On August 29, 1996, about 1015 central daylight time, a nonregistered Flight Star 2Sl airplane, operating as a 14 CFR Part 91 demonstration flight, crashed on initial takeoff climb from Stennis International Airport, Bay St. Louis, Mississippi. Visual meteorological conditions prevailed and no flight plan was filed. The airplane sustained substantial damage. The noncertificated pilot and one passenger sustained serious injuries. The flight was originating at the time of the accident. The pilot stated the passenger conducted the takeoff with full flaps from runway 18. They were airborne at about 40 mph and were climbing through 100 feet in a nose high attitude in a prestall condition. Both wings were rocking from back and forth. He was about to raise the flaps when he saw a landing light coming straight at them. He told his passenger he had the flight controls and made a 90-degree turn to the right to avoid the airplane, rolled out and continued climbing. The airplane hit some turbulence and a downdraft. The right wing dropped down, and the airplane collided with the ground in a nose down, right wing low attitude with the engine running at full power. A witness stated, the airplane took off from runway 18. Upon reaching about 50 feet, the airplane started a steep right climbing turn estimated at about a 45-degree angle of bank. The airplane stalled, and collided with the terrain in a nose down, right wing low attitude. Examination of the aircraft wreckage by the FAA revealed no evidence of a precrash mechanical failure or malfunction. Review of surface weather information obtained from Gulfport, Mississippi, for the time period of the accident revealed no recorded record of turbulence, downdrafts, gusts, or windshear. Records on file with the United States Ultralight Association, and Experimental Aircraft Association revealed that the pilot does not have an exemption on file with either organization for the airplane being flown at the time of the accident. A record of diligent search conducted by FAA airman records, revealed neither the pilot or passenger was ever issued a recreational pilot or higher level airman certificate.