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 QUARTER ENDED OCTOBER 31, 1996 COMMISSION FILE NO. 33-19324
LOGIPHONE GROUP, INC.
(Exact name of registrant as specified in charter)
DELAWARE 75-0223079
(State or other jurisdiction (IRS Employer Identification No.)
at incorporation)
607 WEST BROADWAY, SUITE 247
FAIRFIELD, IOWA 52556
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (515) 469-3044
STAR RESOURCES, INC. , 5420 LBJ FREEWAY SUITE 540, DALLAS, TEXAS 75240
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Indicate by check mark whether the registrant (1) has 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 registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
As of December 19, 1996, there were outstanding 9,000,000 shares of common
stock, $.0001 par value.
This report consists of 13 pages.
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LOGIPHONE GROUP, INC.
October 31, 1996
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION 3
Item 1. Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 3
PART II. OTHER INFORMATION 4
Item 1. Legal Proceedings. 4
Item 2. Changes in Securities 4
Item 3. Default Upon Senior Securities 4
Item 4. Submission of Matters to a Vote of Security Holders 4
Item 5. Other Information 4
Item 6. Exhibits and Reports on Form 8-K. 5
SIGNATURES 6
FINANCIAL STATEMENTS 7
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The financial statements of the Company as of and for the quarter ended October
31, 1996 begin on the page following the signature page.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
THREE MONTHS ENDED OCTOBER 31, 1996 AS COMPARED TO THREE MONTHS ENDED OCTOBER
31, 1995.
The Company had no operations during the quarters ended October 31, 1996 and
October 31, 1995. Expenses were related to the Company's audit and transfer
agent fees.
SIX MONTHS ENDED OCTOBER 31, 1996 AS COMPARED TO THE SIX MONTHS ENDED
OCTOBER 31, 1995
On May 1, 1995, the Company transferred the ownership of its wholly owned
subsidiary, New View Broadcasting, Inc., a South Carolina corporation ("New
View"), to Lawrence E. Steinberg, the majority stockholder of the Company at
that time. New View owns a television station in Charleston, South Carolina. The
subsidiary comprised all of the revenue producing assets of the Company. The
Company also transferred a judgment held by the Company against Gerald Arthur,
former officer and director of the Company, and Christopher Arthur, former
director and stockholder of the Company. As consideration for the subsidiary
stock and the judgment, Mr. Steinberg agreed to release the Company from its
obligations as guarantor of Mr. Steinberg's loans to New View in the amount of
$1,682,095, . Following these transactions, the Company's only assets were a
minimal amount of cash and had no operations during the six months ended October
31,1995. During the six months ended October 31, 1996, the Company's only assets
were a minimal amount of cash, and the Company had no operations. For the six
months ended October 31, 1996, the Company had no revenues and its expenses were
related to its annual audit and various administrative matters, primarily
transfer agent fees.
LIQUIDITY AND CAPITAL RESOURCES
As of October 31, 1996, the Company had no significant assets or sources of
revenue and was solely dependent on the willingness and ability of its major
stockholder to fund any business operations. On November 1, 1996, the Company
completed a sale of 4,000,000 shares of common stock, par value $.0001, to ICA
Marketing Company, L.C., an Iowa limited liability company, in exchange for all
of the issued and outstanding equity in ICA B.V., Dutch limited liability
company, as well as an assignment of all the debt owed by ICA B.V. to ICA-Iowa.
See Form 8-K filed on November 13, 1996.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None
ITEM 2. CHANGES IN SECURITIES.
On October 23, 1996, by written consent the holders of the majority of
outstanding shares of common stock (the "Common Stock"), par value $.001 per
share, of the Company (then called Star Resources, Inc.) voted to effect a one
for eight two and eighty-five one hundredths (1:82.85) reverse split of the
Common Stock, reduce the authorized shares of Common Stock to twenty million
(20,000,000) shares, and change the name of the Company to Logiphone Group, Inc.
Any fractional shares resulting from the reverse stock split were rounded up to
the nearest whole share of Common Stock. Mr. Lawrence E. Steinberg, the then
President and principal stockholder of the Company, contributed to the Company
such number of shares of Common Stock necessary to reduce the number of
outstanding shares of Common Stock immediately after the reverse stock split but
prior to the acquisition of ICA B.V. (see Item 5 below) by the Company to
500,000 shares.
ITEM 3. DEFAULT UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
See Item 2 above.
ITEM 5. OTHER INFORMATION.
As noted in Item 2 of Part I, on November 1, 1996, the Company completed a sale
of 4,000,000 shares (the "Star Shares") of common stock, par value $.0001 to ICA
Marketing Company, L.C., an Iowa limited liability company ("ICA-Iowa"), in
exchange for all of the issued and outstanding equity (the "ICA Shares") in ICA
B.V., a Dutch limited liability company, as well as an assignment of all of the
debt owed by ICA B.V. to ICA-Iowa. The Star Shares are being held in escrow
pending the registration of the transfer of the ICA Shares to the Company under
Dutch law. See the Company's Form 8-K, which was filed with the Securities and
Exchange Commission on November 13, 1996.
On November 15, 1996, the Board of Directors of the Company declared a
one-for-one stock dividend payable to stockholders of record as of the close of
business on November 29, 1996.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBITS. The following exhibits are furnished in accordance with Item 601 of
Regulation S-B.
2.1 Agreement For Exchange of Stock, dated October 10, 1996, by and between
Star Resources, Inc., ICA Marketing Company, L.C. and ICA B.V.
(Filed with the SEC on November 13, 1996 as Exhibit 10.3 to the
Company's Form 8-K and incorporated herein by reference).
2.2 Amendment to Agreement For Exchange of Stock, dated October 31, 1996,
by and between Star Resources, Inc., ICA Marketing Group, L.C. and ICA
B.V. (Filed with the SEC on November 13, 1996 as Exhibit 10.4 to the
Company's Form 8-K and incorporated herein by reference).
3.1 Certificate of Amendment to Registrant's Certificate of Incorporation,
effective October 25, 1996. (Filed with the SEC on November 13, 1996 as
Exhibit 3.1 to the Company's Form 8- K and incorporated herein by
reference).
10.1 Strategic Alliance Agreement, dated October 8, 1996, by and between
RADLINX LTD. and I.C.A. International Callers Association, B.V.
(certain annexes have been omitted pursuant to Rule 601(b)(2) of
Regulation S-K). (Filed with the SEC on November 13, 1996 as Exhibit
10.1 to the Company's Form 8-K and incorporated herein by reference).
10.2 Strategic Alliance Agreement, dated as of November 10, 1996, by and
between Logiphone Telephone Communications, Ltd.; Logiphone Group,
Inc., and I.C.A. B.V. (Filed with the SEC on November 13, 1996 as
Exhibit 10.2 to the Company's Form 8-K and incorporated herein by
reference).
27 Financial Data Schedule
Form 8-K: The following reports on Form 8-K have been filed since July 31, 1996:
1. The Company filed a report on Form 8-K on November 13, 1996 reporting
that the Company completed a sale of 4,000,000 shares of common stock,
(the "Common Stock"), par value $.0001, to ICA Marketing Company, L.C.,
an Iowa limited liability company, in exchange for all of the issued
and outstanding equity in ICA B.V., Dutch limited liability company, as
well as an assignment of all the debt owed by ICA B.V. to ICA-Iowa.
2. The Company filed a report on Form 8-K/A on November 20, 1996
correcting the address and telephone number for the Company following
the acquisition of ICA B.V.
3. The Company filed a report on Form 8-K on November 27, 1996 reporting
the declaration of a one-for-one stock dividend with respect to the
Common Stock payable to stockholders of record as of the close of
business on November 29, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Quarterly Report to be signed on its behalf
by the undersigned thereunto duly authorized.
LOGIPHONE GROUP, INC.
(Registrant)
Date: December 19, 1996 By: /s/ Marc Schechtman
-------------------
Marc Schechtman, Chairman and
Chief Executive Officer (Principal
Executive Officer)
Date: December 19, 1996 By: /s/ Ronald D. Gardner
---------------------
Ronald D. Gardner, Treasurer
(Principal Financial Officer)
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<PAGE>
LOGIPHONE GROUP, INC.
(FORMERLY STAR RESOURCES, INC.)
FINANCIAL STATEMENTS
AS OF AND FOR THE PERIOD ENDED OCTOBER 31, 1996
(UNAUDITED)
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LOGIPHONE GROUP, INC. (FORMERLY STAR RESOURCES, INC.)
Statements of Operations
Unaudited
<TABLE>
<CAPTION>
Three months ended Six months ended
October 31, October 31,
1996 1995 1996 1995
---------------------------- -------------------------
Other - - - -
---------------------------- -------------------------
<S> <C> <C> <C> <C>
Total Revenue $ 0 $ 0 $ 0 $ 0
---------------------------- -------------------------
Expenses:
Legal - - - 398
Accounting fees - - $3,980 -
Administration $155 - 1,009 -
Other 499 (26) 825 340
---------------------------- -------------------------
Total Expenses 654 (26) 5,814 738
---------------------------- -------------------------
Net Income (Loss) from operations ($654) $26 ($5,814) ($738)
Loss on disposition of investment - (301,309) - (301,309)
---------------------------- -------------------------
Net loss ($654) ($301,283) ($5,814) ($302,047)
============================ =========================
Weighted Average loss per share ($0.0013) ($0.0073) ($0.0116) ($0.0073)
============================ =========================
</TABLE>
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<PAGE>
LOGIPHONE GROUP, INC. (FORMERLY STAR RESOURCES, INC.)
Statements of Cash Flows
Unaudited
<TABLE>
<CAPTION>
Six months ended October 31,
1996 1995
--------------------------
<S> <C> <C>
Net loss (5,814) (302,047)
Adjustments to reconcile net loss to net cash used
Accounts receivable (1,000) -
Accounts payable and accrued expenses (134) -
Depreciation and amortization - -
Accrued interest - -
Loss on disposition of subsidiary - 301,309
--------------------------
Net cash used (6,948) (738)
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Investments - (24,000)
--------------------------
Net cash from (used) in investing 0 (24,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans from shareholders 6,700 -
Proceeds from issuance of common stock - 550
Proceeds from paid in capital - 23,350
--------------------------
Net cash used in financing 6,700 23,900
--------------------------
Net increase (decrease) in cash (248) (838)
CASH AT BEGINNING OF PERIOD 262 964
--------------------------
CASH AT END OF PERIOD $14 $126
==========================
</TABLE>
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<PAGE>
LOGIPHONE GROUP, INC. (FORMERLY STAR RESOURCES, INC.)
Statements of Changes in Stockholders' Equity
Unaudited; Consolidated through April 30, 1995
<TABLE>
<CAPTION>
Additional Total
Common Stock Paid-in Retained Stockholders'
Shares Amount Capital Deficit Equity
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance April 30, 1995 40,876,186 40,876 294,492 (1,721,423) (1,386,055)
Exercise of stock options 550,000 550 4,950 5,500
Disposition of investment
in New View Broadcasting, Inc. 1,686,328 1,686,328
Stockholder contribution 18,400 18,400
Change in par value of stock (37,284) 37,284 0
Net income for the quarter
ended July 31, 1995 - - - (300,074) (300,074)
----------------------------------------------------------------------------
Balance July 31, 1995 41,426,186 4,142 355,126 (335,169) 24,099
Net income for the quarter
ended October 31, 1995 - - - 26 26
Dividend distribution - - - (24,000) (24,000)
----------------------------------------------------------------------------
Balance October 31, 1995 41,426,186 $4,142 $355,126 ($359,143) $125
Net loss for the quarter
ended January 31, 1996 - - - ($637)
(637)
----------------------------------------------------------------------------
Balance January 31, 1996 41,426,186 4,142 355,126 (359,780) ($512)
Net loss for the quarter
ended April 30, 1996 - - 1,500 (1,017) $483
----------------------------------------------------------------------------
Balance April 30, 1996 41,426,186 4,142 356,626 (360,797) ($29)
Net loss for the quarter
ended July 31, 1996 - - - (5,160) ($5,160)
----------------------------------------------------------------------------
Balance July 31, 1996 41,426,186 4,142 356,626 (365,957) ($5,189)
Effect of reverse stock split (40,926,186) (4,092) 4,092 $0
Net loss for the quarter
ended October 31, 1996 - - - (654) ($654)
----------------------------------------------------------------------------
Balance October 31, 1996 500,000 50 360,718 (366,611) ($5,843)
============================================================================
</TABLE>
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1- BASIS OF FINANCIAL STATEMENTS
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB and do not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the six months ended October 31, 1996
are not necessarily indicative of the results that may be expected for
the year ending April 30, 1997. For further information, refer to the
financial statements and management's discussion and analysis of
results of operations and financial condition included in the Company's
report on Form 10-KSB.
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Logiphone Group, Inc. and is qualified in it's entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000827065
<NAME> LOGIPHONE GROUP, INC.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> AUG-01-1996
<PERIOD-END> OCT-31-1996
<EXCHANGE-RATE> 1
<CASH> 14
<SECURITIES> 0
<RECEIVABLES> 1,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,014
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,014
<CURRENT-LIABILITIES> 155
<BONDS> 6,700
0
0
<COMMON> 50
<OTHER-SE> (5,892)
<TOTAL-LIABILITY-AND-EQUITY> 1,014
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,814
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,814)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,814)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,814)
<EPS-PRIMARY> (0.012)
<EPS-DILUTED> (0.012)
</TABLE>
