SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
[ ] Transitional Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended April 30, 1997
Commission File No. 0-24512
SUARRO COMMUNICATIONS, INC.
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(Name of small business issuer in its charter)
SOLUTIONS, INCORPORATED
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(Former name of small business issuer)
Nevada 84-1273503
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number
6 Venture, Suite 207
Irvine, CA
(949) 453-9262
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(Address, including zip code and telephone number, including area
code, of registrant's executive offices)
Securities registered under Section 12(b) of the Exchange Act:
none
Securities registered under to Section 12(g) of the Exchange Act:
Common Stock
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(Title of class)
Check whether the issuer (1) 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
Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes No x
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Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this
Form 10-KSB. x
---
(Continued on Following Page)
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Issuer's revenues for its most recent fiscal year: $ -0-
State the aggregate market value of the voting stock held by non-
affiliates, computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as of
a specified date within the past 60 days: As of December 31, 1998:
$0.
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: As of
December 31, 1998, there were 1,000,000 shares of the Company's
common stock issued and outstanding.
Documents Incorporated by Reference: None
This Form 10-KSB consists of Forty-Eight Pages.
Exhibit Index is Located at Page Thirty Three.
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TABLE OF CONTENTS
FORM 10-KSB ANNUAL REPORT
SUARRO COMMUNICATIONS, INC.
PAGE
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Facing Page
Index
PART I
Item 1. Description of Business......................... 4
Item 2. Description of Property......................... 13
Item 3. Legal Proceedings............................... 14
Item 4. Submission of Matters to a Vote of
Security Holders........................... 14
PART II
Item 5. Market for the Registrant's Common Equity
and Related Stockholder Matters............ 14
Item 6. Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................. 15
Item 7. Financial Statements............................ 17
Item 8. Changes in and Disagreements on Accounting
and Financial Disclosure................... 26
PART III
Item 9. Directors, Executive Officers, Promoters
and Control Persons; Compliance with
Section 16(a) of the Exchange Act.......... 26
Item 10. Executive Compensation.......................... 28
Item 11. Security Ownership of Certain Beneficial
Owners and Management...................... 29
Item 12. Certain Relationships and Related
Transactions............................... 30
PART IV
Item 13. Exhibits and Reports of Form 8-K................ 30
SIGNATURES................................................ 32
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Suarro Communications, Inc., f/k/a Solutions, Incorporated
(the "Company") was incorporated on August 18, 1988, under the laws
of the State of Nevada to engage in any lawful corporate
undertaking, including but not limited to selected mergers and
acquisitions. Relevant thereto, effective August 16, 1996, the
Company acquired all of the issued and outstanding common stock of
Suarro Communications, Inc., a Texas corporation ("Suarro"),
wherein it undertook a forward split of its issued and outstanding
common stock whereby twenty (20) shares of common stock were issued
in exchange for each share of common stock previously issued and
outstanding. Thereafter, the Company acquired all of the issued
and outstanding securities of Suarro in exchange for issuance by
the Company of 5,200,000 shares of "restricted" common stock of the
Company to Suarro shareholders. The consideration given and
received was determined by arms-length negotiations between the
principals of the Company and Suarro. As part of the terms of the
aforesaid transaction, the Company also changed its name to "Suarro
Communications, Inc."
Various disputes arose subsequent to the closing of the Suarro
transaction referenced above. Applicable thereto, an action was
filed in the Second Judicial District Court of the State of Nevada,
in and for the County of Washoe, entitled Lee R. Goldberg v. Suarro
Communications, Inc. et al., Cause No. CV-97-05053, relevant to
certain claims held by shareholders of the Company relating to
representations made by the shareholders of Suarro in the
reorganization between the companies. A stipulation, Mutual
Release and Indemnity Agreement was reached in relation to such
action, with the results of such settlement being that the Suarro
transaction described above was rescinded, with all of the
5,200,000 shares issued in favor of the Suarro shareholders being
returned to the Company's treasury.
Certain additional matters were undertaken by the Company at
the time of the Suarro transaction described above, including the
shareholders undertaking adoption of an amendment to the Company's
Articles of Incorporation whereby the Company's shareholders
increased the number of shares of common stock authorized for
issuance from 1,000,000 common shares, par value $0.001 per share,
to 20,000,000 common shares, par value $0.001 per share.
Additionally, 1,000,000 shares of preferred stock, no par value per
share, were also authorized. Further, as a result of the
rescission of the Suarro transaction, management of the Company did
change. See "PART III, Item 9 - Directors, Executive Officers,
Promotors and Control Persons; Compliance With Section 16(a) of the
Exchange Act" below for a detailed description of current
management of the Company.
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As such, the Company can be defined as a "shell" company,
whose sole purpose at this time is to locate and consummate a
merger or acquisition with a private entity. The Board of
Directors of the Company has elected to commence implementation of
the Company's principal business purpose, described below under
"PART II, Item 6(a) - Plan of Operation."
The Company's business is subject to numerous risk factors,
including the following:
Going Concern; No Operating History or Revenue and Minimal
Assets. The Company's financial statements accompanying this
report have been prepared assuming that the Company will continue
as a going concern, which contemplates the realization of assets
and liquidation of liabilities in the normal course of business.
The financial statements do not include any adjustment that might
result from the outcome of this uncertainty. The Company has had
no operating history nor any revenues or earnings from operations.
The Company has no significant assets or financial resources. The
Company will, in all likelihood, sustain operating expenses without
corresponding revenues, at least until the consummation of a
business combination. This may result in the Company incurring a
net operating loss which will increase continuously until the
Company can consummate a business combination with a profitable
business opportunity. There is no assurance that the Company can
identify such a business opportunity and consummate such a business
combination.
Speculative Nature of Company's Proposed Operations. The
success of the Company's proposed plan of operation will depend to
a great extent on the operations, financial condition and
management of the identified business opportunity. While
management intends to seek business combination(s) with entities
having established operating histories, there can be no assurance
that the Company will be successful in locating candidates meeting
such criteria. In the event the Company completes a business
combination, of which there can be no assurance, the success of the
Company's operations may be dependent upon management of the
successor firm or venture partner firm and numerous other factors
beyond the Company's control.
Scarcity of and Competition for Business Opportunities and
Combinations. The Company is and will continue to be an
insignificant participant in the business of seeking mergers with,
joint ventures with and acquisitions of small private and public
entities. A large number of established and well-financed
entities, including venture capital firms, are active in mergers
and acquisitions of companies which may be desirable target
candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise and
managerial capabilities than the Company and, consequently, the
Company will be at a competitive disadvantage in identifying
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possible business opportunities and successfully completing a
business combination. Moreover, the Company will also compete in
seeking merger or acquisition candidates with numerous other small
public companies.
No Agreement for Business Combination or Other Transaction-No
Standards for Business Combination. The Company has no
arrangement, agreement or understanding with respect to engaging in
a merger with, joint venture with or acquisition of, a private or
public entity. There can be no assurance the Company will be
successful in identifying and evaluating suitable business
opportunities or in concluding a business combination. Management
has not identified any particular industry or specific business
within an industry for evaluation by the Company. There is no
assurance the Company will be able to negotiate a business
combination on terms favorable to the Company. The Company has not
established a specific length of operating history or a specified
level of earnings, assets, net worth or other criteria which it
will require a target business opportunity to have achieved, and
without which the Company would not consider a business combination
in any form with such business opportunity. Accordingly, the
Company may enter into a business combination with a business
opportunity having no significant operating history, losses,
limited or no potential for earnings, limited assets, negative net
worth or other negative characteristics.
Continued Management Control, Limited Time Availability.
While seeking a business combination, management anticipates
devoting up to twenty hours per month to the business of the
Company. None of the Company's officers has entered into a written
employment agreement with the Company and none is expected to do so
in the foreseeable future. The Company has not obtained key man
life insurance on any of its officers or directors.
Notwithstanding the combined limited experience and time commitment
of management, loss of the services of any of these individuals
would adversely affect development of the Company's business and
its likelihood of continuing operations. See "PART III, Item 9 -
Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act."
Conflicts of Interest - General. Officers and directors of
the Company may in the future participate in business ventures
which could be deemed to compete directly with the Company.
Additional conflicts of interest and non-arms length transactions
may also arise in the future in the event the Company's officers or
directors are involved in the management of any firm with which the
Company transacts business. Management has adopted a policy that
the Company will not seek a merger with, or acquisition of, any
entity in which management serve as officers, directors or
partners, or in which they or their family members own or hold any
ownership interest.
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Reporting Requirements May Delay or Preclude Acquisition.
Sections 13 and 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") require companies subject thereto to provide
certain information about significant acquisitions, including
certified financial statements for the company acquired, covering
one, two, or three years, depending on the relative size of the
acquisition. The time and additional costs that may be incurred by
some target entities to prepare such statements may significantly
delay or essentially preclude consummation of an otherwise
desirable acquisition by the Company. Acquisition prospects that
do not have or are unable to obtain the required audited statements
may not be appropriate for acquisition so long as the reporting
requirements of the 1934 Act are applicable.
Lack of Market Research or Marketing Organization. The
Company has neither conducted, nor have others made available to
it, results of market research indicating that market demand exists
for the transactions contemplated by the Company. Moreover, the
Company does not have, and does not plan to establish, a marketing
organization. Even in the event demand is identified for a merger
or acquisition contemplated by the Company, there is no assurance
the Company will be successful in completing any such business
combination.
Lack of Diversification. The Company's proposed operations,
even if successful, will in all likelihood result in the Company
engaging in a business combination with a business opportunity.
Consequently, the Company's activities may be limited to those
engaged in by business opportunities which the Company merges with
or acquires. The Company's inability to diversify its activities
into a number of areas may subject the Company to economic
fluctuations within a particular business or industry and therefore
increase the risks associated with the Company's operations.
Regulation. Although the Company is subject to regulation
under the Securities Exchange Act of 1934, management believes the
Company will not be subject to regulation under the Investment
Company Act of 1940, insofar as the Company will not be engaged in
the business of investing or trading in securities. In the event
the Company engages in business combinations which result in the
Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the
Investment Company Act of 1940. In such event, the Company would
be required to register as an investment company and could be
expected to incur significant registration and compliance costs.
The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company
under the Investment Company Act of 1940 and, consequently, any
violation of such Act would subject the Company to material adverse
consequences.
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Probable Change in Control and Management. A business
combination involving the issuance of the Company's Common Shares
will, in all likelihood, result in shareholders of a private
company obtaining a controlling interest in the Company. Any such
business combination may require management of the Company to sell
or transfer all or a portion of the Company's Common Shares held by
them, or resign as members of the Board of Directors of the
Company. The resulting change in control of the Company could
result in removal of one or more present officers and directors of
the Company and a corresponding reduction in or elimination of
their participation in the future affairs of the Company.
Reduction of Percentage Share Ownership Following Business
Combination. The Company's primary plan of operation is based
upon a business combination with a private concern which, in all
likelihood, would result in the Company issuing securities to
shareholders of any such private company. The issuance of
previously authorized and unissued Common Shares of the Company
would result in reduction in percentage of shares owned by present
and prospective shareholders of the Company and may result in a
change in control or management of the Company.
Disadvantages of Blank Check Offering. The Company may enter
into a business combination with an entity that desires to
establish a public trading market for its shares. A business
opportunity may attempt to avoid what it deems to be adverse
consequences of undertaking its own public offering by seeking a
business combination with the Company. Such consequences may
include, but are not limited to, time delays of the registration
process, significant expenses to be incurred in such an offering,
loss of voting control to public shareholders and the inability or
unwillingness to comply with various federal and state laws enacted
for the protection of investors.
Taxation. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination the
Company may undertake. Currently, such transactions may be
structured so as to result in tax-free treatment to both companies,
pursuant to various federal and state tax provisions. The Company
intends to structure any business combination so as to minimize the
federal and state tax consequences to both the Company and the
target entity; however, there can be no assurance that such
business combination will meet the statutory requirements of a tax-
free reorganization or that the parties will obtain the intended
tax-free treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the imposition of both
federal and state taxes which may have an adverse effect on both
parties to the transaction.
Requirement of Audited Financial Statements May Disqualify
Business Opportunities. Management of the Company believes that
any potential business opportunity must provide audited financial
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statements for review, for the protection of all parties to the
business combination. One or more attractive business
opportunities may choose to forego the possibility of a business
combination with the Company, rather than incur the expenses
associated with preparing audited financial statements.
The Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business
opportunities presented to it by persons or firms who or which
desire to seek the perceived advantages of an Exchange Act
registered corporation. The Company will not restrict its search
to any specific business, industry, or geographical location and
the Company may participate in a business venture of virtually any
kind or nature. This discussion of the proposed business is
purposefully general and is not meant to be restrictive of the
Company's virtually unlimited discretion to search for and enter
into potential business opportunities. Management anticipates that
it may be able to participate in only one potential business
venture because the Company has nominal assets and limited
financial resources. See "PART II, Item 7 - Financial Statements."
This lack of diversification should be considered a substantial
risk to shareholders of the Company because it will not permit the
Company to offset potential losses from one venture against gains
from another.
The Company may seek a business opportunity with entities
which have recently commenced operations, or which wish to utilize
the public marketplace in order to raise additional capital in
order to expand into new products or markets, to develop a new
product or service, or for other corporate purposes. The Company
may acquire assets and establish wholly owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business
opportunity in which to participate will be complex and extremely
risky. Due to general economic conditions, rapid technological
advances being made in some industries and shortages of available
capital, management believes that there are numerous firms seeking
the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms
on which additional equity financing may be sought, providing
liquidity for incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of
applicable statutes), for all shareholders and other factors.
Potentially, available business opportunities may occur in many
different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis
of such business opportunities extremely difficult and complex.
The Company has, and will continue to have, no capital with
which to provide the owners of business opportunities with any
significant cash or other assets. However, management believes the
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Company will be able to offer owners of acquisition candidates the
opportunity to acquire a controlling ownership interest in a
publicly registered company without incurring the cost and time
required to conduct an initial public offering. The owners of the
business opportunities will, however, incur significant legal and
accounting costs in connection with acquisition of a business
opportunity, including the costs of preparing Form 8-K's, 10-K's or
10-KSB's, agreements and related reports and documents. The
Securities Exchange Act of 1934 (the "34 Act") specifically
requires that any merger or acquisition candidate comply with all
applicable reporting requirements, which include providing audited
financial statements to be included within the numerous filings
relevant to complying with the 34 Act. Nevertheless, the officers
and directors of the Company have not conducted market research and
are not aware of statistical data which would support the perceived
benefits of a merger or acquisition transaction for the owners of
a business opportunity.
The analysis of new business opportunities will be undertaken
by, or under the supervision of, the officers and directors of the
Company, none of whom is a professional business analyst.
Management intends to concentrate on identifying preliminary
prospective business opportunities which may be brought to its
attention through present associations of the Company's officers
and directors, or by the Company's shareholders. In analyzing
prospective business opportunities, management will consider such
matters as the available technical, financial and managerial
resources; working capital and other financial requirements;
history of operations, if any; prospects for the future; nature of
present and expected competition; the quality and experience of
management services which may be available and the depth of that
management; the potential for further research, development, or
exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the
Company; the potential for growth or expansion; the potential for
profit; the perceived public recognition of acceptance of products,
services, or trades; name identification; and other relevant
factors. Officers and directors of the Company expect to meet
personally with management and key personnel of the business
opportunity as part of their investigation. To the extent
possible, the Company intends to utilize written reports and
personal investigation to evaluate the above factors. The Company
will not acquire or merge with any company for which audited
financial statements cannot be obtained within a reasonable period
of time after closing of the proposed transaction.
Management of the Company, while not especially experienced in
matters relating to the new business of the Company, shall rely
upon their own efforts and, to a much lesser extent, the efforts of
the Company's shareholders, in accomplishing the business purposes
of the Company. It is not anticipated that any outside consultants
or advisors will be utilized by the Company to effectuate its
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business purposes described herein. However, if the Company does
retain such an outside consultant or advisor, any cash fee earned
by such party will need to be paid by the prospective merger/
acquisition candidate, as the Company has no cash assets with which
to pay such obligation. There have been no contracts or agreements
with any outside consultants and none are anticipated in the
future.
The Company will not restrict its search for any specific kind
of firms, but may acquire a venture which is in its preliminary or
development stage, which is already in operation, or in essentially
any stage of its corporate life. It is impossible to predict at
this time the status of any business in which the Company may
become engaged, in that such business may need to seek additional
capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may offer. However,
the Company does not intend to obtain funds in one or more private
placements to finance the operation of any acquired business
opportunity until such time as the Company has successfully
consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses
in the implementation of its business plan described herein.
Because the Company has no capital with which to pay these
anticipated expenses, present management of the Company will pay
these charges with their personal funds, as interest free loans to
the Company. However, the only opportunity which management has to
have these loans repaid will be from a prospective merger or
acquisition candidate. Management has agreed among themselves that
the repayment of any loans made on behalf of the Company will not
impede, or be made conditional in any manner, to consummation of a
proposed transaction.
Acquisition of Opportunities
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, or licensing
agreement with another corporation or entity. It may also acquire
stock or assets of an existing business. On the consummation of a
transaction, it is probable that the present management and
shareholders of the Company will no longer be in control of the
Company. In addition, the Company's directors may, as part of the
terms of the acquisition transaction, resign and be replaced by new
directors without a vote of the Company's shareholders or may sell
their stock in the Company. Any terms of sale of the shares
presently held by officers and/or directors of the Company will be
also afforded to all other shareholders of the Company on similar
terms and conditions. Any and all such sales will only be made in
compliance with the securities laws of the United States and any
applicable state.
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It is anticipated that any securities issued in any such
reorganization would be issued in reliance upon exemption from
registration under applicable federal and state securities laws.
In some circumstances, however, as a negotiated element of its
transaction, the Company may agree to register all or a part of
such securities immediately after the transaction is consummated or
at specified times thereafter. If such registration occurs, of
which there can be no assurance, it will be undertaken by the
surviving entity after the Company has successfully consummated a
merger or acquisition and the Company is no longer considered a
"shell" company. The issuance of substantial additional securities
and their potential sale into any trading market which may develop
in the Company's securities may have a depressive effect on the
value of the Company's securities in the future.
While the actual terms of a transaction to which the Company
may be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to avoid
the creation of a taxable event and thereby structure the
acquisition in a so-called "tax-free" reorganization under Sections
368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In
order to obtain tax-free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or
more of the voting stock of the surviving entity. In such event,
the shareholders of the Company, would retain less than 20% of the
issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and
directors of the Company will meet personally with management and
key personnel, may visit and inspect material facilities, obtain
independent analysis of verification of certain information
provided, check references of management and key personnel, and
take other reasonable investigative measures, to the extent of the
Company's limited financial resources and management expertise.
The manner in which the Company participates in an opportunity will
depend on the nature of the opportunity, the respective needs and
desires of the Company and other parties, the management of the
opportunity and the relative negotiation strength of the Company
and such other management.
With respect to any merger or acquisition, negotiations with
target company management is expected to focus on the percentage of
the Company which the target company shareholders would acquire in
exchange for all of their shareholdings in the target company.
Depending upon, among other things, the target company's assets and
liabilities, the Company's shareholders will in all likelihood hold
a substantially lesser percentage ownership interest in the Company
following any merger or acquisition. The percentage ownership may
be subject to significant reduction in the event the Company
acquires a target company with substantial assets. Any merger or
acquisition effected by the Company can be expected to have a
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significant dilutive effect on the percentage of shares held by the
Company's then shareholders.
The Company will participate in a business opportunity only
after the negotiation and execution of appropriate written
agreements. Although the terms of such agreements cannot be
predicted, generally such agreements will require some specific
representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing
and the conditions which must be satisfied by each of the parties
prior to and after such closing, will outline the manner of bearing
costs, including costs associated with the Company's attorneys and
accountants, will set forth remedies on default and will include
miscellaneous other terms.
As stated hereinabove, the Company will not acquire or merge
with any entity which cannot provide independent audited financial
statements within a reasonable period of time after closing of the
proposed transaction. The Company is subject to all of the
reporting requirements included in the 34 Act. Included in these
requirements is the affirmative duty of the Company to file
independent audited financial statements as part of its Form 8-K to
be filed with the Securities and Exchange Commission upon
consummation of a merger or acquisition, as well as the Company's
audited financial statements included in its annual report on Form
10-K (or 10-KSB, as applicable). If such audited financial
statements are not available at closing, or within time parameters
necessary to insure the Company's compliance with the requirements
of the 34 Act, or if the audited financial statements provided do
not conform to the representations made by the candidate to be
acquired in the closing documents, the closing documents will
provide that the proposed transaction will be voidable, at the
discretion of the present management of the Company. If such
transaction is voided, the agreement will also contain a provision
providing for the acquisition entity to reimburse the Company for
all costs associated with the proposed transaction.
Employees
During the fiscal year ended April 30, 1997, the Company had
two nonsalaried employees, its President and its Secretary. See
"PART II, Item 9 - Directors, Executive Officers, Promoters and
Control Persons; Compliance With Section 16(a) of the Exchange
Act."
ITEM 2. DESCRIPTION OF PROPERTY
Facilities. The Company operates from offices located at 6
Venture, Suite 207, Irvine, CA 92718. This space is provided to
the Company on a rent free basis by Bryan A. Gianesin, legal
counsel to the Company, and it is anticipated that this arrangement
will remain until such time as the Company successfully consummates
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a merger or acquisition. See "PART II, Item 7 - Financial
Statements." The Company reimburses its legal counsel for any out-
of-pocket costs incurred by him on behalf of the Company, such as
long distance telephone toll charges, office supplies and small,
miscellaneous expenses, provided that sufficient funds for the same
are available. As of the date of this report, the Company has no
funds available to reimburse any person for expenses. However, the
Company's attorney has agreed to continue to advance any necessary
costs until the Company successfully consummates a merger or
acquisition.
Other Property. The Company owns no other property.
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings which are pending or
have been threatened against the Company of which management is
aware as of the date of this report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In May 1996, the Company's Board of Directors called a special
meeting of the Company's shareholders in order to obtain approval
of various matters, including approval of the reorganization
between the Company and Suarro, as well as authorizing various
amendments to the Company's Articles of Incorporation. All matters
presented to the Company's shareholders were approved. However,
subsequent to approval, the reorganization between the Company and
Suarro was rescinded. See "PART I, Item 1 - Description of
Business," above for a more detailed description of these events.
The amendments authorized at the meeting of shareholders remain in
effect.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
(a) Market Information. The Company's common stock was
approved for trading on the OTC Bulletin Board operated by the
National Association of Securities Dealers in April 1997. Prior to
that date none of the Company's securities were traded. The
initial price of the Company's common stock at April 30, 1997, was
$5.25 bid, $6.00 asked. Since April 30, 1997, the price of the
Company's common stock has not changed. The Company's common stock
presently trades under the symbol "SRRO".
(b) Holders. There are six (6) holders of the Company's
Common Stock, not including those persons or entities who hold
their securities in "street name."
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As of the date of this report all 1,000,000 shares of the
Company's Common Stock are eligible for sale under Rule 144
promulgated under the Securities Act of 1933, as amended, subject
to certain limitations included in said Rule. In general, under
Rule 144, a person (or persons whose shares are aggregated), who
has satisfied a two year holding period, under certain
circumstances, may sell within any three-month period a number of
shares which does not exceed the greater of one percent of the then
outstanding Common Stock or the average weekly trading volume
during the four calendar weeks prior to such sale. Rule 144 also
permits, under certain circumstances, the sale of shares without
any quantity limitation by a person who has satisfied a three-year
holding period and who is not, and has not been for the preceding
three months, an affiliate of the Company.
(c) Dividends.
(1) The Company has not paid any dividends on its Common
Stock. The Company does not foresee that the Company will have the
ability to pay a dividend on its Common Stock in the future until
such time as the Company successfully consummates a merger or
acquisition, of which there can be no assurance. In addition, once
such a merger or acquisition is so consummated, there can be no
assurance that the Company will pay any dividends on its
securities.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with
the Company's audited financial statements and notes thereto
included herein. In connection with, and because it desires to
take advantage of, the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company cautions
readers regarding certain forward looking statements in the
following discussion and elsewhere in this report and in any other
statement made by, or on the behalf of the Company, whether or not
in future filings with the Securities and Exchange Commission.
Forward looking statements are statements not based on historical
information and which relate to future operations, strategies,
financial results or other developments. Forward looking
statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are
beyond the Company's control and many of which, with respect to
future business decisions, are subject to change. These
uncertainties and contingencies can affect actual results and could
cause actual results to differ materially from those expressed in
any forward looking statements made by, or on behalf of, the
Company. The Company disclaims any obligation to update forward
looking statements.
15
<PAGE>
(a) Plan of Operation.
-----------------
The Company intends to seek to acquire assets or shares of an
entity actively engaged in business, in exchange for its
securities. As of the date of this report, management of the
Company has had preliminary discussions with potential merger or
acquisition candidates, but there is no definitive agreement
between the Company and any third party relevant thereto. In the
event the Company does enter into an agreement with such a third
party, the Board of Directors does intend to obtain certain
assurances of value of the target entity assets prior to
consummating such a transaction, with further assurances that an
audited financial statement would be provided within sixty days
after closing of such a transaction. Closing documents relative
thereto will include representations that the value of the assets
conveyed to or otherwise so transferred will not materially differ
from the representations included in such closing documents, or the
transaction will be voidable.
The Company has no full time employees. The Company's
President and Secretary have agreed to allocate a portion of their
time to the activities of the Company, without compensation. These
officers anticipate that the business plan of the Company can be
implemented by their devoting approximately 20 hours per month to
the business affairs of the Company and, consequently, conflicts of
interest may arise with respect to the limited time commitment by
such officers.
Because the Company presently has nominal overhead or other
material financial obligations, management of the Company believes
that the Company's short term cash requirements can be satisfied by
management injecting whatever nominal amounts of cash into the
Company to cover these incidental expenses. There are no
assurances whatsoever that any additional cash will be made
available to the Company through any means.
Year 2000 Disclosure
Many existing computer programs use only two digits to
identify a year in the date field. These programs were designed
and developed without considering the impact of the upcoming change
in the century. If not corrected, many computer applications could
fail or create erroneous results by or at the Year 2000. As a
result, many companies will be required to undertake major projects
to address the Year 2000 issue. Because the Company has no assets,
including any personal property such as computers, it is not
anticipated that the Company will incur any negative impact as a
result of this potential problem. However, it is possible that
this issue may have an impact on the Company after the Company
successfully consummates a merger or acquisition. Management
intends to address this potential problem with any prospective
merger or acquisition candidate. There can be no assurances that
16
<PAGE>
new management of the Company will be able to avoid a problem in
this regard after a merger or acquisition is so consummated.
ITEM 7. FINANCIAL STATEMENTS
17
<PAGE>
R.E. Bassie & Co.
Certified Public Accountants
- ------------------------------------------------------------------------------
Suarro Communications, Inc.
(A Development Stage Company)
Financial Statements
April 30, 1997 and 1996
(With Independent Auditor's
Report Thereon)
18
<PAGE>
Suarro Communications, Inc.
(A Development Stage Company)
Index
Independent Auditors' Report
Financial Statements:
Balance Sheets - April 30, 1997 and 1996
Statements of Operations - For the years ended April 30, 1997 and 1996,
and for the period from August 18, 1988 (date of inception) to
April 30, 1997
Statements of Stockholders' Equity - For the years ended April 30, 1997
and 1996, and for the period from August 18, 1988 (date of inception)
to April 30, 1997
Statements of Cash Flows - For the years ended April 30, 1997 and 1996,
and for the period from August 18, 1988 (date of inception) to April
30, 1997
Notes to Financial Statements
All schedules have been omitted because they are not applicable, not required,
or because the information is included in the financial statements or notes
thereto.
19
<PAGE>
R.E. Bassie & Co.
Certified Public Accountants
- ------------------------------------------------------------------------------
7171 Harwin Drive, Suite 306
Houston, Texas 77036-2197
Tel: (713) 266-0691 Fax: (713) 266-0692
E-Mail: [email protected]
Independent Auditors' Report
The Board of Directors
Suarro Communications, Inc.:
We have audited the financial statements of Suarro Communications, Inc. (a
Development Stage Company) as listed in the accompanying index. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above presents fairly, in
all material respects, the financial position of Suarro Communications, Inc.
as of April 30, 1997 and 1996, and the results of its operations and its cash
flows for the period from August 18, 1988 (date of inception) to April 30,
1997, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company is a newly organized development stage
corporation with limited capital. Successful development and marketing of the
Company's products and the procurement of additional financial is necessary
for the Company to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
s/R.E. Bassie & Co.
November 18, 1998
20
<PAGE>
<TABLE>
SUARRO COMMUNICATIONS, INC.
(A Development Stage Company)
Balance Sheets
April 30, 1997 and 1996
<CAPTION>
April 30, April 30,
1997 1996
--------- ---------
<S> <C> <C>
Assets
------
Cash $ 4,645 1,870
--------- ---------
Total assets $ 4,645 1,870
========= =========
Liabilities and Stockholders' Equity
------------------------------------
Liabilities 4,645 0
--------- ---------
Total liabilities 4,645 0
--------- ---------
Stockholders' equity (note 2):
Preferred stock, no par value. Authorized
1,000,000 shares; issued and outstanding,
0 shares 0 0
Common stock, $.001 par value. Authorized
20,000,000 shares; issued and outstanding,
1,000,000 shares 1,000 1,000
Additional paid-in capital 32,494 4,934
Deficit accumulated during the development
stage (33,494) (4,064)
--------- ---------
Total stockholders' equity 0 1,870
--------- ---------
Total liabilities and stockholders' equity 4,645 1,870
========= =========
<FN>
See accompanying notes to financial statements.
</TABLE>
21
<PAGE>
<TABLE>
SUARRO COMMUNICATIONS, INC.
(A Development Stage Company)
Statements of Operations
For the years ended April 30, 1997 and 1996, and for the
period from August 18, 1988 (date of inception) to April 30, 1997
<CAPTION>
August 18,
1988
Year ended Year ended (inception) to
April 30, April 30, April 30,
1997 1996 1997
---------- ---------- --------------
<S> <C> <C> <C>
Revenue $ 0 0 0
Expenses 29,430 1,782 33,494
---------- ---------- --------------
Net loss $ (29,430) (1,782) (33,494)
========== ========== ==============
<FN>
See accompanying notes to financial statements.
</TABLE>
22
<PAGE>
<TABLE>
SUARRO COMMUNICATIONS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
For the years ended April 30, 1997 and 1996
For the period from August 18, 1988 (date of inception) to April 30, 1997
<CAPTION>
Deficit
Accumulated
Paid-in during the Total
Preferred Common Capital Development Stockholders'
Stock Stock (Discount) Stage Equity
--------- ------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance, August 18,
1988 $ 0 0 0 0 0
Issuance of 50,000
shares of common
stock 0 50 2,232 0 2,282
Stock split,
20 to 1 0 950 (950) 0 0
Net loss 0 0 0 (2,282) (2,282)
--------- ------ ---------- ----------- -------------
Balance, April 30,
1995 0 1,000 1,282 (2,282) 0
Issuance of
5,200,000 shares
of common stock
(note 2) 0 5,200 (3,330) 0 1,870
Cancellation of
shares under
rescission
agreement
(note 5) 0 (5,200) 5,200 0 0
Contribution of
capital 0 0 1,782 0 1,782
Net loss 0 0 0 (1,782) (1,782)
--------- ------ ---------- ----------- -------------
Balance, April 30,
1996 0 1,000 4,934 (4,064) 1,870
Contribution of
capital 0 0 27,560 0 27,560
Net loss 0 0 0 (29,430) (29,430)
--------- ------ ---------- ----------- -------------
Balance, April 30,
1997 0 1,000 32,494 (33,494) 0
========= ====== ========== =========== =============
<FN>
See accompanying notes to financial statements.
</TABLE>
23
<PAGE>
<TABLE>
SUARRO COMMUNICATIONS, INC.
(A Development Stage Company)
Statements of Cash Flows
For the years ended April 30, 1997 and 1996, and for the
period from August 18, 1988 (date of inception) to April 30, 1997
<CAPTION>
August 18,
1988
Year ended Year ended (inception) to
April 30, April 30, April 30,
1997 1996 1997
---------- ---------- --------------
<S> <C> <C> <C>
Cash flows from operating activities:
Deficit accumulated during the
development stage $ (29,430) (1,782) (33,494)
Increase in accounts payable 4,645 0 0
---------- ---------- --------------
Net cash used in
operating activities $ (24,785) (1,782) (33,494)
---------- ---------- --------------
Cash flows from investing activities 0 0 0
Cash flows from financing activities
Contribution of capital 27,560 1,782 29,342
Issuance of common stock 0 1,870 4,152
---------- ---------- --------------
Net cash provided by
financing activities 27,560 3,652 33,494
---------- ---------- --------------
Net increase in cash 2,775 1,870 0
Cash, beginning of period 1,870 0 0
---------- ---------- --------------
Cash, end of period 4,645 1,870 0
========== ========== ==============
Supplemental disclosures:
Noncash investing and financing activities (note 2)
<FN>
See accompanying notes to financial statements.
</TABLE>
24
<PAGE>
SUARRO COMMUNICATIONS, INC.
(A Development Stage Company)
Notes to Financial Statements
April 30, 1997 and 1996
(1) Organization
Suarro Communications, Inc. (the Company), a Nevada corporation, was
incorporated on August 18, 1988, under the name of Solutions, Inc. The
Company as formed to evaluate, structure and complete a merger with, or
acquire a privately owned corporation.
(2) Merger
Effective August 16, 1996, the Company acquired all of the outstanding
common stock (300,000 shares of common stock) of Suarro Communications
Inc., a Texas Corporation ("Suarro"), by issuing 5,200,000 shares of its
authorized common stock. Suarro was incorporated effective March 1,
1996. As a result of the consummation of this share exchange, the
Company undertook a forward split of its common stock whereby 20 shares
of common stock was issued in exchange for 1 share of common stock,
increased its authorized capitalization to 20,000,000 shares of common
stock and authorized 1,000,000 shares of preferred stock, and changed
its name to Suarro Communications, Inc.
The merger was accounted for by the "pooling of interests" method of
accounting. As such, the financial statements of the Company were
retroactively restated to present the combination as of March 1, 1996.
(3) Development Stage Operations
The Company is currently in the development stage and has no significant
operations to date.
(4) Going Concern
The Company is a newly organized development stage corporation that has
not commenced operations as of April 30, 1997. This factor, together
with its limited capital, among others, indicate that the Company may be
unable to continue its operations without successful development and
marketing of the Company's products and the procurement of additional
financing.
The accompanying financial statements have been prepared on the
assumption that the Company will continue in business, which
contemplates the realization of assets through continuing operations
No adjustments have been made to reflect potentially lower realizable
value of assets should the Company be unable to continue its operations,
as the outcome of the above matter is not currently determinable.
(5) Subsequent Event
Effective September 9, 1997, the Company and the stockholders of Suarro
agreed to rescind the merger noted in note 2 above. Accordingly, the
Company returned the 300,000 shares of common stock to the shareholders
of Suarro and received back all 5,200,000 shares of its common stock
issued in the merger transaction. Once received, the Company cancelled
all 5,200,000 shares of common stock. The rescission of the prior
"pooling of interests" business combination was treated as a
"de-pooling." As such, the financial statements of the Company were
retroactively restated to treat the combination as though it had never
occurred.
25
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
On August 16, 1996, Kish, Leake & Associates, P.C., the
Registrant's independent accountant for the Registrant's two most
recent fiscal years, resigned. The Registrant's financial
statements for the last two years prepared by Kish, Leake &
Associates, P.C., contained no adverse opinion or disclaimer of
opinion, or was qualified as to uncertainty, audit scope, or
accounting principles.
Also on August 16, 1996, the Registrant engaged the accounting
firm of R. E. Bassie & Co. as the independent public accountants to
audit the Registrant's fiscal year ended April 30, 1996, as well as
future financial statements, to replace the firm of Kish, Leake &
Associates, P.C., which was the principal independent public
accountant as reported in the Registrant's Form 10-SB as filed with
the Securities & Exchange Commission. This change in independent
accountants was approved by the Board of Directors of the
Registrant.
There were no disagreements within the last two fiscal years
and subsequent periods with Kish, Leake & Associates, P.C., on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope of procedure, which disagreement(s),
if not resolved to the satisfaction of Kish, Leake & Associates,
P.C., would have caused that firm to make reference in connection
with its reports to the subject matter of the disagreement(s) or
any reportable events.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Directors are elected for one-year terms or until the next
annual meeting of shareholders and until their successors are duly
elected and qualified. Officers continue in office at the pleasure
of the Board of Directors.
The Directors and Officers of the Company as of the date of
this report are as follows:
Name Age Position
---- --- --------
Adam Stull 37 President, Director
Libby Stull 42 Secretary, Director
George Unwin 52 Director
26
<PAGE>
All Directors of the Company will hold office until the next
annual meeting of the shareholders and until successors have been
elected and qualified. Officers of the Company are elected by the
Board of Directors and hold office until their death or until they
resign or are removed from office.
Adam Stull and Libby Stull are brother and sister. Otherwise,
there are no other family relationships among the officers and
directors. There is no arrangement or understanding between the
Company (or any of its directors or officers) and any other person
pursuant to which such person was or is to be selected as a
director or officer.
(b) Resumes
Adam Stull, President and a director. Mr. Stull has held his
positions with the Company since he was elected on December 15,
1997. From October 1997 through the present, Mr. Stull has been a
partner of Goldberg Burke & Stull, LLP, Attorneys, Irvine,
California, engaged in the practice of law, emphasizing criminal
law and general business matters. Prior to that, Mr. Stull was a
partner in the firm of Stull & Stull, Bakersfield, California from
January 1994 to September 1997. From 1993 to 1994, Mr. Stull was
an assistant at Pacific Coast Chemicals, Berkeley, California. Mr.
Stull received a Juris Doctor degree from California Western School
of Law, San Diego in 1988 and a Bachelor of Arts degree from the
University of California, Santa Barbara in 1984.
Libby Stull, Secretary and Director. Ms. Stull has held her
position with the Company since she was elected on December 15,
1997. Since 1997, Ms. Stull has been employed by Goldberg Burke &
Stull, LLP, Attorneys, Irvine, California, engaged in the practice
of law, emphasizing civil litigation and general business matters.
Prior to that, Ms. Stull was a partner in the firm of Stull &
Stull, Bakersfield, California from 1994 to 1997. Ms. Stull was
engaged in a general law practice as a sole practitioner from 1990
to 1993. Ms. Stull received a Juris Doctor degree from Hastings
College of Law, San Francisco, California in 1981 and a Bachelor of
Arts, Political Science degree from UCLA in 1978.
George Unwin, Director. Mr. Unwin has held his position with
the Company since he was elected on December 15, 1997. Since 1993,
Mr. Unwin has been a self-employed, free-lance writer of
advertising and marketing materials in Southern California. He
creates advertising and marketing materials for a host of private
clients and has written advertising copy for numerous local
newspaper and magazine publishers.
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers, directors and person who own more than 10%
of the Company's Common Stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission.
27
<PAGE>
All of the aforesaid persons are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they
file. As of the date of this report, the Company has not received
any such filings from the applicable persons responsible for filing
these reports. However, it is believed that there has been no
change in each applicable persons' ownership of the Company's
securities since they acquired the same.
ITEM 10. EXECUTIVE COMPENSATION.
Remuneration
The following table reflects all forms of compensation for
services to the Company for the year ended April 30, 1997, of the
chief executive officer of the Company.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
____________________________
Annual Compensation Awards Payouts
_____________________ ____________________ _______
Securities
Other Under- All
Name Annual Restricted lying Other
and Compen- Stock Options/ LTIP Compen-
Principal Salary Bonus sation Award(s) SARs Payouts sation
Position Year ($) ($) ($) ($) (#) ($) ($)
__________ ____ ______ _____ ______ ________ _______ _______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael (2)
McAuliffe, 1997 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0
President &
Director(1) 1996 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0
_________________________
<F1>
(1) Mr. McAuliffe resigned his position with the Company in December 1997 as
part of the terms of the rescission of the Suarro transaction. See "PART I, Item
1 - Description of Business."
<F2>
(2) It is not anticipated that any executive officer of the Company will
receive compensation exceeding $100,000 until such time as the Company
successfully consummates a business combination.
</TABLE>
The Company maintains a policy whereby the directors of the
Company may be compensated for out of pocket expenses incurred by
each of them in the performance of their relevant duties. The
Company did not reimburse any director for such expenses during the
fiscal year ended April 30, 1997.
28
<PAGE>
In addition to the cash compensation set forth above, the
Company reimburses each executive officer for expenses incurred on
behalf of the Company on an out-of-pocket basis. The Company
cannot determine, without undue expense, the exact amount of such
expense reimbursement. However, such reimbursements did not
exceed, in the aggregate, $1,000 during fiscal year 1997.
There are no bonus or incentive plans in effect, nor are there
any understandings in place concerning additional compensation to
the Company's officers.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) and (b) Security Ownership of Certain Beneficial Owners
and Management.
The table below lists the beneficial ownership of the
Company's voting securities by each person known by the Company to
be the beneficial owner of more than 5% of such securities, as well
as by all directors and officers of the issuer. Unless otherwise
indicated, the shareholders listed possess sole voting and
investment power with respect to the shares shown.
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent of
Title of Class Owner Owner Class
- -----------------------------------------------------------------
Common Adam Stull(1) 1,000 .10%
6 Venture, Ste. 207
Irvine, CA 92618
Common Libby Stull(1) 1,000 .10%
6 Venture, Ste. 207
Irvine, CA 92618
Common George Unwin(1) 900 .09%
23721 Arjay Way
Laguna Niguel, CA 92618
Common Bryan A. Gianesin 301,300 30.00%
6 Venture, Ste. 207
Irvine, CA 92618
Common Joseph J. Thuney 300,000 30.00%
11506 NE 33rd Ave.
Vancouver, WA 98686
29
<PAGE>
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent of
Title of Class Owner Owner Class
- -----------------------------------------------------------------
Common Jim Thuney 395,800 39.50%
11017 NE Sherwood Dr.
Vancouver, WA 98686
Common All Officers and 2,900 .29%
Directors as a
Group (3 persons)
_______________________
(1) Officer and/or director.
The above named persons hold all of the 1,000,000 issued and
outstanding Common Shares of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
There were no related party transactions which occurred during
the past two years and which are required to be disclosed pursuant
to the requirements included under Item 404 of Regulation S-B.
PART IV
Item 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
--------
The following Exhibits were filed with the Securities and
Exchange Commission in the Exhibits to Form 10-SB, filed on or
about September 1, 1994, and are incorporated by reference herein:
3.1 Certificate and Articles of Incorporation
3.2 Bylaws
The following Exhibit was filed with the Securities and
Exchange Commission in the Exhibits to Form 8-K, filed on or about
June 6, 1996, and is incorporated by reference herein:
2.0 Letter of Intent between the Company and Suarro
Communications, Inc., a Texas corporation.
The following exhibit was included in the Company's Definitive
Proxy Statement filed with the Commission on or about August 16,
1996, and is hereby incorporated by reference thereto:
30
<PAGE>
2.1 Plan of Reorganization between the Company and Suarro
Communications, Inc.
The following exhibit was included in the Company's Form 8-K
filed with the Commission on or about August 28, 1996, and is
hereby incorporated by reference thereto:
16 Letter from Kish, Leake & Associates, P.C., resigning as
independent accountant for the Company.
The following exhibits are included herewith:
2.2 Rescission Agreement dated September 9, 1997
3.3 Certificate of Amendment to Articles of Incorporation
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
The Company did not file any reports on Form 8-K during the
three month period ended April 30, 1997.
31
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on
December 31, 1998.
SUARRO COMMUNICATIONS, INC.
(Registrant)
By:/s/ Adam Stull
-------------------------------
Adam Stull, President
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the Registrant
and in the capacities indicated on December 31, 1998.
/s/ Adam Stull
- --------------------------------
Adam Stull, Director
/s/ Libby Stull
- --------------------------------
Libby Stull, Director
/s/ George Unwin
- --------------------------------
George Unwin, Director
32
<PAGE>
<PAGE>
SUARRO COMMUNICATIONS, INC.
Exhibit Index to Annual Report on Form 10-KSB
For the Fiscal Year Ended April 30, 1997
EXHIBITS Page No.
2.2 Rescission Agreement dated September 9, 1997 . . . 34
3.3 Certificate of Amendment to Articles
of Incorporation . . . . . . . . . . . . . . 45
27 Financial Data Schedule . . . . . . . . . . . . . 47
33
<PAGE>
SUARRO COMMUNICATIONS, INC.
___________________________
EXHIBIT 2.2
___________________________
RESCISSION AGREEMENT
BETWEEN THE COMPANY AND
SUARRO COMMUNICATIONS, INC.
____________________________
34
<PAGE>
RESCISSION AGREEMENT
--------------------
THIS RESCISSION AGREEMENT (herein "Agreement") is entered into
this 9th day of September , 1997 by and among Lee R. Goldberg,
Bryan A. Gianesin, Mary Jackson, Gerard Jackson, Anne Marie South
Gianesin and Julie Studebaker (herein "Shareholders"), and Michael
D. McAuliffe and Christian E. Zenner (herein "Texas Shareholders")
(all parties hereto are collectively referred to as the "Parties"),
with reference to the following:
RECITALS
--------
A. Various disputes have arisen among the Parties with
respect to Suarro Communications, Inc., a Nevada corporation,
(herein "Company") described more particularly in a document
entitled Mutual Release and Indemnity Agreement (herein for
convenience "Settlement Agreement").
B. As part of the Settlement Agreement, the Parties hereto
have agreed to execute this Agreement and to undertake all acts
necessary to fulfill their duties and responsibilities under the
terms of this Agreement.
C. The intent of this Agreement is to resolve all
outstanding matters respecting the management, officer and director
positions of the Company and to resolve all matters respecting the
shares of Company common stock issued to the Texas Shareholders.
D. To fully sanction the actions taken pursuant to the terms
of this Agreement, the Parties agree to execute all necessary
documents, including but not limited to, Stipulation for a
Dismissal of Cause No. CV-97-05053 entitled Lee R. Goldberg, et al.
v. Suarro Communications, Inc., et al. in Second Judicial District
Court of the State of Nevada in and for the County of Washoe
("Nevada Litigation").
AGREEMENT
---------
NOW, THEREFORE, the Parties agree as follows:
1. Rescission of Share Exchange Agreement and Plan of
Reorganization. On or about August 16, 1996, the Parties executed
a document entitled Share Exchange Agreement and Plan of
Reorganization (herein "Merger Agreement").
a. Stock Exchange. Pursuant to the Merger Agreement,
the Company issued to each of the Texas Shareholders 2,600,000
shares of common stock of the Company in exchange for a total of
300,000 shares of common stock of Suarro Communications, Inc., a
Texas corporation (the "Corporation"), which constituted all of the
issued and outstanding shares of the Texas entity.
1
35
<PAGE>
b. Suarro, Texas Stock Certificates Received. On or
about June 3, 1997, the Shareholders rescinded the Merger
Agreement, and Gianesin & Associates, Attorneys at Law, Bryan A.
Gianesin, returned all of the original stock certificates
representing the 300,000 shares of the Corporation to the Texas
Shareholders (herein "Certificates"). The Texas Shareholders
hereby acknowledge receipt of the Certificates.
c. Delivery of Company Stock Certificates. At Closing,
the Texas Shareholders shall deliver all original stock
certificates issued to them by the Company in the Merger Agreement
(or any other Company stock certificates derived therefrom)
totaling 5,200,000 shares of common stock of the Company and stock
or any other security of the Company issued to them between August
16, 1996 and the Closing Date (herein collectively the "Texas
Stock"). The Texas Shareholders agree that the Texas Stock may be
immediately canceled by the Company. The Shareholders hereby
acknowledge receipt of the Texas Stock.
d. Execution of Minutes/Resignations. To further the
purposes of this Agreement, the Texas Shareholders agree to execute
the Board of Director Minutes in the form and content attached
hereto as Exhibit "A" which shall confirm the adoption of this
Agreement, resignation of their positions as officers and directors
of the Company.
2. Effective Date of Agreement. The effective date of the
transactions and obligations described in this Agreement (herein
the "Closing") will occur upon the execution by all Parties of this
Agreement. The date upon which the Agreement will be effective is
sometimes referred to herein as the "Closing Date."
3. Shareholders' Closing Conditions. The Shareholders'
obligation to complete the rescission and subsequent transactions
described in this Agreement is subject to satisfaction on the
Closing Date of each of the following conditions, unless waived in
writing by all of the Shareholders.
a. Representations and Warranties Accurate. The
representations and warranties of the Texas Shareholders set forth
in this Agreement will be accurate in all material respects on and
as of the Closing Date.
b. Performance. The Texas Shareholders will have
performed all obligations and complied with all covenants required
to be performed or to be complied with by the Texas Shareholders
under this Agreement as of the Closing Date.
c. Texas Shareholders' Shares. The Texas Stock as and
when delivered to the Shareholders shall be owned free and clear by
the Texas Shareholders, free from all options, purchase or sale
agreements, claims, assessments, liens, or encumbrances of any
nature whatsoever.
4. Texas Shareholders' Closing Conditions. The Texas
Shareholders' obligation to complete the rescission and the
subsequent transactions described in this Agreement is subject to
the satisfaction on or before the Closing Date of each of the
following conditions, unless waived in writing by the Texas
Shareholders.
2
36
<PAGE>
a. Representations and Warranties Accurate. The
representations and warranties of the Shareholders set forth in
this Agreement will be accurate in all material respects on and as
of the Closing Date.
b. Performance. Shareholders will have performed all
material obligations and complied with all material covenants
required to be performed or to be complied with by the Shareholders
under this Agreement as of the Closing Date.
c. Delivery of Settlement Agreements and Share
Certificates. The Shareholders shall have delivered to the Texas
Shareholders all settlement agreements and documentation, including
share certificates to be delivered pursuant to the Settlement
Agreement.
5. Texas Shareholders' Representations and Warranties. Each
of the Texas Shareholders, jointly and severally, represent,
warrant and agree as follows:
a. Company Debts/Obligations/Liabilities. Between
August 16, 1996 and the Closing Date, neither of the Texas
Shareholders have incurred or authorized any debt or any other
obligation whatsoever on behalf of the Company, (except the
obligations to Foothill Equities Corporation, Stewart Financial
Group, Roger Stewart, and 4-Y Investments all as described in the
Settlement Agreement) including claimed or alleged debts or
obligations, of any kind or character or with respect to which
Company may be, or as claimed or alleged to be, a guarantor or
surety.
b. Company Contracts /Leases. Neither of the Texas
Shareholders between August 16, 1996 and the Closing Date, has
executed or authorized any contract, lease or other legally binding
obligation by and on behalf of the Company, express or contingent,
of any kind or character, which would obligate the Company to pay
any money, provide any labor, services, materials, reports,
software, equipment or any other tangible or intangible item of
value to any person or entity whatsoever.
c. Compensation . Between August 16, 1996 and the
Closing Date, neither of the Texas Shareholders has made or
authorized any agreement, arrangement or provision with the Company
for the payment to either of the Texas Shareholders or any third
party of any amount of wages, salary, employee benefits or any
other kind of compensation of any nature whatsoever.
d. Benefits. Between August 16, 1996 and the Closing
Date, neither of the Texas Shareholders has made or authorized any
agreement, arrangement or provision with the Company whereby the
Company would be obligated to the Texas Shareholders or any third
party, for any retirement, pension, profit sharing, incentive
compensation, bonus, deferred compensation, health, welfare or
other benefit plan, including without limitation, any such benefit
programs required by any government or any branch, subdivision,
municipality or agency thereof.
e. Real/Personal Property Contracts/Leases. Between
August 16, 1996 and the Closing Date, neither of the Texas
Shareholders has entered into or authorized any agreement or lease
whatsoever for the ownership, use or lease of real or personal
property on behalf of the Company.
3
37
<PAGE>
f. Pending or Threatened Litigation. Other than the
matters described in the Settlement Agreement as the Texas
Litigation, the Nevada Litigation and the Oregon Litigation,
neither of the Texas Shareholders has instituted or authorized
institution of any pending or threatened litigation, arbitration or
other judicial or quasi judicial proceedings or administrative
proceedings to which Company or any of the Texas Shareholders is or
may be a party relating to the Company, or to which Company or any
of the shareholders of the Company is or may be subject.
g. Receivables. Neither of the Texas Shareholders has
incurred or authorized any Company accounts receivable.
h. Proprietary Rights. As of the Closing Date, the
Texas Shareholders and/or any other entity or designee of the Texas
Shareholders, has received from the Company all computer
programming, software, trade names, service names, trademarks,
service marks, logos, copyrights, patents, technology, know-how,
and all other proprietary rights or processes owned or delivered to
the Company as part of the Merger Agreement and no claims exist by
the Texas Shareholders against the Company for any of the
Proprietary Rights described hereinabove.
i. Assets/Equipment/Bank Accounts. Company has
delivered and the Texas Shareholders have received, all assets,
whether tangible or intangible, equipment and proceeds of any bank
accounts contributed to the Company by the Texas Shareholders and
there remains no obligation by the Company or the Shareholders to
deliver to the Texas Shareholders any other tangible or intangible
assets whatsoever.
j. Company Securities. Between August 16, 1996 and the
Closing Date, neither of the Texas Shareholders has issued or
authorized issuance of any note, stock, warrant, option, treasury
stock, bond, debenture, evidence of indebtedness, or participation
in any profit sharing agreement, collateral-trust certificate, any
ownership interest in the Company or instrument commonly known as
a "Security".
k. Tax Information/Returns. Between August 16, 1996
and the Closing Date, neither of the Texas Shareholders has filed
or authorized filing of any state or federal income tax or other
return of any kind whatsoever.
l. Company Books and Records. As of the Closing Date,
the Texas Shareholders have delivered to the Shareholders, all of
the Company Financial Books and Records in their actual or
constructive possession.
m. Corporate Status. As of the Closing Date, the Texas
Shareholders have not qualified the Company as a foreign
corporation to do business in the State of Texas or any other state
or territory.
n. Agreement Not a Breach. To the knowledge of the
Texas Shareholders, the execution of this Agreement and the
performance hereof, will not conflict with, violate or result in
any breach of any of the terms, conditions or provisions of, or
constitute a default or result in the
4
38
<PAGE>
acceleration of any obligation under, or permit termination of, any
agreement or instrument entered into or authorized by the Texas
Shareholders, to which Company is a party or by which Company is
bound.
o. No Misleading Statements. No statement,
representation or warranty made herein by the Texas Shareholders
contains any untrue or misleading statement of a material fact, or
omits to state a material fact necessary to make the statements,
representations or warranties made herein not misleading.
p. Indemnity. The Texas Shareholders agree to defend,
indemnify and hold Shareholders, and their agents, employees,
attorneys, officers and directors, harmless from and against any
liability, claim, damage, loss, penalty, cost or expense
(including, without limitation, attorneys' fees and costs
(including appeal)) arising out of any breach of the foregoing
representations.
6. Shareholders' Representations and Warranties. The
Shareholders represent, warrant and agree as follows:
a. Company Debts/Obligation/Liabilities. Between
August 16, 1996 and the Closing Date, none of the Shareholders have
incurred any debt or any other obligation whatsoever on behalf of
the Company or the Corporation, (except the obligations to Foothill
Equities Corporation, Stewart Financial Group, Roger Stewart, and
4-Y Investments all as described in the Settlement Agreement)
including claimed or alleged debts or obligations, of any kind or
character or with respect to which Company or the Corporation may
be, or as claimed or alleged to be, a guarantor or surety.
b. Company Contracts /Leases. None of the Shareholders
between August 16, 1996 and the Closing Date, have executed any
contract, lease or other legally binding obligation by and on
behalf of the Company or the Corporation, express or contingent, of
any kind or character, which would obligate the Company to pay any
money, provide any labor, services, materials, reports, software,
equipment or any other tangible or intangible item of value to any
person or entity whatsoever.
c. Compensation . Between August 16, 1996 and the
Closing Date, none of the Shareholders have made any agreement,
arrangement or provision with the Company or the Corporation for
the payment to any of the Shareholders or any third party of any
amount of wages, salary, employee benefits or any other kind of
compensation of any nature whatsoever.
d. Benefits. Between August 16, 1996 and the Closing
Date, none of the Shareholders have made any agreement, arrangement
or provision with the Company or the Corporation whereby the
Company or the Corporation would be obligated to the Shareholders
or any third party, for any retirement, pension, profit sharing,
incentive compensation, bonus, deferred compensation, health,
welfare or other benefit plan, including without limitation, any
such benefit programs required by any government or any branch,
subdivision, municipality or agency thereof.
5
39
<PAGE>
e. Real/Personal Property Contracts/Leases. Between
August 16, 1996 and the Closing Date, none of the Shareholders have
entered into any agreement or lease whatsoever for the ownership,
use or lease of real or personal property on behalf of the Company
or the Corporation.
f. Pending or Threatened Litigation. Other than the
matters described in the Settlement Agreement as the Texas
Litigation, the Nevada Litigation, and the Oregon Litigation, none
of the Shareholders have instituted or authorized institution of
any pending or threatened litigation, arbitration or other judicial
or quasi judicial proceedings or administrative proceedings to
which Company or the Corporation or any of the Texas Shareholders
is or may be a party relating to the Company or the Corporation, or
to which Company or the Corporation or any of the Texas
Shareholders of the Company or the Corporation is or may be
subject.
g. Receivables. None of the Shareholders have incurred
or authorized any Company or Corporation accounts receivable.
h. Proprietary Rights. As of the Closing Date, the
Company and/or the Shareholders and/or any other entity or designee
of the same, have received from the Texas Shareholders all computer
programming, software, trade names, service names, trademarks,
service marks, logos, copyrights, patents, technology, know-how,
and all other proprietary rights or processes owned or delivered to
the Company as part of the Merger Agreement by the Shareholders, or
their agents or attorneys, and no claims exist by the Shareholders
or any other third party against the Texas Shareholders for any of
the Proprietary Rights described hereinabove.
i. Assets/Equipment/Bank Accounts. Company has
received, and the Shareholders acknowledge Company's receipt of,
all assets, whether tangible or intangible, equipment and proceeds
of any bank accounts, if any, payable by the Texas Shareholders to
the Company and/or the Shareholders, and there remains no
obligation by the Texas Shareholders to deliver to the Company
and/or the Shareholders any other tangible or intangible assets
whatsoever.
j. Company Securities. Between August 16, 1996 and the
Closing Date, none of the Shareholders have issued or authorized
issuance of any note, stock, warrant, option, treasury stock, bond,
debenture, evidence of indebtedness, or participation in any
profit-sharing agreement, collateral-trust certificate, any
ownership interest in the Company or the Corporation or instrument
commonly known as a "Security".
k. Tax Information/Returns. Between August 16, 1996
and the Closing Date, none of the Shareholders have filed or
authorized filing of any state or federal income tax or other
return of any kind whatsoever.
l. Company Books and Records. As of the Closing Date,
the Shareholders acknowledge receipt of all of the Company
Financial Books and Records formerly in the possession of the Texas
Shareholders.
6
40
<PAGE>
m. Corporate Status. As of the Closing Date, the
Shareholders have not qualified the Company or the Corporation as
a foreign corporation to do business in the State of Texas or any
other state or territory.
n. Agreement Not a Breach. To the knowledge of the
Shareholders, the execution of this Agreement and the performance
hereof, will not conflict with, violate or result in any breach of
any of the terms, conditions or provisions of, or constitute a
default or result in the acceleration of any obligation under, or
permit termination of, any agreement or instrument entered into or
authorized by the Shareholders, to which Company or the Corporation
is a party or by which Company or the Corporation is bound.
o. No Misleading Statements. No statement,
representation or warranty made herein by the Shareholders contains
any untrue or misleading statement of a material fact, or omits to
state a material fact necessary to make the statements,
representations or warranties made herein not misleading.
p. Indemnity. The Shareholders agree to defend,
indemnify and hold the Texas Shareholders, and their agents,
employees, attorneys, officers and directors, harmless from and
against any liability, claim, damage, loss, penalty, cost or
expense (including, without limitation, attorneys' fees and costs
(including appeal)) arising out of any breach of the foregoing
representations.
7. Access to Records and Properties. The Texas Shareholders
and the Shareholders may, prior to the Closing Date, through its
employees, agents or representatives, make or cause to be made such
investigation of the Company or the Corporation or any materials
delivered or to be delivered hereunder as they deem necessary or
advisable.
8. Public Press Releases/Announcements. Neither of the
Texas Shareholders nor Shareholders shall make any press release or
public announcement concerning this Agreement and all right,
ability and any content of any press release or announcement shall
be approved by both the Texas Shareholders and the Shareholders.
9. Survival of Representations and Warranties. The
respective representations and warranties made by each of the
Parties to this Agreement will survive the execution and delivery
of this Agreement, the Settlement Agreement, the Closing Date and
the receipt of the Texas Stock or the Certificates.
10. Legal Expenses. Each of the Parties hereto shall bear
their own expenses incurred relative to this Agreement and the
transactions described herein, including without limitation, fees
for attorneys and accountants or other consultants (collectively,
"Expenses").
11. Notices. All notices, requests, demands or other
communication (collectively, "Notice") given to any party pursuant
to this Agreement shall not be effective unless given in writing
and addressed to the parties at their respective addresses as set
forth below.
7
41
<PAGE>
If to Shareholders: Bryan A. Gianesin
Gianesin & Associates
6 Venture, Suite 207
Irvine, CA 92618
If to Texas Shareholders: Raul M. Rodriguez
Rosenberg, Tuggey, Agather,
Rosenthal & Rodriguez, P.C.
140 E. Houston Street, 2nd
Floor
San Antonio, Texas 78205
Notice shall be deemed duly given when delivered personally or
by telegram, telex or courier or Federal Express, or, if mailed, 72
hours after deposit in the United States mail, certified mail,
postage prepaid. The addresses of the parties for the purpose of
providing notice pursuant to this paragraph may be changed from
time to time by notice to the other party duly given in the
foregoing manner.
12. Further Documents and Acts. Each of the parties hereto
agrees to cooperate in good faith with the other, and to execute
and deliver such further instruments and perform such other acts as
may be reasonably necessary or appropriate to consummate and carry
into effect the transactions contemplated by this Agreement.
13. Specific Performance. If any of the Parties to this
action fails to provide information or otherwise cooperate in the
good faith performance of this Agreement, in addition to any of the
remedies allowed by law or equity, the aggrieved Party shall be
entitled to seek specific performance of the Agreement.
14. Attorneys' Fees. The prevailing party in any action,
litigation or proceeding arising out of or in relation to this
Agreement, shall be awarded, in addition to any damages, injunc-
tions or other relief, and without regard to whether or not such
matter be prosecuted to final judgment, such party's costs,
expenses and attorneys' fees.
15. Choice of Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Nevada,
including all matters of construction, validity, performance and
enforcement, without giving effect to principles of conflict of
laws.
16. Amendments/Waiver. This Agreement may be amended, sup-
plemented, modified or rescinded only through an express written
instrument signed by all the parties or their respective successors
and assigns. Each Party may specifically and expressly waive in
writing any portion of this Agreement or any breach hereof, but no
such waiver shall constitute a further or continuing waiver of any
preceding or succeeding breach of the same or any other provision.
The consent by one Party to any act for which such consent was
required shall not be deemed to imply consent or waiver of the
necessity of obtaining such consent for the same or similar acts in
the future.
8
42
<PAGE>
17. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
18. Severability. Each provision of this Agreement is
intended to be severable and if any term or provision hereof is
determined invalid or unenforceable for any reason, such illegality
or invalidity shall not affect the validity of the remainder of
this Agreement and, wherever possible, intent shall be given to the
invalid or unenforceable provision.
19. Entire Agreement. This Agreement contains the entire and
complete understanding between the Parties concerning its subject
matter and all representations, agreements, arrangements or unders-
tandings between or among the Parties, whether oral or written,
have been fully and completely merged herein and are superseded
hereby.
20. Successors. This Agreement will be binding upon and
insure to the benefit of the Parties and their respective heirs,
legatees, legal representatives, personal representatives,
successor and assigns.
21. Interpretation/ Recitals. The Parties are not joint
venturers, partners or fiduciaries of one another in any manner.
The language in all parts of this Agreement will be in all cases
construed simply according to its fair meaning and not strictly for
or against any party. Whenever the context requires, all words
used in the singular will be construed to have been used in the
plural, and vice versa, and each gender will include any other
gender. The captions of the sections of this Agreement are for
convenience only and will not affect the construction or
interpretation of any of the provisions herein. The Recitals
herein shall be deemed to be part of the Agreement.
22. Signatories Authority. Each of the individuals signing
this agreement represent and warrant to the others that he or she
has the right, capacity, power and authority to sign this Agreement
on his or her behalf, or on behalf of the Company, as the case may
be, and to execute all other documents and perform all other acts
as may be necessary in relation to the performance of this
Agreement.
23. Miscellaneous. The recitals and all exhibits, schedules,
attachments or other documents referenced in this Agreement are
fully incorporated into this Agreement by reference. Unless
expressly set forth otherwise herein, all references herein to a
"day," "month" or "year" will be deemed to be a reference to a
calendar day, month or year, as the case may be. All cross-
references herein will refer to provisions within this Agreement,
and will not be deemed to be references to the overall transaction
or to any other agreement or document. Time is of the essence in
the performance of this Agreement.
9
43
<PAGE>
IN WITNESS WHEREOF, the Parties have signed this Agreement all
as of the date first above written.
s/Lee R. Goldberg
SHAREHOLDERS: ______________________________
Lee R. Goldberg
s/Bryan A. Gianesin
______________________________
Bryan A. Gianesin
s/AnneMarie South Gianesin
______________________________
AnneMarie South Gianesin
s/Mary Jackson
______________________________
Mary Jackson
s/Gerard Jackson
______________________________
Gerard Jackson
s/Julie Studebaker
______________________________
Julie Studebaker
s/Michael D. McAuliffe
TEXAS SHAREHOLDERS: ______________________________
Michael D. McAuliffe
s/Christian E. Zenner
______________________________
Christian E. Zenner
10
44
<PAGE>
SUARRO COMMUNICATIONS, INC.
___________________________
EXHIBIT 3.3
___________________________
CERTIFICATE OF AMENDMENT
OF ARTICLES OF INCORPORATION
___________________________
45
<PAGE>
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock) Filed by:
SOLUTIONS INCORPORATED
----------------------------------------------------------------
Name of Corporation
We the undersigned RANDEL C. SHERWOOD and
----------------------------------------------------
SUZANNE R. JOHNSON of SOLUTIONS INCORPORATED
- ---------------------------------- -----------------------------------------
do hereby certify.
That the Board of Directors of said corporation at a meeting duly convened,
held on the 16th day of August , 19 96, adopted a resolution
---------- ------------------- ---
to amend the original articles as follows:
Article II is hereby amended to read as follows: The name of this
Corporation is "SUARRO COMMUNICATIONS, INC."
Article V is hereby amended to read as follows:
------
AUTHORIZED SHARES
A. This corporations is authorized to issue two (2) classes of shares which
shall be designated as "Common Shares" and "Preferred Shares". The
aggregate number of theses shares which the corporation shall have the
authority to issue is as follows:
1. 20,000,000 Common Shares, par value$.001
2. 1,000,000 Preferred Shares, no par value
SALES TO OFFICERS AND EMPLOYEES
C. This section is omitted.
The number of shares of the corporation outstanding and entitled to vote on
an amendment to the Articles of Incorporation is 50,000 , that the said
---------
change(s) and amendment have been consent to and approved by a majority of the
stockholders holding at least a majority of each class of stock outstanding
and entitled to vote thereon.
s/Randel C. Sherwood
---------------------------------------
President or Vice President
s/Suzanne R. Johnson
---------------------------------------
Secretary or Assistant Secretary
State of CA )
------------------ : ss.
County of Orange )
-----------------
On 8-19-96 , personally appeared before me, a Notary Public,
-----------------------
Randel C. Sherwood , who acknowledged
- -----------------------------------------------------------
that they executed the above instrument.
s/Chow T. Ling s/Chow T. Ling
Comm. #999135 ---------------------------------------
Notary Public for California Signature of Notary
Orange County
My Comm. Expires Jul 5, 1997
(Notary Stamp or Seal)
46
SUARRO COMMUNICATIONS, INC.
___________________________
EXHIBIT 27
___________________________
FINANCIAL DATA SCHEDULE
___________________________
47
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED APRIL 30, 1997, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> APR-30-1997
<CASH> 4,645
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,645
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,645
<CURRENT-LIABILITIES> 4,645
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> 32,494
<TOTAL-LIABILITY-AND-EQUITY> 4,645
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 29,430
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (29,430)
<INCOME-TAX> 0
<INCOME-CONTINUING> (29,430)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (29,430)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> 0
</TABLE>
