SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For Quarter Ended: September 30, 2000
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File No. 33-18143-D
CORVALLIS, INC.
(Exact name of registrant as specified in its charter)
Nevada 87-0449399
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1486 South 11th East
Salt Lake City, Utah 84105
(801) 487-3893
(Address and telephone number of principal executive offices
and principal place of business)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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 [ ]
As of October 31, 2000, Corvallis had a total of 1,505,000 shares of
common stock issued and outstanding.
<PAGE>
TABLE OF CONTENTS
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements...............................................3
Item 2: Management's Discussion and Analysis or Plan of Operations.........9
PART II: OTHER INFORMATION
Item 2: Changes in Securities ..............................................10
Item 4: Submission of Matters to a Vote of Security Holders ................10
Item 5: Other Information...................................................11
Changes in Control..................................................11
Acquisition and Disposition of Assets...............................11
Item 6: Exhibits and Reports filed on Form 8-K ............................19
Signatures..................................................................20
<PAGE> 2
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
The following financial information for the three months ended September
30, 2000 and 1999 is unaudited. In the opinion of management, this financial
information, includes all adjustments consisting of normal recurring entries
necessary for the fair presentations of such data. Filing of audited
financial statements of USAOneStar.Net and pro forma financial information for
the transaction is impracticable at this time. We intend to file such
financial statements within 60 days on an 8-K current report.
<PAGE> 3
Corvallis, Inc.
(a Development Stage Company)
Financial Statements
September 30, 2000
<PAGE> 4
Corvallis, Inc.
(a Development Stage Company)
Balance Sheets
Assets
September 30, June 30,
2000 2000
------------- -------------
(Unaudited)
CURRENT ASSETS
Cash $ - $ -
------------- -------------
Total Current Assets $ - $ -
------------- -------------
Total Assets $ - $ -
============= =============
Liabilities and Stockholders' Equity
CURRENT LIABILITIES
Accounts payable-related party $ 28,966 $ 28,966
------------- -------------
Total Current Liabilities 28,966 28,966
------------- -------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock, authorized 200,000,000 shares of
$.001 par value, issued and outstanding
1,505,000 shares 1,505 1,505
Additional Paid-in Capital 201,799 201,799
Deficit Accumulated During the
Development Stage (232,270) (232,270)
------------- -------------
Total Stockholders' Equity (Deficit) (28,966) (28,966)
------------- -------------
Total Liabilities and Stockholders' Equity $ - $ -
============= =============
<PAGE> 5
Corvallis, Inc.
(a Development Stage Company)
Statements of Operations
Cumulative
For the Three Months Total
Ended September 30, Since
2000 1999 Inception
------------ ------------ ------------
Revenues $ - $ - $ -
Expenses:
General & Administrative - - 75,516
------------ ------------ ------------
Total Expenses - - 75,516
------------ ------------ ------------
Net loss before discontinued operations $ - $ - (75,516)
------------ ------------ ------------
Loss on discontinued operations - - (156,754)
------------ ------------ ------------
Net Loss $ - $ - $ (232,270)
============ ============ ============
Weighted Average Loss Per Share $ (.000) $ (.000) $ (0.223)
============ ============ ============
Weighted Average Shares Outstanding 1,505,000 1,505,000 1,040,716
============ ============ ============
<PAGE> 6
Corvallis, Inc.
(a Development Stage Company)
Statement of Cash Flows
From
Inception on
September 28,
For the Three Months 1987 through
ended September 30, September 30,
2000 1999 2000
------------ ------------ ------------
Cash Flows from Operating Activities:
Net loss $ - $ - $ (232,270)
Discontinued operations - - 19,308
Non-cash services rendered and
expenses paid by stockholders - - 39,357
Increase (decrease) in current
liabilities - - 28,966
------------ ------------ ------------
Net Cash Provided (Used)
by Operating Activities - - (144,639)
------------ ------------ ------------
Cash Flows from Investment Activities: - - -
------------ ------------ ------------
Cash Flows from Financing Activities:
Issuance of common stock - - 142,910
Capital Contribution - - 1,729
------------ ------------ ------------
Net Cash Provided by
Financing Activities - - 144,639
------------ ------------ ------------
Net increase (decrease) in cash - - -
Cash, beginning of year - - -
------------ ------------ ------------
Cash, end of year $ - $ - $ -
============ ============ ============
Cash, paid during the year for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Noncash financing activities
Issuance of common stock for
fixed assets $ - $ - $ 19,308
Issuance of common stock for
stockholders' payable $ - $ - $ 20,612
Issuance of stock for services
rendered $ - $ - $ -
<PAGE> 7
Corvallis, Inc.
(a Development Stage Company)
September 30, 2000
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
GENERAL
-------
Corvallis, Inc. (the Company) has elected to omit substantially all footnotes
to the financial statements for the three months ended September 30, 2000
since there have been no material changes (other than indicated in other
footnotes) to the information previously reported by the Company in their
Annual Report filed of Form 10-KSB for the Fiscal year ended June 30, 2000.
UNAUDITED INFORMATION
---------------------
The information furnished herein was taken from the books and records of the
Company without audit. However, such information reflects all adjustments
which are, in the opinion of management, necessary to properly reflect the
results of the interim period presented. The information presented is not
necessarily indicative of the results from operations expected for the full
fiscal year.
LETTER OF INTENT
---------------
On August 14, 2000, the Company signed a letter of intent to acquire all the
issued and outstanding common stock of USAStarOne.Net, Inc., a Texas
corporation (USAStar) through the issuances of the Company's common stock.
USAStar is an educational Internet service and eCommerce solutions provider
based in Owensboro, Kentucky. The rate of exchange contemplated in the letter
of intent is 13,500,000 shares of the Company's common stock for all
outstanding shares of USAStar common stock. Upon completion of the merger the
Company will be the surviving corporation and will change its name to reflect
USAStar's business.
<PAGE> 8
In this report references to "Corvallis," "we," "us," and "our" refer to
Corvallis, Inc.
FORWARD LOOKING STATEMENTS
This Form 10-QSB contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose any statements contained in this Form 10-QSB that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or comparable terminology are intended
to identify forward-looking statements. These statements by their nature
involve substantial risks and uncertainties, and actual results may differ
materially depending on a variety of factors, many of which are not within
Corvallis' control. These factors include but are not limited to economic
conditions generally and in the industries in which Corvallis may participate;
competition within Corvallis' chosen industry, including competition from
much larger competitors; technological advances and failure by Corvallis to
successfully develop business relationships.
ITEM 2: PLAN OF OPERATIONS
Since the end of 1995, we have been seeking a business opportunity which
we could acquire or in which we could become engaged. On October31, 2000, we
signed an Agreement and Plan of Reorganization with USAStarOne.Net, Inc., a
privately held Texas corporation ("USAStar"). Corvallis will merge with
USAStar and will be the surviving corporation of the merger. Upon filing of
the Articles of Merger, we will change our name to USAStarOne.Net, Inc. We
anticipate completing the merger within the next sixty days.
For the first fiscal quarter of 2001, ended September 30, 2000, we had $0
in cash, $28,966 in current liabilities, and no other liquid assets or
resources. We did not post any revenues for the fiscal year and essentially
had no operations during the fiscal year. The total current liabilities are
owed to a shareholder for legal and accounting fees paid on our behalf.
During the next twelve months we intend to continue the business
operations conducted and intended to be conducted by USAStar. See, Part II,
Item 5: "Other Information."
Based on USAStar's unaudited financial information, we anticipate that we will
acquire total current assets, comprised mostly of cash, valued at
approximately $34,749 and computer equipment valued at $77,389. However, we
will also assume current liabilities of approximately $29,562 and long-term
notes payable to related parties for approximately $441,452. USAStar has
posted revenues of approximately $117,314 in its first two months of
operations with a net income of approximately $10,857 for the that time
period.
During the next twelve months, we intend to rely on revenues to support
our operations. We anticipate the majority of revenues will come from new
independent representatives joining
<PAGE> 9
USAStar and the corresponding growth in our customer base that they may bring
to the company. We intend to hire between 10-15 additional employees.
If additional funds are needed for our future growth, we can not assure
that funds will be available from any source, or, if available, that we will
be able to obtain the funds on terms agreeable to us. The acquisition of
funding through the issuance of debt could result in a substantial portion of
our cash flows from operations being dedicated to the payment of principal and
interest on the indebtedness, and could render us more vulnerable to
competitive and economic downturns.
Any future securities offerings will be effected pursuant to applicable
exemptions under federal and state laws. The purchasers and manner of
issuance will be determined according to our financial needs and the available
exemptions. At this time we have not decided to offer securities and,
accordingly, have not determined the type of offering or the type or number of
securities which we might offer. We have no plans to make a public offering
of our common stock at this time. We also note that if we issue more shares
of our common stock our shareholders may experience dilution in the value per
share of their common stock.
PART II: OTHER INFORMATION
ITEM 2: CHANGES IN SECURITIES
Changes to Bylaws
Our bylaws allow our board of directors to increase the authorized number
of directors. On October 20, 2000 our board of directors adopted an amendment
to our bylaws which increased the number of directors from three to up to
seven. The Board adopted the amendment in order to allow the USAStar board to
join our board as part of the merger.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On October 31, 2000, 843,345 common shares of our outstanding shares
entitled to vote approved and adopted the merger agreement by written consent
in lieu of a special meeting. As a result of the shareholder approval the
following events will occur:
1. The USAStar board, which includes Lowell G. Mims, Kelly Turner and
Gene Bowlds, will join our board and as a result these individuals will be
appointed directors and officers. See, "Part II, Item 5: Other information -
Acquisition of Assets - Management."
2. Upon filing of the Articles of Merger with the Secretary of State of
Nevada,
<PAGE> 10
Corvallis will change its name to USAOneStar.Net.
ITEM 5: OTHER INFORMATION
The following discussions provide certain information regarding the
business and management of Corvallis following the consummation of the merger
with USAStar.
CHANGES IN CONTROL
The merger agreement, discussed below in "Acquisition of Assets"
provides that Corvallis will issue 13,500,000 shares to the three shareholders
of the 1,000,000 USAStar outstanding stock. Prior to the merger, we had
1,505,000 shares outstanding and after the merger we will have 15,005,000
shares outstanding.
Upon completion of the merger, Messrs. Mims, Turner and Bowlds, the three
shareholders of USAStar, will each individually acquire 29% of our issued and
outstanding shares. This will result in them holding 89.9% of our outstanding
common shares. In addition these three individuals will be appointed as
directors and officers of the surviving corporation.
ACQUISITION OF ASSETS
Terms of The Agreement
On October 31, 2000, Corvallis and USAStar entered into an Agreement and
Plan of Reorganization by which we will merge with USAStar through a
stock-for-stock exchange intended to qualify as a tax-free exchange. The
agreement was approved by our board of directors and shareholder approval was
obtained by written consent in lieu of a special meeting of shareholders.
We intend to acquire 100% of the 1,000,000 USAStar common stock
outstanding by exchanging 13.5 million of our common shares for the USAStar
common stock. Upon completion of the merger, Corvallis will change its name
to USAOneStar.Net, Inc. and the management of USAStar will replace our
current management.
The merger agreement contains customary representations and warranties
relating to each company's corporate status, corporate authority to complete
the merger, capital structure and corporate conduct prior to the closing.
Each company has agreed to use its best efforts to maintain and preserve its
business organization, employee relationships and keep its good will intact
until the merger is complete. Also, each company provided corporate
documentation to the other for due diligence purposes.
<PAGE> 11
Termination of the agreement may occur if we or USAStar fail to comply in
any material respect with the covenants or agreements included in the merger
agreement. The merger agreement may be terminated by mutual consent, which
must be expressed by action of our board of directors or USAStar shareholders.
In the event that the parties terminate the agreement, both have agreed to pay
their own costs incurred.
The exchange of stock is intended to qualify as a tax-free exchange in
accordance with Section 368(a)(1)(B) of the Internal Revenue Code, as amended.
The merger will be accounted for under the purchase method of accounting using
generally accepted accounting principles. This means that USAStar's results
of operation will be included with ours from the closing date and its
consolidated assets and liabilities will be recorded at their fair values at
the same date. Each company has agreed to carry on their respective
businesses in the usual and ordinary course and each will bear its own
operating expenses until completion of the merger.
Consideration for the Merger. The consideration exchanged in the merger
was negotiated at "arms length" and our management used criteria used in
similar proposals, including the relative value of the assets of USAStar,
USAStar's present and past business operations, the future potential of
USAStar, the management of USAStar and the potential benefit to the
stockholders of Corvallis. The source of the consideration used to acquire
our interest in USAStar is 13.5 million authorized but unissued common shares.
The consideration used by the three USAStar shareholders to acquire their
interest in Corvallis was the exchange of all of the issued and outstanding
equity securities of USAStar which they held. Our board of directors
determined that the consideration for the exchange was reasonable based upon
these factors.
Interests of Certain Persons. Except as set forth in this report neither
we, nor to the best of our knowledge, any of our directors, executive officers
or other affiliates had any contract, arrangement, understanding or
relationship with any other person with respect to any USAStar shares. Except
as described in this report, there have been no contacts, negotiations or
transactions within the last two years between Corvallis or any of our
directors, executive officers or their affiliates, on the one hand, and
USAStar or its affiliates, on the other hand, regarding the merger,
consolidation, acquisition of shares or election of directors.
Business of USAStar
USAStar is based in Owensboro, Kentucky and offers educational Internet
service and eCommerce solutions. USAStar was incorporated July 21, 2000 and
began operations shortly thereafter. USAStar utilizes a network marketing
model for distribution of its Internet service provider business. Each
dial-up or direct service link customer of USAStar receives a CD-ROM-based
interactive educational software package, which is designed to provide these
customers with the necessary tools to access the Internet and educational
programs ranging from basic
<PAGE> 12
"point-and-click" techniques to the development of web sites. Included in the
software are lessons involving computer and Internet fundamentals, the Windows
operating system, word processing, spreadsheets, web site development, etc.
Market. The Internet is a collection of connected computer systems and
networks that link millions of public and private computers to form what is
essentially the largest computer network in the world. The Internet has
experienced rapid growth in recent years and is expected to continue to grow
based on estimated increases in the numbers of web users, web traffic and the
number of web sites.
Internet access services represent the means by which Internet service
providers interconnect business and consumer users to the Internet's
resources. Access services vary from dial-up modem access for individuals and
small businesses to high-speed dedicated transmission lines for broadband
access by large organizations. An Internet service provider provides Internet
access either by development of a proprietary network infrastructure or by
purchasing access service from a wholesale access vendor, or through a
combination of both.
For many businesses, the Internet has created a new communication and
sales channel that enables companies to interact with large numbers of
geographically dispersed consumers and business partners. In the last several
years, many companies have emerged that focus solely on the Internet as the
medium for selling products or delivering services directly to purchasers,
bypassing traditional wholesale and retail channels.
In addition, advances in on-line security and payment mechanisms are
alleviating concerns associated with conducting transactions in an
open-platform environment, thus prompting more consumers and businesses to use
the Internet in conjunction with purchases and more business to offer a
greater breadth of electronic commerce services.
Products. USAStar offers Internet access and services to subscribers and
USAStar independent representatives. The basic services include
Internet access: Includes unlimited Internet access and email.
Domain hosting: The user is provided a personal domain and URL with up
to 25 megabytes of storage.
Domain hosting with shopping cart software: This service includes the
features of the domain hosting plus 50 megabytes of storage and shopping cart
software. The customer must set up a credit card merchant account with
Merchant Commerce.
Network Marketing. In July 2000 USAStar instituted a network marketing
program as an
<PAGE> 13
approach within the Internet service provider industry to rapidly expand
USAStar's subscriber base. The program is designed to establish and expand a
network of USAStar independent representatives to sell USAStar's access
services. Independent representatives are independent contractors not our
employees.
Generally, an individual or business entity may become an independent
representative by completing an application and purchasing a business building
starter kit. The kit includes marketing materials, policies and training
materials for business building. In general, each independent representative
is paid a commission for signing up new customers for USAStar's services and
is paid residual commissions as those customers renew their subscriptions.
USAStar believes that network marketing assists us in lowering USAStar's
cost of customer acquisition, reducing variable technical support costs by
utilizing independent representatives to aid in the set-up and maintenance of
new customers and reducing customer turnover as the result of the customer's
loyalty to his or her independent representative. As of October 31, 2000 we
have approximately 1000 independent representatives who are each responsible
for the acquisition of between 3-10 new subscribers.
The basic structure of our network marketing is:
Agent/Silver Star. An agent has the right to sell Internet access and
sponsor other agents only. Services and products include a replicating web
site with a separate URL; a virtual domain at USAStar; an online control panel
for customer management; billing and back up customer support; full back
office support; and access to company sponsored training.
Internet Service Provider/ Gold Star. An Internet Service Provider has
the right to sell Internet access and domain hosting personally. Services and
products include: online control panel for customer management; billing and
back up customer support; set up, registration, and one year of domain hosting
for personal domain with a separate URL; and access to company sponsored
training.
Internet Service Provider/Platinum Star. This type of independent
representative has the right to sponsor Agents, ISPs and ISP Agents. Services
and products include all of those provided to an Agent and ISP.
The USAStar business is particularly well suited for individuals who
possess strong sales skills and are motivated by the prospect of supplementing
their sources of income under a flexible work schedule. The commission
structure of the USAStar Business also creates incentives for independent
representatives to recruit other independent representatives to the program.
For each sale of an access service subscription to a new customer that is made
by an independent representative who has been recruited to the program by an
existing independent
<PAGE> 14
representative, and for each renewal of that subscription, a commission is
paid to the existing independent representative in addition to the commission
paid to the independent representative who was responsible for the new
subscription or renewal.
Additional commissions also are paid to the existing independent
representative as independent representatives that were recruited into the
program by the existing independent representative recruit other independent
representatives who, in turn, effect sales or renewals of USAStar's access
services. The commission tree extends as these recruited independent
representatives recruit other representatives; such that a new subscription
sale or renewal may result in the payment of commissions. The amount of the
commission paid to the existing independent representative in connection with
the sale or renewal will vary according to the level of the existing
independent representative within the chain of representatives above the
representative who received direct credit for the sale or renewal. As the
program continues to develop and mature, the total amount of commissions paid
to independent representatives per new subscriber will increase; however,
USAStar believes that such total commissions will nonetheless be less than the
costs for new subscriber acquisitions through traditional sales and marketing
activities.
Competition. The market for the provision of Internet access services is
extremely competitive and highly fragmented. As there are no significant
barriers to entry, USAStar expects that competition will intensify. USAStar
believes that the primary competitive factors determining success as an
Internet service provider are:
1. A reputation for reliability and high-quality service;
2. Effective customer support;
3. Access speed;
4. Pricing;
5. Effective marketing techniques for customer acquisition;
6. Ease of use; and
7. Scope of geographic coverage.
USAStar's current and prospective competitors include many large
companies that have substantially greater market presence, brand name
recognition and financial, technical, marketing and other resources than us.
USAStar cannot assure you that it will be able to compete successfully against
current or future competitors or that competitive pressures faced by it will
<PAGE> 15
not materially and adversely affect USAStar's business, operating results or
financial condition.
With respect to USAStar's access and business services, USAStar currently
competes, or expects to compete in the foreseeable future, with the following:
1. Direct marketing Internet service providers, such as Flashnet
Communications;
2. Numerous regional and local Internet service providers, some of which
have significant market share in their particular market area;
3. Established on-line information service providers, which provide basic
Internet access as well as proprietary information not available through
public Internet access, such as AOL;
4. Providers of web hosting, co-location and other Internet-based business
services, including AOL, Exodus and Verio;
5. Computer hardware and software and other technology companies that
provide Internet access through television cable lines, including TCI and
Time Warner Cable;
6. Electric utility companies;
7. Communications companies;
8. Companies that provide television or telecommunications through
participation in satellite systems; and
9. Nonprofit or educational Internet access providers.
With respect to USAStar's potential competitors, USAStar believes that
manufacturers of computer hardware and software products, medial and
telecommunications companies and others will continue to enter the Internet
service market, which will intensify competition. In addition, as consumers
and businesses increasingly move on-line in greater numbers, USAStar expects
existing competitors to increase their emphasis on Internet access and
electronic commerce initiatives, competitors or others to enter into business
combinations, strategic alliances or joint ventures, or to bundle their
services and products with Internet access, which could place USAStar at a
significant competitive disadvantage.
Moreover, USAStar expects to face competition in the future from
companies that provide connections to consumers' homes, such as
telecommunications providers, cable companies and electrical utility
companies. For example, recent advances in technology have enabled cable
television operators to offer Internet access through their cable facilities
at
<PAGE> 16
significantly faster rates than existing analog modem speeds. Such companies
could include Internet access in their basic bundle of services or offer such
access for a nominal additional charge, or could deny us access to their
proprietary wire and cable connections for purposes of providing Internet
access services to USASTAR's customers and prospective customers. Any such
developments could materially and adversely affect USASTAR's business,
operating results and financial condition.
Trademarks, License and Intellectual Property. USAStar does not hold any
patents, trademarks or copyrights.
Government Regulations. USAStar provides Internet access, in part, using
telecommunications services provided by carriers. Terms, conditions and
prices for telecommunications services are subject to economic regulation by
state and federal agencies. USAStar, as an Internet access provider, is not
currently subject to direct economic regulation by the Federal Communications
Commission or any state regulatory body, other than the type and scope of
regulation that is applicable to businesses generally. In April 1998 the
Federal Communications Commission reaffirmed that Internet access providers
should be classified as unregulated "information service providers" rather
than regulated "telecommunications providers" under the terms of the Federal
Telecommunications Act of 1996. As a result, USAStar is not subject to
federal regulations applicable to telephone companies and similar carriers
merely because USAStar provides USAStar's services using telecommunications
services provided by third-party carriers. To date, no state has attempted to
exercise economic regulation over Internet access providers.
Governmental regulatory approaches and policies to Internet access
providers and others that use the Internet to facilitate data and
communication transmissions are continuing to develop and in the future
USAStar could be exposed to regulation by the Federal Communications
Commission or other federal agencies or by state regulatory agencies or
bodies.
Employees. We currently employ 11 persons.
Management. Upon completion of the merger, the name, age, and position of
each of the executive officers and directors of the surviving corporation are
listed below. Our bylaws provide for a board of directors consisting of up to
seven persons. The term of office of each director is one year or until his
successor is elected and qualified. Executive officers are chosen by our
board of directors and serve at its discretion. Biographical information for
each officer and director is also provided below. There are no family
relationships among our directors and officers.
<PAGE> 17
Name Age Position
--------------- ------- ---------------
Lowell G. Mims 37 President and director
R. Eugene Bowlds 56 Vice-President and director
Kelly Turner 38 Secretary/Treasurer and director
J. Daniel Greene 52 Chief Operating Officer
Lowell G. Mims. Mr. Mims was a founding member of USAStar. He
received a bachelors degree in Theology and has practiced as a minister since
1985. He was a top income earner in several network marketing companies and
has built downlines in excess of 75,000 people. From March 1996 to May 1998
he was a top income earner in a network marketing company, Destiny Telecom
Inc. in Oakland, California. He also participated in Unified International
Inc. in Dallas, Texas network marketing company.
Richard Eugene Bolwds Gene Bowlds was a founding member of USAStar.
He has extensive experience in business and has had tremendous success in
taking companies public. His last five years were with Thermotilt Inc. and
Thermoview Inc. as Founder and C.E.O. He has served in senior management
capacities at a number of publicly traded companies. He took Thermoview
Industries from less than $6 million in revenues in 1997 to over $100 million
in audited revenues in 1999.
Kelly Turner. Mr. Turner was a founding member of USAStar. From 1988
to the present he has served as Pastor for the United Christian Fellowship
Church. He has 15 years of experience in the network marketing industry
including being a consultant to the industry and assisting in the design of
marketing plans for two network marketing companies. He built a downline in
excess of 80,000 people from February 1996 to May 1998 with Destiny Telecom in
Oakland, California. He founded "Inform Magazine," a publication for the
network marketing industry. He also owned a retail jewelry store from 1987
until 1998.
Daniel Greene Mr. Greene joined USAStar as its chief operating
officer in September 2000. He will continue to serve in that capacity upon
completion of the merger. From January 2000 through September 2000 he served
as CEO of Changes International and from January 1998 to December 2000 he was
president of Vigor Life, Inc. Both of those companies sell vitamins through a
network marketing structure. From January 1995 to December 1997 he was the
sales manager of Orange Lake Country Club, a condominium project. He
attended Georgia State in 1966-1968.
<PAGE> 18
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Part I Exhibits.
Exhibit Description
2.1 Agreement and Plan of Reorganization between Corvallis and
USAStar, dated October 31, 2000
3.1 Resolution dated October 20, 2000 amending bylaws
27 Financial Data Schedule
(b) Reports on Form 8-K.
On September 1, 2000, we filed a current report on Form 8-K under Item 4
concerning the replacement of our auditor, Crouch, Bierwolf & Chisholm, with
Chisholm & Associates. No financial statements were filed.
On August 29, 2000 we filed a current report on Form 8-K under Item 5
regarding our signing of a letter of intent to merge with USAStar.
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned who are duly authorized.
CORVALLIS, INC.
(Registrant)
/s/ Whitney O. Cluff
Date: 11/13/00 By:_________________________________
Whitney O. Cluff
President and Chief Executive Officer
<PAGE> 20
