SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 2)
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) NOVEMBER 1, 1996
--------------------------------
LOGIPHONE GROUP, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 33-19324 76-0223079
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(STATE OF OTHER JURIS- (COMMISSION (IRS EMPLOYER
DICTION OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
607 WEST BROADWAY, SUITE 247, FAIRFIELD, IOWA 52556
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (515) 469-3044
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N/A
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
CORPDAL:63639.2 26308-00002
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Item 7. Financial Statements and Exhibits
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
<TABLE>
<CAPTION>
Filed herewith are the following audited financial statements of ICA B.V.
Page
<S> <C> <C>
1. Report of BDO CampsObers, Independent Auditors..............................................................F-1
2. Annual Accounts.............................................................................................F-2
3. Balance Sheet at June 24, 1996..............................................................................F-5
4. Profit and Loss Account for the period from December 12, 1995
to June 24, 1996...................................................................................F-7
5. Notes to the Balance Sheet as of June 24, 1996..............................................................F-8
6. Notes to the Company Profit and Loss Account for the period from
December 12, 1995 to June 24, 1996................................................................F-10
7. Related Parties/Subsequent Events..........................................................................F-11
(b) PRO FORMA FINANCIAL INFORMATION
1. Unaudited Proforma Balance Sheet for Logiphone Group, Inc.
as of October 31, 1996............................................................................PF-1
2. Unaudited Proforma Statement of Operations for Logiphone Group, Inc.
for the period from June 24, 1996 to October 31, 1996.............................................PF-2
</TABLE>
EXHIBITS. The following exhibits are furnished in accordance with Item 601 of
Regulation S-K.
3.1* Certificate of Amendment to Registrant's Certificate of Incorporation,
effective October 25, 1996.
10.1* [Deleted]
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.
10.3* Agreement For Exchange of Stock, dated October 10, 1996, by and between
Star Resources, Inc., ICA Marketing Company, L.C. and ICA B.V.
10.4* 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.
- ------------------------
* Previously filed as exhibits to the Form 8-K, dated November 1, 1996,
and filed with the Securities and Exchange Commission on November 13,
1996.
CORPDAL:63639.2 26308-00002
2
<PAGE>
March 12, 1997
To the Management of ICA B.V.
Brasem 31
4941 SE RAAMSDONKSVEER
AUDITOR'S REPORT
We have audited the financial statements of ICA B.V. (see page 5 thru 10) at
Raamsdonksveer for the period of 13-12-1995 until 24-06-1996. These financial
statements are the responsibility of the entity's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in The Netherlands and in the USA. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement preparation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements give a true and fair view of the
financial position of the company as of 24 June 1996 and of the result for the
period December 1995 until 24 June 1996 in accordance with accounting principles
generally accepted in the USA.
General
ICA B.V. is a company in the state of development. The start of the company is
dated on 22 December 1995. The activities are in the field of telephone
services. On this moment the level of the activities is limited. The negative
result for the period 13-12-1995 until 24-06- 1996 is mainly caused by start up
costs like marketing expenses and salaries. The B.V. is formally established by
notarial deed dated June 20, 1996.
Yours sincerely,
BDO CampsObers
Register accountants
J. M. Dokman RA H. Kroeze RA
CORPDAL:63484.1 26308-00002
F-1
<PAGE>
ANNUAL ACCOUNTS
RELATION WITH JABECO B.V.
The business of the company (servicing of long distance calls) will be set up
through intensive cooperation with Jabeco B.V. Jabeco B.V. will facilitate
through its European marketconnections the commercial set up of the company.
Jabeco B.V. also facilitates the administrative and other (local) demands of the
company.
GENERAL ACCOUNTING POLICIES
The general principle for the valuation of assets and liabilities, as well as
the determination of results, is the historical purchase price or manufacturing
cost. Unless otherwise stated, assets and liabilities are stated at the values
at which they were acquired or incurred.
TRANSLATION OF FOREIGN CURRENCIES
Assets and liabilities in foreign currencies are translated at the official
rates of exchange ruling at the balance sheet dates. Transactions in foreign
currencies are translated at the applicable exchange on the date of the
transaction. The resulting differences are accounted for in the profit and loss
account.
ACCOUNTING POLICIES - ASSETS AND LIABILITIES
Intangible fixed assets
Intangible fixed assets are stated at purchase price or manufacturing cost.
Depreciation is calculated on a straight-line basis over the estimated payback
period.
Tangible fixed assets
Tangible fixed assets are stated at acquisition cost less depreciation
calculated on a straight-line over the estimated useful life. Acquisitions
during the year are written off from the date of acquisition.
Stocks
Stocks of finished goods are stated at cost, comprising direct manufacturing
cost (material and labour) and charges for indirect manufacturing costs and
interest paid. Where appropriate a provision for obsolescence is deducted,
determined by product group.
CORPDAL:63484.1 26308-00002
F-2
<PAGE>
Accounts receivable
Accounts receivable are shown after deduction of a provision for bad and
doubtful debts where appropriate.
Cash and banks
Cash and bank balances are freely disposable, unless stated otherwise.
Provisions
Provisions included under this heading are for liabilities and risks arising in
the ordinary course of the business. They are accounted for at estimated amounts
due, except for the provision for pension liabilities which is stated at
estimated present value.
Long term liabilities
Long term liabilities include outstanding liabilities with a maturity date
beyond one year. The short term portion (due within one year) has been included
in current liabilities.
ACCOUNTING POLICIES - PROFIT AND LOSS ACCOUNT
General
Profit is determined as the difference between net sales and all expenses
relating to the reporting period. Costs are determined in accordance with the
accounting policies applied to the balance sheet. Profit is realized in the year
in which the sales are recognized. Losses are taken upon recognition. Other
income and expenses are allocated to the periods to which they relate.
Net sales
Net sales constitute the proceeds of sales of goods and services to third
parties less discounts.
Depreciation fixed assets
Depreciation on fixed assets is calculated at fixed percentages of cost, based
on the estimated useful life of the assets.
Financial income and expenses
Financial income and expenses relate to interest received or due from and paid
or due to third parties and group companies.
CORPDAL:63484.1 26308-00002
F-3
<PAGE>
Taxation
The tax charge for the year is computed on the book profit before tax at the
nominal rates, taking account of permanent differences.
Extraordinary income and expenses
Extraordinary income and expenses represents income and expense items not
arising the normal course of the business.
CORPDAL:63484.1 26308-00002
F-4
<PAGE>
BALANCE SHEET AS AT 24 JUNE 1996
in Dutch guilders, after profit appropriation
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS 24-06-1996
FIXED ASSETS
Tangible fixed assets
Other fixed assets 228.641
CURRENT ASSETS
Stock 305.572
Accounts receivable
Debtors 49.108
Taxes and social security premiums 82.240
C/A Jabeco Import Export B.V. 172.578
Prepaid expenses 2.500
Other accounts receivable 11.470
Receivable from shareholder 40.000
------
357.896
Cash and banks 149,692
-------
Total assets 1,041.801
=========
</TABLE>
CORPDAL:63484.1 26308-00002
F-5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
EQUITY AND LIABILITIES 24-06-1996
EQUITY
Share capital 40.000
Deficit accumulated during the development stage -273.563
CURRENT LIABILITIES
Creditors 198.990
C/A ICA Marketing Company 1,019.327
Taxes and social security premiums 26.166
Other liabilities 30.881
----------
1,275.364
Total equity and liabilities 1,041.801
=========
</TABLE>
CORPDAL:63484.1 26308-00002
F-6
<PAGE>
PROFIT AND LOSS ACCOUNT 13-12-1995 UNTIL 24-06-1996
in Dutch guilders
<TABLE>
<CAPTION>
13-12-1995
until
24-06-1996
<S> <C> <C>
Sales 95.229
Cost 93.074
-------
OPERATING INCOME 2.155
Wages and salaries/social security premiums 15.817
Management fee 36.318
Depreciation fixed assets 17.695
Other operating expenses 201.600
-------
TOTAL OPERATING EXPENSES 271.430
OPERATING PROFIT -269.275
NET FINANCIAL RESULTS -4.288
INCOME BEFORE TAX -273.563
Tax on income =
-------
INCOME AFTER TAX -273.563
========
</TABLE>
CORPDAL:63484.1 26308-00002
F-7
<PAGE>
NOTES TO THE BALANCE SHEET AS AT 24 JUNE 1996
in Dutch guilders
TANGIBLE FIXED ASSETS
Movements in tangible fixed assets are:
<TABLE>
<CAPTION>
Land and Other fixed Total
buildings assets
At 13 December 1995
<S> <C> <C> <C>
Cost = = =
Accumulated depreciation = = =
Book value = = =
Movements 13-12-1995
until 24-06-1996:
Acquisitions = 246.336 246.336
Depreciation = -17.695 -17.695
Disposals = = =
Depreciation on disposals = = =
---------- --------- ---------
= 228.641 228.641
========== ======= =======
At 24 June 1996:
Cost = 246.336 246.336
Accumulated depreciation = -17.695 -17.695
--------- ---------- ----------
Book value = 228.641 228.641
========= ========== =========
</TABLE>
<TABLE>
<CAPTION>
CURRENT ASSETS 24-06-1996
STOCKS
<S> <C>
Stocks in house 160.320
Goods to receive 145.252
-------
305.572
=======
</TABLE>
CORPDAL:63484.1 26308-00002
F-8
<PAGE>
<TABLE>
<CAPTION>
ACCOUNTS RECEIVABLE 24-06-1996
Taxes and social premiums
<S> <C>
VAT (NL) to be claimed 82.240
Other receivables
Current account managing directors 1.364
Suspense account 10.106
11.470
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES
24-06-1996
<S> <C>
Share capital 40.000
By notary deed dated June 20, 1996 the share capital was issued up to the
legally required minimum of Dfl. 40.000. The corresponding receivable on the
shareholder will be offset against the C/A ICA Marketing Company.
General reserve
Balance at 13 December 1995 =
Loss appropriation for the period -273.563
Balance at 24 June 1996 -273.563
========
</TABLE>
Currently, the Company is in a process of increasing the share capital with an
extra Dfl. 1.000.000. The existing C/A ICA Marketing Company will be brought in
as payment on those shares. Through Notary-deed the increase of the sharecapital
was exercised on October 24, 1996.
CORPDAL:63484.1 26308-00002
F-9
<PAGE>
NOTES TO THE COMPANY PROFIT AND LOSS ACCOUNT 13-12-1995
UNTIL 24-06-1996
in Dutch guilders
<TABLE>
<CAPTION>
13-12-1995
until
24-06-1996
OPERATING EXPENSES
Other operating expenses
<S> <C>
Marketing 65.196
Traveling/entertainment 35.696
Temporary staff 31.503
Office rent 20.000
Printing Stationary 9.025
Other 40.180
-----------
Total other operating expenses 201.600
NET FINANCIAL RESULT
Bank charges 3.780
Exchange differences 508
4.288
========
</TABLE>
AVERAGE NUMBER OF EMPLOYEES
During the period under review, ICA B.V., employed 1 person.
Raamsdonksveer
The management
Mr. M. Hilsenrath
CORPDAL:63484.1 26308-00002
F-10
<PAGE>
RELATED PARTIES/SUBSEQUENT EVENTS
Major shareholder of the Company
On November 1, 1996 Logiphone Group, Inc. has acquired all of the shares of the
Company.
Logiphone Telephone Communications Ltd. (Logiphone Israel)
Logiphone Israel is a preferred supplier of the Company, where as the Company
has agreed to purchase certain numbers of material on a monthly basis. Logiphone
Group, Inc., Logiphone Israel and the Company have agreed on a Strategic
Alliance Agreement, dated November 10, 1996.
Logiphone Israel has agreed to develop new equipment for the Company, for which
Logiphone Group, Inc. will provide financing thru a loan up to one million
dollars.
Conditions:
Interest 10%; Logiphone Israel shall have the right at any time to repay the
loan or to convert the loan into a 75%-equity interest in Logiphone Group, Inc.
The founder and principal shareholder of Logiphone Israel is indirectly a major
shareholder of Logiphone Group, Inc. and provides (under the terms and
conditions of the so-called "Dutch Co Agreement") management services to
Logiphone Group, Inc. at a management fee amounting $240,000, payable to an
affiliate of Logiphone Israel. The Dutch Co agreement is still subject to
negotiation.
Purchase option Radlinx, Ltd.
It was intended that Radlinx Ltd. would become a preferred supplier of the
Company, selling equipment for the transmission of facsimile messages over
Internet. Radlinx would grant the Company an option to acquire new shares of
Radlinx Ltd.
The intention was terminated in January 1997.
Stock Option Plan
Each director and executive officer of Logiphone Group, Inc. has been granted an
option for purchase of 50,000 shares at an exercise price of $20 per share for
an exercise period of two years. The execution of this option may be (highly)
dependent on the performance of the Company, being the only operating
company/subsidiary of Logiphone Group, Inc.
Purchase option Logiphone Israel
In connection with the Logiphone Agreement and the "Dutch Co Agreement"
Logiphone Group, Inc. has been granted to purchase all of the shares of
Logiphone Israel for $10 m1n. after 12 months, or for $15 m1n. during the 2nd
and 3rd year after.
Jabeco B.V.
Jabeco B.V. is the main facilitating entity for the Company. Almost all of the
efforts of Jabeco B.V. are aimed at the commercial and operating development of
the Company. Based on agreement almost all of the operating costs are being
beared by the Company.
CORPDAL:63484.1 26308-00002
F-11
<PAGE>
October 31, 1996-financial statements
The unaudited financial statements as of October 31, 1996 present the following
key-figures:
- total cumulative revenues Dfl. 328,268;
- accumulated deficit Dfl. 1,247,718;
- capital and reserves (not including the deficit) Dfl. 1,040,000.
CORPDAL:63484.1 26308-00002
F-12
<PAGE>
Logiphone Group, Inc.
Unaudited Proforma Balance Sheet
October 31, 1996
<TABLE>
<CAPTION>
International
Callers'
Association B.V.
Logiphone (A development
Group, Inc. stage entity) Total
----------- ---------------- -----
ASSETS
CURRENT
<S> <C> <C> <C>
Cash $ 14 $ 7,428 $ 7,442
Accounts receivable - trade 1,000 167,383 168,383
Accounts receivable - other - 43,097 43,097
Inventory - 157,883 157,883
1,014 375,791 376,805
PROPERTY AND EQUIPMENT
Net of depreciation - 329,797 329,797
TOTAL ASSETS $1,014 $705,588 $706,602
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 155 $280,996 $281,151
Affiliates - 547,146 547,146
Loan from stockholder 6,700 - 6,700
6,855 828,142 834,997
STOCKHOLDERS' EQUITY
Common stock 50 613,600 613,650
Paid-in capital 360,720 - 360,720
Retained deficit (366,611) - (366,611)
Retained deficit - accumulated
during the development stage - (735,540) (735,540)
Currency translation adjustment - (614) (614)
(5,841) (122,554) (128,395)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,014 $705,588 $706,602
</TABLE>
PF-1
<PAGE>
Logiphone Group, Inc.
Unaudited Proforma Statement of Operations
October 31, 1996
<TABLE>
<CAPTION>
International
Callers'
Association B.V.
Logiphone (A development
Group, Inc. stage entity) Total
----------- ---------------- ----------
<S> <C> <C> <C>
REVENUES $ - $ 136,560 $ 136,560
COST OF REVENUE - 205,286 205,286
GROSS PROFIT (LOSS) - (68,726) (68,726)
OPERATING EXPENSES 654 501,382 502,036
LOSS FROM OPERATIONS (654) (570,108) (570,762)
OTHER INCOME (EXPENSES) - (747) (747)
LOSS BEFORE INCOME TAX (654) (570,855) (571,509)
INCOME TAX - - -
NET LOSS $(654) $(570,855) $(571,509)
</TABLE>
PF-2
<PAGE>
SIGNATURE
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.
LOGIPHONE GROUP, INC.
(formerly Star Resources, Inc.)
Date: April 3, 1997 By:/s/ Ronald D. Gardner
---------------------
Ronald D. Gardner, President
CORPDAL:63639.2 26308-00002
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