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): October 6, 1997
TAL Wireless Networks, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-26110 13-3768554
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification Number)
930 East Arques Avenue 94086-4552
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (408) 523-8000
(Former Name or Former Address if Changed Since Last Report)
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Item 5. Other Events.
Introduction
As reported in an earlier Current Report on Form 8-K, on October 6,
1997, TAL Wireless Networks, Inc. ("Registrant") filed a voluntary petition for
relief under Chapter 11 of the U.S. Bankruptcy Reform Act of 1978 (the
"Bankruptcy Code").
The purpose of this Form 8-K is to inform the public how it intends to
handle its reporting obligations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). For the reasons set forth below, Registrant, in
lieu of filing with the Securities and Exchange Commission (the "Commission")
the periodic reports required under the Exchange Act, intends to file modified
reports that although in form do not comply with the rules and regulations under
the Exchange Act will, in substance, keep the investing public informed of
Registrant's condition pending its Chapter 11 proceeding.
Background
Until recently, Registrant was a wireless data communications services
provider that attempted to capitalize on the exploding demand for alternatives
to the high cost of wire line communications networks in developing economies.
Registrant was formed under the laws of the State of Delaware in May
1994 under the name Kushi Macrobiotics Corp., to develop, produce and/or market
a full line of high quality natural foods. In August 1995, Registrant raised
approximately $4.8 million in an initial public offering of its securities,
which proceeds were used to fund activities undertaken during Registrant's
development phase. In early 1996, management determined that revenues and profit
margins were not adequate to sustain the business as a going concern.
Registrant's management then focused on finding a merger, joint venture or
strategic alliance partner to protect stockholder equity. In May 1996,
Registrant executed a definitive agreement to merge with American Phoenix Group,
Inc. a Nevada corporation, which was subsequently amended in July 1996. The
merger was consummated on September 26, 1996, whereupon Registrant, which
emerged as the survivor, changed its name to "American Phoenix Group, Inc."
Following this transaction, Registrants' objective was to create
stockholder value by acquiring, financing and developing technology-related
companies. As a result of the merger, Registrant had three subsidiaries: Marine
Turbine Australian Pty., Ltd. ("MTA"), an Australian proprietary limited
company; Masling Industries Pty. ("Masling"), an Australian proprietary limited
company; and Tokan Holdings, Inc. ("Tokan"), a Delaware corporation through
which Registrant owned a minority interest in Barlile Corp., Ltd. ("Barlile"),
an Australian entity engaged in a variety of agricultural ventures with a
portfolio of notes and investments. MTA has developed a prototype modular power
unit for use in high speed ocean pursuit craft. Masling is an aircraft component
overhaul and engineering facility.
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On October 24, 1996, Registrant entered into an agreement to acquire
all of the capital stock of Tetherless Access Asia Ltd. ("TAAL"), a privately
held Australian corporation, in exchange for shares of Common Stock and
Preferred Stock to be issued to the shareholders of TAAL. On a fully diluted
basis, the shareholders of TAAL became the beneficial owners of 60% of
Registrant's Common Stock. As a condition to closing, Registrant was required to
sell its business assets and make the proceeds generated from such disposition
available to fund the business of TAAL.
The TAAL transaction was consummated on November 13, 1996. In
connection with the consummation of the TAAL transaction, Registrant's
MTA/Masling subsidiary and its Barlile and note portfolio investments were sold
for a total consideration of approximately $10.3 million payable incrementally
and in full by February 28, 1997. Approximately $1.1 million was paid. The
balance was never received by Registrant. In April 1997, Registrant changed
its name to TAL Wireless Networks, Inc., to evidence the new direction of its
business.
On May 21, 1997, Registrant was served with complaints by Golden
Insurance Company ("Golden Eagle") in five separate but related lawsuits. The
suits claimed damages aggregating approximately $12.5 million plus interest and
costs. The suits also named ECI Construction Services, Inc. ("ECI CS") and
Environmental Control Industries, both former subsidiaries of American Phoenix
Group, Inc., Registrant's predecessor by merger ("APG"), and APG's former
officers and directors and controlling shareholders. Golden Eagle sought
reimbursement of losses allegedly incurred in connection with certain
construction projects it purportedly completed. These projects were commenced in
the early 1990's by ECI CS and Environmental Control Industries, which entities
ceased operations a number of years ago. As a result, the lawsuits were
unrelated to Registrant's then current business and operations.
As a result of the non-payment of the promissory notes received by
Registrant in consideration for the sale of substantially all its assets as set
forth above, the suit commenced by Golden Eagle as well as the refusal by
Registrant's principal stockholders, located in Australia, to continue to
finance Registrant through short term loans, in July 1997, it was forced to
cease all operations and lay off its personnel.
It took Registrant in excess of three months to raise the financing
necessary to retain bankruptcy and other counsel and professionals to handle a
bankruptcy proceeding. On October 6, 1997, Registrant filed a voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (the "Petition Date").
Registrant's Future Reports
The burden on Registrant resulting from the need to focus on
reorganization-related matters no longer permits the review and preparation of
periodic reports. Registrant does not have the financial or human resources
necessary to adequately comply with its reporting obligations under the Exchange
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Act. Registrant's financial resources are insufficient to continue its business
for purposes other than its winding up. In addition, in accordance with the
purposes of the Bankruptcy Code, Registrant's activities are necessarily limited
to serving the best interests of its creditors. Preparation of reports under the
Exchange Act by Registrant would detract from serving its creditors' best
interests.
Registrant also believes that non-financial data required to be
included in Registrant's periodic reports are not appropriate under the current
circumstances. Registrant's remaining directors are currently affiliated with
Registrant for the sole purpose of winding up its affairs.
In addition, there is virtually no trading in Registrant's securities.
Registrant's stockholders have no expectation of any distribution upon
liquidation of Registrant's business. Filing reports required under the Exchange
Act would therefore not serve the Exchange Act's disclosure purposes. The
current state of the market for Registrant's securities demonstrates that there
is little danger of harming public stockholders if Registrant follows the
procedure herein set forth. Stockholders will not benefit from the periodic
disclosure required under the Exchange Act. Also, Registrant has made
considerable efforts to keep its stockholders informed through timely
disclosures. Registrant filed a Current Report on Form 8-K on July 29, 1997, to
disclose the closure of its offices and its intention to file a petition under
Chapter 11. The filing of Registrant's bankruptcy petition was promptly
disclosed in a press release on the Petition Date. Furthermore, Registrant
reported its bankruptcy filing in a Current Report on Form 8-K which was filed
within days after the Petition Date.
The monthly reports to be submitted by Registrant (which will be filed
with the Commission as set forth herein) will provide relevant information to
stockholders respecting Registrant's business prospects and possible successful
reorganization. Furthermore, such reports will be more frequently made than
filings made under Forms 10-K or 10-Q.
Conclusion
Registrant intends to file with the Commission under cover of a Form
8-K copies of the monthly reports within 15 calendar days following their
submission to the bankruptcy court. This modified reporting procedure would
replace the periodic reports required under the Exchange Act until confirmation
of a plan of reorganization.
Registrant believes that the proposed modified reporting procedure will
best serve the interests of all its stockholders.
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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, thereto duly authorized.
Date: October 27, 1997
TAL WIRELESS NETWORKS, INC.
By: /s/
Richard Redett, Director
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