promissory notes and commercial papers of all description,
debentures, mortgage, trust certificates, securities of all descriptions; to
exchange the shares of capital stock or bonds of other corporations, trusts,
partnerships or companies of every description, or for real or personal property
of any description; to act as agent, factor, broker, or attorney-in-fact for any
such purpose; to mortgage, pledge, hypothecate, convey or transfer in trust,
sell, lease or dispose of any real or personal property of the corporation; to
incur indebtedness and obligations, secured or unsecured; to guarantee the
obligations of individuals, firms or corporations.
20
<PAGE>
(g) To loan money, with or without security, and to take mortgages,
pledges and securities of real and personal property to secure said loans.
(h) To borrow money (money may be borrowed from the directors and
officers of this corporation), and for moneys borrowed or for the payment for
the property acquired, or for any other object or purpose of the corporation, or
otherwise, in connection with the transaction of any part of its business, to
issue bonds, debentures, notes and other obligations, secured or unsecured, and
to mortgage, pledge or hypothecate any end all of its properties or assets as
security therefor.
(i) To apply for, obtain, register, purchase, lease or otherwise
acquire, hold, own, use, operate, introduce, develop and control, suit, assign
or otherwise dispose of, or to take or grant licenses or other rights with
respect to any and all ways to exploit or turn to account inventions,
improvements, processes, copyrights, patents, trade names, trademarks and
distinctive marks and similar rights of any and all kinds and wherever granted,
registered or established by or under the laws of the United States, or of any
other state country or place.
(j) To purchase or otherwise acquire become interested in, hold, sell,
exchange, mortgage, pledge or otherwise dispose of, deal in and with or turn to
account, or realize upon all forms of securities, including stocks, bonds,
debentures, coupons, notes, evidences of certificates of indebtedness,
certificates of interest, commercial paper, mortgages and other similar
instruments and rights issued or created by domestic or foreign associations,
firms, trustees, syndicates, individuals, governments, states, municipalities,
or other political divisions, or issued or created by others; to purchase, sell,
and exchange coin and bullion; to aid by loan subsidy, guaranty or in any manner
those issuing, creating, responsible for any of such securities, all to such an
extent as it may then lawfully do; to act as financial, commercial or general
agent or representative of any corporation, association, partnership, firm,
syndicate, individual, or others, and as such to develop and improve and extend
the property, trade and business interests thereof, and to aid any lawful
enterprise in connection therewith and in connection with acting as such or as
agent or broker for any principality to give any other aid or assistance to such
extent as may then be permitted by law.
(k) To do all and everything necessary, suitable or proper for the
accomplishment of the foregoing purposes, or anything which the board of
directors of the corporation may from time to time deem to be conducive or
expedient for the prosecution of the interests of or benefit to the corporation,
and the foregoing clauses shall be construed both as objects and power; and it
is hereby expressly provided that the foregoing enumeration of specific powers
shall not be held to limit or restrict in any manner the powers of this
corporation.
(l) To enter into limited or general copartnership agreements with
others.
The several clauses contained in the foregoing statement of purposes
shall be in no wise limited or restricted by reference to or inference from the
terms of any other clause, but shall be regarded as independent purposes and
powers, and no recitations, expressions or declaration of specific or special
purposes hereinbefore enumerated shall be deemed to be exclusive; provided
however, that nothing in these articles of incorporation contained shall be
construed to authorize the corporation to transact or conduct the business of
banking, or insurance, or to accept or execute public or private trusts or to do
safe deposits, telephone, telegraph, or public utility business of any kind.
21
<PAGE>
THIRD: The principal office for the transaction of the business of said
corporation will be located in the County of Los Angeles, State of California.
FOURTH: The number of directors of said corporation shall be nine, and the
names and residences of the Directors who are appointed to act until the first
annual meeting of the shareholders or until the election and qualification of
their successors are as follows:
NAME RESIDENCE
ROBERT WARREN SCHILLINGER 6920 Sepulveda Blvd. Van Nuys, California
LELAND DALE BALEME 13460 Drownfield Ave. Sylmar, California
CLYDE RALPH McROY 7928 Clearfield Ave. Panorama City, California
FORDYCE FRANK EASTBURN 4718 Kester, Ave. Sherman Oaks, California
STANLEY HOULBERG 13147 Gladstone Sylmar, California
HARRY ODYNSKI 6124 Nagle Ave. North Hollywood, California
ROBERT FRANK VAIANA 19130 Lanark Street Reseda, California
FRANK JAMES WRIGHT 6046 Bellingham North Hollywood, California
LEROY EDWARD WINE 7801 Bothwell RoadReseda, California
The shareholders of this corporation shall have power to adopt, repeal or amend
by-laws changing the number of directors. The number of persons so named shall
constitute the number of directors until changed by amendment of the articles or
by a by-law adopted pursuant to the authority contained herein.
FIFTH: The total number, of shares which this corporation shall have
authority to issue is Twenty Thousand (20,0000); the par value of each share is
Ten Dollars ($10.00); the aggregate par value of all shares is Two Hundred
Thousand Dollars ($200,000.00); at the present time there have been no
subscribers to said capital stock.
SIXTH: This corporation from time to time, may do any one or more of the
actual things, or carry out any one or more of the purposes herein set forth and
may transact business in the State of California, or other states, in the
District of Columbia, in the districts, dependencies and colonies of the United
States, and in foreign countries.
SEVENTH: The shareholders of this corporation shall have a preemptive right
to subscribe to any or all issues of shares or securities of this corporation.
IN WITNESS WHEREOF, for the purpose of forming this corporation under
the laws of the State of California, the undersigned, being each of the persons
named above as a director, have personally signed these Articles.
DATED: February 1st, 1962.
22
<PAGE>
/s/ ROBERT WARREN SCHILLINGER
- -------------------------------
Robert Warren Schillinger
/s/ LELAND DALE BALEME
- -------------------------------
Leland Dale Baleme
/s/ CLYDE RALPH McROY
- -------------------------------
Clyde Ralph Mcroy
/s/ FORDYCE FRANK EASTBURN
- -------------------------------
Fordyce Frank Eastburn
/s/ STANLEY HOULBERG
- -------------------------------
Stanley Houlberg
/s/ HARRY ODYNSKI
- -------------------------------
Harry Odynski
/s/ ROBERT FRANK VAIANA
- -------------------------------
Robert Frank Vaiana
/s/ FRANK JAMES WRIGHT
- -------------------------------
Frank James Wright
/s/ LEROY EDWARD WINE
- -------------------------------
Leroy Edward Wine
STATE OF CALIFORNIA
THE GREAT SEAL OF THE STATE OF
CALIFORNIA
DEPARTMENT OF STATE
To all whom these presents shall come, Greetings:
I, FRANK M. JORDAN, Secretary of the State of the State of California, hereby
certify:
That the annexed transcript has been compared with the RECORD on file in my
office, of which it purports to be a copy, and that the same is full, true and
correct.
In testimony whereof, I, FRANK M. JORDAN, Secretary of State, have hereunto
caused the Great Seal of the State of California to be affixed and my name
subscribed, at the City of Sacramento, in the State of California.
this Feb 5 1962
/s/ Frank M. Jordan
- -----------------------------
Secretary of State
By: /s/ Walter C. Stutler
- -----------------------------
Assistant Secretary of State
23
DOCUMENT FILED
LOS ANGELES COUNTY
APR 9 1971
OFFICE OF COUNTY CLERK
CORPORATION DIV.
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
ALTIUS CORP.
ROBERT W. SCHILLINGER and ANN SIGNETT Certify:
1. That they are the president and the secretary, respectively, of ALTIUS
CORP., a California corporation.
2. That at a meeting of the board of directors of said corporation duly
held at San Fernando, California, on January 4, 1971, the following resolution
was adopted:
WHEREAS, it is deemed by the Board of Directors of this corporation to
be to its best interests and to the best interests of the stockholders of this
corporation that its Articles of Incorporation be amended an hereinafter
provided,
NOW, THEREFORE BE IT RESOLVED, that Article FIFTH of said Articles of
Incorporation be amended to read in its entirety as follows:
"FIFTH: This corporation is authorized to issue two classes of shares
of stock, to wit, common stock and preferred stock. The total number of shares
of common stock shall be 2,000,000; the aggregate par value of said shares of
common stock shall be $1,000,000.00, and the par value of each of said shares
shall be $.50. The total number of shares of preferred stock shall be 2,000,000;
the aggregate par value of said shares of preferred stock shall be
$1,000,000.00, and the par value of each of said shares shall be $5.00. The
total number of all authorized shares shall be 2,200,000; and the aggregate par
value of all shares having a par value is $2,000,000.00.
"The preferences, privileges and restrictions granted to or imposed
upon the respective classes of shares or the holders thereof are as follows:
"The preferred shares shall be 6% convertible preferred, convertible at
any time at the option of shareholders into common stock at the conversion rate
of one (1) preferred share for one (1) common share but without adjustment for
dividends. Shareholders' right of conversion shall continue for five (5) days
after the notice of redemption. Preferred shares shall be callable for
redemption by the company, at any time at $5.50 per share. Preferred shares
shall be entitled to dividends at the rate of 30 cents per share annually and no
more, cumulative and before payment of any cash dividends on common shares.
"In any fiscal year in which the aforesaid dividend has been declared
and set aside for, or paid to, the preferred shares, the Board of Directors may
declare and set aside for, or pay to, the common shares out of any funds legally
available for the payment thereof dividends to be determined by said board.
24
<PAGE>
"The conversion rate shall be protected against dilution in that the
number of shares of common stock for which preferred shares may be exchanged
shall be increased pro rata for any stock dividend or stock split declared upon
the common shares unless a corresponding stock dividend or stock split shall
have been declared upon the preferred shares at the same time.
"In the event of winding up, dissolution or liquidation of the
corporation, holders of preferred shares shall be paid the amount of the par
value of said shares before any payment or distribution to holders of common
shares. All voting rights shall be in the common stock except that the holders
of preferred shares, as a class, shall have the right to elect the smallest
number of directors that shall constitute a majority of the Board of Directors
in the event of failure of the corporation to pay an amount aggregating eight
(8) quarterly dividends whether consecutive or not and to retain such majority
until arrears have been raid in full. Shares both preferred and common shall be
fully paid and non-assessable and without preemptive rights when issued.
Upon the effective date of this Amendment each outstanding share of the
par value of $10.00 shall be re-classified and converted into twenty shares of
common stock Of $.50 par value.
PROCEDURE FOR REDEMPTION
"(A,) This corporation, at the Option of the Board of Directors, may
redeem the whole or from time to time may redeem any part of the preferred
shares at any time by paying in cash therefor $5.50 per share and, in addition
thereto, an amount in cash equal to all dividends on preferred shares unpaid and
accumulated to the date fixed for redemption whether owed or declared or not, to
and including the date fixed for redemption.
Such sum, being hereinafter sometimes referred to as the "redemption price."
"In case of the redemption of a part only of the outstanding shares,
this corporation shall designate by lot in such manner as the Board of Directors
may determine the shares to be redeemed, or shall effect such redemption pro
rata. Less than all of the preferred shares at any time outstanding may not be
redeemed until all dividends accrued and in arrears upon all preferred shares
outstanding shall have been paid for all past dividend periods, and until full
dividends for the then current dividend period on all preferred shares then
outstanding, other than the shares to be redeemed shall have been paid or
declared and the full amount thereof set apart for payment. At least twenty (20)
days previous notice by mail, postage prepaid, shall be given to the holders of
record of the preferred shares to be redeemed, such notice to be addressed to
each such shareholder at his post office address as shown by the records of the
corporation.
"On or after the date fixed for redemption and stated in such notice
each holder of preferred shares called for redemption shall surrender his
certificate evidencing such shares to this corporation at the place designated
in such notice and shall thereupon be entitled to receive payment of the
redemption price.
"In case less than all the shares represented by any such surrendered
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares. If such notice of redemption shall have been duly given and
if on the date fixed for redemption funds necessary for the redemption shall be
available therefor, then notwithstanding that the certificates evidencing any
preferred shares so called for redemption shall not have been surrendered, the
dividends with respect to the shares so called for redemption shall cease to
accrue after the date fixed for redemption and all rights with respect to the
shares so called for redemption shall forthwith, after such date, cease and
terminate except only the right of the holders to receive the redemption price
without interest upon surrender of their certificates therefor.
25
<PAGE>
"If on or prior to any date fixed for redemption of preferred shares,
this corporation deposits with any bank or trust company in the City of Los
Angeles, State of California, as a trust fund, a sum sufficient to redeem on the
date fixed for redemption thereof, the shares called for redemption with
irrevocable instructions and authority to the bank or trust company to give the
notice of redemption thereof, if such notice shall not previously have been
given by this corporation, or to complete the giving of such notice if
theretofore commenced, and to pay, on and after the date fixed for redemption or
prior thereto, the redemption price of the shares to their respective holders
upon the surrender of their share certificates, then from and after the date of
the deposit (although prior to the date fixed for redemption), the shares so
called shall be deemed to be redeemed and dividends on those shares shall cease
to accrue after the date fixed for redemption.
"The deposit shall be deemed to constitute full payment of the shares
to their holders and from and after the date of the deposit, the shares shall he
deemed to be no longer outstanding and the holders thereof shall cease to be
shareholders with respect to such shares and shall have no right with respect
thereto except the right to receive from the bank or trust company payment of
the redemption price of the shares without interest, upon the surrender of their
certificates therefore and the right to convert said shares as provided herein
at any time up to but not after the close of business on the 5th day following
the date of notice of redemption of such shares. Any money so deposited on
account of the redemption price of preferred shares converted subsequent to the
making of such deposit shall be repaid to the corporation forthwith upon the
conversion of such preferred shares. Any monies deposited by the corporation
pursuant to this paragraph and not payable by reason of the conversion of
preferred shares shall be repaid to the corporation upon its request expressed
in a resolution of its Board of Directors.
PROCEDURE FOR CONVERSION
(B) The preferred shares shall be convertible, at the option of the
respective holders thereof, at any time, into fully paid and non-assessable
common shares at the conversion rate of one (1) preferred share for one(1)
common share but without adjustment for dividends; provided, however, that in
case of the redemption of any preferred shares, such right of conversion shall
cease and terminate as to the shares called for redemption at the close of
business on the 5th day following the date of notice of redemption, unless
default shall be made in the payment of the redemption price. The conversion
rate shall be protected against dilution in that the number of shares of common
stock, for which preferred shares may be exchanged shall be increased pro rata
for any stock dividend or stock split declared upon the common shares unless a
corresponding stock dividend or stock split shall have been declared upon the
preferred shares at the same time. Upon conversion, no payment or adjustment
shall be made by the corporation or by any holder of preferred shares
surrendered for conversion in respect of dividends, whether declared or paid, on
the preferred shares surrendered for conversion or on the common shares issuable
upon conversion thereof, and no payment or adjustment shall be made by the
corporation on account of dividends accrued or in arrears on the preferred
shares surrendered for conversion.
"Whenever reference is made herein to the issue or sale of common
shares, the term "common shares" shall mean any stock of any class of the
corporation, other than shares with a fixed limit on dividends and a fixed limit
on amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation.
"Before any holder of preferred shares shall be entitled to convert the
same into common shares, he shall surrender the certificate, or certificates for
such preferred shares at the office of the corporation or at the office of any
transfer agent for the preferred shares or at such other place, if any, as the
Board of Directors
26
<PAGE>
shall determine, duly endorsed to the corporation or in blank, or accompanied by
proper instruments of transfer to the corporation or in blank and accompanied by
funds in the amount of any taxes payable in respect of any transfer involved in
the issue and deliver of the common shares into which such preferred shares are
to be converted in a name other than that in which such preferred shares were
registered, and shall give written notice to the corporation at the time and
place of such surrender, that he elects so to convert such preferred shares and
shall state in writing therein the name or names in which he wishes the
certificate or certificates for common shares to be issued. Every such notice of
election to convert shall constitute a contract between the holder of said
preferred shares and the corporation whereby the holder of such preferred shares
shall be deemed to subscribe for the amount of common shares which he shall be
entitled to receive upon such conversion and in satisfaction of such
subscription to surrender the preferred shares to be converted and to release
the corporation from all liability thereunder and thereby the corporation shall
be deemed to agree that the amount paid to it for such preferred shares,
together with the surrender of the certificate or certificates therefor and the
extinguishment of liability thereon, shall constitute full payment of such
subscription for common shares to be issued upon such conversion.
"The corporation shall, as soon as practicable after such deposit of
certificates for preferred shares, accompanied by the written notice and the
statement above prescribed, issue and deliver at such office to the person for
whose account such preferred shares were surrendered or to his nominee or
nominees, certificates for the number of full common shares to which he shall be
entitled as aforesaid together with a scrip certificate or cash adjustment for
any fraction of a share if not evenly convertible. Such conversion shall be
deemed to have been made as of the date of such surrender of the preferred
shares to be converted and the person or persons entitled to receive the common
shares issuable upon conversion of such preferred shares, shall be treated for
all purposes as the record holder or holders of such common shares on such date.
"(1) In case the corporation at any time or from time to time while any
of the preferred shares are outstanding shall issue any of its common shares as
a dividend on its common shares or for a consideration in cash or property which
is less per share than the conversion price in effect immediately prior to the
time of such issue or sale, then forthwith upon such issue or sale the
conversion price shall be reduced to a price (calculated to the nearest cent)
determined by (a) multiplying the number of common shares outstanding
immediately prior to such sale or issue by the conversion price then in effect,
(b) adding to the product so obtained the consideration, if any, received by the
corporation upon such issue or sale, and (c) dividing such sum by the total
number of common shares outstanding immediately after such issue or sale. For
the purposes of this paragraph (B) the number of common shares outstanding at
any given time shall include shares in the treasury of the corporation and
shares issuable in respect of scrip certificates representing fractional
interests in common shares.
"For the purposes of this subdivision (1), the following provisions
also shall be applicable:
"(i) in case the corporation shall in any manner offer any rights to
subscribe for or to purchase common shares, or grant any options for the
purchase of common shares at a price per share less than the conversion price in
effect immediately prior to the time of the offering of such rights to, or the
granting of such options, as the case may be, all common shares which the
holders of such rights or options shall be entitled to subscribe for or purchase
pursuant to such rights or options shall be deemed to be issued or sold as of
the date of the offering of such rights or the granting of such options, as the
case may be, and the minimum aggregate cash consideration named in such rights
or options for the common shares covered thereby, plus the consideration
received by the corporation for such rights or options, shall be deemed to be
the consideration actually received by the corporation (as of the date of the
offering of such rights or the granting of such options, as the case may be) for
the issue or sale of such common shares; provided that no further adjustment of
the conversion price
27
<PAGE>
shall be made by reason of the actual issuance of common shares upon the
exercise of such rights or options; and provided further, that at such time as
all rights or options shall have been exercise or shall have expired, (a) the
number of common shares deemed to have been issued by reason of the offering of
such rights or the granting of such options, but not actually issued, upon the
exercise thereof, shall no longer be deemed to be issued and outstanding, and
(b) the conversion price shall forthwith be readjusted and shall thereafter be
the price which it would have been had adjustment been made on the basis of the
number of common shares actually issued upon the exercise of such rights or
options and the aggregate consideration actually received by the corporation for
such rights or options and for the common shares issued upon the exercise
thereof.
(ii) In case the corporation shall in any manner issue or sell any
shares (other than the preferred shares) or obligations directly or indirectly
convertible into or exchangeable for common shares, and the price per share for
which common shares are deliverable upon such conversion or exchange (determined
by dividing (a) the total amount received or receivable by the corporation as
consideration for the issue or sale of such convertible shares or obligations,
plus the total minimum amount of premiums, if any, payable to the corporation
upon conversion or exchange, by (b) the total maximum number of common shares
necessary to effect the conversion or exchange of all such convertible shares or
obligations) shall be less than the conversion price in effect immediately prior
to the time of such issue or sales then such issue or sale shall be deemed to be
an issue or sale (as of the date of such issue or sale of such convertible
shares or obligations) of the total maximum number of common shares necessary to
effect the conversion or exchange of all sure convertible shares or obligations
and the gross amount received or receivable by the corporation in consideration
of the issue or sale of such convertible shares or obligations plus the minimum
aggregate amount of premiums, if any, payable to the corporation upon conversion
or exchange, shall be deemed to be the consideration actually received (as of
the date of the issue or sale of such convertible shares or obligations) for the
issue or sale of such common shares; provided that no furrier adjustment of the
conversion price shall be made by reason of the actual issuance of common shares
upon conversion or exchange of such convertible shares or obligations; and
provided further, that at such time as all rights of conversion or exchange
evidenced by such convertible shares or obligations shall have been exercised or
shall have expired, (a) the number of common shares deemed to have been issued
by reason of the issuance of such convertible shares or obligations but not
actually issued upon conversion or exchange thereof, shall no longer be deemed
to be issued and, outstanding, and (b) the conversion price shall forthwith be
readjusted and shall thereafter be the price which it would have been had
adjustment beat made on the basis of the number of common shares actually issued
upon such conversion or exchange and the aggregate consideration actually
received by the corporation for such convertible shares or obligations and upon
the conversion or exchange thereof.
(iii) In case any dividends on common shares payable in common shares
shall be declared or paid by the corporation, the common shares so issued shall
be deemed (but only for the purposes of this paragraph (b)) to have been issued
without consideration; and in case at any time the corporation shall declare a
cash dividend on its stock of any class and shall substantially
contemporaneously therewith, or within thirty (30) days after the date of
payment of such dividend give to the holders of its shares of such class the
right to subscribe for common shares at a price which will not the corporation
in the aggregate substantially the amount of such cash dividend so declared such
common shares so issued in respect of any such subscription shall be deemed to
have been issued as a stock dividend.
"(iv) For the purpose of determining the conversion price, the net
value of property for which common shares, or rights or options to purchase
common shares, or any shares or obligations convertible into or exchangeable for
common shares, are issued shall be ascertained by the board of directors of the
Corporation in its sole discretion prior to the issuance of such common shares,
rights, options or convertible shares or obligations, and its determination of
such not value shall be final.
28
<PAGE>
"(v) In the case of an issue or sale for cash of common shares, or of
rights or options to purchase common shares, or of any shares or obligations
convertible into or exchangeable for common shares, the consideration received
by the corporation therefor shall be deemed (but only for the purposes of this
paragraph (B)) to be the amount of cash received, before deducting therefrom any
commissions or expenses paid by the corporation for any underwriting of, or
otherwise in connection with the issue or sale thereof. In the case of the issue
or sale of such securities, rights or options to an underwriter without payment
of any commission, then,(for the purposes of this paragraph (B)), the
consideration received by the corporation therefor shall be deemed to be the
full amount at which such securities, rights or options are initially offered by
the underwriter to the public unless the difference between the price of said
securities, rights or options to such underwriter and said initial public
offering price exceeds 25% of said price to the underwriter, in which the
consideration received by the corporation therefor shall be deemed to be said
price to the underwriter.
(vi) If the corporation shall issue, in payment of any dividends upon
any preferred shares of the corporation, any common shares, or any rights or
options to purchase common shares, or any shares or obligations convertible into
or exchangeable for common shares, the corporation shall be deemed to have
received therefor a consideration equal to the amount of such dividends so paid.
"(2) In case the corporation shall at any time issue any common shares
in subdivision of outstanding shares by, reclassification or otherwise, the
conversion price shall be reduced proportionately, and in like manner in case of
any combination of common shares by reclassification or otherwise, the
conversion price shall be proportionately increased.
"(3) In case of any capital reorganization or any reclassification
(except a reclassification covered by subdivision (2) above) of the capital
stock of the corporation, or in case of the consolidation or merger of the
corporation with another corporation, each preferred share shall thereafter be
convertible into the number of shares or other securities or property of the
corporation or to the successor corporation resulting from such consolidation or
merger, as the case may be, to which the common shares of the corporation
deliverable upon conversion of such preferred shares would have been entitled
upon such capital reorganization, reclassification of capital stock,
consolidation or merger, and in any such case appropriate adjustment (as
determined by the board of directors) shall be made in the application of the
provisions herein set forth with respect to the rights and interests thereafter
of the holders of preferred shares, to the end that the provisions set forth
herein (including the specified changes in and other adjustments of the
conversion price) shall thereafter be applicable, as near as reasonably may be,
in relation to any shares or other property thereafter deliverable upon the
conversion of preferred shares.
"(4) The conversion price shall be adjusted from time to time as often
as may be required under the provisions of subdivisions (1), (2) and (3) of this
paragraph (B), irrespective of the amount of change in the conversion price
determined as the result of each such adjustment of the conversion price shall
be made in accordance with the provisions of said subdivisions. However, for the
sole purpose of determining the rate at which preferred shares are at a
particular time convertible into common shares, the adjustment or adjustments of
the conversion price shall not be taken into account unless or until the
conversion price, as adjusted, is at least 25(cent) more or less than the
conversion price on the basis of which the then prevailing conversion rate was
determined. Whenever the conversion price is adjusted so as to require an
adjustment in the conversion rate (but not otherwise) the corporation shall
forthwith file in the office of its treasurer and with each transfer agent for
common shares and each transfer agent for preferred shares, a statement signed
by the president or one of the vice presidents of the corporation and by its
treasurer or an assistant treasurer, stating the adjusted conversion price
determined as provided in this paragraph (B). Such statement shall show in
detail
29
<PAGE>
the facts requiring such adjustment (and any prior adjustment or adjustments not
theretofore taken into account in determining the conversion rate), including a
statement of the consideration received by the corporation for any additional
shares issued or sold or deemed to have been issued or sold. in each such case
the corporation shall also forthwith cause a notice, stating the adjustment or
adjustments and than adjusted conversion price which is to be used in
determining the now conversion rate to be mailed to the respective holders of
record of preferred shares.
"(5) In case at any time
"(i) the corporation shall pay any dividend payable in stock
upon its common shares or make any distribution (other than
cash dividends) to the holders of its common shares; or
"(ii) the corporation shall offer for subscription pro rata to
the holders of its common shares any additional shares of
stock of any class or any other rights; or
(iii)of any capital reorganization or reclassification of the
capital stock of the corporation or consolidation or merger of
the corporation with another corporation; or
"(iv)of the voluntary or involuntary dissolution, liquidation
or winding up of the corporation, or sale of all or
substantially all of its assets, then and in any one or more
of said cases the corporation shall cause at least ten (10)
days prior notice to be mailed to each transfer agent for the
preferred shares and to the holders of the outstanding
preferred shares of the date on which (a) the books of the
corporation shall close, or a record be taken, for the
determination of holders of comon shares entitled to
participate in such stock dividend distribution or
subscription rights, or (b) such reclassification,
reorganization, consolidation, mergers dissolution,
liquidation, winding upon or sale shall take place, as the
case may be.
"(6) The corporation shall at all times reserve and keep available, out
of its authorized but unissued common shares, solely for the purpose of
affecting the conversion of the preferred shares, and the corporation shall
obtain and keep in force such permits or other authorizations as may be
required, and shall comply with all requirements as to registration or other
qualification, in order to enable the corporation lawfully to issue and deliver,
such number of common shares an shall from time to time be sufficient to effect
the conversion of all preferred shares from time to time outstanding. The
corporation shall from time to time in accordance with the laws of the State of
California Increase the authorized amount of its common shares if at any time
the number of common shares remaining unissued and available for issuance upon
conversion of preferred shares shall not be sufficient to permit conversion of
all the then outstanding preferred shares.
"(7) No fractions of common shares are to be issued upon conversion,
but in lieu thereof the corporation may either pay therefor in cash at the
conversion price, or may issue non-dividend-bearing and nonvoting scrip
(interchangeable in amounts aggregating full shares for stock certificates) in
the denomination of 1/100 of a share, or any multiple thereof, in such form,
bearer or registered, and expiring after such reasonable time (but not less than
two years) as the board of directors may from time to time prescribe prior to
the issue thereof. The corporation will pay any and all issue and other taxes
that may be payable in respect of any issue or delivery of common shares on
conversion of preferred shares pursuant hereto. The corporation shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of comon shares in a name other than
that in which the preferred shares so converted were registered, and no such
issue or delivery shall be made unless and until the person requesting such
issue has
30
<PAGE>
paid to the corporation the amount of any such tax, or has established, to the
satisfaction of the corporation, that such tax has been paid.
"(8) Preferred shares converted pursuant to the provisions of this
paragraph (B) shall not be reissued and no preferred shares shall be issued in
lieu thereof or in exchange therefor.
PROCEDURE FOR VOTING FOR PREFERRED SHAREHOLDERS
"(C) Except as otherwise provided by law or by these Articles of
Incorporation, the holders of common shares issued and outstanding shall have
and possess the exclusive right to notice of shareholders meetings and exclusive
voting rights and powers, and the holders of preferred shares shall not be
entitled to notice of any shareholders meeting or to vote upon the election of
directors or upon any question effecting the management or affairs of this
corporation except where such notice or vote is required by law or by these
Articles of Incorporation.
"If at any time eight (8) or more quarterly dividends (whether
consecutive or not) on the preferred shares shall be in default, in whole or in
part, the holders of preferred shares as a class shall be entitled to elect the
smallest number of directors which will constitute a majority of the authorized
number of directors, and the holders of common shares as a class shall be
entitled to elect the remaining members of the board of directors. At such time
as all dividends accrued an the outstanding preferred shares have been paid or
declared and set apart for payment, the rights of the holders of preferred
shares to vote an provided in this paragraph (C) shall cease, subject to removal
from time to time upon the same terms and conditions.
"At any time after the voting power to elect a majority of the board of
directors shall have become vested in the holders of the preferred shares as
provided, in this paragraph (C), the secretary of this corporation may, and upon
the request of the record holders of at least ten percent (10%) of the preferred
shares then outstanding addressed to him at the principal office of this
corporation shall, call a special meeting of the holders of preferred shares and
of common shares for the election of directors, to be held at the place and upon
the notice provided in the by-laws of the corporation for the holding of annual
meetings. If such meeting shall not be so called within ten (10) days after
personal service of the request, or within fifteen (15) days after mailing of
the same by registered mail within the United States of America, then the record
holders of at least ten percent (10%) of the preferred shares then outstanding
may designate in writing one of their number to call such meeting and the person
so designated may call such meeting at the place and upon the notice above
provided, and for that purpose a shall have access to the stock books of the
corporation. At any meeting so called or at any annual meeting held while the
holders of the preferred shares have the voting power to elect a majority of the
board of directors the holders of a majority of the then outstanding preferred
shares present in person or by proxy shall be sufficient to constitute a quorum
for the election of directors an herein provided. The tems of office of all
persons who are directors of the corporation at the time of such meeting shall
terminate upon the election at such meeting by the holders of the preferred
shares of the number of directors they are entitled to elect, and the persons so
elected as directors by the holders of the preferred shares, together with such
persons, if any, as may be elected as directors by the holders of the common
shares, shall constitute the duly elected directors of this corporation. In the
event the holders of the common shares fail to elect the number of directors
which they are entitled to elect at such meetings additional directors may be
appointed by the directors elected by the holders of preferred shares.
"Whenever the holders of the preferred shares shall be divested of such
voting power as hereinabove in this paragraph (C) provided, the term of office
of all persons who are at the time directors of the corporation shall terminate
upon the election of their successors by the holders of the common shares.
31
<PAGE>
"RESOLVED FURTHER: That the Directors of this corporation hereby adopt
and approve said Amendment of the Articles of Incorporation that the President
or a Vice President and the Secretary or an Assistant Secretary of this
corporation be, and they hereby are, authorized and directed to procure the
adoption and approval of the foregoing amendment by the vote or written consent
of the shareholders of this corporation holding at least two-thirds of the
voting power, and thereafter to sign and verity by their oaths and to file a
certificate in the form and manner required by Section 3672 of the California
Corporation Code, and, in general, do any and all things necessary to effect
said amendment in accordance with said Section 3672."
3. That the shareholders have adopted said amendment by written
consent. That the wording of the amended article, as set forth in the
shareholders' written consent, is the same as that set forth in the directors'
resolution in Paragraph 2 above.
4. That the number of shares represented by written consent is 5,300.
That the total number of shares entitled to vote on or consent to the amendment
is 5,400.
/s/ Robert W. Schillinger
- --------------------------
ROBERT W. SCHILLINGER, President
/s/ Ann Signet
- --------------------------
ANN SIGNET, Secretary
Each of the undersigned declares under penalty of perjury that the matters set
forth in the foregoing certificate are true and correct.
Executed at Los Angeles, California on this 29th day of January, 1971.
/s/ Robert W. Schillinger
- --------------------------
ROBERT W. SCHILLINGER, President
/s/ Ann Signet
- --------------------------
ANN SIGNET, Secretary
32
ENDORSED-FILED
In the Office of the Secretary of State
of the State
of California
MAR 24 1997
BILL JONES Secretary of State
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
OF
ALTIUS CORP.
The undersigned certify that:
1. They are the President and Secretary, respectively of ALTIUS CORP., a
Corporation.
2. Article First of the Articles of Incorporation of this corporation is
amended to read as follows:
"The name of this corporation is "STARUNI
CORPORATION."
3. Article Fifth of the Articles of Incorporation of this corporation is
amended to read as follows:
"The Corporation is authorized to issue two classes of stock, to be
designated as "Common Stock" and "Class B Preferred Stock." The number
of authorized shares of "Common Stock" is 15 Million Shares, which have
No Par Value. The number of authorized shares of "Preferred Stock" is 5
Million Shares, which have No Par Value. The Board of Directors is
authorized to determine the rights preferences and restrictions granted
to or imposed upon the "Class B Preferred Stock."
4. The foregoing amendment of Articles of Incorporation has been duly approved
by the Board of Directors.
5. The foregoing amendment of Articles of Incorporation has been duly approved
by the required vote of shareholders in accordance with Section 902,
California Corporations Code. The total number of outstanding shares of the
corporation is 260,666 shares of "Common Stock" and no shares of "Preferred
Stock." The number of shares voting in favor of the amendment equaled or
exceeded the vote required. The percentage vote required was more than 50%
of the outstanding shares of "Common Stock."
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
DATED: December 30, 1996
By: /s/ Joseph Mazin
- ------------------------
JOSEPH MAZIN, President
By: /s/ Bruce D. Stuart
---------------------
BRUCE D. STUART, Secretary
33
ENDORSED-FILED
In the Office of the Secretary of State
of the State
of California
AUG 20 1999
BILL JONES Secretary of State
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
OF
STARUNI CORPORATION
The Undersigned certify that:
1. They are the President and Secretary, respectively of Staruni Corporation,
a Corporation;
2. Article Fifth of the Articles of Incorporation of this Corporation is
amended to read as follows:
"The Corporation is authorized to issue two classes of stock, to be
designated as "Common Stock" and "Class B Preferred Stock." The number
of authorized shares of "Common Stock" is 250 Million Shares which have
no par value. The number of authorized shares of "Preferred Stock" is
50 Million Shares which have no par value. The Board of Directors is
authorized to determine the rights, preferences and restrictions
granted to or imposed upon the "Class B Preferred Stock."
3. The foregoing amendment of the Articles of Incorporation has been duly
approved by the Board of Directors.
4. The foregoing amendment of the Articles of Incorporation has been duly
approved by the required vote of shareholders in accordance with
Section 902, California Corporations Code. The total number of
outstanding shares of the corporation is 12,757,000 shares of "Common
Stock" and no shares of "Preferred Stock." The number of shares voting
in favor of the amendment equaled or exceeded the vote required. The
percentage vote required was more than 50% of the outstanding shares of
"Common Stock."
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Dated: June 15, 1999
/s/ Bruce D. Stuart
- ---------------------------------
By: Bruce D. Stuart, President
/s/ Sandra Gonzales
- ---------------------------------
By: Sandra Gonzales, Secretary
34
BY-LAWS OF
ALTIUS CORP.
ARTICLE I
SHAREHOLDERS: MEETINGS AND VOTING
Section 1. PLACE OF MEETINGS.
All meetings of the shareholders shall be held at the office of the
corporation in the State of California, as may be designated for that purpose
from time to time by the Board of Directors
Section 2. ANNUAL MEETINGS.
The annual meeting of the shareholders shall be held on the first
Monday of February in each year, if not a legal holiday, and if a legal holiday,
then on the next succeeding business day, at the hour of 1:00 o'clock P.M., at
which time the shareholders shall elect by plurality vote a Board of Directors,
consider reports of the affairs of the Corporation, and transact such other
business as may properly be brought before the meeting,
Section 3. SPECIAL MEETINGS.
Special meetings of the shareholders, for any purpose or purposes whatsoever,
may be called at any time by the President, or by the Board of Directors, or by
any two or more members thereof, or by one or more shareholders holding not less
than one-fifth (1/5th) of the voting power of the corporation.
Section 4. NOTICE OF MEETINGS.
Notices of meetings, annual or special, shall be given in writing to
shareholders entitled to vote by the Secretary or the Assistant Secretary, or if
there be no such officer, or in case of his neglect or refusal, by any director
or shareholder, or as provided in the Corporations Code of the State of
California.
Such notices shall be sent to the shareholder's address appearing on
the books of the corporation, or supplied by him to the corporation for the
purpose of notice, not less than seven days before such meetings. Notice of any
meeting of shareholders shall specify the place, the day and the hour of
meeting, and in case of special meeting, as provided by the Corporations Code of
California, the general nature of the business to be transacted.
When a meeting is adjourned for thirty days or more, notice of the
adjourned meeting shall be given as in case of an original meeting. Save, as
aforesaid, it shall not be necessary to give any notice of the adjournment or of
the business to be transacted at an adjourned meeting other than by announcement
at the meeting at which such adjournment is taken.
Section 5. CONSENT TO SHAREHOLDER'S MEETINGS
The transactions of any meeting of shareholders, however called and
noticed, shall be valid as though had at a meeting duly held after regular call
and notice, if a quorum be present either in person or by proxy, and if, either
before or after the meeting, each of the shareholders entitled to vote, not
present in person or by proxy, sign a written waiver of notice, or a consent to
the holding of such meeting, or an approval of the minutes thereof. All such
waivers, consents or approvals shall be filed with the corporate records or made
a part of the minutes of the meeting. Executors, administrators, guardians,
trustees and other fiduciaries entitled to vote shares may sign such waivers,
consents or approvals. Any action which may be taken at a meeting of the
shareholders, may be taken without a meeting if authorized by a writing signed
by all of the holders of shares who would be entitled to vote at a meeting for
such purpose, and filed with the Secretary of the corporation.
35
<PAGE>
Section 6. QUORUM.
The holders of a majority of the shares entitled to vote thereat,
present in person, or represented by proxy, shall be requisite and shall
constitute a quorum at all meetings of the shareholders for the transaction of
business unless otherwise provided by law. If, however, such majority shall not
be present or represented at any meeting of the shareholders, the shareholders
entitled to vote thereat, present in person, or by proxy, shall have power to
adjourn the meeting from time to time, until the requisite amount of voting
shares shall be present. At such adjourned meeting at which the requisite amount
of voting shares shall be represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 7. VOTING RIGHTS; CUMULATIVE VOTING.
All persons provided by law, or in whose names, shares entitled to vote
stand on the stock records of the corporation on the day of any meeting of
shareholders, unless some other day be fixed by the Board of Directors, for the
determination of shareholders of record, then on such other day, shall be
entitled to vote at such meeting.
Every shareholder entitled to vote shall be entitled to one vote for
each of said shares and shall have the right to accumulate his votes as provided
in the Corporations Code of California.
Section 8. PROXIES.
Every shareholder entitled to vote, or to execute consents, may do so
either in person, or by written proxy duly executed and filed with the Secretary
of the corporation.
ARTICLE II
DIRECTORS; MANAGEMENT
Section 1. POWERS
Subject to the limitation of the Articles of Incorporation, of the
By-Laws and of the Laws of the State of California as to action to be authorized
or approved by the shareholders, all corporate powers shall be exercised by or
under authority of, and the business and affairs of this corporation shall be
controlled by, a Board of Directors.
Section 2. NUMBER AND QUALIFICATION.
The authorized number of directors of the corporation shall be nine
(9), until changed by amendment to the Articles of Incorporation or by an
amendment to this Section 2, Article II of these By-Laws, adopted by the vote,or
written assent of the shareholders as provided by law.
Section 3. ELECTION AND TENURE OF OFFICE.
The directors shall be elected by ballot at the annual meeting of the
shareholders, to serve for one year and until their successors are elected and
have qualified. Their term of office shall begin immediately after election.
Section 4. VACANCIES.
(a) A vacancy in the Board of Directors shall exist in case of the
death, resignation or removal of any director, or if the shareholders shall
increase the authorized number of directors but shall fail at the meeting at
which such increase is authorized, or at an adjournment thereof, to elect the
additional director so provided for, or in case the shareholders fail at any
time to elect the full number of authorized directors.
(b) No reduction of the number of directors shall have the effect of
removing any director prior to the expiration of his term of office.
36
<PAGE>
(c) Vacancies in the Board of Directors may be filled by a majority of
the remaining directors, though less than a quorum, or by a sole remaining
director, and each director so elected shall hold office until his successor is
elected at an annual meeting of shareholders or at a special meeting called for
that purpose.
(d) The shareholders may at any time elect a director to fill any
vacancy not filled by the directors, and may elect the additional directors at
the meeting at which an amendment of the By-Laws is voted authorizing an
increase in the number of directors.
(e) If the Board of Directors accepts the resignation of a Director
tendered to take effect at a future time, the Board, or the shareholders, shall
have power to elect a successor to take office when the resignation shall become
effective.
Section 5. REMOVAL OF DIRECTORS.
The entire Board of Directors or any individual director may be removed
from office by the Shareholders as provided in the Corporations Code of
California.
Section 6. PLACE OF MEETING.
Meetings of the Board of Directors shall be held at the office of the
corporation in the State of California, as designated for that purpose, from
time to time, by resolution of the Board of Directors or written consent of all
the Members of the Board. Any meeting shall be valid, wherever held, if held by
the written consent of all Members of the Board of Directors, given either
before or after the meeting and filed with the Secretary of the corporation.
Section 7. ORGANIZATION MEETINGS
The organization meetings of the Board of Directors shall be held
immediately following the- adjournment of the annual meetings of the
shareholders.
Section 8. OTHER REGULAR MEETINGS.
Regular meetings of the Board of Directors shall be held on the first
Monday of every other month beginning with the month of April, 1962, at 12:00
noon.
Section 9. SPECIAL MEETINGS--NOTICES.
Special meetings of the Board of Directors for any purpose or purposes
shall be called at any time by the President or if he is absent or unable or
refuses to act, by any Vice-President or by any two directors, Written notice of
the time and place of special meetings shall be delivered personally to the
directors or sent to each director by letter or by telegram, charges prepaid,
addressed to him at his address as it is shown upon the records of the
corporation, or if it is not so shown on such records or is not readily
ascertainable, at the place in which the meetings of the directors are regularly
held. In case such notice is mailed or telegraphed, it shall be deposited in the
United States mail or delivered to the telegraph company in the place in which
the principal office of the corporation is located at least forty-eight (48)
hours prior to the time of the holding of the meeting. In case such notice is
delivered as above provided; it shall be so delivered at least twenty-four (24)
hours prior to the time of the holding of the meeting. Such mailing,
telegraphing or delivery as above provided shall be due, legal and personal
notice to such director. If said day shall fall upon a holiday, such meeting
shall be held on the next succeeding business day thereafter. No notice need be
given of such regular meetings.
Section 10. NOTICE OF ADJOURNMENT.
Notice of the time and place of holding an adjourned meeting need not
be given to absent directors if the time and place be fixed at the meeting
adjourned.
37
<PAGE>
Section 11. WAIVER OF NOTICE.
When all the directors are present at any directors' meeting, however
called or noticed, and sign a written consent thereto on the records of such
meeting, or, if a majority of the directors are present, and if those not
present sign in writing a waiver of notice of such meeting, whether prior to or
after the holding@6f such meeting, which said waiver shall be filed with the
Secretary of the corporation, the transactions thereof are as valid as if had at
a meeting regularly called and noticed.
Section 12. QUORUM AND VOTE.
(a) A majority of the number of directors as fixed by the articles or
By-Laws shall be necessary to constitute a quorum for the transaction of
business. A minority of the directors, in the absence of a quorum, may adjourn
from time to time, but may not transact any business.
(b) The action of a majority of the directors present at any meeting at
which there is a quorum, when duly assembled, is valid as a corporate act.
ARTICLE III
OFFICERS
Section 1. OFFICERS.
The officers shall be a President, one or more Vice-Presidents, a
Secretary and a Treasurer, which officers shall be elected by, and hold office
at the pleasure of, the Board of Directors; the corporation may have, at the
discretion of the Board of Directors, a Chairman of the Board of Directorsv
additional Vice- Presidents, Assistant Secretaries, Assistant Treasurers and any
other officers.
Section 2. ELECTION.
After their election the directors shall meet and organize by electing
a President from their own number, and one or more Vice-Presidents, a Secretary
and a Treasurer, who may, but need not be, members of the Board of Directors.
Any two or more of such offices except those of President and Secretary, may be
held by the same person.
Section 3. COMPENSATION AND TENURE OF OFFICE.
The compensation and tenure of office of all the officers of the
corporation shall be fixed by the Board of Directors.
Section 4. REMOVAL AND RESIGNATION.
Any officer may be removed, either with or without cause, by a majority
of the directors at the time in office, at any regular or special meeting of the
Board, or, except in case of an officer chosen by the Board of Directors, by any
officer upon whom such power of removal may be conferred by the Board of
Directors. Any officer may resign at any time by giving written notice to the
Board of Directors or to the President, or to the Secretary of the corporation.
Any such resignation shall take effect at the date of the receipt of such notice
or at any later time specified therein; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
Section 5. VACANCIES.
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
the By-Laws for regular appointments to such office.
Section 6. PRESIDENT.
The President shall be the chief executive officer of the corporation
and shall, subject to the control of the Board of Directors, have general
supervision, direction and control of the business and affairs of the
38
<PAGE>
corporation. He shall preside at all meetings of the shareholders and of
the-Board of Directors. He shall be ex-officio a member of all the standing
committees, including the executive committee, if any, and shall have the
general powers and duties of management usually vested in the office of
President of a corporation, and shall have such other powers and duties as may
be prescribed by the Board of Directors or the By-Laws.
Section 7. VICE-PRESIDENTS.
The Vice-Presidents shall, in the order designated by the Board of
Directors, in the absence or disability of the President, perform the duties and
exercise the powers of the President, and shall perform such other duties as the
Board of Directors shall prescribe.
Section 8. SECRETARY.
The Secretary shall keep, or cause to be kept, a book of minutes at the
principal office or such other place as the Board of Directors may order, of all
meetings of directors and shareholders, with the time and place of holding,
whether regular or special, and if specials how authorized, the notice thereof
given, the names of those present at directors' meetings, the number of shares
present or represented at shareholders' meetings and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office
or at the office of the corporation's transfer agent, a share register, or a
duplicate share register, showing the names of the shareholders and their
addresses; the number and classes of shares held by each; the number and date of
certificates issued for the same, and the number and date of cancellation of
every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the
meetings of the shareholders and of the Board of Directors required by the
By-Laws or by law to be given; he shall keep the seal of the corporation and
affix said seal to all documents requiring a seal, and shall have such other
powers and perform such other duties as may be prescribed by the Board of
Directors or the By-Laws.
Section 9. TREASURER.
The Treasurer shall receive and keep all the funds of the corporation,
and pay them out only on the check of the corporation, signed in the manner
authorized by the Board of Directors.
Section 10. ASSISTANTS.
Any Assistant Secretary or Assistant Treasurer, respectively, may
exercise any of the powers of Secretary or Treasurer, respectively, as provided
in these By-Laws or as directed by the Board of Directors, and shall perform
such other duties as are imposed upon them by the By-Laws or the Board of
Directors.
Section 11. SUBORDINATE OFFICERS.
The Board of Directors may from time to time appoint such subordinate
officers or agents as the business of the corporation may require, fix their
tenure of office and allow them suitable compensation.
ARTICLE IV
EXECUTIVE AND OTHER COMMITTEES
The Board of Directors may appoint an executive committee, and such other
committees as may be necessary from time to time, consisting of such number of
its members and with such powers as it may designate, consistent with the
Articles of Incorporation, the By-Laws and the Corporations Code of California.
Such committees shall hold office at the pleasure of the board.
39
<PAGE>
ARTICLE V
CORPORATE RECORDS AND REPORTS - INSPECTION
Section 1. RECORDS.
The corporation shall maintain adequate and correct accounts, books and
records of its business and properties. All of such books, records and accounts
shall be kept at its principal place of business in the State of California, as
fixed by the Board of Directors from time to time.
Section 2. INSPECTION OF BOOKS AND RECORDS.
All books and records provided for in the Corporations Code of
California shall be open to inspection of the shareholders from time to time and
in the manner provided in said Code, and by the Directors as provided in said
Corporations Code.
Section 3. CERTIFICATION AND INSPECTION OF BY-LAWS.
The original or a copy of these By-Laws, as amended or otherwise
altered to date, certified by the Secretary, shall be open to inspection by the
shareholders and Directors of the company, as provided by the Corporations Code
of California.
Section 4. CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for payment of money, notes or other
evidences of indebtedness, issued in the name of or payable to the corporation,
shall be signed or endorsed by such person or persons and in such manner as
shall be determined from time to time by resolution of the Board of Directors.
Section 5. CONTRACTS, ETC. - HOW EXECUTED.
The Board of Directors, except as in the By-Laws otherwise provided,
may authorize any officer or officers, agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation. Such authority may be general or confined to specific instances.
Unless so authorized by the Board of Directors, no officer, agent or employee
shall have any power or authority to bind the corporation by any contract or
engagement, or to pledge its credit, or to render it liable for any purpose or
to any amount.
Section 6. ANNUAL REPORT.
Upon the request of a shareholder, the directors shall cause to be sent
to the shareholder, not later than one hundred twenty (120) days after the close
of the fiscal or calendar year, a balance sheet as of the closing date of such
year, together with a statement of income and profit and loss for such year.
These financial statements shall be certified to by the President, Secretary,
Treasurer or a public accountant.
ARTICLE VI
CERTIFICATES AND TRANSFER OF SHARES
Section 1. CERTIFICATES FOR SHARES.
Certificates for shares shall be of such form and device as the Board
of Directors may designate and shall state the name of the record holder of the
shares represented thereby; its number; date of issuance; the number of shares
for which it,is issued; the par value, if any, or a statement that such shares
are without par value; a statement of the rights, privileges, preferences and
restrictions, if any; a statement as to redemption or conversion, if any; a
statement of liens or restrictions upon transfer or voting, if any; if the
shares be assessable, or, if assessments are collectible by personal action, a
plain statement of such facts.
Every certificate for shares must be signed by the President or a
Vice-President and the Secretary or an Assistant Secretary or must be
authenticated by facsimiles of the signatures of the President and Secretary
40
<PAGE>
or by a facsimile of the signature of its President and the written signature of
its Secretary or an Assistant Secretary. Before it becomes effective every
certificate for shares authenticated by a facsimile of a signature must be
countersigned by a transfer agent or transfer clerk and must be registered by an
incorporated bank or trust company, either domestic or foreign, as registrar of
transfers.
Section 2. TRANSFER ON THE BOOKS.
Upon surrender to the Secretary or transfer agent of the corporation of
a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
Section 3. LOST OR DESTROYED CERTIFICATES.
Any person claiming a certificate of stock to be lost or destroyed
shall make an affidavit or affirmation of that fact and advertise the same in
such manner as the Board of Directors may require, and shall if the directors so
require give the corporation a bond of indemnity, in form and with one or more
sureties satisfactory to the Board, in at least double the value of the stock
represented by said certificate, whereupon a new certificate may be issued of
the same tenor and for the same number of shares as the one alleged to be lost
or destroyed.
Section 4. TRANSFER AGENTS AND REGISTRARS.
The Board of Directors may appoint one or more transfer agents or
transfer clerks, and one or more registrars, which shall be an incorporated bank
or trust company either domestic or f oreign, who shall be appointed at such
times and places as the requirements of the corporation may necessitate and the
Board of Directors may designate.
Section 5. CLOSING STOCK TRANSFER BOOKS.
The Board of Directors may close the transfer books in their discretion
for a period not exceeding thirty days preceding any annual or special meeting
of the shareholders, or the day appointed for the payment of a dividend.
ARTICLE VII
CORPORATE SEAL
The corporate seal shall be circular in form, and shall have inscribed thereon
the name of the corporation, the date of its incorporation, and the word
California.
ARTICLE VIII
AMENDMENTS TO BY-LAWS
Section l. BY SHAREHOLDERS.
New By-Laws may be adopted or these By-Laws may be repealed or amended
at their annual meeting, or at any other meeting of the shareholders called for
that purpose, by a vote of shareholders entitled to exercise a majority of the
voting power of the corporation, or by written assent of such shareholders, or
by the Board of Directors as provided by law.
Section 2. BY BOARD OF DIRECTORS.
Subject to the right of the shareholders to adopt, amend or repeal
By-Laws, as provided in Section 1 of this Article VIII, the Board of Directors
may adopt, amend or repeal any of these By-Laws other than a By- Law, or
amendment thereof, changing the authorized number of directors.
41
<PAGE>
Section 3. RECORD OF AMENDMENTS.
Whenever an amendment or new By-Law is adopted, it shall be copied in
the Book of By-Laws with the original By-Laws, in the appropriate place. If any
By-Law is repealed, the fact of repeal with the date of the meeting at which the
repeal was enacted or written assent was filed shall be stated in said book.
KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, being all of the persons appointed in the Articles of
Incorporation to act as the first Board of Directors of Altius Corp. hereby
assent to the foregoing By-Laws, and adopt the same as the By-Laws of said
corporation.
IN WITNESS WHEREOF, we have hereunto set our hands this 8th day of February
1962.
Directors
/s/ Robert Warren Schillinger
- --------------------------------
Robert Warren Schillinger
/s/ Frank James Wright
- --------------------------------
Frank James Wright
/s/ Clyde Ralph McRoy
- --------------------------------
Clyde Ralph McRoy
/s/ LeRoy Edward Wine
- --------------------------------
LeRoy Edward Wine
/s/ Leland Dale Baleme
- --------------------------------
Leland Dale Baleme
/s/ Fordyce Frank Eastburn
- --------------------------------
Fordyce Frank Eastburn
/s/ Stanley Houlberg
- --------------------------------
Stanley Houlberg
/s/ Harry Odynski
- --------------------------------
Harry Odynski
/s/ Robert Frank Vaiana
- --------------------------------
Robert Frank Vaiana
THIS IS TO CERTIFY:
That I am the duly elected, qualified and acting Secretary of Altius
Corp. and that the above and foregoing By-Laws were adopted as the By-Laws of
said corporation on the 8th day of February, 1962, by the persons appointed in
the Articles of Incorporation to act as the first directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of
February 1962.
/s/ Clyde Ralph McRoy
Secretary
42
<PAGE>
CORPORATE RESOLUTION
The following resolution was adopted at the second annual shareholders
meeting of Altius Corp., held on Tuesday, April 7, 1964, at the offices of the
corporation, 3201 Arroyo Ave., San Fernando, Calif.
RESOLVED:
That Section 2, Article II, of the By-laws of Altius Corp. be amended to
read: "The authorized number of directors of the corporation shall be ten (10)
...." and it is hereby so directed.
CORPORATE RESOLUTION
The following resolution was adopted at the third annual shareholders
meeting of Altius Corp., held on Tuesday, April 6, 1965, at the offices of the
corporation, 1201 Arroyo Ave., San Fernando, California.
RESOLVED:
That Section 2, Article II, of the By-Laws of Altius Corp. be amended to read:
"The authorized number of directors of the Corporation shall be eleven (11)...."
and it is hereby so directed.
CORPORATE RESOLUTION
The following resolution was adopted at a special meeting of the Board
of Directors, held on Thursday, September 22, 1966, at 1201 Arroyo Avenue, San
Fernando, California.
RESOLVED:
That Section 8 Article II, of the By-Laws of Altius Corp. be amended to
read: "Regular meetings of the Board of Directors shall be held on the first
Monday of every other month beginning with the month of October, 1966, at 8
P.M." and it is hereby so directed.
Section 8(a) ACTION OF THE BOARD WITHOUT MEETING.
If all the members of the Board of Directors shall individually or
collectively consent in writing, the Board of Directors may, without a meeting,
take any action required or permitted under any of the provisions of Division I,
Title I of the Corporations Code of the State of California. Such written
consent or consents shall be filed the minutes of the proceedings of the Board
and such action by written consent shall have the same force and effect as a
unanimous vote of the Directors.
AMENDMENT TO BY-LAWS OF ALTIUS CORP. (A California corporation)
The following resolution was adopted at a meeting of the Board of
Directors held April 6, 1971:
RESOLVED, that the By-Laws, Article VI, Section 2, is deleted and amended to
read as follows:
ARTICLE VI
Section 2. TRANSFER ON THE BOOKS.
Every certificate for shares must have authenticating signatures in a
form prescribed by the California Corporation code.
RESOLVED, FURTHER, that Article VI, Section 4, is deleted and amended to read as
follows:
43
<PAGE>
ARTICLE VI
Section 4. TRANSFER AGENTS AND REGISTRARS.
The Board of Directors may appoint one or more transfer agents or
transfer clerks and/or one or more registrars.
/s/ Ann Signett
Secretary
CORPORATE RESOLUTION
The following resolution was adopted at the fifth annual shareholders'
meeting, held on Tuesday, April 4, 1967:
RESOLVED:
That Section 2, Article I, as amendedy of the By-Laws of Altius Corp,
be amended to read "The annual meeting of the shareholders shall be held on the
first Tuesday of April in each year, if not a legal holiday, and if a legal
holiday, then on the next succeeding business day, at the hour of 7 P.M...." and
it is hereby so directed.
April 16, 1963
TO: THE BOARD OF DIRECTORS, ALTIUS CORP.
Capital for Advanced Technology, Inc. is agreeable to amending the By-Laws of
Altius Corp. to read:
"The annual meeting of the shareholders will henceforth be held on the first
Tuesday of March, at 8 P.M. and, if a legal holiday, then on the next succeeding
business day...."
CAPITAL FOR ADVANCED TECHNOLOGY, INC.
By: /s/
-----------------
By: /s/
-----------------
CORPORATE RESOLUTION
The following resolution was adopted at the tenth annual shareholders'
meeting, held on Tuesday, May 23, 1972:
RESOLVED:
That Section 2, Article I, as amended, of the By-Laws of Altius Corp.
be amended to read: "The annual meeting of the Shareholders' shall be held on
the third Tuesday of May in each year, if not a legal holiday, and if a legal
holiday, then on the next succeeding business day, at a time and place to be
designated by the Board of Directors..." and it is hereby so directed.
44
<PAGE>
CORPORATE RESOLUTION
The following resolution was adopted at the regular meeting of the Board of
Directors held on May 20, 1977 at the offices of the Corporation.
RESOLVED:
Section 2, of the By-Laws is amended, setting the date of the annual
shareholders meeting of Altius Corp. to the last week in May, date, time, and
place to be set by the Executive Committee.
CORPORATE RESOLUTION
The following resolution was adopted at a special meeting of the Board of
Directors, held on December 15, 1976, at 1:00 p.m. at the Los Angeles Hilton
Hotel.
RESOLVED:
That Section 8, Article II, of the By-Laws of Altius Corp. be amended
to read: "Regular meetings of the Board of Directors shall be held on the third
Friday of February, May, August, and November at a time and place to be fixed by
the Chairman.
45
[LETTERHEAD OF SELLERS & ASSOCIATES, P.C.]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the use of our report dated November 29, 1999, in this
registration statement on Form 10-SB for Staruni Corporation.
/s/ Sellers & Associates,P.C.
-----------------------------
Sellers & Associates, P.C.
Salt Lake City, Utah
March 22, 2000
46
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ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1999 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>
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