AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 8, 2000
REGISTRATION NO. 33-____________
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
____________________
STARTRONIX INTERNATIONAL INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 91-1263272
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
10 Corporate Park, Suite 110
Irvine, California 92606
(Address of Principal Executive Offices, Including Zip Code)
____________________
Consulting Agreements
Legal Services Agreements
(Full Title of the Plan)
____________________
Greg Gilbert
President & Co-CEO
10 Corporate Park, Suite 110
Irvine, California 92606
(949) 727-7420
(Name, Address, and Telephone Number of Agent for Service)
COPIES TO:
M. Richard Cutler, Esq.
Cutler Law Group
610 Newport Center Drive, Suite 800
Newport Beach, California 92660
(949) 719-1977
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered Registered (1) per Share(2) Price Fee
------------------------------------------------------------------------------------------------
Common Stock,
par value $0.001 2,265,000 $ 1.63 $ 3,691,950 $ 974.67
------------------------------------------------------------------------------------------------
TOTAL REGISTRATION FEE 2,265,000 $ 1.63 $ 3,691,950 $ 974.67
</TABLE>
(1) Represents shares of Common Stock issued to consultants of the Company.
Please refer to the Selling Shareholders section of this document.
(2) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(c), based on the closing price of the
Common Stock on September 1, 2000.
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EXPLANATORY NOTE
Under cover of this Form S-8 is a Reoffer Prospectus StarTronix prepared in
accordance with Part I of Form S-3 under the 1933 Act. The Reoffer Prospectus
may be utilized for reofferings and resales of up to 2,265,000 shares of common
stock acquired by the selling shareholders.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
StarTronix will send or give the documents containing the information specified
in Part 1 of Form S-8 to employees or consultants as specified by Securities and
Exchange Commission Rule 428 (b) (1) under the Securities Act of 1933, as
amended (the "1933 Act"). StarTronix does not need to file these documents with
the commission either as part of this Registration Statement or as prospectuses
or prospectus supplements under Rule 424 of the 1933 Act.
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REOFFER PROSPECTUS
STARTRONIX INTERNATIONAL INC.
10 CORPORATE PARK, SUITE 110
IRVINE, CALIFORNIA 92606
(949) 727-7420
2,265,000 SHARES OF COMMON STOCK
The shares of common stock, $0.001 par value per share, of StarTronix
International Inc., ("StarTronix" or the "Company") offered hereby (the
"Shares") will be sold from time to time by the individuals listed under the
Selling Shareholders section of this document (the "Selling Shareholders"). The
Selling Shareholders acquired the Shares pursuant to compensatory benefit plans
for consulting and legal services that the Selling Shareholders provided to
StarTronix.
The sales may occur in transactions on the NASDAQ over-the-counter market at
prevailing market prices or in negotiated transactions. StarTronix will not
receive proceeds from any of the sale the Shares. StarTronix is paying for the
expenses incurred in registering the Shares.
The Shares are "restricted securities" under the Securities Act of 1933 (the
"1933 Act") before their sale under the Reoffer Prospectus. The Reoffer
Prospectus has been prepared for the purpose of registering the Shares under the
1933 Act to allow for future sales by the Selling Shareholders to the public
without restriction. To the knowledge of the Company, the Selling Shareholders
have no arrangement with any brokerage firm for the sale of the Shares. The
Selling Shareholders may be deemed to be an "underwriter" within the meaning of
the 1933 Act. Any commissions received by a broker or dealer in connection with
resales of the Shares may be deemed to be underwriting commissions or discounts
under the 1933 Act.
StarTronix's common stock is currently traded on the NASDAQ Over-the-Counter
Bulletin Board under the symbol "STNX".
________________________
This investment involves a high degree of risk. Please see "Risk Factors"
beginning on page 17 .
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED WHETHER
THIS REOFFER PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
________________________
September 5, 2000
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TABLE OF CONTENTS
Where You Can Find More Information 6
Incorporated Documents 6
The Company 8
Risk Factors 17
Use of Proceeds 19
Selling Shareholders 20
Plan of Distribution 21
Legal Matters 21
Experts 21
________________________
You should only rely on the information incorporated by reference or provided in
this Reoffer Prospectus or any supplement. We have not authorized anyone else
to provide you with different information. The common stock is not being
offered in any state where the offer is not permitted. You should not assume
that the information in this Reoffer Prospectus or any supplement is accurate as
of any date other than the date on the front of this Reoffer Prospectus.
WHERE YOU CAN FIND MORE INFORMATION
StarTronix is required to file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission
(the "SEC") as required by the Securities Exchange Act of 1934, as amended (the
"1934 Act"). You may read and copy any reports, statements or other information
we file at the SEC's Public Reference Rooms at:
450 Fifth Street, N.W., Washington, D.C. 20549;
Seven World Trade Center, 13th Floor, New York, N.Y. 10048
Please call the SEC at 1-800-SEC-0330 for further information on the Public
Reference Rooms. Our filings are also available to the public from commercial
document retrieval services and the SEC website (http://www.sec.gov).
INCORPORATED DOCUMENTS
The SEC allows StarTronix to "incorporate by reference" information into this
Reoffer Prospectus, which means that the Company can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this
Reoffer Prospectus, except for any information superseded by information in this
Reoffer Prospectus.
StarTronix's Annual Report on Form 10-KSB for the year ended June 30, 1999,
filed on August 8, 2000, is incorporated herein by reference. In addition, all
documents filed or subsequently filed by the Company under Sections 13(a),
13(c), 14 and 15(d) of the 1934 Act, before the termination of this offering,
are incorporated by reference.
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The Company will provide without charge to each person to whom a copy of this
Reoffer Prospectus is delivered, upon oral or written request, a copy of any or
all documents incorporated by reference into this Reoffer Prospectus (excluding
exhibits unless the exhibits are specifically incorporated by reference into the
information the Reoffer Prospectus incorporates). Requests should be directed to
the Chief Financial Offer at StarTronix International Inc., at StarTronix's
executive offices, located at 10 Corporate Park, Suite 110, Irvine, California
92606. StarTronix's telephone number is (949) 727-7420. The Company's
corporate Web site address is http://www.startronix.com.
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THE COMPANY
StarTronix International Inc., a Delaware corporation, was incorporated in
June 1984 as Gold Express Communications, Inc., and was originally engaged in
the business of mining and natural resources. Beginning in 1993, the Company
began divesting its mining assets and instead focused on technology sectors. In
April 1994, the Company acquired all of the outstanding stock of StarTronix,
Inc., a Delaware corporation, which was developing products and services for
accessing the Internet using a screen-based telephone, a product line that
eventually became the StarScreen System.
In 1997, the Company was unable to continue the implementation of its
business plan due to inadequate capital resources, and suspended all operations
until 1999.
SUBSIDIARIES
STARTRONIX INC. The Company is the sole shareholder of StarTronix Inc., a
Delaware corporation. StarTronix Inc. was concentrated on the development and
marketing of home-based services and products, including personal communications
and telecommunications products. StarTronix Inc. was sold in September 1999.
STARTRONIX MARKETING N.A. INC. The Company formed this subsidiary, a
Canadian company, on June 4, 1996 to market the products and services of
StarTronix Inc. in the Canadian marketplace. This entity had little activity;
it was dissolved in June 2000.
STARTRONIX TELCOM INC. The Company was the sole shareholder of StarTronix
TelCom Inc., (formerly GoldTone Communications, Inc.), a subsidiary formed in
August 1995 for the purpose of providing specialized long distance telephone and
debit card services. StarTronix TelCom Inc. was dissolved in March 1999.
STARTRONIX ON-LINE INC. The Company formed this subsidiary in November
1995 to provide on-line services and Internet access to StarTronix. StarTronix
On-Line Inc. provided home banking, shopping, bill paying, news, financial
services, email and distributor services through the Internet via local dial-up.
StarTronix On-Line Inc. was dissolved in March 1999.
STARTRONIX.COM INC. StarTronix.com, Inc. was formed in October 1999, as a
wholly-owned subsidiary of the Company, to market the upgraded StarScreen
System.
STARTRONIX ESOLUTIONS INC. StarTronix eSolutions Inc. was formed in
December 1999, and is a wholly-owned subsidiary of the Company. The subsidiary
was formed to design, develop, and support technology for the StarScreen.
EMPLOYEES
As of September 1, 2000, there were only two employees, Greg Gilbert,
President, and Lloyd Adams, Chairman. Mr. Gilbert's prior employment agreement
was cancelled when operations were suspended in 1997. He has agreed to waive
any salary until such time as adequate funding is available to revive
operations. In September 1999, he signed a new employment contract. Also in
September 1999, the Company executed an employment contract with Lloyd Adams
which made him Chairman and Co-Chief Executive Officer of the Company.
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OVERVIEW
The Company's mission is to develop the world's first integrated Computing
and Communications hardware and software platform or "Personal Internet
Platform" for the Home PC and the Small Office Home Office (SOHO) marketplace.
The StarScreen System is an "Internet Platform" that will be used by the
Company's direct marketing Internet Resellers and their customers to provide
one-button push access to the Internet for the user, (many of whom might be
first time users of computers as well as the Internet). In addition, the
StarScreen System is designed to become a tool for the development of new OEM
and Private Label opportunities in the marketplace. StarTronix eSolutions will
develop custom vertical markets where the StarScreen System will be the anchor
technology solution for a competitive local exchange company, a home-health care
services company, etc.
The StarScreen System is a technology product line that seamlessly
integrates a desktop computer and either fixed or wireless telephones and
intelligent handsets into a complete computing and communications solution for
the home PC and small business user. The StarScreen System features a
pre-organized Internet menu system enabling on-line banking, bill paying,
e-mail, home shopping, video conferencing and many other value added services.
All are available at the press of a single button, or a few mouse clicks from
the StarTronix eSolutions personalized StarPortal web-site that can be tailored
and customized by each user. Some of the targeted applications might include
the following:
$ Small Business Credit Card Solution.
Merchant banks and card clearing companies who service the small business
marketplace with credit card merchant services. The StarScreen System can be
loaded with industry-specific software for merchants to handle customers credit
card transactions using the built-in credit card, smart card, and debit card
reader. In addition, other value added business functions can be addressed to
enhance their business such as inventory management, (using bar codes), shipping
and receiving software to interface with package shipping companies, and other
operating and accounting software solutions that can be targeted to small
business vertical markets.
$ ILEC's Serving the Residential Apartments and Condominium Marketplace.
A new class of service provider called an "ILEC" (Independent Local Exchange
Company) is now developing new vertical market bundled solutions to what might
be described as "Affinity Groups". These are customers who share a geographic
area, affinity, club, etc. that might want bundled services. The StarScreen
System can be used as an enticement or option to renters whereby the renter
could access local retailers to order products, groceries, movie tickets, etc.
Also, the landowner or ILEC can provision various information services that are
geared toward this user group and provide billing and payment services for rent
and other ILEC bundled services like Pay TV, etc.
$ In-Home Health-Care Service Providers.
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In this area, the StarScreen System can operate like a multifunction medical
device monitoring and communications system that can become a development
platform for the creation of unique "plug-and-processes" for heart,
blood-pressure, and other vital sign monitoring for in-home medical patients.
The patients would be able to effectively transmit their readings to local
doctors over a secure and dependable Internet link to the local medial clinic or
hospital, or to a specialist in another state, or another country. Through
specialized API, (Applications Programming Interfaces) and hardware adapters,
that might work with the USB bus or the PCMCIA card slot, StarTronix eSolutions
will be able to offer these unique services through our strategic OEM/Private
Label Partners .
The strategy of the Company is to bring to the marketplace the StarScreen
System, believed by the Company to be the world's first integrated, Internet
screen-phone system that seamlessly integrates both communications and computing
functions, (telephone, PC, FAX, answering machine, etc.) into a simple but
powerful platform. It will be targeted to both U.S. and International consumers
that may or may not yet have a PC in their home or small business.
The Company can best be described as an integrated "Next Generation
Provider" in that the Company is offering a unique "bundled" Internet access and
value-added services program that is provisioned using the StarScreen System
(Personal Internet Screen-Phone Platform). The services offered include:
unlimited Internet dial-up accessed to either 56Kbps direct dial-up or through
ADSL or cable access (where available) in the marketplace and provisioned by the
Company through our partners, e-mail access, web-site solutions, customized
on-line shopping, electronic-banking, bill-paying services, custom IP-telephony
communications services and value-added content and entertainment programs. The
StarScreen System is provided to the users who simply pay a monthly system fee
depending on the type of services desired and the speed of the access service
chosen. The target markets are the first time Home PC user who might be
purchasing a computer for the first time, as well as the Small Office Home
Office (SOHO) customer that wants to acquire an "all-in-one" telephony and
computer appliance that is better suited to their small business needs.
The Company will market the bundled services through two primary
distribution channels:
$ Internet Resellers and OEM/Private Label partners. Internet Resellers
sell directly to home PC users and the SOHO marketplace. The Company, through
its wholly-owned subsidiary StarTronix.com Inc. ("StarTronix.com") is a unique
Internet marketing, sales and customer-support company responsible for
building-up and supporting independent Internet Reselling Distributors.
StarTronix.com develops "Internet Resellers" through a marketing, promotion,
recruiting and customer support model, while utilizing an integrated on-line
services-oriented Internet Site and Services strategy developed by StarTronix
eSolutions (see below) for the support of its distributors and the provisioning
of standard Internet dial-up access and premium information and entertainment
services for its customers.
$ OEM and Private Label alliance partners who develop custom hardware and
software solutions that are targeted to niche marketplaces where they will
bundle value added hardware and software to sell an "integrated" solution. The
Company through its second wholly-owned subsidiary, StarTronix eSolutions Inc.
("StarTronix eSolutions"), is a business development, and Internet services
provisioning company that is responsible for designing, developing, and
supporting the technology for the StarScreen System and creating value-added
Internet service programs that are promoted by the Company and its other
subsidiaries. StarTronix eSolutions is actively involved in overseeing the
creation of the web-based e-commerce, on-line Internet and service support
initiatives. StarTronix eSolutions is also responsible for developing and
managing the strategic alliances and key partners who will work with the
Company.
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STARTRONIX.COM INC.
StarTronix.com Inc., a Delaware Corporation founded in October 1999, is a
wholly-owned subsidiary of StarTronix International Inc. Headquartered in
Irvine, California, StarTronix.com was formed by StarTronix International to
market the upgraded StarScreen System.
StarTronix.com is a national marketing organization which will include
independent distributors trained as Internet Resellers to market a new dimension
of on-line services and personal/home communication products never before found
within a single system. These services combined with user-friendly products,
re-define the way information and communications can be accessed for the
home-based business.
PRODUCTS AND SERVICES
The StarScreen System is believed by management to be the first
user-friendly "Internet Platform" based on advanced telephony and computing
technology that offers first-time PC computer users and home-based business
owners a cost-effective integrated telephone communications and computer
platform. It is uniquely designed into a compact and stylish
consumer-electronics-class desktop appliance. The StarScreen System is equipped
with a powerful Windows-based computing platform that has a built-in growth path
for expanding computing power as well as adapting to external peripherals,
storage and communications devices that consumers have come to expect due to the
fast-pace and changing technology marketplace. The StarScreen System users will
be able to accomplish a wide variety of desktop computing and communications
functions. These functions include on-line Internet access, e-mail, bill
paying, home banking, home shopping, faxing and many other interactive services
that StarTronix.com will be providing in concert with its strategic service
providers. In addition, the StarScreen System also provides for a number of
communications facilities utilizing its built-in telephony sub-system, whose
features include: 2-line phone, digital answering machine, voice mailboxes for
home users, faxing terminal, and various caller ID feature sets (available as
optional services from the phone company) which can be accessed from the
computer via software utilities.
The upgraded StarScreen System has been developed by Western Global
Telecommunications, Inc. (WGT) utilizing technology and sub-components that are
capable of being upgraded as technology advances. Major changes in the
functionality can be facilitated in software or accomplished in hardware with
minimal effort in overall manufacturing or product design. This allows
continuous offerings for planned future options.
The StarScreen System includes the latest in Pentium processor technology,
significant local memory to run specialty applications, an externally adapted
CD-ROM drive for upgrading or adding applications, as well as a complete
modem/fax/voice-mail system. Unlike other Internet access-only devices that
simply provide a "thin-client" software platform through either a black and
white monochrome screen, or a television set, the StarScreen System includes a
complete PC with a compliment of external connectivity options including RS-232
serial port, parallel port, game port, PCMCIA Ports, sound inputs/outputs and
Universal Serial Bus (USB) ports, as well as an integrated 10/100T Ethernet
network interface.
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Standard Services
Management hopes that the no fee group of standard services provided to
end-users and Internet Resellers will make StarTronix.com a favorite destination
for our users increasing the value of our on-line display banner advertising.
Many of these areas represent an opportunity to provide additional premium
services that generate additional revenue for StarTronix.com.
The standard services include the following:
$ On-Line Shopping: The StarTronix.com Store will provide the typical
accessories ordered by our users including printers, scanners and high speed
connection devices. The Internet Reseller will be able to complete their sales
here and also order support materials for their business. All users and
visitors to the site will be able to shop from main categories including books,
music, software and auctions.
$ Training: Training the Internet Resellers to be effective in sales and
operations of their business and basic StarScreen System use and operations is
provided. The interactive support area will handle the most common user
questions to allow StarTronix.com to maximize our dedicated customer support
team.
$ e-Mail: StarTronix.com e-mail will be outsourced to our ISP partner or
strategic e-mail vendor and we will provide up to 10 e-mail accounts per
StarScreen System depending on the plan chosen by the customer. StarTronix.com
is investigating a number of user-friendly e-mail packages on the marketplace
today to provide a standard e-mail client that is compatible with any SMTP/POP3
e-mail server.
$ e-Fax: The multi-functional capabilities of the StarScreen System allow
it to directly receive faxes with local storage. The StarScreen System is also
a full-featured faxing solution with the integrated fax software. A scanner can
be ordered from StarTronix.com to allow the user to send paper source documents.
Users can also choose an Internet faxing solution through a third party
electronic faxing supplier where a free phone number is provided and all faxed
documents are automatically sent to the user as an e-mail attachment.
$ Search Portal: StarTronix.com will be developing alliances with a wide
variety of search engine providers and portals on the Internet to provide a
comprehensive set of Internet searching solutions that will "mine" all the
leading search engines on the Internet to provide an aggregated search result
list for subscribers. In addition a rich base of personalized Internet
calendars, schedules, address book and other collaborative software services
will be provided to the subscribers through alliances with some of the leading
application services providers on the Internet.
$ Customized Advertisements: Special advertising opportunities are possible
by leveraging the StarTronix.com Independent Internet Reseller channels whereby
local advertisers can be solicited directly to include advertising on the
StarTronix.com web-site targeted to StarScreen System users by location. Data
can be maintained in the master user database so local ads can be delivered by
local companies and provide specialized offers tailored to the users lifestyles.
This represents an interesting "localized" revenue stream model for both
StarTronix.com and its Internet Resellers.
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$ Bill Paying: Through alliances with both regional and national Internet
banking companies, StarTronix.com will be able to provide its users the ability
to pay their phone, electric and other monthly bills on-line through credit or
bank debit cards. This can also be extended to other payment entities such as
grocery bills, and small business oriented vendors and suppliers.
StarTronix.com is also exploring the use of Smart Card technology for the
StarScreen System which will encrypted and authenticated security services in
concert with the financial bill paying and banking services.
$ Local Information: Local events and activities including movie theater
listings, concerts and sporting events including ticket-purchasing links are
provided from existing regional portals that are aggregating this information
today and will be tied into the StarTronix.com web site through special alliance
relationships. Other local information including weather, TV listings and
merchant specials is provided and is customized to their user-defined profile.
$ Financial and Investment Information: Again, through alliances with
leading brokerage and financial planning service companies that are operating on
the web today, StarTronix.com users will be able to manage their complete
investment and financial needs over the Internet using the StarScreen System.
Premium Services
Premium services represent a significant additional revenue opportunity for
StarTronix.com with services available to Internet Resellers and their
customers. StarTronix.com will be developing a comprehensive set of packaged
communications and computing solutions to enable the Company to expand the
number of distribution channels it can access. StarTronix.com will also be able
to attract a number of developers to market the commercial platform for the
provisioning of services to the Home PC marketplace as well as the SOHO business
owners. The Internet is providing many new avenues for income from new and
traditional services, which are more effectively delivered on-line, using new
hardware and software interfaces.
$ Home Security Services: Several revenue opportunities are available to
StarTronix.com through the integration of home security devices into the
StarScreen System. User interface and management as well as on-line alarm
notification and the automatic request of emergency services will be available
through the provision of an "alarm seizure jack" in the StarScreen System to
various alarm systems. This area will include special API (Applications
Programming Interface) kits that will be made available to our OEM (original
equipment manufacturers)/Private Label partners to develop solutions for the
StarScreen System. These new services will then be available through our
partner alliances as well as through StarTronix.com.
$ Multi-site Video and Audio Conferencing: This premium service solution
will be provided to StarTronix.com from a third party alliance partner that will
provision a multi-site audio bridging or multi-site video conferencing facility
where more than one person can participate in an audio or video conference.
These services provide for a fully collaborative environment where multiple
users can share files and a common whiteboard during an audio or video
conference. A USB video camera can be ordered from StarTronix.com to support
the video functionality.
$ Internet Phone: Allows phone calls to be placed through the Internet to
other Internet phone users. Partners and Software Solutions are available from
a variety of vendors, and StarTronix.com is already in discussions with a number
of candidate alliance partners in this area.
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$ Home Automation and Networking: The StarScreen System can act as a "Home
Server" for other Internet appliances and thin clients. The future wireless
StarScreen System can become the network hub or server for the entire home or
office.
$ Health & Lifestyle Information: Partnerships with Dr. Koop, WebMD,
eDiets, iVilliage and others are planned to allow users to improve their
lifestyle through managed and tailored diet, meal, shopping and exercise plans.
$ Subscription Intranets: To support the small home office user,
StarTronix.com is developing partnerships with a wide variety of web-based
intranet and remote office services companies to provide a complete web based
corporate Intranet for small and network-based business. Services include a
company portal, company news, HR, procurement, bulletin boards, conferencing,
document storage, group calendars and related services will result in a
recurring revenue stream for StarTronix.com.
STRATEGIC PARTNERS
Western Global Communications, Inc. (WGT), an Irvine, California company,
has been contracted by StarTronix International Inc. to manage the design
upgrade of the existing StarScreen System previously sold by StarTronix. WGT is
working closely with StarTronix eSolutions on the design configuration, module
procurement, assembly, testing, and fulfillment strategies to assure that a
high-level of quality control is maintained. The StarScreen System prototype
has been developed and the pre-production unit is currently being tested and
evaluated.
All warehousing, distribution, shipping, and fulfillment of the product
will be performed by a key third party fulfillment house under a long-term
outsourcing contract. StarTronix.com has evaluated a number of proposals from
both small and large fulfillment houses and is currently in the final stages of
decision making to determine the most appropriate fulfillment house for the
Company. One of these companies is currently providing nationwide PC
fulfillment services for two of the largest PC manufacturers in the United
States.
On-line web development, Screen-Phone firmware & operating system
integration, connectivity issues, screen instructions and configuration software
will be overseen by StarTronix eSolutions. Outside support and third party
development services will be provided by key strategic development partners
located in Atlanta, Georgia and Southern California. A number of web-site
hosting, software development and integration specialists have been contacted
and various request for proposals and specifications for work have already been
submitted and are under final review by the Company. In addition, a number of
new "Friction-Free" advertiser supported content and service models have
recently been launched in the Internet marketplace that StarTronix.com will be
able to utilize.
Other strategic partners that StarTronix.com is in various stages of
discussion with include: video conferencing companies, long distance providers,
local telcos, CLEC's, on-line shopping companies, search engines, software
companies, advertising management companies, ISP's, etc.
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STARTRONIX ESOLUTIONS INC.
INTERNET SERVICES DEVELOPMENT
StarTronix eSolutions Inc., a Delaware Corporation founded in December
1999, is a wholly owned subsidiary of StarTronix International Inc.
Headquartered in Atlanta, Georgia, StarTronix eSolutions is a business
development and Internet services provisioning company that is responsible for
designing, developing, and supporting the technology for the StarTronix.com
StarScreen System and creating value-added Internet service programs that are
promoted by the Company and its other subsidiaries.
StarTronix eSolutions is actively involved in the design, manufacturing
liaison, and operational development of the StarScreen System product and is
overseeing the creation of the StarTronix.com web-based e-commerce, on-line
Internet and service support initiatives, and the management of the strategic
alliances and key partners who will work with StarTronix.com.
StarTronix eSolutions will be responsible for the development of or third
party licensing and OEM outsourcing. The StarScreen System Applications
Software Suite will be outsourced to a well known hardware and software supplier
and contains the following features, advantages, and benefits for the StarScreen
System user:
1. Integrated StarScreen System Software Solution Set which includes:
a. Operating System Software (Windows or other screen-phone friendly OS).
b. Integrated Communications Software for Voice, Data, Fax and Multimedia,
(Audio, Video).
c. Credit, Debit, and Smart Card Reader Services (for the integrated Hybrid
Reader).
d. Value-Added Hardware and Software Solutions for the StarScreen System
(With Third Party OEM clients).
2. On-line Dial-up Access Services for the StarScreen System:
a. National US and Canada POP-dial-up access.
b. Internet E-Mail solutions for Users and Groups.
c. Internet Banking, Bill Paying and Financial Support Services.
d. Web-Hosting Solutions for home and small business users.
e. e-Commerce Solutions for small business users.
f. The StarTronix.com StarPortal Access, Search, and Value Added Services.
3. Complete Applications Software Suite, (Word Processing, Spreadsheet,
Presentation, etc).
a. Fully integrated productivity environment: spreadsheet, word processor,
presentation, graphics, database, event planning, e-mail, and news reader
applications.
b. For The Millenium StarScreen System the Software bundle will be Windows
98 and Microsoft Works 2000 which is an integrated entry-level Word Processing,
Spreadsheet, Database and Communications Solution.
c. Runs natively Intel platforms, Windows 95, Windows 98, and Windows NT,
OS/2, and will also operate on Linux.
d. Supports open protocols, open file formats, and industry standards.
15
<PAGE>
LEGAL PROCEEDINGS
On November 7,1996 a suspension of conversion of the Series "C" Convertible
Preferred stock was announced to preferred stockholders as a result of alleged
irregularities in the trading of StarTronix' Common Stock, which management
believed was related to the conversion terms of a previous Regulation S private
placement. A shareholder brought an action against the Company to compel the
conversion of certain class "C" Preferred Stock to Common stock or to rescind
the subscription agreement and recover the shareholders' original investment in
the amount of $1,337,500. In December 1996, a second action was filed by a
shareholder group in the Superior Court of the State of California in Los
Angeles County related to the suspension of the conversion feature of the Series
"C" Preferred Stock. The action sought to compel the Company to resume
conversion of the Series "C" Preferred Stock or, in the alternative, to rescind
the subscription agreement and recover the shareholders' original investment in
the amount of $2,367,500, plus interest and punitive damages. In August 1997,
the Company settled the lawsuits with all but two of the Series "C" Preferred
Stock holders, resulting in the conversion of their shares as originally
contemplated. In August 1999 and May 2000, a settlement was reached with the
final two holders of Series "C" Preferred Stock, who were issued 1,250,000 and
2,000,000 shares of common stock, respectively.
In 1996, the Company was unable to continue the implementation of its
business plan due to inadequate capital resources, and suspended all operations
until 1999. The Company currently has the following material outstanding legal
matters, all of which arose during the aforementioned period:
$ Jack Dignan v. StarTronix International Inc., et al. A judgment was
entered against the Company in June 1998 in an amount, including interest
through September 1999, of over $76,000. The Company is in negotiations to
settle the matter for an unknown amount.
$ Marketing Direct v. StarTronix International Inc. A judgment was entered
against the Company in November 1997 in an amount, including interest through
August 1999, of over $95,000. The Company is in negotiations to settle the
matter for an unknown amount.
$ Canon Financial Services, Inc. v. StarTronix International Inc. A
judgment was entered against the Company in 1998 in an amount, including
interest through February 2000, of over $26,000. The Company is in negotiations
to settle the matter for an unknown amount.
$ Kimco Services, Inc. v. StarTronix International Inc., et al. A judgment
was entered against the Company in November 1997 in an amount, including
interest through February 2000, of over $54,000. The Company is in negotiations
to settle the matter for an unknown amount.
$ FNF Capital, Inc. The Company has been notified of two claims against it,
one for approximately $5,630 and the other for approximately $51,900, arising
out of unpaid business leases from 1996. The Company is in negotiations to
settle the matter for an unknown amount.
The Company may from time to time be involved in various other claims, lawsuits,
disputes with third parties, actions involving allegations of discrimination, or
breach of contract actions incidental to the operation of its business.
16
<PAGE>
RISK FACTORS
In this section we highlight some of the risks associated with our business and
operations. Prospective investors should carefully consider the following risk
factors when evaluating an investment in the common stock offered by this
Reoffer Prospectus.
FUTURE CAPITAL NEEDS. To date, we have relied mostly on private funding from
the sale of restricted shares of our Common Stock and short term borrowing to
fund our operations. We have extremely limited cash liquidity and capital
resources to meet our ongoing expenses. Our future capital requirements will
depend on many factors, including our ability to market our products and
services successfully, our cash flow from operations, and competing market
developments. Our business plan requires additional funding beyond the proceeds
previously generated from the sale of our restricted Common Stock.
Consequently, although we currently have no specific plans or arrangements for
financing, we intend to raise additional funds through private placements,
public offerings or other financings. Any equity financings would result in
dilution to our then-existing shareholders. Additionally, sources of debt
financing may result in higher interest expense. Any financing, if available,
may be on terms unfavorable to us. If adequate funds are not obtained, we may
be required to reduce or curtail operations. Our existing capital resources
will not be adequate to satisfy our current operating expenses and capital
requirements for the next full fiscal year. Consequently, we may have to secure
additional financing in order to develop our business plan.
THERE IS A LIMITED PUBLIC TRADING MARKET FOR OUR COMMON STOCK. Our Common Stock
presently trades on the Nasdaq over-the-counter bulletin board under the symbol
STNX. There can be no assurance, however, that such market will continue or
that investors in this offering will be able to liquidate their shares acquired
in this Offering at the price herein or otherwise. There can be no assurance
that any other market will be established in the future. There can be no
assurance that an investor will be able to liquidate his or her investment
without considerable delay, if at all. The price of our Common Stock may be
highly volatile. Additionally, the factors discussed in this Risk Factors
section may have a significant impact on the market price of the shares offered
in this Reoffer Prospectus.
COMPETITION. The Internet appliances and Internet service providers industries
are highly competitive and include dominant worldwide firms such as Lucent,
Samsung, America Online, AT&T and countless others. Many of our competitors
have significantly more assets and resources than we have. Although we believe
that we have the human and technical resources to pursue our strategy and
compete effectively in this competitive environment, our success will depend
upon our continued ability to profitablity provide quality, high value services
at prices generally competitive with, or lower than those charged by our
competitors. Competition from very large and well-financed companies may
attract potential suppliers, resellers, and customers away from us. In
addition, there may be other competitors that we have not identified.
We can make no representations or assurances that there will not be increased
competition or that our projections will ever be realized due to the intensity
of competition.
17
<PAGE>
OUR STARSCREEN SYSTEM HAS NOT YET RECEIVED NECESSARY REGULATORY APPROVAL. We
have not yet petitioned the Federal Communications Commission for the approval
which is necessary before we can sell our StarScreen products. Further, we have
no estimate as to how long it will take to obtain the necessary approvals once
our petition is submitted. Because we cannot sell the StarScreen products until
we have obtained the necessary approvals, there may be a delay in generating
sales revenues.
INTERNET RELATED RISKS. We are subject to federal, state, and local laws
concerning the conduct of business on the Internet. Today, there are relatively
few laws specifically directed towards online services. However, due to the
increasing popularity and use of the Internet and online services, additional
laws and regulations may be adopted in the future 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. There can be no assurance that the
regulatory authorities in one or more states or the federal government will not
take action having an adverse effect on the business or financial condition or
results of StarTronix.
DEPENDENCE ON MANAGEMENT. Our success depends, to a significant extent, upon
certain key employees and directors, including primarily, Greg Gilbert and Lloyd
Adams. The loss of services of one or more of these employees or directors
could have a material adverse effect on our business. In addition, we have
substantial need for additional qualified management and marketing personnel.
We believe that our future success will also depend in part upon our ability to
attract, retain and motivate qualified personnel. There can be no assurance
that we will be successful in attracting and retaining such personnel.
Competition for such personnel is intense. We currently do not maintain a
policy of key man life insurance on any employees.
PROTECTION OF PROPRIETARY INFORMATION. Currently, we do not hold any patents or
trademarks on any of our names, products or processes under development. We
intend to seek patent protection for our StarScreen System, however, there can
be no assurances we will be granted such protection. We treat our technical
data as confidential and rely on internal nondisclosure safeguards, as well as
on laws protecting trade secrets, to protect our proprietary information. There
can be no assurance that these measures will adequately protect the
confidentiality of our proprietary information or that others will not
independently develop products or technology that are equivalent or superior to
ours. We may receive in the future communications from third parties asserting
that our products infringe the proprietary rights of third parties. There can
be no assurance that any such claims would not result in protracted and costly
litigation, having a materially adverse and negative effect on us and our
financial results.
DIFFICULTY OF PLANNED EXPANSION; MANAGEMENT OF GROWTH. We plan to expand our
level of operations. Our operating results will be adversely affected if net
sales do not increase sufficiently to compensate for the increase in operating
expenses caused by this expansion. In addition, our planned expansion of
operations may cause significant strain on our management, technical, financial
and other resources. To manage our growth effectively, we must continue to
improve and expand our existing resources and management information systems and
must attract, train and motivate qualified managers and employees. There can be
no assurance, however, that we will successfully be able to achieve these goals.
If we are unable to manage growth effectively, our operating results will be
adversely affected.
18
<PAGE>
AUTHORIZATION OF ADDITIONAL SHARES OF COMMON STOCK. Our Articles of
Incorporation authorize the issuance of up to 100,000,000 shares of Common
Stock. Our Board of Directors has the authority to issue additional shares of
Common Stock and to issue options and warrants to purchase shares of our Common
Stock without shareholder approval. Future issuance of Common Stock could be at
values substantially below current market prices therefore could represent
further substantial dilution to investors in this Offering. In addition, the
Board could issue large blocks of voting stock to fend off unwanted tender
offers or hostile takeovers without further shareholder approval.
AUTHORIZATION OF ADDITIONAL SHARES OF PREFERRED STOCK. Our Articles of
Incorporation also authorizes the issuance of up to 10,000,000 shares of
Preferred Stock in one or more series. Consequently, our Board of Directors
have the authority to fix the number of preferred shares and to determine or
alter for each such series, such voting powers, full or limited, or no voting
powers, and such designations, preferences, and relative, participating,
optional, or other rights and such qualifications, limitations, or restrictions
thereof, in a resolution or resolutions adopted by the Board of Directors
providing for the issue of such shares. The Board of Directors are also
authorized to increase or decrease (but not below the number of shares of such
series then outstanding) the number of shares of any series subsequent to the
issue of shares of that series.
USE OF PROCEEDS
StarTronix will not receive any of the proceeds from the sale of shares of
common stock by the Selling Shareholders.
19
<PAGE>
SELLING SHAREHOLDERS
The Shares of StarTronix to which this Reoffer Prospectus relates are being
registered for reoffers and resales by the Selling Shareholders, who acquired
the Shares pursuant to a compensatory benefit plan with StarTronix for
consulting and legal services they provided to StarTronix. The Selling
Shareholders may resell all, a portion or none of such Shares from time to time.
The table below sets forth with respect to the Selling Shareholders, based upon
information available to the Company as of September 5, 2000, the number of
Shares owned, the number of Shares registered by this Reoffer Prospectus and the
number and percent of outstanding Shares that will be owned after the sale of
the registered Shares assuming the sale of all of the registered Shares.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NUMBER OF NUMBER OF SHARES % OF SHARES OWNED
SELLING SHARES OWNED REGISTERED BY BY SHAREHOLDER
SHAREHOLDERS BEFORE SALE PROSPECTUS NUMBER OF SHARES OWNED AFTER SALE AFTER SALE
---------------------- ------------ ---------------- --------------------------------- -----------
Gene Abbadessa 1,546,208 1,050,000 496,208 1.86%
---------------------- ------------ ---------------- --------------------------------- -----------
Gabriel Nassar 1,546,208 1,050,000 496,208 1.86%
---------------------- ------------ ---------------- --------------------------------- -----------
M. Richard Cutler (1) 126,000 126,000 0 0.00%
---------------------- ------------ ---------------- --------------------------------- -----------
Brian A. Lebrecht (2) 10,000 10,000 0 0.00%
---------------------- ------------ ---------------- --------------------------------- -----------
Vi Bui (2) 2,500 2,500 0 0.00%
---------------------- ------------ ---------------- --------------------------------- -----------
Stephanie Crumpler (2) 2,500 2,500 0 0.00%
---------------------- ------------ ---------------- --------------------------------- -----------
Cora Lo (2) 1,500 1,500 0 0.00%
---------------------- ------------ ---------------- --------------------------------- -----------
Jaime Ceniceros (2) 1,000 1,000 0 0.00%
---------------------- ------------ ---------------- --------------------------------- -----------
Rebecca Laveaga (2) 1,000 1,000 0 0.00%
---------------------- ------------ ---------------- --------------------------------- -----------
Elaine Arritt (2) 500 500 0 0.00%
---------------------- ------------ ---------------- --------------------------------- -----------
Jonathan Gulla 26,876 20,000 6,876 0.03%
---------------------- ------------ ---------------- --------------------------------- -----------
TOTAL SELLING SHARES: 2,265,000
---------------------- ------------
</TABLE>
(1) Mr. Cutler is StarTronix's securities attorney. The securities registered
pursuant to the Reoffer Prospectus represent shares of common stock issued to
Mr. Cutler in exchange for legal services provided to StarTronix.
(2) Employee of Mr. Cutler.
(3) Includes 6,876 shares held in the name of family members of Mr. Gulla.
20
<PAGE>
PLAN OF DISTRIBUTION
The Selling Shareholders may sell the Shares for value from time to time under
this Reoffer Prospectus in one or more transactions on the Nasdaq
Over-the-Counter Bulletin Board, or other exchange, in a negotiated transaction
or in a combination of such methods of sale, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at prices
otherwise negotiated. The Selling Shareholders may effect such transactions by
selling the Shares to or through brokers-dealers, and such broker-dealers may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the Shares
for whom such broker-dealers may act as agent (which compensation may be less
than or in excess of customary commissions).
The Selling Shareholders and any broker-dealers that participate in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of Section 2(11) of the 1933 Act, and any commissions received by them and any
profit on the resale of the Shares sold by them may be deemed be underwriting
discounts and commissions under the 1933 Act. All selling and other expenses
incurred by the Selling Shareholders will be borne by the Selling Shareholders.
In addition to any Shares sold hereunder, the Selling Shareholders may, at the
same time, sell any shares of common stock, including the Shares, owned by him
or her in compliance with all of the requirements of Rule 144, regardless of
whether such shares are covered by this Reoffer Prospectus.
There is no assurance that the Selling Shareholders will sell all or any portion
of the Shares offered.
The Company will pay all expenses in connection with this offering and will not
receive any proceeds from sales of any Shares by the Selling Shareholders.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by the Cutler Law Group, Newport Beach, California. The Cutler Law
Group and its employees currently holds 145,000 shares of the Company's Common
Stock.
EXPERTS
The balance sheets as of June 30, 1999 and the statements of operations,
shareholders' equity and cash flows for the two years ended June 30, 1999 and
1998 of StarTronix International, Inc. have been incorporated by reference in
this Registration Statement in reliance on the report of Strabala, Ramirez &
Associates, independent accountants, given on the authority of that firm as
experts in accounting and auditing.
21
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference in this
Registration Statement:
(i) The Registrant's Annual Report on Form 10-KSB for the year ended June
30, 1999, filed with the Commission on August 8, 2000.
(ii) All other reports and documents subsequently filed by the Registrant
pursuant after the date of this Registration Statement pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 and prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference and to be a part hereof
from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters with respect to the Common Stock offered hereby will be
passed upon for the Company by the Cutler Law Group, counsel to the Company.
Mr. M. Richard Cutler, principal of the Cutler Law Group is the beneficial owner
of 126,000 shares of Common Stock of the Company. All such shares of the
foregoing are being registered for sale herein. Other employees of the Cutler
Law Group hold an additional 19,000 shares of the Common Stock of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Corporation Laws of the State of Delaware and the Company's Bylaws provide
for indemnification of the Company's Directors for liabilities and expenses that
they may incur in such capacities. In general, Directors and Officers are
indemnified with respect to actions taken in good faith in a manner reasonably
believed to be in, or not opposed to, the best interests of the Company, and
with respect to any criminal action or proceeding, actions that the indemnitee
had no reasonable cause to believe were unlawful. Furthermore, the personal
liability of the Directors is limited as provided in the Company's Articles of
Incorporation.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The Shares were issued for advisory and legal services rendered. These sales
were made in reliance of the exemption from the registration requirements of the
Securities Act of 1933, as amended, contained in Section 4(2) thereof covering
transactions not involving any public offering or not involving any "offer" or
"sale".
22
<PAGE>
ITEM 8. EXHIBITS
3.1 Articles of Incorporation of the Registrant, as amended
(incorporated herein by reference to Exhibit 3.1, of the Registrant's Annual
Report on Form 10-KSB for the period ended June 30, 1993). (File No. 1-09190).
3.2 Bylaws of the Registrant, as amended and restated (incorporated
herein by reference to Exhibit 3.2 of the Registrant's Annual Report on Form
10-KSB for the period ended June 30, 1996). (File No. 1-09190).
5.1 Opinion of M. Richard Cutler, Esq., counsel to the Registrant,
regarding legality of securities being registered.
23.1 Consent of M. Richard Cutler (included in Exhibit 5.1).
23.2 Consent of Strabala, Ramirez & Associates, Independent Public
Accountants.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a) (3) of the Securities
Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that paragraphs (a) (1)(i) and (a) (1) (ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
23
<PAGE>
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant 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 Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that is meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, State of California, on September 5, 2000.
STARTRONIX INTERNATIONAL, INC.
/s/ Greg Gilbert
-------------------
By: Greg Gilbert
Its: President & Co-CEO
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ Greg Gilbert President, Co-CEO and Director
-------------------
Greg Gilbert
/s/ Lloyd Adams Chairman of the Board and Co-CEO
-----------------
Lloyd Adams
/s/ Gabriel Nassar Secretary and Director
---------------------
Gabriel Nassar
/s/ Robert Hart Chief Financial Officer
------------------
Robert Hart
/s/ E.G. Abbadessa Treasurer and Director
--------------------
E.G. Abbadessa
/s/ James L. King Director
--------------------
James L. King
25
<PAGE>
