U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 000-28399
NORSTAR GROUP, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
UTAH 59-1643698
---- ----------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4101 RAVENSWOOD RD, SUITE 128, FT. LAUDERDALE, FLORIDA 33312
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (954) 772-0240
CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED BY
SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT DURING THE PAST 12 MONTHS
(OR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),
AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES [X] NO [ ]
AT AUGUST 13, 2002 THERE WERE ISSUED AND OUTSTANDING 25,793,825
SHARES OF COMMON STOCK.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): YES [ ] NO [X]
NorStar Group, Inc. and Subsidiaries
Index to Unaudited Condensed Financial Statements
-------------------------------------------------
PAGE
----
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheet at June 30, 2002
(Unaudited) F-1
Condensed Consolidated Statements of Operations
Six and Three Months Ended June 30, 2002 and 2001 (Unaudited) F-2
Condensed Statement of Changes in Stockholders' Equity (Deficiency)
Six Months Ended June 30, 2002 (Unaudited) F-3
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2002 and 2001 (Unaudited) F-4
Notes to Condensed Consolidated Financial Statements (Unaudited) F-5/7
Part II - Other Information
Item 1. Legal proceedings 6
Item 2. Changes in Securities 6
Item 3. Default in Senior Securities 6
Item 4. Submission of Matters to a Vote of Security Holders 6
Item 5. Other Information 6
Item 6. Exhibits and Reports on Form 8-K 6
SIGNATURES 7
2
NorStar Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
June 30, 2002 (Unaudited)
Assets
------
Current assets - cash $ 2,144
Equipment, net of accumulated depreciation of $2,797 1,397
Capitalized web site development costs 238,391
Mineral rights, at estimated net realizable value --
------------
Total $ 241,932
============
Liabilities and Stockholders' Deficiency
----------------------------------------
Current liabilities:
Noninterest bearing demand notes payable to stockholders $ 204,944
Accounts payable and accrued expenses 37,896
------------
Total 242,840
------------
Commitments and contingencies
Stockholders' deficiency:
Class A convertible preferred stock, par value $10 per
share; 1,000,000 shares authorized; none issued --
Class B preferred stock, par value $10 per share;
1,000,000 shares authorized; none issued --
Common stock, par value $.01 per share; 150,000,000
shares authorized; 20,743,825 shares issued and outstanding 207,438
Additional paid-in capital 6,222,590
Accumulated deficit (6,430,936)
------------
Total stockholders' deficiency (908)
------------
Total $ 241,932
============
See Notes to Condensed Consolidated Financial Statements.
F-1
NorStar Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Six and Three Months Ended June 30, 2002 and 2001
(Unaudited)
Six Months Ended Three Months Ended
June 30, June 30,
----------------------------- -----------------------------
2002 2001 2002 2001
------------- ------------- ------------- -------------
Revenues $ -- $ -- $ -- $ --
------------- ------------- ------------- -------------
Operating expenses:
Selling -- 141,375 -- 15,708
General and administrative 28,804 50,202 7,564 20,057
Research and development 4,641 32,799 641 15,799
------------- ------------- ------------- -------------
Totals 33,445 224,376 8,205 51,564
------------- ------------- ------------- -------------
Net loss $ (33,445) $ (224,376) $ (8,205) $ (51,564)
============= ============= ============= =============
Basic net loss per common share $ ( - ) $ (.01) $ ( - ) $ ( - )
============= ============= ============= =============
Basic weighted average common
shares outstanding 20,743,825 18,743,825 20,743,825 18,743,825
============= ============= ============= =============
See Notes to Condensed Consolidated Financial Statements.
F-2
NorStar Group, Inc. and Subsidiaries
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficiency)
Six Months Ended June 30, 2002
(Unaudited)
Common Stock
-------------------------- Additional
Number of Paid-in Accumulated
Shares Amount Capital Deficit Total
------------ ------------ ------------ ------------ ------------
Balance, January 1, 2002 20,743,825 $ 207,438 $ 6,222,590 $(6,397,491) $ 32,537
Net loss -- -- -- (33,445) (33,445)
------------ ------------ ------------ ------------ ------------
Balance, June 30, 2002 20,743,825 $ 207,438 $ 6,222,590 $(6,430,936) $ (908)
============ ============ ============ ============ ============
See Notes to Condensed Consolidated Financial Statements.
F-3
NorStar Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2002 and 2001
(Unaudited)
2002 2001
---------- ----------
Operating activities:
Net loss $ (33,445) $(224,376)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization of unearned compensation -- 141,375
Depreciation 700 700
Changes in operating liabilities - accounts payable
and accrued expenses (8,597) 12,120
---------- ----------
Net cash used in operating activities (41,342) (70,181)
Financing activities - proceeds from issuance of notes
payable to stockholders 41,000 66,809
---------- ----------
Net decrease in cash (342) (3,372)
Cash, beginning of period 2,486 17,483
---------- ----------
Cash, end of period $ 2,144 $ 14,111
========== ==========
See Notes to Condensed Consolidated Financial Statements.
F-4
NorStar Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 - Business and basis of presentation:
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments, consisting
of normal recurring accruals, necessary to present fairly the financial
position of NorStar Group, Inc. and its subsidiaries (the "Company") as
of June 30, 2002, and the Company's results of operations for the six
and three months ended June 30, 2002 and 2001, changes in stockholders'
equity (deficiency) for the six months ended June 30, 2002 and cash
flows for the six months ended June 30, 2002 and 2001. Pursuant to the
rules and regulations of the United States Securities and Exchange
Commission (the "SEC"), certain information and disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed in or omitted from these consolidated financial statements
unless significant changes have taken place since the end of the most
recent fiscal year. Accordingly, these unaudited condensed consolidated
financial statements should be read in conjunction with the audited
consolidated financial statements as of December 31, 2001 and for the
years ended December 31, 2001 and 2000 and the notes thereto (the
"Audited Financial Statements") and the other information included in
the Company's Annual Report on Form 10-KSB (the "Form 10-KSB") for the
year ended December 31, 2001.
The results of operations for the six and three months ended June 30,
2002 are not necessarily indicative of the results to be expected for
the full year ending December 31, 2002.
The accompanying condensed consolidated financial statements have been
prepared assuming that the Company will continue as a going concern.
However, the Company has not generated any significant revenues on a
sustained basis from its current operations. Management estimates that
the Company will not begin to generate revenues from sales of
memberships to subscribers until the fourth quarter of the year ending
December 31, 2002. As shown in the accompanying condensed consolidated
financial statements, the Company incurred net losses of approximately
$33,000 and $224,000 for the six months ended June 30, 2002 and 2001,
respectively, although a substantial portion of the loss in 2001 was
attributable to noncash charges for the fair value of shares and stock
options issued for services, compensation and other expenses. As of
June 30, 2002, the Company had a cash balance of only $2,000, a working
capital deficiency of $241,000 and an accumulated deficit of
$6,431,000. Management believes that the Company will continue to incur
net losses through at least June 30, 2002 and that it will need
additional equity and/or debt financing of at least $2,000,000 to
enable it to fully develop its web services and its proprietary virtual
reality products as initially planned and sustain its operations until
it can achieve profitability and generate cash flows from its operating
activities on a recurring basis. These matters raise substantial doubt
about the Company's ability to continue as a going concern.
F-5
NorStar Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 - Business and basis of presentation (concluded):
Management is attempting to obtain additional financing for the Company
through the issuance of equity securities, loans from financial
institutions and/or agreements with strategic partners. However,
management cannot assure that the Company will be able to sell equity
securities, obtain loans from financial institutions and/or form
strategic alliances that will generate financing on acceptable terms.
If the Company is not able to obtain adequate financing, it may have to
curtail or terminate some or all of its operations.
The accompanying condensed consolidated financial statements do not
include any adjustments related to the recoverability and
classification of assets or the amounts and classification of
liabilities that might be necessary should the Company be unable to
continue its operations as a going concern.
Note 2 - Earnings (loss) per common share:
As further explained in Note 2 of the notes to the Audited Financial
Statements, the Company presents basic earnings (loss) and, if
appropriate, diluted earnings per share in accordance with the
provisions of Statement of Financial Accounting Standards No. 128,
"Earnings per Share". Diluted per share amounts have not been presented
in the accompanying unaudited condensed consolidated statements of
operations because the Company had net losses for the six and three
months ended June 30, 2002 and 2001 and, accordingly, the assumed
effects of the exercise of options granted to consultants in April 2000
that expired in April 2001 (see Note 5 herein) would have been
anti-dilutive.
Note 3 - Income taxes:
As of June 30, 2002, the Company had net operating loss carryforwards
of approximately $6,431,000 available to reduce future Federal taxable
income which, if not used, will expire at various dates through 2022.
The Company had no other material temporary differences as of that
date. Due to the uncertainties related to, among other things, the
changes in the ownership of the Company, which could subject those loss
carryforwards to substantial annual limitations, and the extent and
timing of its future taxable income, the Company offset the deferred
tax assets attributable to the potential benefits of approximately
$2,572,000 from the utilization of those net operating loss
carryforwards by an equivalent valuation allowance as of June 30, 2002.
The Company had also offset the potential benefits from net operating
loss carryforwards by equivalent valuation allowances during 2001. As a
result of the increases in the valuation allowance of $13,000 and
$89,000 during the six months ended June 30, 2002 and 2001,
respectively, and $3,000 and $20,000 during the three months ended June
30, 2002 and 2001, respectively, the Company did not recognize any
credits for income taxes in the accompanying condensed consolidated
statements of operations to offset its pre-tax losses in any of those
periods.
F-6
NorStar Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 4 - Stock option plan:
On April 17, 2000, the Board of Directors approved a Stock Option Plan
(the "Plan"), subject to ratification by the Company's stockholders,
whereby up to 2,000,000 shares of the Company's common stock may be
granted to key personnel in the form of incentive stock options and
nonstatutory stock options, as defined under the Internal Revenue Code.
Key personnel eligible for these awards may include all present and
future employees of the Company and individuals who are consultants to
the Company as well as nonemployee directors of the Company. Under the
Plan, the exercise price of options must be at least 100% of the fair
market value of the common stock on the date of grant (the exercise
price of an incentive stock option for an optionee that holds more than
10% of the combined voting power of all classes of stock of the Company
must be at least 110% of the fair market value on the date of grant).
The maximum term of any stock option granted may not exceed ten years
(or five years for an optionee that holds 10% or more of the Company's
stock) from the date of grant.
As of August 8, 2002, no stock options had been awarded under the Plan.
Note 5 - Consulting agreements:
On April 17, 2000, the Company entered into agreements with three
consultants that expired on April 17, 2001. Under these agreements, the
consultants were, among other things, assisting the Company in finding
businesses located primarily in England, other European countries and
the Northeastern section of the United States that would advertise in
and/or link to the Company's online community.
As consideration for their services, the three consultants received
options to purchase a total of 1,300,000 shares of the Company's common
stock that were exercisable at $.40 per share at any time during the
terms of the consulting agreements. The options expired on April 17,
2001. As further explained in Note 8 of the notes to the Audited
Financial Statements, the aggregate fair value of the options granted
to the consultants as of the date of grant was $377,000. The Company
recorded the aggregate fair value as unearned compensation which it
amortized to expense over the period from April 17, 2000 to April 17,
2001.
On July 25, 2002, the Company entered into new agreements with certain
of these consultants as well as additional agreements with other
consultants. Under these agreements, the consultants will be required
to, among other things, assist the Company in finding businesses
located primarily in Europe that would advertise in and/or link to the
Company's online community in addition to performing web site
development services. These agreements will expire on July 25, 2003. As
consideration for their services, the consultants received a total of
4,800,000 shares of common stock with an aggregate fair market value of
$96,000.
* * *
F-7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS ON PLAN OF OPERATION
The following discussion regarding NorStar and its business and
operations contains "forward-looking statements" within the meaning of Private
Securities Litigation Reform Act 1995. Such statements consists of any statement
other than a recitation of historical fact and can be identified by the use of
forward-looking terminology such as "may," "expect," "anticipate," "estimate" or
"continue" or the negative thereof of other variations thereon or comparable
terminology. The reader is cautioned that all forward-looking statements are
necessarily speculative and there are certain risks and uncertainties that could
cause actual events or results to differ materially from those referred to in
such forward-looking statements. NorStar does not have a policy of updating or
revising forward-looking statements and thus it should not be assumed that
silence by management of NorStar over time means that actual events are bearing
out as estimated in such forward-looking statements.
OVERVIEW
NorStar Group, Inc. was originally incorporated in the State of Utah in
March 1961 as Florist Accounting Services, Inc., a finance company that was
primarily engaged in factoring accounts receivables for florists in Utah. The
name Florist Accounting Services, Inc. was changed to Luxor Group N.S. during
1971 and to Norstar Group, Inc. during 1992. The Company was unable to develop a
profitable operation and became inactive until April 1992. During the period
from April 1992 through December 31, 1999, the Company acquired and/or began to
develop and dispose of, several businesses and certain other investments. In
1998, the company began the development of its Internet business which involves
the creation of a portal to a cyber-city, an on-line community of "One Stop
Shopping" for products, entertainment, education and business services. The
on-line community is being developed through its two subsidiaries
VeeAreCity.com, Inc. and VeeAre City the Burbs.com, Inc. The portal is designed
to provide subscriber/member with access to several web browsers, a directory to
thousands of stores, three dimensional virtual reality ("VR") chat rooms, forums
and game rooms, a VR dating service, VR business conference room, specialty
advertising rooms with VR activities and global e-mails that can be accessed
through the web anywhere in the world. The Company intends to generate revenues
from this business primarily through the usage fees from certain of its
activities and the sale of annual memberships to consumers who will be offered
discounts on products and services through a provider network to be developed by
the Company. Norstar is also continuing with ongoing research and development of
its proprietary virtual reality products. The Company also holds mineral rights
attributable to 17 claims that were acquired for gold mines located in the Gold
Mountain mining district of Esmeralda County, Nevada. However, management does
not expect mining operations to become one of the Company's core businesses.
Management is attempting to find a joint venture partner to assist the Company
in developing these claims.
RESULTS OF OPERATIONS:
Six and Three months ended June 30, 2002 as compared to the Six and
Three months ended June 30, 2001.
3
The Company did not have any revenues during the six and three months
ended June 30, 2002 and 2001. Management estimates that the Company will not
generate revenues from sales of memberships to subscribers until the fourth
quarter of the year ending December 31, 2002.
During the six months ended June 30, 2002, the Company's operating
expenses decreased by approximately $191,000 to approximately $33,000 from
approximately $224,000 for the six months ended June 30, 2001. The primary cause
of the decrease was non-cash charges of approximately $141,000 relating to
amortization of unearned compensation, which resulted from the issuance of stock
options to consultants relating to the agreements described below.
On April 17, 2000, the Company entered into agreements with three
consultants. Under these agreements, the consultants, among other things,
assisted the Company in finding businesses located primarily in England, other
European countries and the Northeastern section of the United States of America
that would advertise in and/or link to the Company's on-line community. The
three consultants received options to purchase a total of 1,300,000 shares of
the Company's common stock that were exercisable at $.40 per share at any time
during the term of the consulting agreements as consideration for their
services. The options expired on April 17, 2001.
The aggregate fair value of the options granted to the consultants of
$377,000 as of the date of grant, as determined based on the Black-Scholes
option-pricing model, was recorded as unearned compensation, which will be
amortized to expense over the periods in which the related services are
rendered, as required by generally accepted accounting principles in the United
States of America.
In addition to the aforementioned agreements, the Company's operating
expenses also were impacted by a reduction in corporate overhead and research
and development costs of approximately $21,000 and $28,000, respectively, due to
the Company's cash position.
During the Three months ended June 30, 2002, the Company's operating
expenses decreased by approximately $43,000 to approximately $8,000 from
approximately $52,000 for the three months ended June 30, 2001. This decrease
was primarily a result of the company reducing its corporate spending and
research and development activities until which time its financing is in place.
As a result of the above, the Company incurred a loss of approximately
$33,000 and $8,000 for the six and three months ended June 30, 2002,
respectively, as compared to approximately $224,000 and $52,000 for the
comparable period ended June 30,2001.
(a) Liquidity and Capital Resources
NorStar's condensed consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. However,
the Company has not generated any significant revenues on a sustained basis from
its current operations. As shown in the condensed consolidated financial
statements, the Company has continued to incur net losses, although a
substantial portion of the losses was attributable to noncash charges for the
fair value of shares and stock options issued for services, compensation and
other expenses. As of June 30, 2002, the Company had a cash balance of only
$2,000, a working capital deficiency of approximately $241,000 and an
accumulated deficit of $6,431,000. Management believes that the Company will
continue to incur net losses through at least June 30, 2003 and that it will
need additional equity and/or debt financing of at least $2,000,000 to enable it
to fully develop its web services and development of its proprietary virtual
reality products as initially planned and sustain its operations until it can
achieve profitability and generate cash flows from its operating activities on a
recurring basis. These matters raise substantial doubt about the Company's
ability to continue as a going concern.
4
Management is attempting to obtain additional financing for the Company
through the issuance of equity securities, loans from financial institutions
and/or agreements with strategic partners. However, management cannot assure
that the Company will be able to sell equity securities, obtain loans from
financial institutions and/or form strategic alliances that will generate
financing on acceptable terms. If the Company is not able to obtain adequate
financing, it may have to curtail or terminate some or all of its operations.
During the six months ended June 30, 2002 and 2001, the Company financed its
operations from its existing cash reserves and/or the proceeds generated from
the sale of notes to its stockholders of approximately $41,000 for the six
months ended June 30, 2002 and $67,000 for the six months ended June 30, 2001.
On July 25, 2002, the Company entered into agreements with certain
consultants, who will be required to, among other things, assist the Company in
finding businesses located primarily in Europe that would advertise in and/or
link to the company's online community in addition to performing web site
development services. These agreements will expire on July 25, 2003. As
consideration for their services, the consultants received a total of 4,800,000
shares of common stock with an aggregate fair market value of $96,000.
We do not believe that our business is subject to seasonal trends or
inflation. On an ongoing basis we will attempt to minimize any effect of
inflation on our operating results by controlling operating costs and whenever
possible, seeking to insure that subscription rates and usage fees reflect
increases in costs due to inflation.
The Company believes the following trends, events and uncertainties
could have a material impact on their short-term and/or long-term liquidity. The
market for Internet discount services and product programs is relatively new and
is evolving rapidly. NorStar's future growth is dependent upon its ability to
create, develop and distribute programs that are accepted by its clients as an
integral part of their business model for communicating with their targeted
audiences. Demand and market acceptance of discount products and service
programs is dependent upon a number of factors, including the growth in consumer
access to and acceptance of these programs, the willingness of service and
product providers to offer their services and products to customers of NorStar
at a discount, and NorStar's ability to develop and maintain distribution
channels to sell memberships to consumers. The failure of providers or consumers
to participate in NorStar's programs or substantial increases in the adequacy or
availability of other programs could have a material and adverse impact on
NorStar's business, operating results and financial condition. In addition,
NorStar does not have long-term contracts and needs to establish relationships
with new vendors. As a result, providers of discounted services or products to
NorStar's members may unilaterally reduce the scope of, or terminate their
relationships with NorStar. The termination of NorStar's business relationship
or a material reduction in the availability of services or products from any of
NorStar's significant providers or networks thereof or NorStar's failure to
develop significant new provider relationships would materially and adversely
affect its business, operating results and financial condition.
NorStar believes that within the market niche it seeks to develop, the
following known trends, events or uncertainties that have had or that are
reasonably expected to have a material impact on their net sales or revenues or
income from their continuing operations will include the following: (i) The
market for discounted products and services is characterized by rapid changes in
participating companies, consumers and service provider requirements and
preferences, new service and product introductions and evolving industry
standards that could render NorStar's existing service practices and
5
methodologies obsolete; (ii) NorStar's success will depend, in large part, on
its ability to improve its existing services, develop new services and solutions
that address the increasingly sophisticated and varied needs of NorStar's
clients, and respond to technological advances, emerging industry standards and
practices, and competitive service offerings; and (iii) NorStar may not be
successful in responding quickly, cost-effectively and sufficiently to these
developments. If NorStar is unable, for technical, financial or other reasons,
to adapt in a timely manner in response to changing market conditions or these
requirements, its business, results of operations and financial condition would
be materially adversely affected.
PART II - OTHER INFORMATION
Item 1. Legal proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Default in Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
------- -----------
99.1 Certification of the Chief Executive Officer of
Norstar Group, Inc. Pursuant to 18 U.S.C. Section
1350, As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2 Certification of the Chief Financial Officer of
Norstar Group, Inc. Pursuant to 18 U.S.C. Section
1350, As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) There were no Current Reports on Form 8-K filed by
the registrant during the quarter ended June 30,
2002.
6
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Company
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
NORSTAR GROUP, INC.
By: /s/ Harry DiFrancesco
---------------------
Harry DiFrancesco
President
Date: August 14, 2002
In accordance with the Exchange Act, this Report has been signed below by the
following persons on behalf of the Company in the capacities set forth and on
the dates indicated.
Signature Position Date
--------- -------- ----
By: /s/ Harry DiFrancesco President and Chairman Date: August 14, 2002
------------------------ of the Board
Harry DiFrancesco
By: /s/ Andrew S. Peck Vice President of Finance Date: August 14, 2002
------------------------ Secretary and Director
Andrew S. Peck
By: /s/ Maynard Neil Abogov Vice President of Sales Date: August 14, 2002
------------------------ and Management and Director
Maynard Neil Abogov
By: /s/ Jay Sanet CEO and Director Date: August 14, 2002
------------------------
Jay Sanet
7