SARS Corp.(fka SARO)

[chartbuster]

Is SARS' Frank Bonadio the same Frank Bonadio who was released as President and CEO of UStel for faulty merger info and no SEC reporting? UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K
Current Report Pursuant
To Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 25, 1999

UStel, Inc.
(Exact name of registrant as specified in its charter)
Minnesota
(State or Other Jurisdiction of Incorporation)

0-24098 95-4362330
(Commission File Number) (IRS Employer Identification Number)

2033 6th Avenue, Suite 401, Seattle, Washington 98121-2516 [phone]


(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)


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Item 5. - OTHER EVENTS

Removal of Frank Bonadio from the Board of Directors

On January 19,1999, the Board of Directors removed Frank Bonadio as a member of the Board.

Hiring of Ernst & Young.

UStel has recently hired Ernst & Young to (i) assist UStel with conducting and evaluating its operations and (ii) make recommendations to UStel's Board of Directors regarding the operations and alternatives available to UStel for enhancing or otherwise preserving value to UStel's equity and debt holders, vendors and creditors, including but not limited to the possible filing of a petition for bankruptcy under Chapter 11 or Chapter 7 of the United States Bankruptcy Code.

Forensic Audit Report

On January 19, 1999, the Independent Committee to the Board of Directors (the "Committee") issued its findings in connection with the completion of the forensic audit report conducted by Arthur Andersen (the "Report"). The Report was initiated as a result of concerns raised by the Board of Directors regarding the financial condition of Arcada and the suspected non-disclosure of certain liabilities, inaccurate accounting procedures and interested party transactions. The Report found that certain accounting errors, merger related expenditures, interested party transactions and management decisions regarding certain expenditures were made and, accordingly, impacted Arcada's financial condition. UStel is currently analyzing its alternatives with respect to the conclusions of the Report.