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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 Act of 1934
Date of Report (Date of earliest event reported) March 10, 1998
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STAR Telecommunications, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 000-22581 77-0362681
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
223 E. De La Guerra, Santa Barbara, California 93101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (805) 899-1962
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Not applicable
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(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) Pursuant to the terms of that certain Stock Purchase Agreement
dated as of January 26, 1998, as amended (the "Purchase Agreement"), by and
among STAR Telecommunications, Inc., a Delaware corporation ("STAR" or the
"Company"), T-One Corp., a Delaware corporation ("T-One"), and Taha Mikati,
an individual ("Mikati"), on March 10, 1998 (the "Closing") STAR acquired all
of the outstanding shares of the capital stock of T-One (the "T-One Shares")
in exchange for shares of the Company's Common Stock, $0.001 par value per
share (the "STAR Common Stock"). In connection with the Closing, T-One
became a wholly-owned subsidiary of STAR.
On the Closing, Mikati received an aggregate of 660,000 shares of STAR
Common Stock (the "Shares") in exchange for 100 shares of common stock, $.01
par value per share, of T-One. The number of Shares will be adjusted in
connection with a 2.05-for-1 stock split in the nature of a stock dividend
declared by the Board of Directors of the Company on February 2, 1998 and
payable on March 31, 1998 to the holders of all shares of Common Stock
outstanding on February 20, 1998.
Following the Closing, a total of 65,340 of these shares (the "Escrow
Shares") will be deposited in an escrow established at Santa Barbara Bank and
Trust. The Escrow Shares will be held in escrow for a period commencing on
March 10, 1998 and ending on the earlier to occur of (a) March 10, 1999 and
(b) the completion following the Closing of the first audited consolidated
financial statements of STAR containing combined operations of STAR and
T-One. Such Escrow Shares may be used, at the option of STAR, to offset any
amounts owed to the Company pursuant to the indemnity obligations of Mikati
set forth in the Purchase Agreement.
On March 10, 1998, the closing sales price of the STAR Common Stock
on the NASDAQ Stock Market was $38. Based on such price, the aggregate
purchase price paid by STAR for T-One was $25,080,000. The purchase price
was arrived at through arms-length negotiations between the Company, T-One
and Mikati. Prior to the Closing, none of the officers, directors or
employees of T-One nor Mikati were affiliates of the Company.
(b) Prior to the Closing, T-One was in the international wholesale long
distance business. Pursuant to the consummation of the transactions
contemplated by the Purchase Agreement, T-One became a direct wholly-owned
subsidiary of the Company. It is the present intention of the Company that
T-One will continue to engage in such business.
2.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Not applicable.
(c) EXHIBITS.
2.1+ Stock Purchase Agreement dated as of January 26, 1998 by
and among the Company, T-One and Mikati, as amended by
Amendment No. 1 to Stock Purchase Agreement, dated as of
March 5, 1998.
4.1+ Registration Rights Agreement dated as of March 10, 1998
between the Company and Mikati.
+ Filed on March 24, 1998 as an exhibit to the Company's Registration
Statement on Form S-1 (Registration Statement No. 333-48559).
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
In connection with the terms of the Purchase Agreement, as further
described in Item 2(a) above, on the Closing the Company issued an aggregate
of 660,000 shares of Common Stock to Mikati pursuant to Regulation S
("Regulation S") under the Securities Act of 1933, as amended (the "'33
Act"). Such shares constituted 100% of the aggregate consideration paid by
STAR in connection with the transactions contemplated by the Purchase
Agreement. Pursuant to Section 5.27 of the Purchase Agreement, Mikati made a
number of representations and covenants to the Company concerning Regulation
S. Mikati represented to STAR, that, among other things, he is not a "U.S.
person" and was not acquiring shares of Common Stock for the benefit of any
"U.S. person." With respect to the issuance of the 660,000 shares of Common
Stock referred to above, the Company relied on the representations and
covenants of Mikati contained in Section 5.27 of the Purchase Agreement in
determining that Regulation S was available as an exemption from the
registration requirements of the '33 Act.
3.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: March 24, 1998
STAR TELECOMMUNICATIONS, INC.
By: /s/ Kelly D. Enos
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Kelly D. Enos
Chief Financial Officer
4.
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EXHIBIT INDEX
2.1+ Stock Purchase Agreement dated as of January 26, 1998 by and
among the Company, T-One and Mikati, as amended by Amendment
No. 1 to Stock Purchase Agreement dated as of March 5, 1998.
4.1+ Registration Rights Agreement dated as of March 10, 1998 between
the Company and Mikati.
+ Filed on March 24, 1998 as an exhibit to the Company's Registration
Statement on Form S-1 (Registration Statement No. 333-48559).
