UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ended September 30, 2000
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No fee required) for the transition period from ________________ to
_______________.
Commission file number: 000-30061
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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, CA 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 registered under Section 12(b) of the Exchange Act:
Common Stock ($0.001 Par Value) None
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Title of Each Class Name of each Exchange on Which Registered
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
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Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [ ].
The issuer's total consolidated revenues for the year ended September 30, 1999,
were $205,949
The aggregate market value of the registrant's Common Stock, $0.0001 par value
(the only class of voting stock), held by non-affiliates was approximately
$616,620 based on the average closing bid and asked prices for the Common Stock
on January 2, 2001.
At January 2, 2001, the number of shares outstanding of the registrant's Common
Stock, $0.0001 par value (the only class of voting stock), was 30,526,839.
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TABLE OF CONTENTS
PART I
Page
Item 1. Description of Business..............................................1
Item 2. Description of Property..............................................5
Item 3. Legal Proceedings....................................................5
Item 4. Submission of Matters to a Vote of Security-Holders..................5
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.............6
Item 6. Management's Discussion and Analysis or Plan of Operation............7
Item 7. Financial Statements................................................10
Item 8. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure............................................10
PART III
Item 9. Directors and Executive Officers....................................11
Item 10. Executive Compensation..............................................12
Item 11. Security Ownership of Certain Beneficial Owners and Management......13
Item 12. Certain Relationships and Related Transactions......................13
Item 13. Exhibits and Reports on Form 8-K....................................14
Signatures....................................................................15
Index to Exhibits.............................................................16
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
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").
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, 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.
Description of Products and Services
The Company offers Internet services tailored to meet the needs of both
individual and business customers. The Company's primary service offering is
dial-up Internet access and value-added services for its individual customers.
The Company's business customers are able to take advantage of dedicated high
speed Internet access, Web hosting and other services. The Company's services
are offered in various prices and packages so that customers may customize their
subscription with services that meet their particular requirements.
The Company's current network provides customers with local dial-up access in
all the major areas of Southern California, as well as several smaller
communities. The Company's systems and network infrastructure are designed to
provide customers with reliability and speed. Reliability is primarily achieved
through redundancy 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.
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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.
Marketing and Distribution.
The Company's marketing approach is designed to further its user density
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.
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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.
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,
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.;
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(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.
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.
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.
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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.
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.
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. DESCRIPTION OF PROPERTIES
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 $1,750
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 3. LEGAL PROCEEDINGS
The Company is currently not a party to any pending material legal proceeding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the last 3 months of the fiscal year ended September 30, 2000, no matters
were submitted by the Company to a vote of its shareholders.
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ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
Market Information
The Company's common stock is traded on Over the Counter Bulletin Board under
the symbol "SRUN." The table below sets forth the high and low sales prices for
the Company's Common Stock for each quarter of the past two fiscal years. The
bid price for the Common Stock was $0.05 on January 2, 2001. The quotations
below reflect inter-dealer prices, without retail mark up, mark down or
commission and may not represent actual transactions:
Quarter Ended High Low
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December 31, 1998 $0.94 $0.06
March 31, 1999 $2.25 $0.50
June 30, 1999 $1.88 $0.29
September 30, 1999 $2.00 $0.88
December 31,1999 $0.91 $0.25
March 31, 2000 $0.80 $0.38
June 30, 2000 $0.64 $0.04
September 30, 2000 $0.56 $0.19
Record Holders
As of January 2, 2000, there were approximately 1056 shareholders of record
holding a total of 30,526,839 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.
Recent Sales of Unregistered Securities
The following is a list of all unregistered securities sold by the Company
within the period covered by this report, including, where applicable, the
identity of the person who purchased the securities, title of the securities,
and the date sold.
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On September 21, 2000, the Company issued 100,000 shares of common stock for
services to James Morris & Associates, Inc., 200,000 shares of common stock for
services to Observation Capital, Inc., and 200,000 shares of common stock for
services to Rocket Worldwide Consulting, Inc. 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 three
corporations for services rendered to the Company; (2) there were only three
offerees who were issued stock for services; (3) the offerees have not resold
the stock but have continued to hold it since the date of issue; (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.
Between July 11 and September 25, 2000, Bruce Stuart sold 58,600 shares of the
Company's common stock which had previously been issued to him as an employee of
the Company pursuant to the S-8 Registration filed by the Company on June 12,
2000. Being an affiliate as defined in Rule 405, the shares sold were "Control
Shares" and should have been sold under a Re-offering Prospectus. Having sold
the shares without a Re- offering Prospectus, the shares may have been sold in
violation of Section 5 of the Securities Act of 1933.
On November 9, 2000 the Company issued a total of 15,000,000 shares of its
common stock to Enola Holdings, Inc. for 33,000 shares of the common stock (100%
of the issued and outstanding shares) of Pego Systems, Inc., a California
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; (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
since the date of the transaction; (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 6. 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.
Results of Operations
Sales
Sales for the year ended September 30, 2000, decreased to $205,949 from $209,801
for the year ended September 30, 1999. The Company believes that the slight
(1.8%) decrease in revenues is primarily attributable to a slowing in growth of
new accounts resulting from the Company's decision to decrease the amount of
advertising carried out by the Company.
Losses
Net Losses for the year ended September 30, 2000, decreased to $261,456 from
$304,756 for the year ended September 30, 1999. The decrease in losses is
primarily attributable to a decrease in advertising costs during the fiscal
year.
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The Company expects that it may continue to incur losses at least through fiscal
2001 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 year ended September 30, 2000, decreased to
$472,995 from $514,557 for the year ended September 30, 1999.
Computer and Internet related expenses increased to $167,271 in the year ended
September 30, 2000 from $154,444 in the year ended September 30, 1999. The
increase in Computer and Internet expenses is primarily attributable to the
increase in the Company's ISP business.
General and Administrative expenses decreased to $305,724 in the year ended
September 30, 2000 from $360,113 in the year ended September 30, 1999. The
decrease in General and Administrative expenses was the result of a decrease in
advertising and technical support costs.
Liquidity and Capital Resources
Cash flow used by operations was $200,982 for the year ended September 30, 2000,
as compared to cash flows used in operations of $287,825 for a comparable period
in 1999. Negative cash flows in 2000 are primarily attributable to marketing
costs.
Cash flow used by from investing activities increased to $11,821 for the year
ending September 30, 2000, from $513 for the comparable period in 1999.
Cash flow generated from financing activities was $102,500 for the year ending
September 30, 2000, as compared to $427,000 for the comparable period in 1999.
The Company's financing activities have primarily consisted of private
placements of its common stock. The financing activities for the year ending
September 30, 2000, were conducted outside the United States.
The Company has partially funded its cash needs over the periods covered by this
Form 10-KSB 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.
On September 28, 2000, the Company entered into a contract for a private equity
line of credit with Boat Basin Investors, LLC (the ""LLC"), a Limited Liability
Company formed under the laws of Nevis. Pursuant to the said agreement, the LLC
has been given the option to purchase up to two million dollars in value of the
Company's common stock pursuant to exemptions from registration provided by
Section 4(2) of the Securities Act of 1933 and Regulation "D" promulgated
thereunder. Purchases will be made at 75% of the market price, which is defined
as the lowest closing bid price, as reported on the principal exchange where the
Company's stock is traded, for a thirty (30) day period prior to the date of
notice of intent to purchase under the Agreement.
[See exhibit 10(vii)]
However, there is no guarantee that any purchases will be made under the
Agreement or that the Company will be able to raise additional funds from the
sale of its securities.
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On August 18, 2000, the Company entered into an agreement for consulting
services with Rocket Worldwide Consulting, Inc. ("Worldwide"), a New York
corporation, wherein the Company agreed to issue 200,000 shares of its common
stock to Worldwide in exchange for business management and marketing
consultation services to be provided by Worldwide. For additional information
regarding the agreement, see exhibit 10(iv).
On August 18, 2000, the Company entered into an agreement for consulting
services with James Morris & Associates ("Morris"), a New York corporation,
wherein the Company agreed to issue 100,000 shares of its common stock to Morris
in exchange for Business Management and marketing consultation services to be
provided by Morris. For additional information regarding the agreement, see
exhibit 10(iii).
On August 31, 2000, the Company entered into an agreement for consulting
services with AMD Capital L.L.C. ("AMD"), wherein the Company agreed to issue
140,000 shares of its common stock to AMD in exchange for public relations
services to be provided by AMD. For additional information regarding the
agreement, see exhibit 10(ii).
On September 6, 2000, the Company entered into an agreement for consulting
services with Observation Capital ("Observation"), a Delaware corporation,
wherein the Company agreed to issue 200,000 shares of its common stock to
Observation in exchange for public relations services to be provided by the
corporation. For additional information regarding the agreement, see exhibit
10(v).
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 1999 or 2000. The Company has no present plans for any significant
capital expenditures during the coming year.
Income Tax Expense (Benefit)
The Company may have an income tax benefit resulting from net operating losses
which may be used to offset operating profit.
Impact of Inflation
The Company believes that inflation has had a little effect on operations over
the past two years. The Company believes that it can offset inflationary
increases with increased sales and improved operating efficiencies
Going Concern
The Company's auditors have expressed an opinion as to the Company's ability to
continue as a going concern. The Company's ability to continue as a going
concern is subject to the ability of the Company to obtain a profit and/or
obtaining the necessary funding from outside sources. Management's plan to
address the Company's ability to continue as a going concern, includes: (1)
obtaining funding from the sale of the Company's securities; (2) increasing
sales, and (3) obtaining loans and grants from various financial
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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.
Events Subsequent to End of Fiscal Year
On October 13, 2000, the Company entered into a Placement Agent Agreement with
Capstone Partners, L.C. ("Capstone"), a Utah Limited Liability Company. Pursuant
to the Agreement [Exhibit 10(viii)], Capstone has agreed, on a best efforts
basis, to help market the shares which are being offered pursuant to the Private
Equity Line of Credit Agreement dated September 28, 2000, between the Company
and Boat Basin Investors, LLC. [See exhibit 10(viii)].
On November 16, 2000, Staruni Corporation acquired from Enova Holdings, Inc. all
of the outstanding shares of Pego Systems, Inc. in exchange for Fifteen Million
(15,000,000) restricted shares of the common stock of Staruni (or sufficient
shares to make Enova a Fifty percent (50%) holder of the issued and outstanding
shares of Staruni). No additional cash consideration was exchanged between the
parties. Staruni has agreed that Frederic Cohn, Chairman of Enova, shall be
appointed to the board of directors of Staruni effective as of the date of the
Stock Purchase Agreement. Enova Holdings, Inc. is a Nevada corporation, with its
principal offices located in Los Angeles, California.
Pego Systems, Inc. is a privately held corporation in the business of
distribution and development of environmental- control and filtration systems.
It has been in business for 27 years with such customers as Coca- Cola, Mobil
Oil and other Fortune 500 Companies. The addition of Pego, with its significant
revenues, is expected to add significant shareholder value to Staruni. Pego owns
a manufacturing site, consisting of a 22,000 square foot facility located in
Long Beach, California.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following pages contain the audited financial statements and accompanying
notes as prepared by the Company's independent auditors.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
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STARUNI CORPORATION
-------------------
Audited Financial Statements
September 30, 2000 & 1999
<PAGE>
STARUNI CORPORATION
TABLE OF CONTENTS
September 30, 2000 & 1999
Page
INDEPENDENT AUDITORS' REPORT.................................................F-1
FINANCIAL STATEMENTS:
Balance Sheets......................................................F-2
Statements of Operations.............................................F-3
Statements of Stockholders' Equity...................................F-4
Statements of Cash Flows............................................F-5
NOTES TO FINANCIAL STATEMENTS................................................F-6
<PAGE>
[SELLERS & ASSOCIATES, P.C.
3785 HARRISON BOULEVARD, SUITE 101
OGDEN, UTAH 84403
PHONE: 801-621-8128
FAX: 801-627-1639]
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, 2000 and 1999 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, 2000 and 1999 and the results of its operations and its cash flows
for the two years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As disclosed in the financial
statements and notes to the financial statements, the Company has suffered
significant losses. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans regarding these
matters are described in the notes to the financial statements. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ SELLERS & ASSOCIATES, P.C.
----------------------------------
December 6, 2000
Ogden, Utah
F-1
<PAGE>
STARUNI CORPORATION
BALANCE SHEETS
AS OF SEPTEMBER 30, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
---------- ----------
ASSETS
<S> <C> <C>
Current assets
Cash $ 50,589 $ 160,892
Receivables 14,172 12,895
Advance to stockholder / officer - 30,150
Short term Investments 11,821 -
Prepaid Expenses 55,777 -
---------- ----------
Total current assets 132,359 203,937
---------- ----------
Property and equipment, net of
accumulated depreciation 211 2,174
---------- ----------
Total assets $ 132,570 $ 206,111
========== ==========
LIABILITIES AND STOCKHOLDERS'EQUITY
Current liabilities
Accounts payable $ 8,944 $ 9,442
Accrued payables 1,784 1,072
---------- ----------
Total current liabilities 10,728 10,514
---------- ----------
Total liabilities 10,728 10,514
---------- ----------
Stockholders'equity
Class B Preferred Stock, no par value,
authorized 5,000,000 shares,issued and
outstanding -0- shares - -
Common stock, no par value, 250,000,000 shares
authorized, 14,503,079 and 3,595,576 shares
issued and outstanding with -0- and 68,748
shares held in treasury at 9-30-00 and 9-30-99
respectively 1,249,164 1,163,963
Common stock issued and not paid (410,781) (513,281)
Accumulated (deficit) (716,541) (455,085)
---------- ----------
Net stockholders' equity 121,869 195,597
---------- ----------
Total liabilities and stockholders'equity $ 132,597 $ 206,111
========== ==========
</TABLE>
See Accompanying Notes to Financial Statements
F-2
<PAGE>
STARUNI CORPORATION
STATEMENTS OF OPERATIONS
YEAR ENDING SEPTEMBER 30,2000 and 1999
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
Income $ 205,949 $ 209,801
---------- ----------
Computer and internet related expenses 167,271 154,444
General and administration expenses 305,724 360,113
---------- ----------
Total operating expenses 472,995 514,557
---------- ----------
(Loss) from operations (267,046) (304,756)
Income from investments 5,590 -
---------- ----------
Income (loss) from operations before provision
for income taxes (261,456) (304,756)
Provision for income taxes - -
---------- ----------
Net (loss) $ (261,456) $ (304,756)
========== ==========
Basic and diluted income (loss) per share $ (0.02) $ (0.04)
========== ==========
Basic and diluted weighted-average number of
common stock outstanding, for income taxes 13,835,298 7,769,415
========== ==========
</TABLE>
See Accompanying Notes to Financial Statements
F-3
<PAGE>
STARUNI CORPORATION
STATEMENTS OF STOCKHOLDERS'EQUITY
Years Ended September 30, 2000 and 1999
<TABLE>
<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 30,1998 - $ - 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
Cancellation of treasury stock - - (68,748) - - - -
Stock for services - - 690,000 85,201 - - 85,201
Payments received on previously
issued stock not paid - - - - 102,500 - 102,500
Net (loss) - - - - - (261,456) (261,456)
--------- ---------- ---------- --------- -------------- ------------- ---------
Balance as of September 30, 2000 - $ - 14,503,079 $1,249,164 $ (410,781) $ (716,541) $ 121,842
========= ========== ========== ========= ============== ============= =========
</TABLE>
See Accompanying Notes to Financial Statements
F-4
<PAGE>
STARUNI CORPORATION
STATEMENTS OF CASH FLOWS
YEARS ENDING SEPTEMBER 30,2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
------------- -------------
<S> <C> <C>
Cash Flows From Operating Activities
Net (loss) $ (261,456) $ (304,756)
------------- -------------
Adjustments To Reconcile Net Loss To Net Cash
Used In Operating Activities
Depreciation 1,964 2,261
(Increase) in prepaid expenses (55,777) -
(Increase) in receivables (1,277) (7,100)
(Increase) in loans to stockholder/officer (Net) 30,150 (30,150)
Increase (decrease) in accounts payable (498) 1,750
Increase (decrease) in accrued payables 711 (1,130)
Stock issued for services 85,201 51,300
------------- -------------
Net Adjustment 60,474 16,931
------------- -------------
Net Cash (Used) In Operating Activities (200,982) (287,825)
------------- -------------
Cash Flows From Investing Activities
Purchase of securities (11,821) -
Purchase of equipment - (513)
------------- -------------
Net Cash (Used) By Investing Activities (11,821) (513)
------------- -------------
Cash Flows From Financing Activities
Proceeds from issuance of capital stock-net 102,500 427,000
------------- -------------
Net Cash Provided By Financing Activities 102,500 427,000
------------- -------------
Net increase (decrease) in cash (110,303) 138,662
Cash - beginning 160,892 22,230
------------- -------------
Cash - end $ 50,589 $ 160,892
============= =============
Other information:
Interest paid in cash $ - $ -
Stock issued for services in lieu of cash $ 85,201 $ 51,300
</TABLE>
See Accompanying Notes to Financial Statements
F-5
<PAGE>
STARUNI CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
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, 2000.
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 250,000,000 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.
The Company's common stock is traded on Over the Counter Bulletin Board
under the symbol "SRUN."
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.
F-6
<PAGE>
STARUNI CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
NOTE 1 - Summary of Significant Accounting Policies - Continued
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.
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 $10 and $134,515 for fiscal years ended September
30, 2000 and 1999 respectively.
F-7
<PAGE>
STARUNI CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
NOTE 1 - Summary of Significant Accounting Policies - Continued
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 liabilities for the expected future consequences of
temporary differences between the financial reporting basis and tax basis
of assets and liabilities.
NOTE 2 - Property and Equipment
Property and equipment consisted of the following at September 30, 2000 and
1999:
Estimated
2000 1999 Useful Lives
----------- ----------- ------------
Computer & other equipment $ 16,817 $ 16,817 2-5 years
(Less) Accumulated Depreciation (16,606) (14,643)
---------- -----------
Net Property and Equipment $ 211 $ 2,174
========== ==========
NOTE 3 - Related Party Transactions
Monies have been advanced by the Company to the Company's principal
shareholder / officer. No amounts are due to/from the Company at September
30, 2000.
NOTE 4 - Common Stock
From November 1998 through August 1999, 10,286,251 shares of common stock
were issued for $991,581 under a Rule 504 Regulation D offering. Of the
$991,581 to receive for stock, $580,800 has been received, $529,500 in cash
and $51,300 in services rendered. As of September 30, 2000, $410,781 in
stock issued 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. No interest on these notes have
been recognized in the financial statements.
In August , 1999 the Company issued 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. Management has since
determined it is not in the best interest of the Company to have completed
this transaction and plans to undo it. Consequently, management has left
this transaction out of the financial statements.
As of September 30, 2000, there were a total of 14,503,079 shares of common
stock issued with no shares held in the name of the Company.
F-8
<PAGE>
STARUNI CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
NOTE 5 - Lease Commitments
The Company entered into three computer equipment and software lease
contracts payable over 24 months, all ending before September 30, 2001.
Lease commitments by year are:
September 30, 2001 -- 1,965
The Company rents office space at $1,530 per month on a month to month
basis with no long term commitment. It also rents space and usage of
Internet equipment and phone clinic at $1,950 per month on a month to month
arrangement.
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, 2000 $28,824 $19,264
September 30, 1999 28,485 17,985
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:
2000 1999
------------ ------------
Deferred tax assets:
Net operating loss carryforward $ 140,000 $ 85,000
----------- -----------
Total gross deferred tax assets 140,000 85,000
(Less) valuation allowance (140,000) (85,000)
----------- -----------
Net deferred tax assets - -
----------- -----------
Deferred tax liabilities:
Total gross deferred tax liabilities - -
----------- -----------
Net deferred tax $ - $ -
=========== ===========
F-9
<PAGE>
STARUNI CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
NOTE 6 - Income Taxes - Continued
As of September 30, 2000, the Company has available for income tax purposes
approximately $665,000 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. Also, refer to
Note 8 - Subsequent Event.
NOTE 7 - Going Concern Issues
The Company has suffered significant losses the past two years. Despite the
strong current ratio and equity position at September 30, 2000, unless
significant additional cash flows come into the Company, or a major
reduction in operating losses occur, the Company could be in jeopardy of
continuing operations. Management is attempting to merge with another
Company that will provide positive cash flow. Management is also seeking
additional financing.
NOTE 8 - Subsequent Event
On November 16, 2000 the Company acquired all of the outstanding stock of
Pego Systems, Inc. (Pego) in exchange for 15,000,000 restricted shares of
the Company, or whatever would equal 50% of the outstanding stock of the
Company after the exchange. Pego was a wholly owned subsidiary of Enova
Holdings, Inc. before the exchange. The newly acquired subsidiary of the
Company is closing down its operations. However, the Company anticipates
this merger will provide positive cash flows to the Company by selling off
the assets of the acquired Company. The stock has been issued; however, a
dispute has since arisen regarding what liabilities are being assumed.
Therefore, management indicates the acquisition may be rescinded.
F-10
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has had no changes in or disagreements with its accountants in its
two most recent fiscal years, or any later interim period.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
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 53 Director, President, CEO
Michael Petrusis 32 Director, Vice-President
Robert I Riecks 59 Director, Vice-President
Frederic Cohn 60 Director, Vice-President
Bruce D. Stuart, 53. 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, 32. 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.
Robert I. Riecks, 59. Mr. Riecks has served a vice-president of marketing, and
as a director of the Company since June of 2000. From 1993 to 1996, he served as
national sales manager for Perfect Data Corporation of Simi California. From
1996 until the present, he as been a regional sales manager for Ansco Photo
Corporation of Chicago Illinois. Mr. Riecks provides services to the Company on
a part-time basis. Mr. Riecks was elected a Director of the Company in June,
2000, to serve until the next annual meeting of the Company, or until his
replacement is duly elected and qualified. Mr. Riecks does not serve as a
Director of any other public company.
11
<PAGE>
Frederic Cohn, 60. Mr. Cohn has served as a Director of the Company since
November, 2000. He has over 30 years of diversified experience in business
management. During the last five years, Mr. Cohn was a successful entrepreneur
owning and operating medium size companies in the fields of transportation,
entertainment, manufacturing and distribution. Mr. Cohn is a member of the Board
of Directors of Enova Holdings, Inc. Mr. Cohn obtained a law degree from New
York School of Law and a Bachelors degree in Accounting from Wilkes University.
Mr. Cohn also serves as an officer and director of The Hartcourt Company, a
publically trading company. He has served in this capacity since 1997. Mr. Cohn
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.
Compliance with Section 16(a) of the Exchange Act
During the fiscal year ended September 30, 2000, The following persons were
Officers or Directors of the Company, or owners of in 10% or more of the
outstanding shares of the Company who failed to file reports required by Section
16(a) on a timely basis:
Number of Transactions
Name Number of Reports Filed Late Not Reported(1)
---- ---------------------------- ------------
Bruce D. Stuart 0 6
Michael Petrusis 0 1
Robert I. Riecks 0 1
No Section 16(a) Reports were filed by any of the persons named above.
ITEM 10. EXECUTIVE COMPENSATION
The following table provides summary information for the fiscal year ended
September 30, 2000 concerning cash and non-cash compensation paid or accrued by
the Company to or on behalf of the president and any other employee(s) who
received compensation in excess of $100,000.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Awards Payouts
Securities
Restricted Underlying
Other Annual Stock Options All Other
Name and Principal Salary Bonus Compensation Award(s) SARs LTIP payouts Compensation
Position Year ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bruce D. Stuart, 2000 70,000 - - 280,000 - - -
CEO and President 1999 0 - - shares - - -
1998 0 - - - - - -
</TABLE>
---------------------
(1)The three individuals who are listed above as being late in filing
reports are expected to file the requisite Forms 3,4, and 5 by January 26, 2000.
12
<PAGE>
Compensation of Directors
The Company's directors are not compensated for their services.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
As of January 2, 2001, there were 30,526,839 shares of common stock outstanding.
The following table sets forth certain information concerning the ownership of
the Company's Common Stock as of January 2, 2001, 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>
Name and Address of Beneficial Amount and Nature of Percent of
Title of Class Owner Beneficial Ownership class
=========================================================================================================================
<S> <C> <C> <C>
Common Stock, Bruce D. Stuart 2,514,444 8.23%
$.0001 par value 1642 Westwood Blvd.
Los Angeles, CA 90024
Common Stock, Michael Petrusis 650,000 2.12%
$.0001 par value 1642 Westwood Blvd.
Los Angeles, CA 90024
Common Stock, Frederic Cohn 15,000,000(2) 49.13%
$.0001 par value 1642 Westwood Blvd.
Los Angeles, CA 90024
Common Stock, Robert I. Riecks 30,000 0.09%
$.0001 par value 1642 Westwood Blvd.
Los Angeles, CA 90024
Common Stock, Directors and Executive Officers as 18,194,444 59.6%
$.0001 par value a Group (4 individuals)
Common Stock, Enova Holdings, Inc. 15,000,000 49.13%
$.0001 par value 9800 So. Sepulveda Blvd.,Suite 818
Los Angeles, CA 90045
=========================================================================================================================
</TABLE>
ITEM 12. 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.
----------------------
(2)Shares are beneficially attributed to Mr. Cohn as president of Enova
Holdings, Inc.
13
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits. Exhibits required to be attached by Item 601 of Regulation S-B are
listed in the Index to Exhibits beginning on page 17 of this Form 10-KSB, which
are incorporated herein by reference.
Reports on Form 8-K. The Company filed no reports on Form 8-K during the last
quarter of the period covered by this report.
14
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 12th day of January, 2001.
Staruni Corporation
/s/ Bruce Stuart
--------------------------------------------------
Bruce Stuart, President and Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
/s/ Bruce Stuart Chief Executive Officer January 12, 2001
------------------------- and Director
Bruce Stuart
/s/ Mike Petrusis Director January 12, 2001
-------------------------
Mike Petrusis
/s/ Frederic Cohn Director January 12, 2001
-------------------------
Frederic Cohn
/s/ Robert I. Riecks Director January 12, 2001
-------------------------
Robert I. Riecks
15
<PAGE>
INDEX TO EXHIBITS
EXHIBIT PAGE
NO. NO. DESCRIPTION
------- ---- -----------
2(i) * Articles of Incorporation of Altius Corp. dated February 1,
1962 and filed February 5, 1962.
2(ii) * Certificate of Amendment of Articles of Incorporation of
Altius Corp. dated January 29, 1971 and filed April 9, 1971.
2(iii) * Certificate of Amendment of Articles of Incorporation of
Altius Corp. dated December 30,1996 and filed March 24, 1997
wherein the name of the corporation was changed from Altius
Corp. to Staruni Corporation.
2(iv) * Certificate of Amendment of Articles of Incorporation of
Staruni Corporation dated June 15, 1999 and filed August 20,
1999.
2(v) * By-Laws of Altius Corp. (Staruni Corporation) dated February
8, 1962.
10(i) * Staruni Employee Benefit Plan dated March 15, 1999
10(ii) 17 Consulting Agreement dated August 31, 2000 between Staruni
Corporation and AMD Capital L.L.C.
10(iii) 20 Consulting Agreement dated August 18, 2000 between Staruni
Corporation and James Morris & Associates.
10(iv) 23 Consulting Agreement dated August 18, 2000, between Staruni
Corporation and Rocket Worldwide Consulting, Inc.
10(v) 26 Consulting Agreement dated September 6, 2000 between Staruni
Corporation and Observation Capital.
10(vi) 28 Stock Purchase Agreement dated November 16, 2000 between
Staruni Corporation and Enova Holdings, Inc.
10(vii) 33 Private Equity Line of Credit Agreement between Boat Basin
Investors, LLC and Staruni Corporation dated September 28,
2000.
10(viii) 61 Placement Agent Agreement between Staruni Corporation and
Capstone Partners, L.C., a Utah Limited Liability Company
dated October 13, 2000.
23 78 Consent Letter of Auditor
27 79 Financial Data Schedule
* Incorporated by reference from Form 10-SB/A filed May 12, 2000.
16
