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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-K
     (Mark One)

[X]  Annual report  pursuant to section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 [Fee Required] for the fiscal year ended December 31, 1996 or

[ ]  Transition  report  pursuant  to  section  13 or  15(d)  of the  Securities
     Exchange  Act of 1934 [No Fee  Required]  for the  transition  period  from
     __________ to ___________

                         Commission file number 0-22046

                    BOGEN COMMUNICATIONS INTERNATIONAL, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

        Delaware                                        38-3114641
------------------------                    ------------------------------------
(State of Incorporation)                    (I.R.S. Employer Identification No.)

  50 Spring Street, Ramsey, New Jersey                             07446
----------------------------------------                         ----------
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code:  (201) 934-8500

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

                         Common Stock, $0.001 Par Value
                                (Title of class)
                 Warrants to Purchase One Share of Common Stock
                                (Title of Class)

     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  [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Registration S-K is not contained herein,  and will not be contained,  to
the  best  of  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated by reference in Part III of this Form 10-K or amendment
to this Form 10-K. [X]

     As of March 27, 1997,  5,758,850 shares of the  Registrant's  Common Stock,
par value $.001 per share were  outstanding.  The aggregate  market value of the
voting  stock,  based on the closing price of the  Registrant's  common stock on
March  27,  1997,  as  reported  on  the  American  Stock   Exchange,   held  by
non-affiliates of the Registrant was approximately $5,685,505.

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                                 Page 1 of 143
                    Exhibit Index Appears on Page 47 Hereof.

<PAGE>

                    BOGEN COMMUNICATIONS INTERNATIONAL, INC.
                                    FORM 10-K
                                TABLE OF CONTENTS
                                                                           PAGE
                                                                           ----
PART I
Item      1.  Business......................................................  1
Item      2.  Properties ................................................... 12
Item      3.  Legal Proceedings ............................................ 13
Item      4.  Submission of Matters to a Vote of Security Holders........... 13

PART II
Item      5.  Market Price for Registrant's Common Equity and 
                  Related Stockholder Matters............................... 14
Item      6.  Selected Financial Data....................................... 16
Item      7.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations....................... 17
Item      8.  Financial Statements and Supplementary Data................... 23
Item      9.  Changes in and Disagreements with Accountants
                  on Accounting and Financial Disclosure.................... 24

PART III
Item 10.      Directors and Executive Officers of the
                Registrant.................................................. 25
Item 11.      Executive Compensation........................................ 27
Item 12.      Security Ownership of Certain Beneficial
                Owners and Management....................................... 34
Item 13.      Certain Relationships and Related Transactions................ 36


PART IV
Item 14.      Exhibits, Financial Statement Schedules and Reports on
                Form 8-K.................................................... 36

<PAGE>

                                     PART I

     All statements  contained herein that are not historical facts,  including,
but  not  limited  to,  statements  regarding  the  Company's  current  business
strategy,  the Company's  projected  sources and uses of cash, and the Company's
plans  for  future   development   and   operations,   are  based  upon  current
expectations.  These  statements  are  forward-looking  in nature and  involve a
number of risks and uncertainties.  Actual results may differ materially.  Among
the  factors  that  could  cause  actual  results to differ  materially  are the
following:   competitive   factors,   including  the  fact  that  the  Company's
competitors  are highly  focused  and may have  greater  resources  and/or  name
recognition than the Company; changes in technology and the Company's ability to
develop or acquire  new or  improved  products  and/or  modify and  upgrade  its
existing  products;  changes in labor,  equipment and capital costs;  changes in
access to suppliers; currency fluctuations; changes in regulations affecting the
Company's  business;   future  acquisitions  or  strategic   partnerships;   the
availability  of sufficient  capital to finance the Company's  business plans on
terms  satisfactory to the Company;  general  business and economic  conditions;
political  instability in certain regions; and other factors described from time
to  time in the  Company's  reports  filed  with  the  Securities  and  Exchange
Commission. The Company wishes to caution readers not to place undue reliance on
any such  forward-looking  statements  which statements are made pursuant to the
Private  Litigation  Reform Act of 1995 and, as such,  speak only as of the date
made.

Item 1. BUSINESS

     Bogen  Communications   International,   Inc.,  formerly  European  Gateway
Acquisition Corp., (the "Registrant",  and, together with its subsidiaries,  the
"Company"),   develops,  produces  and  sells  sound  processing  equipment  and
telecommunications peripherals,  through its subsidiaries,  Bogen Corporation, a
Delaware  corporation  ("Bogen"),  and Speech Design GmbH, a German  corporation
("Speech Design").

     Bogen   focuses  on  commercial   and   engineered   sound   equipment  and
telecommunication  peripherals for the voice and sound  processing  market.  For
over six decades,  Bogen has been a leader in commercial amplifiers and intercom
systems for  background and foreground  music  applications,  as well as for the
security  and  educational  industry,   and,  since  1991,  has  produced  voice
processing systems, including voice mail systems, message/music-on-hold systems,
digital announcers, call distributors and automated attendants.

     Speech Design focuses on digital voice processing systems for the mid-sized
Private Branch Exchange ("PABX") market,  targeting the rapidly growing European
voice  processing  market.  With the  launch,  in late 1995,  of its new product
family called "Memo", Speech Design has added innovative non-PC based voice mail
systems to its existing line of  telecommunication  peripheral  products,  which
includes voice-mail, automated attendants, digital announcers and message/music-
on-hold  systems.  The initial  market  reception for Memo has been positive and
approximately 1,500 systems were shipped in 1996.

     Bogen's  products  are sold  primarily  through a network of  distributors,
dealers and contractors.  Speech Design sells directly, through leading European
telephone switch manufacturers in Germany, and through major independent dealers
outside Germany.

     Suppliers and  subcontractors,  located  primarily in the Republic of South
Korea,  as well as  Taiwan,  Israel,  Germany,  and the United  States,  produce
sub-assemblies and finished products for the Company.

                                        1

<PAGE>

     The Company is a Delaware corporation whose principal executive offices are
located at 50 Spring Street,  Ramsey,  New Jersey 07446 and its telephone number
is (201) 934-8500.

Company History

     The Registrant was formed on May 6, 1993 as a Specified Purpose Acquisition
Company  ("SPAC")  with the  objective  of  acquiring a  medium-sized  operating
business engaged in industrial  manufacturing or industrial services and located
in  Germany,  Switzerland  or  Austria.  On October  13,  1993,  the  Registrant
consummated  an initial public  offering (the "IPO")of  1,550,000  units,  which
resulted in $8,120,000 in net proceeds to the Registrant. Each unit consisted of
one share of the Registrant's  common stock,  $.001 par value per share ("Common
Stock"), and two warrants (the "Warrants"), each entitling the holder thereof to
purchase one share of Common Stock for $5.50 per share (the "Units").  As of the
date hereof,  there are 5,758,850 shares of Common Stock and 3,660,000  Warrants
outstanding.

     Until  April 6, 1995,  the  Registrant  did not  engage in any  substantive
commercial business other than evaluating prospective companies for acquisition.
On such date, the Registrant  entered into an agreement (as amended,  the "Stock
Purchase Agreement") with Geotek  Communications,  Inc.  ("Geotek"),  to acquire
controlling  interests in two  communications  products  companies  then held by
Geotek (the "Business Combination").

     Pursuant  to  the  Stock  Purchase  Agreement,  on  August  21,  1995,  the
Registrant  acquired from Geotek  approximately  67% of the outstanding  capital
stock of Speech Design GmbH and  approximately  99% of the  outstanding  capital
stock of Bogen  Corporation.  As  consideration  for such  acquisitions,  Geotek
received from the Company:  (i) 3,701,919  shares of Common Stock;  (ii) 200,000
Warrants;  (iii)  $7,000,000;  and  (iv) a  convertible  promissory  note in the
principal amount of $3,000,000 due in February, 1997. Furthermore,  depending on
whether  Speech  Design  and Bogen in the  aggregate  achieve or fail to achieve
certain earnings goals during the period from July 1, 1995 to June 30, 1997, the
Company may be  obligated to make an  additional  payment to Geotek of up to $11
million in cash or Common  Stock or Geotek may be obligated to make a payment to
the Company of up to $2.5 million in cash (or at Geotek's option, a ten-year, 4%
loan in the principal amount of up to $5 million).  Based on management's review
of the earnout calculation, the anticipated contingent consideration payment, if
any,  will not have a material  effect on the Company's  financial  position and
operating  results.  Geotek also  acquired  the right to receive 70% of any cash
proceeds  received  by the  Company  upon  exercise  of the  3,660,000  Warrants
outstanding  if  exercised  by  June  30,  1997.  As a  result  of the  Business
Combination,  Geotek acquired an approximately  64% controlling  interest in the
Company.

     In May 1996, the Company and Geotek entered into the most recent  amendment
to the Stock  Purchase  Agreement  effective  January 1, 1996.  Pursuant to such
agreement, (i) the $3,000,000 convertible promissory note payable by the Company
to Geotek,  due  February  1997,  was  reduced  and  restructured  to a $500,000
non-convertible  promissory  note due July 1997,  (ii) the  earnout  formula was
revised to reflect an increase in the amount the Company  could be liable to pay
Geotek from  $11,000,000 to $13,500,000 in connection  with the reduction of the
principal  amount of the promissory note, and (iii) Geotek was granted an option
to purchase,  at any time through October 31, 1997, from the Company  $3,000,000
worth of Common Stock with  exercise  prices  ranging from 100% to 65% of market
price, depending on the date of exercise.

                                        2

<PAGE>

Bogen

     Bogen develops,  assembles and distributes  sound processing  equipment and
telecommunication   peripherals  through  its  wholly  owned  subsidiary,  Bogen
Communications,  Inc.  ("BCI").  Since  its  founding  in 1932,  Bogen  has been
involved in the  commercial  sound  industry,  concentrating  its efforts on the
development and sale of equipment for commercial,  industrial,  professional and
institutional markets and applications.

     Traditionally, Bogen's core products (which are sold through the Engineered
Systems and Commercial Sound product lines) include: commercial audio amplifiers
and related sound and intercom systems  equipment for  professional,  industrial
and commercial system  applications,  including  background and foreground music
applications,  intercommunications and administrative communications systems for
the security and educational industry, and telephone paging.

     During   1991,   Bogen   introduced   its  first   product  in  a  line  of
telecommunications  peripherals,  the Telco product  line.  The first product in
this  line  was the MMT,  a  digital  announcer  with  automatic  microprocessor
controlled  tape  download  for  "on-hold"  applications.   During  1992,  Bogen
introduced various products in the digital telephone peripherals area, including
the Automated  Attendant and the Digital  Announcer.  These products are used in
message/music on-hold and voice mail systems.

     During 1993, Bogen began marketing to the retail and end-user markets a new
product line,  resulting in the Company's Office Automated  Systems ("OAS").  In
December  1995,  the Company's  management  decided to phase-out the OAS product
line and to concentrate on its traditional commercial and institutional customer
base. See also "Product Lines - OAS".

     Product Lines

     Telco

     Bogen's Telco products  consist of telephone  paging systems and equipment,
digital  message/music-on-hold  players, one port voice mail systems and digital
telecommunication peripherals such as auto-attendants,  digital announcers, call
buffers and others.  These  products  allow  installers to increase the value of
their telephone system offerings by providing users with enhanced efficiency and
convenience.  Management  believes  that the  Company's  latest  Telco  product,
MiniMail, introduced in late 1996, is well positioned as the most economical yet
full featured voice mail system available today.  MiniMail  delivers many of the
features  typically  associated with high-end voice mail systems,  yet is priced
competitively enough to appeal to owners of small telephone systems. MiniMail is
compatible with all leading PABX and key and hybrid key telephone systems.

     Bogen Telco net sales were  $13,122,000,  $12,169,000,  and $11,065,000 for
the years ended December 31, 1996,  1995 and 1994,  respectively.  Speech Design
also has a Telco line of  products,  see  "Speech  Design - Product  Line".  The
Company's  combined Telco net sales through Bogen and Speech Design  amounted to
$28,720,000,  $26,010,000 and $19,242,000 for the years ended December 31, 1996,
1995 and 1994,  respectively.  Telco net sales  through  Bogen  provided  28.4%,
27.3%, and 24.1% of the Company's net sales for these respective years. Combined
Telco sales  provided  62.1%,  58.4%,  and 41.9% of the  Company's net sales for
these respective years.

                                        3

<PAGE>

     Commercial Sound

     Bogen's  Commercial  Sound product line consists of  amplifiers,  speakers,
microphones,  intercom  systems and other sound  equipment used in  non-consumer
applications, such as industrial public address systems, and background music in
offices.  This  line's  newest  product,  the  PROMATRIX  amplifier,  which  was
introduced  to  the  market  in  the  third  quarter  1996,  incorporates  three
independent  amplifier  channels in a single package.  The Company believes that
the  product's  user  interface  sets new  standards in ease of use and provides
customers with superior control over  sophisticated  background music and paging
applications. The PROMATRIX is a one-box solution for installations that usually
require a rack full of costly equipment.

     Commercial  Sound net sales for the years ended December 31, 1996, 1995 and
1994 were $9,315,000, $8,436,000, and $8,749,000, respectively. Commercial Sound
provided 20.1%,  19.0%, and 19.1% of the Company's net sales for the years ended
December 31, 1996, 1995 and 1994, respectively.

     Engineered Systems

     Bogen's   Engineered   Systems   product  line  features   custom  designed
intercom/paging  systems  that  are  sold to  contractors  for  installation  in
schools.  Introduced in late 1996, this line's newest product,  MULTICOM-DCS(TM)
(Digital Communication System),  provides system users with high quality control
speaker   and   telephony   functions   through   a  single   user   interphase.
MULTICOM-DCS(TM)  provides full  integration  of the Company's  MULTICOM  paging
technology with COMDIAL PABX systems.

     Engineered  Systems net sales for the years ended  December 31, 1996,  1995
and 1994 were $6,682,000, $5,629,000, and $5,679,000,  respectively.  Engineered
Systems net sales amounted to 14.4%, 12.6%, and 12.4% of the Company's net sales
for the years ended December 31, 1996, 1995 and 1994, respectively.

     Office Automated Systems

     The OAS line was designed  for the small  office/home  office  environment.
FRIDAY Home Office Receptionist,  an all-digital office communications  manager,
was Bogen's  leading product in this category and was intended to serve as a hub
for phone  messages,  faxes and links to pagers  and  cellular  phones.  The OAS
product line  targeted the retail and  end-user  marketplace  in contrast to the
commercial and institutional focus for Bogen's other product lines.

     For the  years  ended  December  31,  1996,  1995 and  1994,  OAS net sales
amounted to $1,552,000, $4,444,000, and $12,252,000, respectively. OAS net sales
were  3.4%,  10.0%,  and 26.7% of the  Company's  net sales for the years  ended
December 31, 1996, 1995 and 1994, respectively.

     Due to intense  competition from (i) central voice mail services offered by
local  telephone  companies  and answering  service  companies and (ii) products
which benefited from better brand  recognition in the marketplace and which were
frequently  offered at lower  retail  prices  than the  Company's  products,  in
December 1995, the Company's  management decided to phase out Bogen's entire OAS
product line and to concentrate on its traditional  commercial and institutional
customer base.

                                        4

<PAGE>

     Sales and Marketing

     Telco

     Bogen  distributes its Telco products to  approximately 12 distributors who
operate more than  approximately 200  telecommunications  distribution  centers.
These  distributors  sell  to  hundreds  of  telecommunications   installers  or
interconnects  across North America. The major distributors are Graybar Electric
Co., Inc. ("Graybar"),  Alltel Corp. and Sprint/North Supply. In addition to its
distribution   network,   Bogen  has  a  relationship   with   approximately  25
message/music-on-hold studios that specialize in creating custom messages. These
studios sell their services along with Bogen's Telco products. Bogen also has an
original equipment manufacturer (OEM) agreement to supply AT&T with AT&T-branded
on-hold systems.

     Bogen  markets  its  Telco   products   through  a  group  of   independent
manufacturer's  representatives comprised of organizations with approximately 40
salespeople  who  sell  Bogen's  Telco  and  other  complementary   products  to
distributors and  interconnects in their territory on an exclusive basis.  These
representatives are supported by a 4-person Bogen sales and support staff.

     Commercial Sound and Engineered Systems

     Bogen  distributes  its  Commercial  Sound  products  through a network  of
approximately  2,000  distributors,  dealers and contractors,  often as complete
systems  designed to satisfy an  end-user's  specific  sound and  communications
needs. In addition,  a network of  approximately  200 major  contractors  market
Bogen's school intercom systems on a territory-exclusive basis.

     Bogen's  Commercial  Sound  products are stocked by  virtually  every major
sound master  distributor,  industrial  equipment  distributor,  and  commercial
security products distributor in North America.

     Bogen's  Commercial  Sound and  Engineered  Systems  products  are marketed
generally   through  a  field  sales   organization   and  several   independent
manufacturers  representatives  under the  direction of Bogen's  internal  sales
force.  Both the field sales group and the  representatives  are responsible for
assigned territories. The field sales personnel receive a salary and bonus based
on performance and the  representatives  are compensated on a commission  basis.
Sales  agreements  are  maintained  with  all  of  Bogen's   independent   sales
representatives  and engineered systems  contractors.  The sales  representative
agreements  typically permit the sale of Bogen products by the representative in
a specific territory assigned to one or more sales  representatives.  Similarly,
the engineered systems contractor  agreements  typically allow the contractor to
purchase and install specific product lines in a designated territory.

     The principal  users of these  products are  industrial,  professional  and
commercial  concerns  and  institutions  such  as  schools,  nursing  homes  and
correctional  facilities.  Bogen management believes that these user markets are
relatively  stable and that Bogen has developed  significant name recognition in
these markets.

     OAS

     Bogen sold its OAS products to nearly 2,000  retail  outlets,  distributors
and catalogers in North America,  including major consumer electronic retailers.
Bogen   marketed   its   OAS   products   through   independent   manufacturer's
representatives who sold Bogen's OAS and other complementary products to

                                        5

<PAGE>

distributors and retailers in their territory on an exclusive basis.

     Sales Outside the U.S.

     Although Bogen's sales are primarily in the United States, Bogen also sells
its  products  in  Canada  through  a  stocking   representative  that  has  its
headquarters in Ontario and branch offices  throughout  Canada.  Export sales to
Europe are handled through the Company's subsidiaries in Europe. Export sales to
other  foreign  countries  are  handled in the same  manner as sales  within the
United States (i.e., through distributors, dealers and contractors that purchase
the products and sell them to an established account base overseas).

     Operations

     All components and materials used in the  construction of Bogen's  products
are of standard  commercial  quality or better,  and are readily  available from
overseas  and  United  States  suppliers.   Bogen  relies  principally  upon  an
established  network of suppliers and  subcontractors  primarily  located in the
Republic of South Korea,  and to a lesser extent  Taiwan,  Israel and the United
States.  These suppliers and sub-contractors  either produce  sub-assemblies for
use in the final assembly of a finished product or produce the finished products
themselves. Products are based on Bogen designs and are built in accordance with
Bogen drawings and  specifications.  There can be no assurances that disruptions
in supplies will not occur from time to time, or that any such  disruptions will
not have a material adverse effect on the Company.

     Patents and Trademarks

     "Bogen" is a trademark  of the Company  which is  registered  in the United
States and in certain  foreign  countries  throughout the world.  This trademark
expires  in the  United  States  in March  2000.  Bogen has also  obtained  U.S.
trademark registration for the trade name  "Multicom2000(TM)." This trademark is
utilized in  connection  with  Engineered  Systems and expires in July 2001.  In
addition, during 1996, Bogen obtained a U.S. trademark for the tradename "Speech
Design", which will expire on December 31, 2006 and which can be renewed at that
time for an additional ten years.

     Research and Development

     Bogen's  in-house  engineering  department is responsible  for research and
development,  production  engineering  and sales  engineering.  In 1997, the R&D
Department will focus on new innovative solutions for the Telco paging market by
developing a unified messaging system incorporating  paging, voice messaging and
wireless  peripherals  into one  integrated  product.  There can be no assurance
however,  that Bogen will be able to develop such  system,  nor can there be any
assurance that it will be able to compete with similar products offered by other
manufacturers.  Research  and  development  expenditures  for  the  years  ended
December 31, 1996, 1995 and 1994 were  $1,865,000,  $1,415,000,  and $1,463,000,
respectively.

     Competition and Major Customers

     Bogen's competition varies from market to market and product to product. In
areas in which it faces  competition,  Bogen  competes  on the basis of  several
different  factors,  including name recognition,  price,  innovation and product
quality.  However,  such  factors vary in relative  importance  depending on the
markets and products involved. Bogen's management has concentrated on markets in
which it believes that Bogen can obtain at least a 10% market share, be one

                                        6

<PAGE>

of the top two or three suppliers or which have  substantial  growth  potential.
Bogen's  key  strength  continues  to be  its  distribution  channels  and  name
recognition,  especially  in the  school,  background/foreground,  and  security
markets.

     Bogen's Telco  products  compete in the voice  processing  and voice paging
niches of the Telco market.

     In the voice processing  market,  Bogen's  competitors are relatively small
companies that offer basic voice mail systems up to four ports. Competition also
comes from the many telephone system  manufacturers which offer small voice mail
systems as options  to their  telephone  equipment.  The  Message-On-Hold  voice
processing market provides Bogen with three small but tough competitors, NelTech
Labs, Premier, Inc., and Mackenzie Labs.

     In the voice paging  market,  Bogen's main  competitor  is Valcom,  Inc., a
company which has been  established  in this market for several  decades.  Other
competition  comes from  several  other U.S.  companies  which have been  losing
market share over the past few years, and from several  companies  attempting to
enter the market.  Bogen has increased its share in the voice paging market from
18% to 33% in recent years.

     The  Commercial   Sound  customer  market  is   characterized   by  intense
competition,  particularly from several overseas companies,  with no one company
accounting for more than 10% of the U.S. market. Bogen's principal competitor is
TOA Electronics,  a Japanese Company ("TOA"), and University Sound, a U.S. based
manufacturer  ("University").  Bogen  also  competes  with  comparatively  small
manufacturers  that rely  mainly on  established  account  relationships.  Bogen
concentrates  on  customer  needs to design,  manufacture  and  market  tailored
packaged  solutions  for each  particular  vertical  market.  Bogen  focuses  on
durability  and  reliability as opposed to  state-of-the-art  performance in its
product design and positioning.

     Bogen's  Commercial  Sound  competition can be divided into two categories:
General Line/Master  Distributor  competitors,  and competitors at the Sound and
Systems Contractor level.

     In the distributor channel, Bogen faces full line competitors such as Paso,
Inc.,  University,  Speco, Inc. and others,  as well as specialized  competitors
such as  Atlas  Soundolier,  Inc.,  Quam  Nichols,  Inc.,  Lowell,  Inc.,  Shure
Brothers,   Inc.,  and   CTI/Astatic  who  market  and  sell  products  such  as
microphones,  speakers,  horns  and other  non-amplifier  items.  Bogen  garners
greater  than 50% market share  versus all of these  competitors  selling to the
distributor channel.

     At the  contractor  level,  Bogen faces  competition  from many sources,  a
number  of  them  overseas  companies.   Bogen's  principal  competitor  at  the
contractor level is TOA, comprising  approximately 10% of the U.S. market, which
invests  considerable effort in developing sound systems.  Bogen competes with a
number of other amplifier  manufacturers such as QSC Electronics,  none of which
has secured  more than  approximately  10% of the market.  There are a number of
comparatively  small  manufacturers  Bogen competes with, whose sales and market
share  depend  upon  established  reputation  for  quality and support and solid
relationships with their account base.

     The  Engineered  System  customer  market  is a highly  specialized  market
characterized  by low unit  volume  and high  dollar  sales.  Bogen's  principal
competition  comes from Rauland Borg Corp.,  the market leader in this area, and
Dukane Corporation, which, like Bogen, have been in the market for several years

                                        7

<PAGE>

and have well established name  recognition and distribution  channels.  Rauland
Borg Corp. is currently the acknowledged market leader.

     The OAS market is characterized  by intense  competition from central voice
mail  services  offered  by local  telephone  companies  and  answering  service
companies  and  other   competitors  with  greater  brand   recognition  in  the
marketplace  whose products are  frequently  offered at lower retail prices than
the Company's  products.  Accordingly,  in late 1995,  the Company's  management
decided to phase out Bogen's entire OAS product line.

     Graybar,  Bogen's  largest  customer,  accounted  for more  than 10% of the
Company's  gross  sales.  The loss of Graybar as a customer  is likely to have a
material adverse effect on the Company.

     Backlog of Orders

    As of December 31, 1996, Bogen had a backlog of firm orders of approximately
$425,000,  all of which it expects to fill within 1997. As of December 31, 1995,
Bogen had a backlog of firm orders of approximately $1,090,000.

Speech Design

     Speech  Design,  located in Munich,  Germany,  develops,  manufactures  and
markets  telephone   peripheral  hardware  utilizing  digital  voice  processing
technologies.  Speech Design  products  include  voice mail  systems,  automated
attendants,  digital announcers and  message/music-on-hold  systems. Until 1992,
Speech Design was engaged primarily in selling peripheral equipment for cellular
telephones utilized in connection with an analog network. With the advent of the
European  GSM digital  standard  and the related  decline in prices of ancillary
subscriber  equipment,   Speech  Design's  management  decided  to  refocus  its
activities from the cellular market to the telephone peripherals market.

     In late 1995,  Speech Design  launched a new product  family called "Memo",
which  consists  of  stand-alone   non-PC  based  voice  mail   peripherals  for
small-to-medium PABXs. The high-end Memo-CDA model includes a CD based music and
information  on hold  system.  Memo  offers  full  integration  with most of the
popular  PABX  models  on  the  European  market.  Management  expects  Memo  to
contribute  significantly to Speech Design's strategic goal of becoming a market
leader in the rapidly growing  European voice processing  market.  Memo has been
well-accepted in the marketplace and approximately 1,500 systems were shipped in
1996, contributing approximately 23% to Speech Design's 1996 net sales.

     In  1994,   Speech  Design   launched  a  major  program  to  establish  an
international market presence.  Speech Design signed distribution contracts with
partners in ten European  countries  and gained  national  Post,  Telegraph  and
Telephone ("PTT") approval in most major markets. The Company believes that such
approval  constitutes  a major market entry  barrier to  non-European  and small
European companies.  Also on July 1, 1994, Speech Design acquired a 67% interest
in Satelco AG, a Swiss company, which is a marketer of telephone peripherals and
a  distributor  of Speech  Design's  and Bogen's  products.  In order to further
support  its  efforts  to enter the UK  market,  Speech  Design  founded a sales
subsidiary, Speech Design (UK) Ltd., in early 1996. With a staff of four, the UK
branch has had some initial  sales.  In the last quarter of 1996,  Speech Design
signed a distribution  agreement with GEC,  partially owned Siemens  subsidiary,
the second  largest  distributor  in the UK. Sales outside of Germany  increased
from 11% of total  sales in 1994 to 20% in 1995 to 24% in 1996 and are  expected
to reach 40% of total sales within the next 3 years.  There can be no assurance,
however,  that Speech  Design will  achieve  such goal and that Speech  Design's
growth outside of

                                        8

<PAGE>

Germany will continue.

     In mid-1996, a manufacturing  subsidiary,  Speech Design (Israel) Ltd., was
founded in  Israel.  It has begun to assume the  production  of certain  product
lines from Speech Design Germany,  resulting in reduced  manufacturing  cost and
tax  levels.  The Israeli  facility  has been  granted a 10-year tax  exemption,
effective January 1, 1997.

     Product Line

     Speech  Design's  products  are in the Telco line of  products  and include
voice mail, automated attendants,  digital announcers and  message/music-on-hold
systems.   Telco  net  sales   provided  by  Speech  Design  were   $15,598,000,
$13,841,000,  and  $8,177,000  for the years ended  December 31, 1996,  1995 and
1994, respectively. Speech Design Telco sales amounted to 33.7%, 31.1% and 17.8%
of the Company's net sales for these years.

     Sales and Marketing

     The general market for Speech Design's products is the under-developed, but
rapidly growing,  European voice processing market for commercial and industrial
end users. According to the Company's estimates, the current penetration of such
applications as voice mail in Europe is less than 1% of the installed  telephone
system PABX base and less than 5% of new PABX  shipments (as compared to between
20%-40% in the U.S.A.). PABXs are multiple-line business telephone systems which
are  installed  at end users'  businesses  to  facilitate  internal and external
communications.  The PABX is an  alternative  to  providing  each  employee in a
company with his or her own direct line.

     Speech  Design  markets its PABX  peripherals  to major  manufacturers  and
distributors  of PABX systems  throughout  Europe for use by mid-size  companies
consisting of approximately 20-200 employees.  The major manufacturers integrate
Speech  Design  products  with their PABXs for sale to the end-user as part of a
new system. The increased visibility of Speech Design's products had led to more
Speech Design peripherals being sold to owners of previously installed PABXs.

     Speech Design attempts to differentiate itself both from high-end suppliers
of large customized systems and suppliers of semi-professional,  price-sensitive
solutions  for the small  company  sector by providing  standard,  high-quality,
affordable and easy-to-use products for the small to mid-size PABX.

     Speech  Design sells its products  through  resellers.  In Germany,  Speech
Design's main customers are sales  organizations  of leading PABX  manufacturers
and major independent  dealers. In other European  countries,  Speech Design has
exclusive agreements with national distributors, which in Switzerland and the UK
are Speech  Design  subsidiaries,  which  market to the  reseller  base in their
respective territories. In the United States, Bogen is the exclusive distributor
of Speech Design products.

     Germany

     In Germany,  Speech  Design has  developed an effective  approach for local
distribution of voice processing  products.  Speech Design sells directly to the
regional sales offices of the leading  manufacturers of PABX equipment including
Alcatel, Siemens, Philips, Bosch Telecom and DeTeWe. Over 75% of Speech Design's
sales  are  to  these   customers   (which   percentage   corresponds  to  these
manufacturers'  approximate joint share of the PABX market). The loss of any one
of these customers is likely to have a material adverse effect on the Company.

                                        9

<PAGE>

Speech Design has achieved  central pricing  agreements and technical as well as
commercial  endorsements  from the  headquarters  of each of the companies.  The
regional offices of these companies consist of approximately 200 locations and a
combined sales force of  approximately  3,000 people.  Speech Design's own sales
and technical team of 15  individuals  supports and motivates the regional sales
forces of the large PABX companies to actively market Speech Design's  products.
Speech Design routinely updates its data bank of all PABX sales  representatives
in Germany to help the sales team optimize communications and efficiency.

     Speech  Design  considers its sales  network in Germany,  Europe's  largest
telecommunications  market,  to be one of its most  valuable  assets and a major
market entry barrier to potential competitors.

     Outside of Germany

     Speech  Design  utilizes  exclusive  national  distributors  in  all  major
European  markets  (Austria,  Belgium,  Denmark,  Finland,  France,  Italy,  The
Netherlands,  The United Kingdom,  Sweden and Switzerland).  These distributors,
other than Satelco AG, in which Speech  Design  holds  approximately  67% of the
equity,  and Speech  Design's  U.K.  subsidiary,  are  independent  resellers of
telecommunications  equipment,  who market  Speech  Design's  products  to local
manufacturers  and  distributors  of PABXs.  In the United States,  Bogen is the
designated distributor. In order to achieve the Company's planned rate of growth
in export sales,  Speech Design has employed some of the marketing  methods used
in Germany to its other markets.  There can be no assurance,  however, that such
methods will prove successful in achieving further growth in these markets.

     Operations

     Speech Design  manufactures  its products in cooperation  with a network of
German  subcontractors  and an Israeli  subcontractor that was retained in 1995.
Speech  Design  purchases  all  mechanical  and  electronic  components  for its
products and ships them for  board-level  assembly  work by its  subcontractors.
Speech  Design's  own  manufacturing  group  assembles  finished  products  from
pre-tested modules and performs final quality tests. In mid-1996,  Speech Design
(Israel) Ltd. assumed the production of certain product lines.

     Speech  Design  maintains a  computerized  order  processing  and warehouse
system and a level of product  availability that generally enables it to deliver
products  in Germany  an  average  of three  days after  receipt of an order and
within two weeks after receipt of an order for other countries.

     Patents and Trademarks

     "Speech Design" is a registered  trademark in Germany and the U.S.  Several
of Speech Design's products also have registered trademarks.

     Research and Development

     Speech  Design's  engineering  group is  responsible  for the  development,
production  engineering  and sales  engineering  of all Speech Design  products.
Research and  development  expenditures  for the years ended  December 31, 1996,
1995 and 1994 were $1,027,000, $892,000, and $536,000, respectively.

     Competition

     In Germany, Speech Design is the acknowledged market leader in the small to
mid-size PABX peripherals, with an estimated market share of 60%. Speech

                                       10

<PAGE>

Design's  main  competitor  in  Germany  is Beyer KG, a  provider  of  telephone
peripherals  primarily at the low-end of the Speech Design product range (simple
music-on-hold  units and announcers).  Speech Design's  management believes that
its new Memo  family  of voice  mail and  related  products  will  increase  its
competitive advantage in Germany.

     There is no single  dominating  company in the European market for small to
mid- size PABX peripherals.  With the exception of Octel, Northern Telecom, AT&T
and a  handful  of  other  competitors  who are  highly  focused  on the  large,
customized systems market, Speech Design's competition comes from a large number
of smaller companies offering PC-based voice mail systems.  These companies tend
to be highly focused on their national markets and generally cannot afford to be
global players due to the cost of establishing distribution channels and gaining
regulatory  approval for selling  telecommunications  products in each  country.
Some of Speech  Design's  competitors  include  Beyer KG (Germany)  and Vox S.A.
(France);  the only company  offering a non-PC-based  solution similar to Speech
Design's is VOX S.A.of France.

     Management  believes that the combination of Speech Design's  mid-size PABX
focus, broad and unique product range and Europe-wide  distribution presence may
enable Speech Design to become a leading  provider of telephone  peripherals  in
many European countries.  There can be no assurance,  however, that such results
will  occur or that the Memo  family of voice  mail and  related  products  will
increase Speech Design's competitive advantage in Germany, because this industry
is highly sensitive to general economic conditions and is characterized by rapid
technological change. Speech Design's ability to compete successfully may depend
in  substantial  measure on its  ability to develop or acquire  new or  improved
equipment,  techniques  and  products  and/or to modify and upgrade its existing
equipment, techniques and products, none of which can be assured.

Backlog of Orders

     As of  December  31,  1996,  Speech  Design had a backlog of firm orders of
approximately  $496,000, all of which it expects to fill in 1997. As of December
31, 1995, Speech Design had a backlog of firm orders of approximately $918,000.

Strategy for Growth and Expansion

     Bogen's  goal is to increase its market share in each niche market in which
it is operating.  For the 1997 fiscal year, Bogen  restructured its organization
into three separate  Business Units (each a "BU").  The Commercial Sound BU, the
Telco  Messaging  BU and the  School  Systems BU with each BU  assuming  its own
profit and loss  responsibility.  Management  believes that such  structure will
enable Bogen to focus on each of the business  segments.  Bogen plans to achieve
growth through internal innovation and possible acquisitions.

     Speech  Design  management  believes  that the growing  demand for mid-size
voice mail in the rest of Western  Europe will create  opportunities  for Speech
Design to export its product  outside of Germany.  Speech  Design will focus its
efforts on duplicating its success in Germany into other West European countries
along  with  developing  the Memo  family to fit  larger  PBXs.  There can be no
assurance,  however,  that it will be able to duplicate  its success  outside of
Germany or expand Memo's potential customer base.

Government Regulations and Industry Certifications

     The federal government regulates domestic telecommunications equipment and

                                       11

<PAGE>

related industries. The federal agency vested with primary jurisdiction over the
telecommunication industry is the Federal Communications Commission (the "FCC").
Many telephone peripheral  industries,  while not directly regulated by the FCC,
are  nevertheless  substantially  affected by the enforcement of its regulations
and changes in its regulatory policy.

     The FCC has adopted  regulations  regarding  attachments  to the  telephone
networks as well as regulations imposing radio frequency emanation standards for
computing and radio equipment and many of Bogen's products require certification
by the FCC. In addition,  many of Bogen's  products also require the approval of
the Underwriter's Laboratory.  All such required certifications and/or approvals
have been obtained.  As a result of  modifications  and  improvements to Bogen's
products,  Bogen will be obligated to seek new  certifications  and/or approvals
where there is a degradation in the radio frequency emissions. Failure to obtain
such  certifications  and/or  approvals  may  preclude  Bogen from  selling  its
products  in the U.S.  Bogen  makes all  reasonable  efforts to ensure  that its
products comply with such requirements.

     To successfully access the Canadian market,  Bogen must obtain Underwriters
Laboratory  Canada  and  Canadian  Standards  Association  approvals  for all AC
powered products.

     All  Speech   Design   products   have  been   adopted  to  the   technical
(PTT-approvals) and commercial sound requirements of West European markets.

     In 1995,  Speech Design  received the ISO 9001 Quality  Certificate for its
research and development, production and customer support operations in Germany.
This certification is becoming an increasingly important  international "Quality
Mark" and  competitive  advantage.  In 1996,  the Quality  Mark was  extended to
include Speech Design's Israel and U.K. subsidiaries.

Employees

     As of  December  31,  1996,  the Company had  approximately  173  full-time
employees  engaged in its  businesses.  The Company also uses  temporary  and/or
part-time  employees,  as required.  Twenty of Bogen's  employees are subject to
collective  bargaining  agreements,   which  expire  in  mid-1997.  The  Company
considers its relationship with its employees to be good.

Item 2. PROPERTIES

     The  Registrant's  principal  place of  business  is  located  at 50 Spring
Street,  Ramsey,  New Jersey.  Bogen also maintains its principal  warehouse and
executive offices at that location which is subleased from an unaffiliated third
party. The lease, which covers  approximately  70,000 square feet,  commenced on
January 1, 1987 and expires on December  31, 2000.  Annual base rental  payments
over the remainder of the lease are approximately $670,000, plus taxes and other
expenses.

     Bogen also  maintains  inventory in the State of  Washington at a warehouse
managed by one of Bogen's independent sales representatives.

     Speech  Design  leases its  facilities  in  Munich,  Germany  under  leases
expiring in 2005 and 1999. Speech Design also has subsidiaries which have leases
in Israel,  the UK and Switzerland.  Speech Design and  subsidiaries'  aggregate
annual rental payments are approximately $458,000.

     Management  of the Company  believes  that the  facilities  occupied by the
Company and its subsidiaries are adequate to meet current needs.

                                       12

<PAGE>

Item 3. LEGAL PROCEEDINGS

     The  Company  is not aware of any  material  pending  or  threatened  legal
proceedings to which it is a party or of which any of its property is subject.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The 1996  Annual  Meeting of  Stockholders  of the  Registrant  was held on
December  13, 1996 for the purpose of (i)  electing  three Class 1 Directors  to
serve until the 1998 Annual Meeting of Stockholders, (ii) adopting the Company's
1996 Incentive Stock Option Plan, and (iii) ratifying the selection of Coopers &
Lybrand, LLP as the Company's auditors.

     Set forth below are the names of the class 1 directors whose term of office
continued after the annual meeting:

                               For            Against         Abstain
                               ---            -------         -------
Dr. Leonard Lodish          3,976,634           -0-             -0-
Michael McCoy               3,976,634           -0-             -0-
David Jan Mitchell          3,976,634           -0-             -0-

     Set forth below is the  tabulation of the votes cast with  reference to the
adoption of the Company's 1996 Incentive Stock Option Plan:

                               For            Against         Abstain
                               ---            -------         -------
                            4,046,335           -0-             -0-

     Set forth below is the  tabulation of the votes cast with  reference to the
ratification  of the  selection  of  Coopers  &  Lybrand,  LLP as the  Company's
auditors.

                               For            Against         Abstain
                               ---            -------         -------
                            3,921,385         131,250          1,000

                                       13

<PAGE>

                                     PART II

Item 5. MARKET  PRICE FOR  REGISTRANT'S  COMMON  EQUITY AND RELATED  STOCKHOLDER
        MATTERS

     The Registrant's  Common Stock and Warrants currently trade on the American
Stock Exchange under the symbols "BGN" and "BGNW," respectively. Between October
7, 1993 and August 21, 1995, the Registrant's  Common Stock,  Warrants and Units
were quoted on the OTC Bulletin  Board under the symbols EGAQ,  EGAQW and EGAQU,
respectively.  The Units were traded on the American  Stock  Exchange  under the
symbol  "BGNE" from August 21,  1995 until they were  de-registered  in December
1996.

     The following table sets forth the range of high and low bid prices for the
Common  Stock,  Warrants  and Units for each of the fiscal  quarters  during the
period from  January 1, 1995 through  December 31, 1996,  as reported by the OTC
Bulletin Board. The quoted prices represent "inter-dealer" prices without retail
markups,  markdowns or  commissions  and may not  necessarily  represent  actual
transactions.  Subsequent to August 21, 1995, the quotes  represent the high and
low sales prices on the American  Stock Exchange for BGN and BGNW and BGNE (from
August 21, 1995 until the Units were de-registered in December 1996).

                       January 1, 1995 to March 31, 1995

Security                     High ($)                            Low ($)
--------                     --------                            -------
Common Stock                 5 1/4                               4 3/8
Warrants                     1 1/16                                1/8
Units                        6                                   5 1/2

                       April 1, 1995 to June 30, 1995

Security                     High ($)                            Low ($)
--------                     --------                            -------
Common Stock                 5 3/16                               4 7/8
Warrants                       15/16                                1/2
Units                        7                                    6

                       July 1, 1995 to September 30, 1995*

Security                     High ($)                            Low ($)
--------                     --------                            -------
Common Stock                 5 1/2                               5
Warrants                       7/8                                 5/8
Units                        7 1/4                               5 3/4


                                       14

<PAGE>

                       October 1, 1995 to December 31, 1995

Security                     High ($)                            Low ($)
--------                     --------                            -------
Common Stock                 6                                   2 15/16
Warrants                     1 3/16                                1/4
Units                        6 3/4                               4 1/2

                       January 1, 1996 to March 31, 1996

Security                     High ($)                            Low ($)
--------                     --------                            -------
Common Stock                 4 1/2                               2 7/8
Warrants                     1                                     3/8
Units                        4                                   4

                       April 1, 1996 to June 30, 1996

Security                     High ($)                            Low ($)
--------                     --------                            -------
Common Stock                 4 13/16                             3 1/8
Warrants                     1 3/16                                7/16
Units                        5 7/8                               3 3/4

                       July 1, 1996 to September 30, 1996

Security                     High ($)                            Low ($)
--------                     --------                            -------
Common Stock                 5                                   3 3/4
Warrants                     1 3/16                                9/16
Units                        4 3/4                               4 1/4

                       October 1, 1996 to December 31, 1996

Security                     High ($)                            Low ($)
--------                     --------                            -------
Common Stock                 4 1/4                               2 15/16
Warrants                       15/16                               1/2
Units                        5 7/8                               3 1/2


     *Securities  were  exchanged on August 21,  1995,  the date of the Business
Combination.

     The  Registrant  has not declared or paid any cash  dividends on its Common
Stock since  commencing  operations.  In  addition,  Bogen's $7 million  line of
credit with Summit Bank,  obtained the first  quarter of 1997,  prohibits  Bogen
from declaring or paying any dividends on its capital stock. The Registrant does
not anticipate

                                       15

<PAGE>

paying any dividends on the Common Stock in the  foreseeable  future and intends
to retain any earnings for possible future expansion of the Company's business.

     As of March 1, 1997, there were 25 record holders of the Common Stock.

Item 6. SELECTED FINANCIAL DATA

     For accounting  purposes,  the Business  Combination was treated as a joint
acquisition of the Company by Bogen and Speech Design, companies that were under
the  common  control  of  Geotek.   The  transaction  is  considered  a  reverse
acquisition  ("Reverse  Acquisition") with Geotek as the acquiror for accounting
purposes. The selected financial data of the Company presented below reflect the
combination   of  Bogen   and   Speech   Design  in  a  manner   similar   to  a
pooling-of-interests.  Accordingly,  the selected  financial data of the Company
presented below reflects the operations of Bogen which was acquired by Geotek in
1991, and Speech Design which was acquired by Geotek in 1993.

     In 1994,  Speech  Design  acquired a 67%  interest  in Satelco  AG, and its
financial statements are consolidated with the Company's financial statements in
accordance with pooling-of-interests.

    The following  table  summarizes  certain  selected  consolidated  financial
information  for the  Company  and should be read in  conjunction  with the more
detailed consolidated financial statements and the notes thereto. See "Item 8.
Financial Statements and Supplementary Data."

                      (In thousands, except per share data)
------------------------------------------------------------------------------
For the Year 
Ended December 31,        1996      1995        1994        1993      1992(1)
------------------------------------------------------------------------------

Net Sales              $ 46,269   $ 44,518    $ 45,922    $ 30,072    $ 19,501
Net income (loss)      $  2,008   $ (4,543)   $   (355)   $    (37)   $   (214)
Net income (loss)
  per common share     $   0.35   $  (1.37)   $  (0.18)   $  (0.04)   $   --

------------------------------------------------------------------------------
As of December 31,         1996       1995        1994        1993        1992
------------------------------------------------------------------------------

Total Assets(2)        $ 31,386   $ 31,304    $ 32,866    $ 14,420    $  9,437
Long-term debt (net
  of current 
  maturities)          $    370   $  3,458    $  5,039    $  5,570    $  5,809


(1)  The net loss per common share for 1992 is not presented, because the Common
     Stock was not issued until 1993.  Accordingly,  such calculations  prior to
     1993 are not meaningful.

(2)  Refer  to  footnote  1G in  the  consolidated  financial  statements  for a
     discussion of the "Push-Down" of goodwill to Bogen.

     The Company  did not pay a cash  dividend  on the Common  Stock  during any
period indicated.


                                       16

<PAGE>

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     The financial  statements and the following  discussion  include Bogen, the
Company's 99% owned subsidiary,  and Speech Design, its 67% owned subsidiary, as
well as the  subsidiaries  of Speech  Design,  which are Satelco,  Speech Design
(Israel) Ltd. and Speech Design (UK) Ltd. All significant  intercompany accounts
and transactions have been eliminated in consolidation.

RESULTS OF OPERATIONS 1996 COMPARED TO 1995

NET SALES

     Net  sales  of  $46,269,000  for  1996  increased  4%  from  net  sales  of
$44,518,000  for  1995.  The  increase  in net  sales is  principally  due to an
increase in net sales across all product lines (other than OAS, which was phased
out in 1995) as a result of the  introduction  of new products,  increased sales
volume of the Company's products to existing and new customers,  and an increase
in the  sales  price  for  most  of the  Company's  domestic  products,  and was
partially offset by a decline in OAS sales.

     Telco net sales in 1996 amounted to $28,720,000  compared to $26,010,000 in
1995, an increase of $2,710,000 or 10%. Domestic Telco sales increased  $953,000
in 1996 or 8% over  comparable  sales in 1995.  Foreign  Telco  sales  increased
$1,757,000 in 1996 or 13% over  comparable  sales in 1995.  The increase in both
markets is  attributable  to the release of new  products  as well as  increased
volume to existing and new customers.

     Net sales of  Commercial  Sound  products  amounted to  $9,315,000 in 1996,
increased  $879,000,  or 10%,  from net sales of  $8,436,000 of such products in
1995. The increase of $879,000 is a result of an increase in the number of units
sold due to growth in the consumer  sales market and a three percent sales price
increase implemented during the first quarter of 1996.

     The  Engineered  System line of products  also had an increase in net sales
for the year ended 1996 as compared to 1995. Net sales of the Engineered  System
line increased  $1,053,000 or 19% from $5,629,000 in 1995 to $6,682,000 in 1996.
This  increase  of  $1,053,000  is  attributed  to  the   introduction   of  the
MULTICOM-DCS(TM).

    Net sales for the OAS product line for 1996 were  $1,552,000,  a decrease of
$2,892,000  from sales of $4,444,000  for 1995. The decrease in 1996 as compared
to 1995 is primarily related to the phase-out of this product line. See "-Phase-
Out of OAS Product Line."

     All of the Company's  product lines are  distributed  domestically  through
Bogen.  Telco products are  distributed  in both domestic and overseas  markets.
Overseas distributions are made through Speech Design.

GROSS PROFIT

    The Company's gross profit in 1996 was $21,265,000,  or approximately 46% of
sales, an increase of $4,085,000,  compared to $17,180,000, or approximately 39%
of sales, in 1995.

     The increase is mainly due to the following:  (i)charges of $2.2 million in
1995 to reduce certain inventory to market value; (ii)an increase in 1996 in the
sales price of most of the Company's domestic products; (iii) a reduction in the

                                       17

<PAGE>

cost of direct materials due to successful renegotiation with suppliers.

     Gross profit as a percentage of sales for all the  Company's  product lines
excluding OAS, amounted to 46% in 1996 and 44% in 1995.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses ("SG&A") decreased in absolute
dollars  and as a  percentage  of sales in 1996 as  compared  to 1995.  SG&A was
$14,360,000  or about 31% of sales in 1996  compared  to  $15,067,000  or 34% of
sales in 1995. This decrease of $707,000 is due to the decrease in selling costs
relating to OAS sales,  which, in 1995,  included an intense  marketing  effort.
This decrease was  partially  offset by an increase in  administrative  expenses
primarily  due  to  additional  administrative  expenses  at  Speech  Design  in
connection with its expansion into Europe.

RESEARCH AND DEVELOPMENT

     Research and  Development  expense ("R&D") was $2,892,000 or 6% of sales in
1996, compared to $2,307,000, or 5% of sales in 1995. This represents a $585,000
increase  from 1995.  The  Company's  R&D programs  are designed to  efficiently
introduce  innovative  products in a timely  manner and  support  the  Company's
planned growth. The Company anticipates  introducing  additional products to the
Telco and Engineered System product lines.  There can be no assurance,  however,
that the Company will be able to successfully introduce additional products. The
inability  to introduce  such  additional  products may have a material  adverse
effect on the Company.

AMORTIZATION OF INTANGIBLES

     Amortization  expense increased less than 1%, or $2,000 to $445,000 in 1996
from $443,000 in 1995. The increase is mainly a result of amortization  relating
to Speech Design's 1996 purchase of intangible assets.

INCOME (LOSS) FROM OPERATIONS

     Operating income in 1996 amounted to $3,568,000, a $4,205,000 increase from
operating  losses of  $637,000  in 1995.  The  increase  is due to a  $1,751,000
increase in net sales; a 7% increase in gross profit margin percentage; and a 1%
decrease in operating expenses.

INTEREST EXPENSE

     Interest  expense,  including  interest expense payable to related parties,
was $668,000 in 1996, a decrease of $538,000, as compared to $1,206,000 in 1995.
This decrease was  attributable to (i) a reduction in notes payable to Geotek in
August 1995 in connection with the Company's  acquisition of Bogen, and (ii) the
reduction and restructuring of the $3,000,000 Geotek note in 1996.

TAXES ON INCOME

     The Company incurred  approximately  $555,000 in taxes, a $707,000 decrease
from 1995.  The decrease is due to more  efficient tax planning at Speech Design
which resulted in a 14% decrease in the effective tax rate at Speech Design,  as
well as a $214,000 refund of taxes paid in 1995.

NET INCOME(LOSS)

     After deducting its minority  interest in the earnings of its  subsidiaries
of  $337,000,  the  Company's  net income for 1996  increased by  $6,551,000  to
$2,008,000 in 1996 as compared to losses of $4,543,000 in 1995.  The  $6,551,000
increase is due to the  following:  (i) a  $1,491,000  decrease  in  acquisition
costs;  (ii) a $4,205,000  increase in income from operations;  (iii) a $538,000
decrease in interest expense; and (iv) a $707,000 reduction in income taxes, and
was partially offset by a $237,000 reduction in other income.

                                       18

<PAGE>

EARNINGS PER SHARE

     Primary earnings per common share for the year ended December 31, 1996 were
$0.35  compared to $(1.37) for the year ended  December 31,  1995.  The weighted
average number of shares outstanding in the calculation for primary earnings per
share was 5,759,075 in 1996 as compared to 3,311,668 in 1995.

PHASE-OUT OF OAS PRODUCT LINE

     Effective  December 31, 1995 the Company's  management decided to phase-out
the OAS product line.  This decision was based on the intense  competition  that
the  Company  faced  from  local  telephone   companies  and  answering  service
companies,  both of which offer central voice mail  services.  The Company's OAS
product line  competed with  products  that were  frequently  offered at a lower
retail price than the Company's  products.  In addition,  competitors'  products
benefited from better brand  recognition in the marketplace,  which is dominated
by AT&T, Panasonic and PhoneMate.

     Net OAS sales of $1,552,000 in 1996 decreased $2,892,000 from $4,444,000 of
sales in 1995.  Gross  profit  (deficit)  of OAS  products  of  $630,000 in 1996
increased by $1,118,000  from a gross deficit of $(488,000) in 1995.  Net income
(loss) from the OAS product  line  increased by  $4,786,000  to $272,000 in 1996
from a net loss of $(4,514,000) in 1995.

RESULTS OF OPERATIONS 1995 COMPARED TO 1994

NET SALES

     Net  sales  of  $44,518,000  for  1995  decreased  3%  from  net  sales  of
$45,922,000 for 1994. The decrease in net sales is principally due to poor sales
in the Company's OAS product line, and to a lesser extent,  due to poor sales in
the  Commercial  Sound and  Engineered  Systems  product lines and was partially
offset by increased sales in the Telco product line.

     Telco net sales in 1995 amounted to $26,010,000  compared to $19,242,000 in
1994,  an increase in 1995 as compared to 1994 of  $6,768,000  or 35%.  Domestic
Telco sales increased  $1,105,000 in 1995 or 10% over comparable  sales in 1994.
Foreign Telco sales increased $5,664,000 in 1995 or 69% over comparable sales in
1994.  The  increase  in both  markets  is  attributable  to the  release of new
products as well as increased volume to existing and new customers.

    Net sales of  Commercial  Sound  products  amounting to  $8,436,000 in 1995,
decreased  $313,000,  or 4%, from net sales of  $8,749,000  of such  products in
1994.

     Net  sales of the  Engineered  System  line  decreased  $50,000  or 1% from
$5,679,000 in 1994 to $5,629,000 in 1995.

     Net sales for the OAS product line for 1995 were $4,444,000,  a decrease of
$7,808,000  from sales of $12,252,000 for 1994. The decrease in 1995 as compared
to 1994  is  primarily  related  to a  one-time  sale  to  AT&T  during  1994 of
approximately $5,300,000. See "-Phase-Out of OAS Product Line."

     All of the Company's  product lines are  distributed  domestically  through
Bogen.  Telco products are  distributed  in both domestic and overseas  markets.
Overseas distributions are made through Speech Design.

GROSS PROFIT

     Gross  profit  was  $17,180,000  in  1995,  or 39%  of  sales  compared  to
$16,183,000,  or 35% of sales in 1994. The increase is mainly due to a change in
product  mix, see "-Net  Sales," and was  partially  offset by the  write-off of
certain inventories, the majority of which related to the OAS product line.

                                       19

<PAGE>

     Sales from the Telco  product  line,  which has the highest gross profit of
all of the Company's  product  lines,  amounted to 58% of total sales in 1995 as
compared  to 42% of total  sales in 1994.  However,  the  Telco  product  line's
positive  contribution to gross profit was offset by a significantly lower gross
margin on OAS products,  which resulted primarily from a $1,500,000 provision in
1995 to reduce OAS inventory to its market value. See "-Phase-Out of OAS Product
Line."

     Gross profit as a percentage of sales for all the  Company's  product lines
excluding OAS, amounted to 44% in 1995 and 40% in 1994.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses ("SG&A") increased in absolute
dollars  and as a  percentage  of sales in 1995 as  compared  to 1994.  SG&A was
$15,067,000  or about 34% of sales in 1995  compared  to  $12,555,000  or 27% of
sales in 1994. This increase of $2,512,000,  or 20% is attributable primarily to
an intensive  marketing  campaign to promote declining sales of OAS products and
increased  consulting and payroll  expense  required to facilitate the continued
growth and operations of a public company.

RESEARCH AND DEVELOPMENT

     Research and  Development  expense ("R&D") was $2,307,000 or 5% of sales in
1995,  compared to $1,999,000 or 4% of sales in 1994. This represents a $308,000
increase  from  1994.  Expenditures  in 1995  were made in  connection  with the
development of additional  products to the Telco and  Engineered  System product
lines.

INCOME (LOSS) FROM OPERATIONS

     Operating losses in 1995 amounted to $637,000,  a $1,842,000  decrease from
operating  income of  $1,205,000  in 1994.  The  decrease is due  primarily to a
decrease in OAS sales and  increases in R&D and OAS SG&A  expenses.  See " - Net
Sales; -Selling, General and Administrative Expenses."

TRANSACTION COSTS

     In 1995, the Company incurred $1,491,000 in non-recurring transaction costs
for legal and other professional  services in connection with the acquisition of
Bogen and Speech  Design.  A portion  of these  costs,  approximately  $740,000,
related to the issuance of the Common  Stock and  Warrants and for  professional
fees incurred in facilitating the Business Combination.

AMORTIZATION OF INTANGIBLES

     Amortization  expense  increased  $19,000,  or 5% to  $443,000 in 1995 from
$424,000 in 1994.  The  increase  reflects a full year of goodwill  amortization
relating  to Speech  Design's  investment  in  Satelco  AG versus  six months of
amortization in 1994.

TAXES ON INCOME

     The  Company  incurred   approximately   $1,262,000  in  foreign  taxes,  a
$1,183,000  increase from 1994. The increase is  attributable to the utilization
of loss  carryfowards in 1994, which offset most of the taxable income from that
year.

NET INCOME(LOSS)

     After deducting its minority  interest in the earnings of its  subsidiaries
of  $184,000,  the  Company's  net loss  for 1995  increased  by  $4,188,000  to
$4,543,000 in 1995 as compared to $355,000 in 1994.  The increase in net loss is
mainly due to the lack of success of the OAS product line in the marketplace, an
increase in income taxes and the effect of  non-recurring  transaction  costs in
connection with the Business Combination.

                                       20

<PAGE>

EARNINGS PER SHARE

     Primary earnings per common share for the year ended December 31, 1995 were
$(1.37)  compared to $(0.18) in the year ended  December 31, 1994.  The weighted
average number of shares outstanding in the calculation for primary earnings per
share was 3,311,668, respectively in 1995 as compared to 1,925,000, respectively
in 1994.

PHASE-OUT OF OAS PRODUCT LINE

     Effective  December 31, 1995 the Company's  management decided to phase-out
the OAS product line.  This decision was based on the intense  competition  that
the  Company  faced  from  local  telephone   companies  and  answering  service
companies,  both of which offer central voice mail  services.  The Company's OAS
product line  competed with  products  that were  frequently  offered at a lower
retail price than the Company's  products.  In addition,  competitors'  products
benefited from better brand  recognition in the marketplace,  which is dominated
by AT&T, Panasonic and PhoneMate.

     Net OAS sales of $4,444,000 in 1995 decreased  $7,808,000 from $12,252,000
of sales in 1994,  principally  due to a one-time  sale to AT&T  during  1994 of
approximately  $5,300,000.  Losses on sales of OAS  products of $488,000 in 1995
decreased by $3,309,000  from a gross profit of $2,821,000 in 1994. The decrease
in gross profit is attributable to a decrease in sales volume and a provision to
reduce certain OAS inventory to its market value.  OAS research and  development
expenditures decreased by 40% to $487,000 in 1995 from $815,000 in 1994, because
the Company  focused its R&D efforts on other  product  lines during 1995.  SG&A
expenses attributable to OAS of $3,539,000 in 1995 increased 20% from $2,958,000
in 1994 due to an intensive marketing program that the Company instituted during
1995 to improve lagging sales results.  Due to the above factors, the operations
of the OAS  product  line  resulted  in a net loss of  $4,514,000  in  1995,  an
increase of 374% from the net loss of $952,000 in 1994.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

     During 1996,  the Company  focused on long term growth.  Accordingly,  cash
utilization focused primarily on operations,  investments in equipment and other
fixed assets and the pay down of debt.

     There was a net decrease in the Company's  cash and cash  equivalents  from
$1,276,000 at the end of 1995 to $885,000 at the end of 1996.

     The  Company's  operating  activities  generated  $1,262,000  of cash.  The
Company's net income of $2,008,000 was reduced by non-cash  adjustments  for the
following  items:   (i)  depreciation  and  amortization  of  $1,423,000;   (ii)
reductions in reserves for accounts  receivable  and inventory  obsolescence  of
$1,362,000;  and (iii) loss from minority interest of consolidated  subsidiaries
of $337,000.  Additionally,  inventory decreased by $2,269,000, accounts payable
decreased by  $1,040,000,  accounts  receivable  increased by $1,703,000 and net
changes in other operating assets and liabilities amounted to $670,000.

     Net cash used in investing activities amounted to $1,101,000.  During 1996,
the  Company  purchased  equipment  and other  fixed  assets of  $1,017,000  and
intangibles of $102,000. Other investing activities provided $18,000 in cash.

     Net cash used in financing  activities  amounted to  $773,000.  The Company
paid down  $502,000  of notes  payable,  of which  $341,000  was paid to related
parties.  Net borrowings of $23,000 were made under revolving credit agreements.
In  addition,  Speech  Design  made a  $294,000  distribution  to  its  minority
shareholders.

                                       21

<PAGE>

     As of December 31, 1996, the Company's total  liabilities were $13,810,000,
of which  $12,312,000  was due and payable  within one year.  Such  indebtedness
included loans from third parties and loans and advances from Geotek.

     Bogen had a $10,000,000  asset based revolving credit line which would have
expired in August 1997. In the first quarter of 1997, BCI obtained,  from Summit
Bank, a new $7,000,000 revolving credit line for a period of two years. This new
line  is  collateralized  by the  accounts  receivable,  inventory  and  general
intangibles of BCI. This line is guaranteed by the Company. This new line, which
meets  Bogen's  needs,  is lower than the previous  line  thereby  substantially
decreasing the associated fees to be paid on an annual basis. In addition, Bogen
has an established  working  capital line of credit with Geotek in the aggregate
amount of $2,000,000.  At December 31, 1996, Bogen had no borrowings outstanding
under the working capital line with Geotek.

     Speech  Design has credit lines and overdraft  facilities of  approximately
$4,300,000.  At December 31, 1996 borrowing and  availability  under these lines
amounted  to  $3,300,000   and   $1,000,000,   respectively.   These  lines  are
collateralized by all of Speech Design's accounts receivable and inventory.

     The Company believes that it has adequate  liquidity to finance its ongoing
activities  and  capital  expenditures  for the near term but may be required to
seek additional  capital in the event it wishes to expand its operations through
acquisitions or otherwise.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In February 1997, the Financial  Accounting  Standards  Board (FASB) issued
Statement 128, Earnings per Share, effective for financial statements issued for
periods ending after December 15, 1997. This statement establishes standards for
computing and presenting  earnings per share  ("EPS"),  and replaces the current
presentation  of primary EPS with basic EPS, which excludes the effect of common
stock  equivalents.  The  Company  will  adopt  this  standard  in 1997,  and is
presently analyzing the impact of this new standard on its financial  statements
and related disclosures.

INFLATION

     Inflation did not have a material  effect on the Company's  results  during
the periods discussed.

CURRENCY FLUCTUATIONS

     Approximately  one-third of the Company's  revenues are derived  outside of
the United States,  mostly in Germany.  Accordingly,  currency  fluctuations may
impact the Company's  earnings.  Over the course of 1996, the Deutsche Mark fell
steadily  against the U.S. dollar.  As a result,  the earnings for Speech Design
and the Company are lower when translated into U.S.  dollars.  Local  currencies
are  considered  to  be  the  functional  currencies  of  the  Company  and  its
subsidiaries. Translation adjustments that arise from translation of the Company
and  its  subsidiaries'  financial  statements  are  accumulated  in a  separate
component of shareholder's equity.  Transaction gains and losses that arise from
exchange rate changes on transactions denominated in a currency other than local
currencies are included in income as incurred.

                                       22

<PAGE>

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Information

     The Company's consolidated  operations are considered one segment,  engaged
in the development and  manufacturing  of  communication  and  telecommunication
products in the United States  (Bogen) and Germany  (Speech  Design).  Financial
information  regarding  the  breakdown  of the  Company's  foreign and  domestic
operations is disclosed in footnote 13 to the Company's  Consolidated  Financial
Statements.

                                       23

<PAGE>

            BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                          Pages
                                                                          -----
Financial Statements:

 Report of Independent Accountants                                         F-1

 Consolidated Balance Sheets as of December 31, 1996 and 1995              F-2

 Consolidated Statements of Operations for the years ended
   December 31, 1996, 1995 and 1994                                        F-4

 Consolidated Statements of Changes in Common Stock Subject
   to Possible Redemption and Stockholders' Equity for the years
   ended December 31, 1996, 1995 and 1994                                  F-5

 Consolidated Statements of Cash Flows for the years ended
   December 31, 1996, 1995 and 1994                                        F-7

 Notes to Consolidated Financial Statements                                F-9

                                       24

<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and Board of Directors
 of Bogen Communications International, Inc.:


We  have  audited  the  consolidated  financial  statements  and  the  financial
statement schedules of BOGEN COMMUNICATIONS INTERNATIONAL, INC. and SUBSIDIARIES
(formerly  European Gateway  Acquisition  Corp.) (the "Company")  listed in Item
14(a)(2) of this Form 10-K. These financial  statements and financial  statement
schedules are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial  statements and financial  statement
schedules based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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 presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material   respects,   the   consolidated   financial   position  of  Bogen
Communications International,  Inc. and Subsidiaries as of December 31, 1996 and
1995,  and the results of their  operations and their cash flows for each of the
three years in the period ended  December 31, 1996 in conformity  with generally
accepted  accounting  principles.  In addition,  in our opinion,  the  financial
statement  schedules referred to above, when considered in relation to the basic
financial statements taken as a whole, present fairly, in all material respects,
the information required to be included therein.

                                                        COOPERS & LYBRAND L.L.P.

March 7, 1997
New York, New York


                                       F-1

<PAGE>

            BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 1996 and 1995
                 (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS)

ASSETS
                                                     1996             1995
                                                   -------           -------
CURRENT ASSETS:                               
                                              
Cash and cash equivalents                            $885           $  1,276
                                              
Accounts receivable (less allowance           
 for doubtful accounts of $470                
 and $424 at December 31, 1996 and            
 1995, respectively)                                6,517              4,992

Inventory, net                                      6,519              7,598

Prepaid expenses and other current            
 assets                                               780                366
                                                   ------            -------
     TOTAL CURRENT ASSETS                          14,701             14,232
                                              
Property and equipment, net                         2,130              2,191

Goodwill and intangible assets, net                14,308             14,706

Other assets                                          247                175
                                                  -------            -------
      TOTAL ASSETS                                $31,386            $31,304
                                                  =======            =======

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                       F-2

<PAGE>

            BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 1996 and 1995
                 (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS)

LIABILITIES
                                                             1996        1995
                                                           -------      -------
CURRENT LIABILITIES:
Amounts outstanding under revolving credit
 agreements                                                 $4,828       $4,944
Accounts payable                                             3,707        2,861
Accrued expenses                                             3,026        3,610
Income taxes payable                                            -         1,353
Advances and notes payable to related parties                  746          537
Current maturities of notes payable to
 non-related parties                                             5          174
                                                           -------      -------

    TOTAL CURRENT LIABILITIES                               12,312       13,479

Advances and notes payable to related parties                  361        3,458
Notes payable to non-related parties                             8           -
Other long term liabilities                                    536          674
Minority interest                                              593          550
                                                           -------      -------
  TOTAL LIABILITIES                                         13,810       18,161
                                                           -------      -------
Commitments and contingencies (Note 8)

STOCKHOLDERS' EQUITY

Preferred stock - $.001 par value; 1,000,000 shares
 authorized; none issued and outstanding at
 December 31, 1996 and 1995, respectively                       -            -
Common stock - $.001 par value; 50,000,000 shares
 authorized; 5,758,850 and 5,759,350 shares issued
 and outstanding at December 31, 1996 and 1995,
 respectively.                                                   6            6
Additional paid-in capital                                  21,774       19,175
Accumulated deficit                                         (4,177)      (6,185)
Currency translation adjustments                               (27)         147
                                                           -------      -------
     TOTAL STOCKHOLDERS' EQUITY                             17,576       13,143
                                                           -------      -------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            $31,386      $31,304
                                                           =======      =======

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                       F-3

<PAGE>

            BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 and 1994
                 (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS)

                                             1996           1995         1994
                                           -------        -------       ------

Net sales                                $  46,269      $  44,518     $  45,922

Cost of goods sold                          25,004         27,338        29,739
                                         ---------      ---------     ---------
 Gross profit                               21,265         17,180        16,183

Operating expenses:
 Research and development                    2,892          2,307         1,999
 Selling, general and administrative        14,360         15,067        12,555
 Amortization of goodwill and
  intangible assets                            445            443           424
                                         ---------      ---------     ---------
  Income (loss) from operations              3,568           (637)        1,205

Other (income) expenses:
  Other (income)                                -            (237)          (39)
  Interest expense, net                        596            587           498
  Interest expense - related parties            72            619           696
  Transaction costs                             -           1,491            -
  Minority interest of consolidated
   subsidiaries                                337            184           326
                                         ---------      ---------     ---------
Income(loss) before provision
  for income taxes                           2,563         (3,281)         (276)
                                        
Provision for income taxes                     555          1,262            79
                                         ---------      ---------     ---------
Net Income (loss)                           $2,008        $(4,543)        $(355)
                                         =========      =========     =========
Net Income (loss) per common share:     
Net Income (loss)                          $  0.35       $  (1.37)      $ (0.18)
                                         =========      =========     =========
Weighted average number of common       
shares outstanding                       5,759,075      3,311,668     1,925,000
                                         =========      =========     =========
                                       
              The accompanying notes are an integral part of these
                        consolidated financial statements

                                       F-4

<PAGE>

            BOGEN COMMUNICATIONS INTERNATIONAL, INC. and SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCK SUBJECT TO
                  POSSIBLE REDEMPTION AND STOCKHOLDERS' EQUITY
                 (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>

                                         COMMON STOCK      COMMON STOCK     
                                          SUBJECT TO       ------------       ADDITIONAL                   CURRENCY
                                           POSSIBLE     NUMBER OF              PAID-IN     ACCUMULATED   TRANSLATION
                                          REDEMPTION     SHARES      AMT       CAPITAL       DEFICIT     ADJUSTMENTS
                                          ----------     ------      ---       -------       -------     -----------
<S>                                       <C>          <C>         <C>        <C>          <C>            <C>     
Balance at December 31, 1994              $   1,575    1,615,155   $      2   $  12,638    $  (2,428)     $     37
                                                                                                       
Recapitalization by foreign subsidiary         --           --         --          (967)         967          --
Accretion of redemption value                                                                          
 of common stock                                 52         --         --           (52)        --            --
Reclass of common stock subject to                                                                     
 redemption to common stock                                                                            
 upon the Company's acquisition                                                                        
 of Bogen and Speech Design                  (1,627)     309,845       --         1,627         --            --
Forgiveness of Bogen inter-                                                                            
 company debt by Geotek                        --           --         --         7,155         --            --
Issuance of common stock and other                                                                     
 adjustments to effect combination                                                                     
 of Bogen and Speech Design                    --      3,701,919          4      (1,966)        --            --
Issuance of common stock and warrants                                                                  
 to purchase 60,000 shares of                                                                          
 common stock for services provided                                                                    
 to facilitate the acquisition of                                                                      
 Bogen and Speech Design                       --        132,431       --           740         --            --
Dividend paid by subsidiary to minority                                                                
    shareholders                               --           --         --          --           (181)         --
Translation adjustments                        --           --         --          --           --             110
Net loss                                       --           --         --          --         (4,543)        --     
                                          ---------    ---------   --------   ---------    ---------      --------
Balance at December 31, 1995              $    --      5,759,350   $      6   $  19,175    $  (6,185)     $    147

</TABLE>
              The accompanying notes are an integral part of these
                        consolidated financial statements

                                       F-5

<PAGE>

            BOGEN COMMUNICATIONS INTERNATIONAL, INC. and SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCK SUBJECT TO
                  POSSIBLE REDEMPTION AND STOCKHOLDERS' EQUITY
                 (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                      COMMON STOCK          COMMON STOCK
                                       SUBJECT TO           ------------           ADDITIONAL                 CURRENCY
                                        POSSIBLE       NUMBER OF                    PAID-IN     ACCUMULATED  TRANSLATION
                                       REDEMPTION       SHARES          AMT         CAPITAL      DEFICIT     ADJUSTMENTS
                                       ----------       ------          ---         -------      -------     ----------

<S>                                  <C>             <C>            <C>            <C>          <C>          <C>      
Restructuring of $3,000 related
  party note with related interest          --            --              --          2,602         --           --
Repurchased and canceled common                                                                           
  stock                                     --            (500)           --             (3)        --           --
Translation adjustments                     --            --              --           --           --           (174)
Net Income                                  --            --              --           --          2,008         --
                                     -----------     ---------      ----------     --------     --------     --------
Balance at December 31, 1996         $      --       5,758,850      $        6     $ 21,774     $ (4,177)    $    (27)
                                     ===========     =========      ==========     ========     ========     ========
</TABLE>

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                       F-6

<PAGE>

            BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
                            (IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>

                                                                   1996        1995      1994
                                                                   ----        ----      ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                              <C>        <C>        <C>     
  Net income (loss)                                              $ 2,008    $(4,543)   $  (355)
  Adjustments to reconcile net income (loss)to net
  cash provided by(used in)operating activities:
     Non-cash transaction costs                                     --          740       --
     Depreciation and amortization                                   978        868        574
     Amortization of goodwill and intangible assets                  445        443        424
     Provisions for doubtful accounts and
       inventory obsolescence                                     (1,362)     1,344      1,281
     Minority interest                                               337        184        326
   Change in operating assets and liabilities 
       (net of effects from acquisitions):
     Accounts receivable                                          (1,703)       984       (405)
     Inventories                                                   2,269        (49)    (2,914)
     Prepaid expenses and other current assets                      (532)       200       (230)
     Payables and accrued expenses                                (1,040)     1,901        412
     Other                                                          (138)      --          145
                                                                 -------    -------    -------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                1,262      2,072       (742)
                                                                 -------    -------    -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of equipment                                           (1,017)    (1,035)      (892)
  Acquisition of Satelco                                            --         --         (392)
  Cash obtained in the acquisition of
   Speech Design and Bogen                                          --        8,149       --
  Proceeds on the sale of property, plant and
   equipment                                                           3       --         --
  Acquisition of investments and intangibles                        (102)       (60)      --
  Collection of notes receivable                                      15         37         38
                                                                 -------    -------    -------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES               (1,101)     7,091     (1,246)
                                                                 -------    -------    -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Amounts(paid to) non-related parties, net                         (161)      (688)      (509)
  Amounts borrowed (paid) under revolving credit
     agreements, net                                                  23       (691)     1,875
  Dividend paid to Geotek related to combination
     of Bogen and Speech Design                                     --       (7,000)      --
  Dividend paid by subsidiary to minority shareholders              (294)      (181)      --
  Amounts borrowed from (paid to) related parties, net              (341)       415        552
  Cash overdraft receipts                                           --         --          118
                                                                 -------    -------    -------
  NET CASH PROVIDED BY (USED IN)
      FINANCING ACTIVITIES                                          (773)    (8,145)     2,036
                                                                 -------    -------    -------
INCREASE (DECREASE) IN CASH                                         (612)     1,018         48
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                     1,276        148         87
Effects of Exchange Rate on Cash                                     221        110         13
                                                                 -------    -------    -------
CASH AND CASH EQUIVALENTS AT END OF YEAR                         $   885    $ 1,276    $   148
                                                                 =======    =======    =======
</TABLE>

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                       F-7

<PAGE>

            BOGEN COMMUNCATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 and 1994
                 (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS)

 
                                                  1996      1995       1994
                                                  ----      ----       ----
SUPPLEMENTAL CASH FLOW INFORMATION

  Cash paid for interest                       $   609   $   829    $   654
  Cash paid for income taxes                     2,175         4          6

Non Cash Investing and Financing Activities:

  Restructuring of $3,000 debt by Geotek
    treated as equity contribution               2,602      --         --

  Forgiveness of Bogen debt by
    Geotek treated as an equity
    contribution                                  --       7,155       --

  Goodwill pushed down from parent                --        --       14,252

  Adjustments to combine companies                --       1,966       --

  Notes payable to Geotek in
    consideration for acquiring
    Bogen and Speech Design                       --       3,000       --

  Common stock issued to Geotek in
    consideration for acquiring Bogen
    and Speech Design                             --           4       --

  Common  stock and warrants issued as
    consideration for certain services
    provided to the Company in connection
    with the acquisition of Bogen and
    Speech Design                                 --         740       --

Assets acquired (net of cash):
  Prepaid assets                                  --           8       --
  Intangible assets                               --          34       --

Liabilities assumed:
  Accrued expenses                                --         160       --
  Note payable to non-related party               --         115       --
  Advances from Geotek                            --          33       --
                                               -------   -------    -------

  Net liabilities assumed                      $  --     $  (266)   $  --
                                               =======   =======    =======

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                       F-8
<PAGE>

(All Footnote information is in thousands of dollars, except share amounts)

1.   Summary of Significant Accounting Policies

A.   Principles of Consolidation

     The   consolidated    financial    statements   of   Bogen   Communications
     International,  Inc.,  formerly  European  Gateway  Acquisition  Corp. (the
     "Company"), include the accounts of Bogen Corporation ("Bogen") and Bogen's
     wholly owned subsidiary,  Bogen  Communications,  Inc. ("BCI"),  as well as
     Speech Design GmbH ("Speech Design"),  its 67%-owned subsidiary Satelco AG,
     and its wholly owned subsidiaries,  Speech Design (Israel), Ltd. And Speech
     Design (UK), Ltd. All significant  intercompany  balances and  transactions
     have been eliminated in consolidation.  Certain 1995 and 1994 balances have
     been reclassified to conform with the 1996 presentation.

B.   Nature of Operations

     The  Company's   operations  are  conducted  in  one  segment   engaged  in
     developing,  manufacturing, and marketing sound and communication products.
     Product lines sold by the company are as follows:

          Telephone  Products ("Telco"), Commercial Audio Products, ("Commercial
          Sound"), and Intercom/Paging Equipment, ("Engineered Systems")

C.   Use of Estimates

     The  preparation of  consolidated  financial  statements in conformity with
     generally  accepted  accounting  principles  requires  management  to  make
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of the  financial  statements  and the  reported  amounts of  revenues  and
     expenses  during the reporting  periods.  Actual  results could differ from
     those estimates.

D.   Basis of Presentation

     On  August  21,  1995,  the  Company  acquired  a  99%  interest  in  Bogen
     Corporation  ("Bogen")  and a 67% interest in Speech  Design GmbH  ("Speech
     Design")  from Geotek  Communications,  Inc.  ("Geotek").  The Company paid
     Geotek  $7,000 in cash,  a  convertible  promissory  note in the  aggregate
     principal amount of $3,000,  3,700,000 shares of the Company's common stock
     and warrants to acquire 200,000 shares of common stock of the Company. As a
     result,  Geotek  acquired  approximately  64% of the stock of the  Company,
     thereby  giving  it a  controlling  interest  in the  Company.  Geotek,  in
     addition,  contributed  approximately  $7,155 of intercompany  indebtedness
     from Bogen to equity as part of the  transaction.  Further,  as  contingent
     consideration,  the  Company  could be liable to pay Geotek an amount up to
     $11,000,  based upon a calculation of operating results of Bogen and Speech
     Design during the two years after the  acquisition.  Based on  management's
     review of the earnout  calculation,  which takes into account Speech Design
     and Bogen's  operating  results for the last two  quarters of 1995,  all of
     1996 and the  first  two  quarters  of  1997,  the  anticipated  contingent
     consideration  payment,  if any,  will not have a  material  effect  on the
     Company's financial position and operating results.

     In May 1996, the Company and Geotek entered into the most recent  amendment
     to the Stock Purchase Agreement effective January 1, 1996. Pursuant to such
     agreement,  (i) the  $3,000  convertible  promissory  note  payable  by the
     Company to Geotek,  due February  1997, was reduced and  restructured  to a
     $500 non-convertible promissory

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                       F-9
<PAGE>

     note due July 1997,  (ii) the  earnout  formula  was  revised to reflect an
     increase  in the amount  the  Company  could be liable to pay  Geotek  from
     $11,000 to $13,500 in connection with the reduction of the principal amount
     of the promissory note, and (iii) Geotek was granted an option to purchase,
     at any time  through  October 31,  1997,  from the Company  $3,000 worth of
     Common Stock with exercise prices ranging from 100% to 65% of market price,
     depending on the date of exercise.

     For  accounting  purposes,  the  acquisition  is being  treated  as a joint
     acquisition of the Company by Bogen and Speech Design,  companies under the
     common  control  of  Geotek.   The  transaction  is  considered  a  reverse
     acquisition  with  Geotek as the  acquiror  for  accounting  purposes.  The
     historical financial statements reflect the combination of Bogen and Speech
     Design in a manner  similar to a pooling  of  interests.  Accordingly,  the
     historical  financial  statements reflect the combined  operations of Bogen
     and Speech Design prior to the transaction.

E.   Transaction Costs

     The Company  incurred  transaction  costs of $1,491 in connection  with the
     acquisition  of  Bogen  and  Speech  Design  which  have  been  charged  to
     non-operating  expenses for the year ended  December 31, 1995.  These costs
     consist of non-recurring  legal and other professional fees and other costs
     of the transaction  amounting to $751 and a non-cash charge of $740 for the
     estimated  fair value of 132,400  shares of common stock of the Company and
     warrants to purchase  60,000 shares of the Company's  common stock at $5.25
     per share,  for  services  provided  to the  Company  by various  unrelated
     parties in connection with facilitating the acquisition of Bogen and Speech
     Design.

F.   Revenue Recognition

     Sales, net of expected returns, are recognized upon shipment.

G.   Goodwill

     Goodwill  represents  the  excess of cost over the fair value of net assets
     acquired.  Goodwill  also  includes  the  effect  of  push-down  accounting
     described  below,  by which  Bogen  recorded  in its  financial  statements
     Geotek's goodwill associated with its purchase of Bogen.  Goodwill is being
     amortized using the straight-line method over 40 years at Bogen and over 20
     years  at  Speech   Design.   The  Company   periodically   evaluates   the
     recoverability  of goodwill and measures any  impairment  by  comparison to
     estimated undiscounted cash flows from future operations.

H.   Cash and Cash Equivalents

     Cash includes cash on-hand and all highly-liquid debt instruments purchased
     with original maturities of three months or less.

I.   Inventories

     Inventories are stated at the lower of cost (first-in, first-out method) or
     market.  Reserves are established  for valuation  purposes or determined by
     management on a periodic basis, as required by conditions of obsolescence.

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-10

<PAGE>

J.   Property and Equipment

     Property and equipment is recorded at cost.  Depreciation  is provided on a
     straight-line  basis over the  estimated  useful  lives of the asset  which
     generally  ranges  from  three to ten  years.  Leasehold  improvements  are
     amortized  ratably over their remaining  lease terms,  or estimated  useful
     lives, if shorter.

     Expenditures  for  maintenance,  repairs  and  renewals  of minor items are
     charged to  operations as incurred.  Major  renewals and  improvements  are
     capitalized.   Upon   disposition,   the  cost  and   related   accumulated
     depreciation is removed from the accounts and the resulting gain or loss is
     reflected in operations for the period.

K.   Income Taxes

     The Company follows  Statement of Financial  Accounting  Standards No. 109,
     "Accounting  for Income Taxes" (FAS 109). FAS 109 is an asset and liability
     approach  that  requires  the   recognition  of  deferred  tax  assets  and
     liabilities  for the expected  future tax  consequences of events that have
     been recognized in the Company's financial statements or tax returns.

L.   Net Income (Loss) Per Share

     Net income  (loss) per common  share is  computed  by  dividing  net income
     (loss) by the weighted  average number of shares of common stock and common
     stock equivalents outstanding during the year, (unless anti-dilutive).

M.   Credit Risk

     The  Company  develops,  produces,  markets  and  sells  commercial  audio,
     electronic,    paging,    communications    and   other    equipment    and
     telecommunications   peripherals.  The  Company  performs  on-going  credit
     evaluations of its customers.  The accounts  receivable  resulting from its
     sales transactions  generally are not collateralized.  The Company provides
     reserves for potential losses from these receivables.

N.   Translation of Foreign Currencies

     Foreign  denominated  assets and  liabilities of the Company are translated
     from local  currencies into U.S. dollars at the exchange rates in effect at
     the end of the period.  Revenues  and expenses  are  translated  at average
     exchange  rates  prevailing   during  the  period.   Local  currencies  are
     considered  to  be  the  functional  currencies  of  the  Company  and  its
     subsidiaries.  Translation  adjustments  that arise from translation of the
     Company and its  subsidiaries'  financial  statements are  accumulated in a
     separate  component of shareholder's  equity.  Transaction gains and losses
     that arise from  exchange  rate changes on  transactions  denominated  in a
     currency other than local currencies are included in income as incurred.

O.   Fair Value of Financial Instruments

     The recorded amount of cash, cash equivalents,  notes payable and advances,
     approximates  fair value due to the short term  maturities  of these assets
     and liabilities.

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-11

<PAGE>

P.   Recently Issued Accounting Pronouncements

     In February 1997, the Financial  Accounting  Standards  Board (FASB) issued
     Statement  128,  Earnings  per Share,  effective  for periods  ending after
     December 15, 1997. This statement  establishes  standards for computing and
     presenting   earnings   per  share   ("EPS"),   and  replaces  the  current
     presentation  of primary EPS with basic EPS,  which  excludes the effect of
     common stock equivalents. The Company will adopt this standard in 1997, and
     is presently  analyzing  the impact of this new  standard on its  financial
     statements and related disclosures.

2.   Inventory

     Inventory,  at the lower of cost  (first in,  first  out) or market,  as of
     December 31, 1996 and 1995, is as follows:

                                                   1996                1995
                                                 -------             ------
     Raw materials and supplies                   $1,525              $1,864
     Work in progress                                701               1,155
     Finished goods                                4,293               4,579
                                                   -----               -----
                  TOTAL                           $6,519              $7,598
                                                  ======              ======

     The  inventory  balances are net of a reserve for  inventory  valuation and
     obsolescence   of  $1,126  and  $2,552  at  December  31,  1996  and  1995,
     respectively.

3.   Property and Equipment

     Property  and  equipment  at December 31, 1996 and 1995 is comprised of the
     following items:

                                                   1996            1995
                                                 -------          ------
     Machinery, equipment and tooling            $ 3,581          $ 3,363
     Furniture and office equipment                1,774            1,485
     Leasehold improvements                          694              600
                                                 -------          -------
                                                   6,049            5,448
     Less: accumulated depreciation
           and amortization, net of
              disposals                           (3,919)          (3,257)
                                                 -------          -------
                                                 $ 2,130          $ 2,191
                                                 =======          =======

     Depreciation and  amortization  expense was  approximately  $978, $868, and
     $574 for the years ended December 31, 1996, 1995 and 1994, respectively.

4.   Goodwill and Intangible Assets

     Goodwill and intangible  assets  consist of the following,  at December 31,
     1996 and 1995:

                                                    1996             1995
                                                  -------          ------

     Goodwill                                     $16,295          $16,345
     Other intangibles                                220              123
                                                  -------         --------
     Total intangibles                             16,515           16,468

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-12
<PAGE>

     Less: accumulated amortization                (2,207)          (1,762)
                                                  -------          -------

                                                  $14,308          $14,706
                                                  =======          =======

     As explained  above in Note 1D, the  acquisition of Bogen and Speech Design
     was  accounted  for as a reverse  acquisition  by Geotek.  No goodwill  was
     recorded in connection with this transaction.

     In January 1994 Geotek  acquired a greater than 95% interest in Bogen,  and
     pursuant to the rules of push-down accounting, the acquisition gave rise to
     a new basis of accounting and the goodwill related to Geotek's  acquisition
     was "pushed-down" to the financial statements of Bogen. Accordingly,  Bogen
     recorded  net  goodwill  in the amount of  $14,300 in the first  quarter of
     1994.  The  goodwill is being  amortized  over its then  remaining  life of
     approximately  38 years.  The related  amortization  expense for the pushed
     down goodwill was approximately  $378 for the year ended December 31, 1996,
     and $376 for the years ended December 31, 1995 and 1994.

     Goodwill in the amount of $685  represents the excess of cost over the fair
     value of net assets acquired by Speech Design related to the acquisition of
     its 67% owned  subsidiary  Satelco.  This Goodwill is being amortized using
     the straight-line method over 20 years.

     Amortization  of goodwill and other  intangibles  was  approximately  $445,
     $443,  and $424 for the  years  ended  December  31,  1996,  1995 and 1994,
     respectively.

5.   Revolving Credit Agreements

     In  August  1995,  Bogen  Communications,  Inc.  ("BCI"),  a  wholly  owned
     subsidiary of Bogen,  extended a $10,000 domestic  revolving senior line of
     credit for a two year term expiring August 1997. The line is collateralized
     by  substantially  all the  assets of Bogen and is  guaranteed  by  Geotek.
     Advances bear  interest at the rate of 2% to 2.75% over the lender's  prime
     rate. At December 31, 1996, the lender's prime rate was 8.25%.  Advances to
     Bogen were made based on a percentage of accounts receivable and inventory.

     As of December 31, 1996 and 1995, Bogen had short term domestic  borrowings
     outstanding  under the line of credit of $1,545 and  $3,670,  respectively.
     The amounts available under the credit line, based upon accounts receivable
     and  inventory,  were  $2,126  and $437 at  December  31,  1996  and  1995,
     respectively.  Under the terms of the line of credit,  Bogen cannot,  among
     other  actions,  declare  or  pay  any  dividends,  return  capital  to its
     stockholders or redeem or repurchase any of its outstanding  capital stock.
     Net  assets of Bogen  restricted  under this  agreement  were  $16,655  and
     $14,910 at December 31, 1996 and 1995, respectively.

     In the first quarter of 1997,  BCI obtained a new  revolving  senior credit
     line for a period of two years.  The new credit line has a maximum  line of
     borrowing  of $7,000  and bears an  annual  interest  rate of .75% over the
     lenders prime rate, and replaces Bogen's previous line of $10,000 which had
     an annual  interest rate of 2.5% over the lender's  prime rate.  The senior
     loan  is  collaterized  by  all  of  the  accounts  receivable,  inventory,
     property,  plant  and  equipment,  and  general  intangibles  of BCI and is
     guaranteed  by the  Company.  Under the terms of this line of  credit,  BCI
     cannot,  among other actions,  declare or pay dividends,  return capital to
     its  stockholders  or redeem or repurchase any of its  outstanding  capital
     stock.

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-13
<PAGE>

     In August 1995, in connection  with the Company's  acquisition of Bogen and
     Speech Design,  Geotek also agreed to provide Bogen with a working  capital
     line of credit for two years in the aggregate  principal  amount of $2,000.
     Amounts  drawn under the line bear  interest at 1% per annum above the rate
     Bogen pays for its then largest credit  facility.  There were no borrowings
     under this facility at December 31, 1996 or 1995.

     At December 31, 1996 and 1995, Speech Design had short term lines of credit
     and overdraft  facilities  of $4,344,  and $3,453,  respectively,  of which
     short term  borrowings  amounted  to $3,283 and $1,274,  respectively.  The
     amounts  available  under  these  credit  lines  were  $1,061 and $2,179 at
     December  31, 1996 and 1995,  respectively,  with rates tied to  short-term
     bank notes and Euromarket loans. Speech Design's short term lines of credit
     are  collaterized  by  all  of  Speech  Design's  accounts  receivable  and
     inventory.  At December 31, 1996  interest  rates on these short term lines
     ranged from 4.4% to 6.3%.

     Total  outstanding  revolving  lines of credit are summarized as follows at
     December 31, 1996 and 1995:

                                                      1996             1995
                                                      ----             ----
     Domestic Lines of Credit Utilized              $1,545           $3,670
     Foreign Lines of Credit Utilized:
       Speech Design                                 2,805              627
       Satelco                                         478              647
                                                    ------           ------

                                                    $4,828           $4,944
                                                    ======           ======

6.   Long-Term Debt

     A: ADVANCES and NOTES PAYABLE TO RELATED PARTIES

     Advances and notes payable to related parties at December 31, 1996 and 1995
     consist of the following:

                                                             1996         1995
                                                           --------      ------

     Advances from Geotek                                    $152        $  138
     Notes Payable - Geotek (at prime rate + 1%)                -           133
     Notes Payable - Geotek (at Swiss prime rate
           + 1%)                                                -           266
     Loan from Speech Design Shareholder (at
           German discount rate + 2%)                         129             -
     Loan from Related Party (at Zurich Kantonal
           Bank rate)                                         232           317
     Notes Payable - Geotek (at 13%)                          594         3,141
                                                           ------        ------

                    Total                                   1,107         3,995
     Less: Current Maturities                                (746)         (537)
                                                           ------        ------
                                                             $361        $3,458
                                                           ======        ======

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-14

<PAGE>

     Advances from Geotek

     Advances from Geotek consist of net  non-interest  bearing advances made to
     Bogen.

     Notes Payable - Geotek (at prime rate + 1%)

     This note  payable to Geotek  from  Speech  Design is payable in  quarterly
     installments of $33 plus interest at the prime rate plus 1%.

     Notes Payable - Geotek

     This note  payable to Geotek is from  Satelco,  a 67% owned  subsidiary  of
     Speech Design, and is payable in quarterly installments of $87 beginning in
     September,  1995 plus  annual  payments of interest at the Swiss prime rate
     plus 1%.

     Loan from Speech Design Shareholders

     This note  payable  to Speech  Design's  minority  shareholders  matures on
     December  31,  1999,  at which date it can be renewed or called in at three
     months notice. Interest is paid in quarterly installments and is charged at
     2% over the German discount rate.

     Loan from Related Party

     This $315  original  note from the  minority  shareholders  of  Satelco  is
     payable  in  quarterly  installments  of $31 plus  interest  at the  Zurich
     Kantonal Bank rate with installments beginning February, 1995. The payments
     of this note have been  suspended  (with the  approval  of the  noteholder)
     until such time as the Satelco subsidiary becomes profitable.  Accordingly,
     this note payable has been classified as long-term.

     Notes Payable (by the Company) to Geotek

     This note  payable to Geotek from the  Company was  incurred at the date of
     acquisition  for  $3,000  plus  interest  payable  quarterly  in arrears at
     varying rates equal to the Company's highest borrowing rate plus 2%. In May
     1996, the $3,000 note plus accrued  interest was reduced and  restructured,
     retroactive to January 1, 1996, to a $500  non-convertible  promissory note
     due July 1997.

     B: NOTES PAYABLE TO NON-RELATED PARTIES

     Notes payable to non-related  parties at December 31, 1996 and 1995 consist
     of the following:

                                                         1996             1995
                                                       -------          ------
     Various Notes Payable (at prime rate)             $    -          $   60
     Notes Payable (with imputed interest at 9%)            -              37
     Notes Payable (at 12% interest rate)                   -              12
     Notes Payable to Bank (at Libor
       plus 2.5% interest)                                  13             -
     Notes Payable to Bank (at 8.5% interest rate)          -              65
                                                          ----          ------
               Total                                        13             174
     Less: Current Maturities                               (5)           (174)
                                                        ------          ------
                                                        $    8          $   -
                                                        ======          ======

     Various Notes Payable (at prime rate)

     Payable in monthly installments of $12 plus interest at the prime rate.

     Notes Payable (with imputed interest at 9%)

     Payable in annual installments of $150 including imputed interest at 9%.

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-15

<PAGE>

     Notes Payable (at 12% interest rate)

     Payable in monthly installments of $4 plus interest at 12%.

     Notes Payable to Bank (at Libor plus 2.5%)

     Payable in monthly installments of $.4 plus interest at the Libor rate plus
     2.5%.

     Notes Payable to Bank (at 8.5% interest rate)

     Payable by Speech Design in quarterly installments plus interest at 8.5%.


     Principal  maturities  of  long-term  debt  over the next  five  years  and
     thereafter are as follows:

                                         Related
                                         Parties    Other       Total
                                         -------    -----       -----
      1997                               $  746     $    5     $  751
      1998                                 --            8          8
      1999                                  129       --          129
      2000                                 --         --         --
      2001                                 --         --         --
      Thereafter                            232       --          232
                                         ------     ------     ------           
                                         $1,107     $   13     $1,120
                                         ======     ======     ======
                                                           
7.   Income Taxes

     The  Company's  pre-tax  book  income is as  follows  for the  years  ended
     December 31, 1996 and 1995:

                                                     1996               1995
                                                     ----               ----
     Domestic U.S. Operations                       $1,322           $(4,886)
     Foreign Operations                              1,241             1,605
                                                    ------            ------
              Total                                 $2,563           $(3,281)
                                                    ======           =======

     The  components  of income tax  expense  are as follows for the years ended
     December 31, 1996 and 1995:

                                                     1996               1995
                                                     ----               ----
     Current Income Tax
              (Foreign Only)                        $  555            $1,262
     Deferred Income Tax                               -                  -
                                                    ------             -----
              Total Income Tax Expense              $  555            $1,262
                                                    ======            ======

     The difference  between the provision for income taxes computed at the U.S.
     federal statutory rate and the provision as reported are as follows:

                                                      1996            1995
                                                      ----            ----

     Provision at U.S. Statutory Rate                $ 871         $(1,116)
     Non-deductible Expenses                           338             785
     Change in Valuation Allowance                    (793)            998
     German Taxes                                      162             604

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-16

<PAGE>

     Other                                              (23)            (9)
                                                       ----         ------
             Tax Provision as Reported                 $555         $1,262
                                                       ====         ======

     The Company has net  operating  loss  ("NOL")  carryforwards  for U.S.  tax
     purposes of  approximately  $7,847 as of December  31,  1996,  which expire
     between the years 2004  through  2010.  Under  Section 382 of the  Internal
     Revenue Code of 1986, as amended,  the net operating loss carryforwards are
     subject  to certain  limitations  on their  utilization  as a result of the
     changes in control of the Company in 1991 and 1995.

     The  components of deferred tax assets at December 31, 1996 and 1995,  were
     as follows:

                                                       1996            1995
                                                       ----            ----
     Deferred Tax Assets:
     NOL Carryforwards                               $2,808          $2,601
     Deferred Rent                                      191             251
     Inventory Items                                    592           1,185
     Allowance for Doubtful Accounts                    157             163
     Accrued Liabilities                                196             470
     Property, Plant & Equipment                        137             103
     Other                                               56              58
                                                      -----           -----
              TOTAL DEFERRED TAX ASSETS              $4,137          $4,831
     Less, Valuation Allowance                       (4,137)         (4,831)
                                                    -------          ------
              NET DEFERRED TAX ASSETS                 $   0          $   0
                                                    =======          =====

     In  accordance  with SFAS No. 109, the Company has  established a valuation
     allowance  of $4,137 and $4,831 for the years ended  December  31, 1996 and
     1995,  respectively.  The valuation  allowance was  established  due to the
     uncertainty of the  realization  of the deferred tax assets.  A significant
     portion  of the  deferred  tax  assets  which are  currently  subject  to a
     valuation allowance may be allocated to reduce goodwill or other noncurrent
     intangible  assets when  subsequently  recognized due to the application of
     SFAS No. 109 and purchase accounting.


8.   Commitments and Contingencies

     Operating Leases

     The Company  occupies its plant and office  facilities and operates certain
     equipment under leases expiring at various dates through 2005. The facility
     lease contains an escalation  clause and provides for payments of taxes and
     expenses  over base rent.  The  facility  lease  also  contains a five year
     renewal option.

     The  minimum  annual  rental  commitments  over the next five  years  under
     operating leases are as follows:

   
              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-17
<PAGE>

                  Year Ending    
                  December 31,
                  ------------
                     1997                    $ 1,351
                     1998                      1,307
                     1999                      1,214
                     2000                      1,043
                     2001                        368
                  Thereafter                     975
                                              ------
                                              $6,258
                                              ======

     Bogen's  facility  lease  includes  scheduled rent increases over the lease
     term.  Rent  expense  has been  recorded on a  straight-line  basis and the
     related  deferred rent obligation of $478 and $597 at December 31, 1996 and
     1995, respectively, is classified as a long-term liability.

     Rent expense charged to operations totaled  approximately  $1,151,  $1,055,
     and  $779  for  the  years  ended   December  31,  1996,   1995  and  1994,
     respectively.

     Employment and Consulting Agreements

     Compensation of Directors

     Directors,  other  than  non-employee  directors  who  are  members  of the
     Executive  Committee of the Board,  receive no  compensation  for acting as
     directors to the Company. During 1996, Messrs. Rosenfeld and Stern received
     $50,000 each as members of the Company's Executive Committee.

     Employment Contracts

     In January 1996,  the Company  entered into an agreement with Mr. Zvi Peled
     generally  setting  forth the terms and  provisions  of his  employment  as
     President and Chief Executive Officer of the Company.  Mr. Peled joined the
     Company in such capacity in March 1996. Mr. Peled's base salary is $150,000
     per  annum  and he is  entitled  to a  minimum  annual  bonus  of  $50,000,
     contingent upon the satisfaction of performance criteria established by the
     Company's  Board of Directors  and Mr. Peled at the start of each year.  In
     addition,  the Company  agreed to grant Mr. Peled stock options to purchase
     175,000  shares of the  Company's  Common Stock,  at the following  prices:
     75,000 shares at an exercise price of $5.00 per share,  75,000 shares at an
     exercise  price of $7.50 per share,  and 25,000 shares at an exercise price
     of $10.00 per share.  Such options will vest in equal  installments  over a
     five year period.  In addition,  the Company provides Mr. Peled with $2,000
     per month towards home rental payments, as well as a car. Effective January
     1, 1997, and in lieu of participating  in the Company's  401(k)  Retirement
     Savings Plan and the Company's life and  disability  insurance  plans,  Mr.
     Peled  receives an  additional  $2,300 per month,  which  amount is applied
     towards  Mr.  Peled's  personal  benefits  program.  In the event  that Mr.
     Peled's  employment is terminated without cause, Mr. Peled will continue to
     receive his salary and benefits until he obtains a replacement  position or
     for six months,  whichever is sooner. Pursuant to the employment agreement,
     Mr. Peled was provided with a $10,000 relocation allowance.

     The Company  also has a written  agreement  with Mr.  Yoav M. Cohen,  dated
     August 1, 1996,  generally  setting  forth the terms and  provisions of his
     employment as Chief Financial Officer of the Company.  Mr. Cohen joined the
     Company in such capacity on July 31, 1996.  Mr.  Cohen's annual base salary
     is  $110,000  and he may  receive an annual  bonus equal to 1 - 1.5% of the
     profits of the Company  during the relevant  fiscal  year.  Pursuant to the
     employment agreement,  the Company agreed to grant Mr. Cohen stock options,
     in accordance with the terms and provisions of the Company's

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-18

<PAGE>

     1996  Incentive  Stock  Option  Plan,  to  purchase  50,000  shares  of the
     Company's Common Stock. Mr. Cohen also participates in the Company's 401(k)
     Retirement  Savings Plan,  health and dental plans, and disability and life
     insurance  plans and is provided with Life Insurance with an annual premium
     of up to $3,000 annually. In addition, Mr. Cohen is provided with a Company
     car,  insured by the  Company.  In the event that Mr.  Cohen is  terminated
     without cause, he is entitled to a severance  package  pursuant to which he
     would  continue to receive his base  salary and  related  benefits  for six
     months.

     Mr.  Menashe  Ben-David  is employed  by the Company  pursuant to a written
     agreement with Geotek,  dated June 7, 1991, which has no definite term. The
     agreement  provides  for Mr.  Ben-David to receive a base salary of $75,000
     per year,  subject to periodic  review and  increase by Geotek.  Geotek has
     also agreed to provide life and health  insurance to Mr.  Ben-David as well
     as an  automobile.  Mr.  Ben-David  also  received a total of 50,000  stock
     options to purchase shares of common stock of Geotek. Geotek is entitled to
     terminate  the  employment  agreement  at any time upon  thirty  days prior
     written notice;  provided,  however,  that Geotek continues to pay Mr. Ben-
     David his base  salary for a period of six months from  termination  of the
     agreement,  unless  Mr.  Ben-David  is  terminated  as a result of  certain
     conditions.  Mr.  Ben-David  has agreed not to  compete  with  Geotek for a
     period of two years after his  employment  is  terminated.  The Company has
     assumed all of Geotek's obligations under this agreement.

     Mr. Kasimir  Arciszewski is employed by Speech Design pursuant to a written
     agreement  dated February 9, 1993 which has no definite term. The agreement
     provides  for Mr.  Arciszewski  to  receive  a base  salary  of DM  180,000
     ($119,682 as of December 31,  1996),  subject to review and increase by the
     parties at the end of each calendar year. In addition,  Mr.  Arciszewski is
     entitled to annual bonuses based on Speech Design's pre-tax profits. Speech
     Design has agreed to provide Social Security and health insurance  benefits
     to Mr.  Arciszewski  and  agreed  to  furnish  an  automobile  to him.  Mr.
     Arciszewski has agreed not to compete with Speech Design during the term of
     the agreement and for one year  thereafter  and Speech Design has agreed to
     compensate  Mr.   Arciszewski  during  this   noncompetition   period.  Mr.
     Arciszewski has agreed not to disclose any of Speech  Design's  business or
     trade secrets.

     Commitments

     At December 31, 1996, the Company had  commitments to purchase  merchandise
     from foreign vendors of $627 under  documentary  letters of credit and $394
     under other sight documents.  Pursuant to the sale of Aryt Optronics,  Ltd.
     by Geotek in 1992, the Company  obtained  certain  benefits and concessions
     from Reshef Technologies,  Ltd.  ("Reshef"),  formerly a related company to
     Bogen.  Such  concessions  and  benefits  would be lost by the  Company  if
     certain  target  purchases  from Reshef were not met.  Purchases made under
     this  agreement   complied  with  the  target  purchase   requirements  and
     approximated  $3,612,  and  $6,284  in 1995  and  1994,  respectively.  The
     concessions and benefits from Reshef expired on December 31, 1995.

     Litigation

     The  Company  is not aware of any  material  pending  or  threatened  legal
     proceedings  to  which it is a party or of  which  any of its  property  is
     subject.

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-19
<PAGE>

9.   Stockholder's Equity

     Common Stock and Common Stock Subject to Possible Redemption

     The following  discussion  summarizes the incorporation of the Company, the
     capitalization,  and the requirements and privileges of the shareholders in
     the periods  preceding the  consummation  of the  acquisition  of Bogen and
     Speech Design on August 21, 1995.

     The Company was  incorporated in Delaware on May 6, 1993 with the objective
     of  acquiring  a  medium-sized  operating  business  engaged in  industrial
     manufacturing or industrial services and located in Germany, Switzerland or
     Austria (a "Business  Combination").  The Company's  founding directors and
     advisors purchased 500,000 common shares, $.001 par value, for five hundred
     dollars during the three month period after incorporation. On September 30,
     1993,  125,000  shares  were  returned  to  the  Company  by  the  founding
     shareholders and was retroactively reflected in the financial statements as
     a net issuance of 375,000 shares.

     On October 15,  1993,  the Company  sold  1,550,000  units  ("Units") in an
     initial public offering  ("Offering") of the Company's  common stock.  Each
     unit consisted of one share of the Company's common stock, $.001 par value,
     and two  Redeemable  Common  Stock  Purchase  Warrants  ("Warrants").  Each
     Warrant  entitled the holder to purchase,  during the period  commencing on
     the later of the consummation by the Company of its Business Combination or
     one year from the  effective  date of the  Offering  and ending seven years
     from the effective  date of Offering,  from the Company one share of common
     stock at an exercise price of $5.50. The Warrants are redeemable at a price
     of $.01 per Warrant upon 30 days notice at any time, only in the event that
     the last sale price of the common stock is at least $10.00 per share for 20
     consecutive  trading  days  ending  on the third day prior to date on which
     notice of redemption is given.  The proceeds of the offering were deposited
     in a Trust  Fund to  fund a  Business  Combination  or  liquidation  of the
     Company.

     The  Company,   after  signing  a  definitive   agreement  for  a  Business
     Combination,  submitted such transaction for shareholder  approval.  In the
     event that 20% or more of the  shareholders  excluding,  for this  purpose,
     those  persons  who were  shareholders  prior to the  Offering,  had  voted
     against the Business  Combination,  the Business Combination would not have
     been  consummated.  For the first Business  Combination  consummated by the
     Company, all of the Company's shareholders prior to the Offering, including
     all of the  officers,  directors  and  advisors  of the  Company  ("Initial
     Shareholders")  agreed to vote their shares of common  stock in  accordance
     with the vote of the majority in interest of all other  shareholders of the
     Company ("Public  Shareholders") with respect to any Business  Combination.
     After  consummation  of the Company's  first  Business  Combination,  these
     voting safeguards were no longer applicable.

     When the Business  Combination  was approved  and  consummated,  any Public
     Shareholder  who had voted  against  the  Business  Combination  could have
     demanded that the Company redeem his shares. The per share redemption price
     equaled  the  amount  in  the  Trust  Fund,  as  of  the  record  date  for
     determination of shareholders entitled to vote on the Business Combination,
     divided by the number of shares held by Public  Shareholders.  Accordingly,
     Public Shareholders  holding 19.99% of the aggregate number of shares owned
     by all Public Shareholders could have had their shares redeemed at the time
     of the Business Combination. The Company classified the value

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-20
<PAGE>

     of this redemption as common stock, subject to possible redemption,  on its
     balance  sheet  at  December  31,  1994  prior to the  consummation  of the
     Business  Combination.  Such Public  Shareholders  were entitled to receive
     their per share  interest  in the Trust  Fund  computed  without  regard to
     shares held by Initial Shareholders. On August 21, 1995, in connection with
     the  Company's   acquisition  of  Bogen  and  Speech  Design,  the  Company
     reclassified  the common  stock  subject to possible  redemption  to common
     stock. No shares of stock were redeemed as discussed above.

     The  Company's  Certificate  of  Incorporation  had provided for  mandatory
     liquidation of the Company, without shareholder approval, in the event that
     the Company did not consummate a Business Combination.

     Warrants

     In June  1993,  300,000  Warrants  were  issued to various  individuals  in
     consideration for providing the Company bridge financing until its offering
     in October  1993.  As  referred  to above,  the  Company  issued  3,100,000
     Warrants to purchase its common stock in connection with the Offering.

     Warrants to purchase  200,000  shares of common stock were issued to Geotek
     in August  1995 in  connection  with the  acquisition  of Bogen and  Speech
     Design.  Another 60,000 Warrants were issued as consideration for providing
     certain  financings and services  provided to the Company to facilitate the
     Business  Combination.  At  December  31,  1996,  3,660,000  Warrants  were
     outstanding.

     Options

     In 1996,  the Company  adopted the 1996  Incentive  Stock  Option Plan (the
     "1996 Plan")  pursuant to which an  aggregate  of  1,253,335  shares of the
     Company's Common Stock were reserved for issuance pursuant to the plan. The
     1996 Plan can award stock options to eligible  employees of the Company and
     its subsidiaries  (including employee directors),  non-employee  directors,
     and independent  contractors  and consultants who perform  services for the
     Company.  The options vest over a period of five years and are  exercisable
     at prices  determined  on a case by case basis.  The Company will apply the
     intrinsic value based method permitted by Statement of Financial Accounting
     Standard No. 123, "Accounting for Stock-Based  Compensation."  During 1996,
     there were no options  granted,  exercised  or  exercisable  under the 1996
     Plan.

     In 1994,  Bogen adopted an Employee  Stock Option Plan (the "Bogen  Plan").
     Under the Bogen Plan,  an aggregate  of  3,000,000  shares may be issued to
     members of its Board of  Directors,  designated  officers and employees and
     independent  contractors  or  consultants  who  perform  services  for  the
     Company.  No  option  granted  under the Bogen  Plan is  intended  to be an
     incentive  stock  option  within  the  meaning  of  section  442A(b) of the
     Internal  Revenue  Code of 1986  for  income  tax  purposes.  During  1994,
     1,400,000 options were granted under the Bogen Plan at a price of $1.14 per
     share which  approximated  fair value.  These  options vest over a five (5)
     year period.

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-21
<PAGE>

     All options  granted under the Bogen Plan were  outstanding at December 31,
     1996,  1995,  and 1994.  In 1997,  the  Company  intends  to cancel all the
     options granted under the Bogen Plan and grant certain  participants  under
     the Bogen Plan one option for a share of Common Stock of the Company  under
     the 1996 Plan in exchange for every three options  granted to a participant
     in the Bogen Plan.  Options for an  aggregate  of 253,335  shares of Common
     Stock will be  granted  under the 1996 Plan to former  participants  of the
     Bogen Plan.

     Push-Down of Goodwill

     Pursuant to  Accounting  Principles  Board No. 16  "Business  Combinations"
     ("APB 16"), the accumulated deficit of Bogen was required to be restated on
     the date of applying  push-down  accounting  (see Note 1G,  Goodwill).  The
     restated  accumulated  deficit  includes  Geotek's  recorded  equity in the
     income and losses of Bogen since its original  acquisition and all goodwill
     amortization  recorded  by Geotek  relating  to the  acquisition  of Bogen.
     Therefore,  a reclassification  of $8,524 was made from accumulated deficit
     to additional paid-in capital in January 1994.

     Preferred Stock

     The Company is authorized to issue 1,000,000 shares of preferred stock with
     such  designations,  voting  and other  rights  and  preferences  as may be
     determined from time to time by the Board of Directors.

     Common Stock

     At  December  31,  1996 and 1995,  3,960,000  shares of common  stock  were
     reserved for issuance upon exercise of redeemable warrants.

10.  Related Party Transactions

     In 1995, the Company issued 132,431 shares of its common stock for services
     received in connection with the acquisition of Bogen and Speech Design.  Of
     these  shares,  19,565 were issued to a member of the Board of Directors of
     Geotek.

     During 1995, in conjunction with the acquisition of Bogen and Speech Design
     Geotek forgave  $7,155 in long-term debt due Geotek,  which was recorded as
     an increase in additional paid-in capital. As part of this acquisition, the
     Company issued $3,000 in convertible  promissory  notes to Geotek which was
     reduced and restructured to a $500 non-convertible promissory note due July
     1997 (see Note 1D "Basis of Presentation").

11.  Economic Dependency

     During the years  ended  December  31,  1996,  1995 and 1994,  the  Company
     purchased audio components of approximately  $12,072,  $8,853, and $14,016,
     respectively,  from three suppliers located in the Republic of South Korea.
     Any future  inability of any of these suppliers to provide the Company with
     a  sufficient  level  of  components  may  have a  negative  impact  on the
     Company's operations.

     Sales to one customer approximated $4,506 and $4,400 and accounted for more
     than 10% of the Company's net sales in 1996 and 1995,  respectively.  Sales
     to a different customer approximated $7,100 and accounted for more than 10%
     of the Company's net sales in 1994.

              The accompanying notes are an integral part of these
                        consolidated financial statements

                                      F-22

<PAGE>

     Twenty of Bogen's employees are subject to collective bargaining agreements
     which expire in mid-1997.

12.  Employee Benefit Plans

     Bogen  participates in  multi-employer  pension plans which cover all union
     employees.  Contributions for the periods ended December 31, 1996, 1995 and
     1994 were approximately $17, $15, and $18, respectively.

     Employees  of the Company are also  eligible  to  participate  in a defined
     contribution  401(K)  plan  sponsored  by Geotek.  The  Company  provides a
     matching  contribution  to a portion  of funds  contributed  by  employees.
     Amounts  charged to expense  were $83,  $82,  and $108 for the years  ended
     December 31, 1996, 1995 and 1994, respectively.

13.  Segments

     The Company's  operations are conducted in one segment in the United States
     (Bogen)  and Germany  (Speech  Design).  Information  about the Company for
     1996, 1995, and 1994 has been presented geographically as follows:

                                      1996               1995             1994
                                     ------            -------          ------
     Geographic Segments:
             Revenues:
             United States           $30,671           $30,677          $37,745
             Foreign                  15,598            13,841            8,177
                                     -------           -------          -------
                                     $46,269           $44,518          $45,922
                                     =======           =======          =======
     Operating income (loss):
             United States           $ 1,862           $(2,405)         $   (18)
             Foreign                   1,706             1,768            1,223
                                     -------           -------          -------
     Income (loss) from operations   $ 3,568           $  (637)         $ 1,205
                                     =======           ========         =======
     Identifiable assets:
             United States           $23,604           $24,425          $27,467
             Foreign                   7,782             6,879            5,399
                                     -------           -------          -------
                                     $31,386           $31,304          $32,866
                                     =======           =======          =======

14.  Fourth Quarter Adjustments

     Certain adjustments and provisions  amounting to $1,500,  primarily related
     to inventory  valuations  for the OAS product  line,  were  recorded in the
     fourth quarter of 1995.


                                      F-23

<PAGE>

Item 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

         N/A    

                                       24

<PAGE>

                                    PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The  directors,   executive  officers  and  significant  employees  of  the
Registrant are as follows:

Name                      Age          Position
----                      ---          --------
Yoram Bibring             39           Director
Yaron Eitan               40           Director and Chairman of the Board of 
                                           Directors
Dr. Leonard Lodish        53           Director
Michael McCoy             43           Director
David Jan Mitchell        35           Director
Yoav Stern                43           Director
Zvi Peled                 47           President and Chief Executive Officer
Yoav M. Cohen             39           Chief Financial Officer and Secretary
Kasimir Arciszewski       45           Co-Founder and Co-Managing Director of
                                           Speech Design
Hans Meiler               49           Co-Founder and Co-Managing Director of
                                           Speech Design

     The members of the Board of Directors of the  Registrant  (the "Board") are
divided  into  two  classes  and  serve  for a term  of two  years  until  their
successors are duly elected and qualified. Officers serve for a term of one year
until their successors are duly elected and qualified.

     Based solely upon a review of the Forms 3 and 4 furnished to the Registrant
during  its  most  recent  fiscal  year,   and  Forms  5  and  related   written
representations  furnished to the Company with respect to its most recent fiscal
year,  the Company knows of no director,  officer,  or beneficial  owner of more
than ten percent  (10%) of its Common Stock who failed to file on a timely basis
reports required by Section 16(a) of the Securities and Exchange Act of 1934, as
amended, during the most recent fiscal year.

     Yoram  Bibring,  age 39, has served as a director of the  Registrant  since
1995.  Mr.  Bibring  is  President  and  Chief   Executive   Officer  of  Geotek
International Networks,  Inc., a wholly owned subsidiary of Geotek. Mr. Bibring,
was Executive  Vice  President and Chief  Operating  Officer of Geotek from June
1993 to March 1996,  Chief  Financial  Officer of Geotek from  February  1990 to
September  1995 and Vice  President  of Aryt  Optronics  Industries,  Ltd.  from
December 1990 to April 1991.

     Yaron Eitan,  age 40, has served as Chairman of the Board and a director of
the Registrant  since 1995. Mr. Eitan was Chairman of the Board of Bogen and its
subsidiary,  BCI, from April 1991 to August 1995.  Since October 1996, Mr. Eitan
has been  Chairman of the Board of Geotek.  From March 1989 until  October 1996,
Mr. Eitan was President, Chief Executive Officer and a director of Geotek. Since
1992, Mr. Eitan also serves as a director and Chief  Executive  Officer of Power
Spectrum,  Inc., and was Chairman of the Board from  1992-1995,  and since 1993,
Mr.  Eitan also serves as Chairman of the Board and Chief  Executive  Officer of
National  Band Three  Limited,  each of which is a wholly  owned  subsidiary  of
Geotek.  Mr.  Eitan also serves as a director of GMSI,  Inc.,  a majority  owned
subsidiary of Geotek.

     Dr.  Leonard  Lodish,  age 53, has served as a director  of the  Registrant
since 1995.  Dr.  Lodish is the Samuel R.  Harrell  Professor  in the  Marketing
Department of The Wharton

                                       25

<PAGE>

School,  University of Pennsylvania  where he has held academic  positions since
1968. Dr. Lodish is a Director of Information Resources, Inc., Chicago, Illinois
(since 1985),  Franklin  Electronic  Publishers,  Inc.,  Burlington,  New Jersey
(since 1987), J&J Snack Foods, Inc., Pennsauken,  New Jersey (since 1993), Walsh
International,  New York (since  1996) and is a former  director of Geotek.  Dr.
Lodish has a Ph.D. in Marketing and Operations Research from M.I.T.

     Michael  McCoy,  age 43, has served as a director of the  Registrant  since
1995.  Since  February  1997,  Mr. McCoy serves as President and CEO of Geotek's
U.S. operations.  Since September 1995, Mr. McCoy had been Senior Vice President
and Chief Financial Officer of Geotek. From November 1994 to September 1995, Mr.
McCoy was Vice President of the Northeast Region of Geotek.  From September 1992
to November 1994, Mr. McCoy was President of Greenlake Associates,  Inc., a high
technology  consulting  company.  From November 1988 through September 1992, Mr.
McCoy was a member of the Office of the  Chairman  and Senior Vice  President of
Business  Development  for LCI  International,  Inc.,  a  facilities  based long
distance telecommunications company.

     David Jan  Mitchell,  age 35, has served as a  director  of the  Registrant
since 1995.  Since 1991, Mr.  Mitchell has been President of Mitchell & Company,
Ltd., a New York-based merchant banking company that he founded and, since March
1992, a partner of Petherton Capital  Corporation,  a privately held real estate
investment  company.  From April  1988 to  December  1990,  Mr.  Mitchell  was a
management  principal and a director of Rodman & Renshaw,  Inc., a publicly held
investment  banking and  brokerage  firm.  Mr.  Mitchell is a director of Holmes
Protection Group, a security alarm system company and Kellstrom Industries, Inc.
("Kellstrom"),  a distributor of jet engine parts.  Mr.  Mitchell also serves as
director of several private  companies,  including  Madah-Com,  an Israeli-based
technology  company,  and First Home, a company that develops and markets houses
to first-time  homeowners.  Mr.  Mitchell also serves as President of Americash,
LLC, a national  network of  Automated  Teller  Machines in non-bank  locations.
During the last ten years, Mr. Mitchell has served as an officer and/or director
of several not-for-profit universities and foundations.

     Yoav Stern,  age 43, has served as a director of the Registrant since 1995.
From March 1995 to August 1995, Mr. Stern, along with Joram Rosenfeld, served as
Co-Chief  Executive  Officer and  Co-President of the Registrant.  Mr. Stern has
been a  managing  partner  of Helix  since  August  1995.  Mr.  Stern  served as
Co-Chairman  and Chief  Executive  Officer of  Kellstrom  from its  inception in
December  1993 until June 1995 and has  served as Co-  Chairman  of the Board of
Kellstrom  since then.  From  January  1993 to  September  1993,  Mr.  Stern was
President  and,  from  January  1992  until May 1995,  a  director  of  WordStar
International,  Inc.  (now  SoftKey  International,  Inc.),  which is engaged in
research and  development and worldwide  marketing and  distribution of software
for business and consumer  applications.  From April 1989 to December  1992, Mr.
Stern was Vice President of Business Development of Elron Electronic  Industries
Ltd., a multinational  public holding company based in Israel that is engaged in
operating and investing in high technology companies.

     Zvi Peled, age 47, has been President and CEO of the Registrant since March
1996. From 1994 through  February 1996, Mr. Peled was General Manager of Telenet
Group, a Division of Elbit, Ltd.  ("Elbit"),  Haifa,  Israel. Mr. Peled was also
President and CEO of Fibronics,  a subsidiary of Elbit, as well as a director of
Polish  Communications  Company,  a company  also owned by Elbit.  Mr. Peled was
employed by Elbit from 1977 to March 1996.

     Yoav M. Cohen, age 39, is the Chief Financial  Officer and Secretary of the
Registrant.  Prior to joining the Company, Mr. Cohen was Chief Financial Officer
of Target Capital Group LLC ("Target"), Garden City, N.Y., and Managing Director
of FEMI International  Limited,  a subsidiary of Target.  From 1993 to 1994, Mr.
Cohen was Corporate Vice

                                       26
<PAGE>

President,  Chief Financial Officer and Management  Information Systems Director
of Taro Pharmaceuticals Ltd. From 1990 to 1993, Mr. Cohen was Vice President and
Controller of Global  Investment  Bank at Bankers Trust Company and from 1985 to
1990,   Mr.   Cohen   was   Assistant   Vice   President   and   Controller   of
CitiCorp/Citibank.

     Kasimir Arciszewski,  age 45, is the Co-Founder and Co-Managing Director of
Speech Design since 1983. Mr.  Arciszewski is  responsible  for Speech  Design's
strategic  planning,  sales and  financial  activities.  Mr.  Arciszewski  is an
outside director of Docunet AG, a privately-held German company.

     Hans Meiler,  age 49, is the Co-Founder and Co-Managing  Director of Speech
Design since 1983. Mr. Meiler is  responsible  for Speech  Design's  operational
matters, including subcontracting, manufacturing and quality assurance.

Recent Events

     Joram Rosenfeld, who served as a director of the Registrant since 1995 and,
along with Mr. Stern,  was Co-Chief  Executive  Officer and  Co-President of the
Registrant for the period of March 1995 to August 1995,  passed away on February
19, 1997.  Mr.  Rosenfeld was a member of the Executive  Committee of the Board.
The  members of the Board have not yet elected a  successor  to Mr.  Rosenfeld's
seat on the Board and its committee.

Committees and Meetings of the Board of Directors

     During 1996,  the Board held three  meetings.  Messrs.  Bibring,  Eitan and
Mitchell attended each of the meetings.  Messrs. McCoy and Stern attended two of
the three meetings and Dr. Lodish attended one of the three meetings.  The Board
has an Executive Committee and an Audit Committee,  but does not have a standing
nominating committee.

Executive Committee

     The  Executive  Committee of the Board was  established  in August 1995 and
currently consists of Messrs. Bibring, Eitan and Stern. A vacancy now exists due
to the death of Joram  Rosenfeld.  The Executive  Committee is authorized by the
entire Board to exercise all of the authority of the Board in the  management of
the  Registrant  between  Board  meetings,  unless  otherwise  provided  in  the
Registrant's by-laws. The Executive Committee also functions as the Registrant's
Compensation/Stock  Option  Committee  and, in that  capacity,  administers  the
Registrant's  1996 Incentive Stock Option Plan and provides general oversight in
all employee  personnel matters through periodic meetings with management of the
Company.

Audit Committee

     The  Audit  Committee  of the  Board was  established  in  August  1995 and
currently consists of Messrs.  McCoy,  Lodish and Mitchell.  The Audit Committee
provides general financial  oversight in financial reporting and the adequacy of
the Registrant's  internal  controls through periodic meetings with Registrant's
management and its external auditors.

Item 11. EXECUTIVE COMPENSATION

Summary Compensation Table

     The  following  table  sets  forth  information  concerning  the annual and
long-term  compensation  for services in all capacities to the Company for 1996,
1995 and 1994, of

                                       27

<PAGE>

those persons who were during 1996 (i) the Chief Executive  Officer and (ii) the
other four most highly compensated executive officers of the Company.

<TABLE>
<CAPTION>
                                                            Annual Compensation                    Long-Term Compensation
                                               ----------------------------------------------    ---------------------------
                                                                                   Other         Securities        All Other
Name and                         Fiscal                                           Annual         Underlying       Compensation
Principal Position(1)           Year(1)        Salary($)       Bonus($)       Compensation($)    Options(#)           ($)
---------------------           -------        ---------       --------       ---------------    ----------        ---------
<S>                               <C>          <C>             <C>               <C>              <C>               <C>  
Zvi Peled                         1996         124,038         60,000            21,820(11)           --            3,750
President and Chief               1995            --             --                 --                --              --
Executive Officer                 1994            --             --                 --                --              --
                                                                             
Yoav M. Cohen                     1996          44,000         13,000               461(10)           --            2,462(6)
Chief Financial Officer           1995            --             --                 --                --              --
& Secretary                       1994            --             --                 --                --              --
                                                                             
Menashe Ben-David (2)             1996          98,000         30,000            18,658(9)            --            1,970(6)
Chief Operating Officer           1995          98,000          5,000            24,066(4)            --            5,635(5)
and Executive VP of               1994          95,115         10,654(3)         25,280(7)        200,000**         5,876(8)
Operations of Bogen                                                          

Kasimir Arciszewski               1996         119,682        128,971                   *             --              --
Co-Founder and Co-                1995         125,820        163,565                   *             --              --
Managing Director of              1994         110,880        180,432                   *             --              --
Speech Design                                                                                    
                                                                                                 
Hans Meiler                       1996         119,682        128.971                   *             --              --
Co-Founder and Co-                1995         125,820        163,565                   *             --              --
Managing Director of              1994         110,880        180,432                   *             --              --
Speech Design                                                                                      
                                                                                                   
</TABLE>
                                                                               
                                                                               
*    Did not receive  prerequisites or other personal benefits,  securities,  or
     property  having an aggregate value of greater than the lower of $50,000 or
     10% of the total salary and bonus reported for such executive officer.

**   Securities underlying options to purchase 200,000 shares of Common Stock of
     Bogen. In 1997 the Registrant  intends to convert such options into options
     to acquire 66,667 shares of Common Stock of the  Registrant.  The shares of
     Common Stock of Bogen have no readily ascertainable market value.

(1)  Prior to April 6, 1995, the Registrant was a Specified Purpose  Acquisition
     Company,  which did not engage in any substantive commercial business other
     than evaluating  prospective  companies for acquisition.  During this time,
     Messrs.  Rosenfeld  and  Stern  were the  Registrant's  Co-Chief  Executive
     Officers and did not receive any material compensation from the Company for
     such  services.  Accordingly,  in order to provide  meaningful  comparative
     information,  this table presumes that the Business Combination occurred as
     of January 1, 1994 and sets forth the relevant compensation information, as
     paid by Bogen or Speech  Design,  as the case may be, with  respect to each
     executive officer from said date.

(2)  Mr.  Ben-David was the Acting  President and Chief  Executive  Officer from
     November

                                       28
<PAGE>

     1995 to March 1996. Mr. Ben-David is currently the Executive Vice President
     of Bogen Communications, Inc.

(3)  $5,654 of this bonus  consists of  compensation  paid to Mr.  Ben-David for
     unused vacation days accrued in 1995.

(4)  Includes a housing expense allowance of $19,097.

(5)  Consists  of $3,866 in  contributions  by  Geotek to  Geotek's  401 plan on
     behalf of Mr. Ben-David and $1,787 in disability insurance premiums paid by
     the Company on behalf of Mr. Ben-David.

(6)  Includes  disability and/or life insurance  premiums paid by the Company on
     behalf of the employees.

(7)  Includes a housing expense allowance of $20,320.

(8)  Represents $4,168 in contributions by Geotek to Geotek's 401 plan on behalf
     of Mr.  Ben-David and $1,708 in disability  insurance  premiums paid by the
     Company on behalf of Mr. Ben-David.

(9)  Includes a housing expense allowance of $17,628.

(10) Includes car allowance.

(11) Includes a housing  expense  allowance  of $20,000,  and car  allowance  of
     $1,820.

Option/SAR Grants in 1996

     At the Annual Meeting of Stockholders  of the Registrant,  held on December
13, 1996, the  Stockholders  adopted the Company's  1996 Incentive  Stock Option
Plan (the "Plan").  Pursuant to which the Registrant may grant  employees of the
Registrant and its subsidiaries  (including  employee  directors),  non-employee
directors and independent  contractors  and consultants  option to shares of the
Company's  Common  Stock.  The Company has reserved  1,253,335  shares of Common
Stock for issuance pursuant to the Plan. The exercise price of all stock options
granted  pursuant to the Plan will be  determined by a committee of the Board of
Directors on a case by case basis.  See "Item 4. Submission of Matters to a Vote
of Security Holders".

     No stock options were granted to or exercised by any of the named executive
officers  during the 1996 fiscal year. In addition,  the Company has no SAR Plan
and has not issued SAR rights during 1996. Pursuant to its employment  agreement
with Mr. Peled, however, the Company has agreed to grant him options to purchase
175,000 shares of Common Stock with

                                       29
<PAGE>

exercise  prices  ranging  from  $5.00  to  $10.00.  In  addition,   upon  their
employment,  the Company agreed to grant to Mr. Cohen options to purchase 50,000
shares of  Common  Stock.  (See  "Employment  Agreements.")  In July  1994,  Mr.
Ben-David  was granted  options to purchase  200,000  shares of Common  Stock of
Bogen.  In lieu of such stock  options,  the Company has agreed to grant Mr. Ben
David options to purchase  66,667  shares of the Company's  Common Stock with an
exercise price of $5.50 per share.

       The  Registrant  does not offer its  employees  any  long-term  incentive
plans,  other  than  stock  options,  nor does it offer any  defined  benefit or
actuarial plans.

Compensation of Directors

     Directors,  other  than  non-employee  directors  who  are  members  of the
Executive  Committee  of the  Board,  receive  no  compensation  for  acting  as
directors to the Registrant.  During 1996, Messrs.  Rosenfeld and Stern received
$50,000 each as members of the Registrant's Executive Committee.

Employment Contracts

     In January  1996,  the  Registrant  entered into an agreement  with Mr. Zvi
Peled  generally  setting forth the terms and  provisions  of his  employment as
President and Chief Executive  Officer of the  Registrant.  Mr. Peled joined the
Registrant in such capacity in March 1996.  Mr.  Peled's base salary is $150,000
per annum and he is entitled to a minimum  annual  bonus of $50,000,  contingent
upon the  satisfaction of performance  criteria  established by the Registrant's
Board of  Directors  and Mr. Peled at the start of each year.  In addition,  the
Registrant agreed to grant Mr. Peled stock options to purchase 175,000 shares of
the  Registrant's  Common Stock,  at the following  prices:  75,000 shares at an
exercise  price of $5.00 per share,  75,000 shares at an exercise price of $7.50
per share,  and 25,000  shares at an  exercise  price of $10.00 per share.  Such
options will vest in equal  installments  over a five year period.  In addition,
the  Registrant  provides  Mr.  Peled with $2,000 per month  towards home rental
payments,  as  well  as a  car.  Effective  January  1,  1997,  and in  lieu  of
participating  in  the  Company's  401(k)   Retirement   Savings  Plan  and  the
Registrant's  life  and  disability  insurance  plans,  Mr.  Peled  receives  an
additional  $2,300  per  month,  which  amount is applied  towards  Mr.  Peled's
personal  benefits  program.  In  the  event  that  Mr.  Peled's  employment  is
terminated  without  cause,  Mr.  Peled will  continue to receive his salary and
benefits until he obtains a replacement position or for six months, whichever is
sooner.  Pursuant to the  employment  agreement,  Mr. Peled was provided  with a
$10,000 relocation allowance.

     The Company  also has a written  agreement  with Mr.  Yoav M. Cohen,  dated
August  1,  1996,  generally  setting  forth the  terms  and  provisions  of his
employment as Chief Financial  Officer of the  Registrant.  Mr. Cohen joined the
Registrant in such capacity on July 31, 1996.  Mr. Cohen's annual base salary is
$110,000  and he may receive an annual bonus equal to 1 - 1.5% of the profits of
the Company during the relevant fiscal year. Pursuant to the

                                       30

<PAGE>

employment  agreement,  the Company agreed to grant Mr. Cohen stock options,  in
accordance  with the terms and provisions of the Company's 1996 Incentive  Stock
Option Plan, to purchase  50,000 shares of the  Registrant's  Common Stock.  Mr.
Cohen also  participates in the  Registrant's  401(k)  Retirement  Savings Plan,
health and dental plans,  and  disability  and life  insurance  plans as well as
additional disability and life insurance with an annual premium of up to $3,000.
In addition,  Mr. Cohen is provided with a Company car,  insured by the Company.
In the event that Mr. Cohen is  terminated  without  cause,  he is entitled to a
severance package pursuant to which he would continue to receive his base salary
and related benefits for six months.

     Mr.  Ben-David is employed by the Company  pursuant to a written  agreement
with  Geotek,  dated June 7, 1991,  which has no definite  term.  The  agreement
provides for Mr. Ben-David to receive a base salary of $75,000 per year, subject
to periodic  review and  increase  by Geotek.  Geotek has also agreed to provide
life  and  health  insurance  to Mr.  Ben-David  as well as an  automobile.  Mr.
Ben-David  also received a total of 50,000 stock  options to purchase  shares of
common stock of Geotek. Geotek is entitled to terminate the employment agreement
at any time upon thirty  days prior  written  notice;  provided,  however,  that
Geotek continues to pay Mr. Ben-David his base salary for a period of six months
from  termination  of the  agreement,  unless Mr.  Ben-David is  terminated as a
result of certain  conditions.  Mr.  Ben-David  has  agreed not to compete  with
Geotek for a period of two years after his employment is terminated. The Company
has assumed all of Geotek's obligations under this agreement.

     Mr.  Arciszewski  is  employed  by  Speech  Design  pursuant  to a  written
agreement  dated  February 9, 1993 which has no  definite  term.  The  agreement
provides for Mr. Arciszewski to receive a base salary of DM 180,000 ($119,682 as
of December 31, 1995),  subject to review and increase by the parties at the end
of each  calendar  year.  In  addition,  Mr.  Arciszewski  is entitled to annual
bonuses based on Speech Design's  pre-tax  profits.  Speech Design has agreed to
provide Social  Security and health  insurance  benefits to Mr.  Arciszewski and
agreed to  furnish  an  automobile  to him.  Mr.  Arciszewski  has agreed not to
compete with Speech  Design  during the term of the  agreement  and for one year
thereafter  and Speech Design has agreed to compensate  Mr.  Arciszewski  during
this noncompetition period.

     Mr.  Meiler is employed by Speech  Design  pursuant to a written  agreement
dated February 9, 1993 which has no definite  term.  The agreement  provides for
Mr.  Meiler to receive a base salary of DM 180,000  ($119,682 as of December 31,
1995), subject to review and increase by the parties at the end of each calendar
year.  In addition,  Mr.  Meiler is entitled to annual  bonuses  based on Speech
Design's  pre-tax  profits.  Speech Design has agreed to provide Social Security
and health insurance  benefits to Mr. Meiler and agreed to furnish an automobile
to him. Mr.  Meiler has agreed not to compete with Speech Design during the term
of the  agreement  and for one year  thereafter  and Speech Design has agreed to
compensate Mr. Meiler during this  noncompetition  period. Mr. Meiler has agreed
not to disclose any of Speech Design's business or trade secrets.

                                       31

<PAGE>

Compensation Committee Interlocks and Insider Participation

     The  Executive  Committee  of the  Board  also  functions  as  the  Board's
Compensation Committee.  During the 1996 fiscal year, the Executive Committee of
the Board consisted of Messrs.  Bibring,  Eitan, Rosenfeld and Stern. During the
past fiscal year, none of the members of the Executive  Committee was an officer
or employee of the Company.  From March 1995 to August 1995,  Messrs.  Rosenfeld
and Stern were Co-Chief Executive Officers and Presidents of the Registrant.

Compensation Committee Report on Executive Compensation

Overview and Philosophy

     The Executive Committee is responsible for, among other things,  developing
and making  recommendations to the Board with respect to the Company's executive
compensation  policies.  In  addition,  the  Executive  Committee,  pursuant  to
authority delegated by the Board, determines on an annual basis the compensation
to be paid to the  Chief  Executive  Officer  and  each of the  other  executive
officers of the Company.  Decisions  with respect to awards of stock  options to
executive officers are also made by the Executive Committee.

     The Company's Executive Compensation Program is based on guiding principles
designed  to align  executive  compensation  with  the  values  and  objectives,
business  strategy,  management  initiatives,  and the  business  and  financial
performance of the Company. In applying these principles the Executive Committee
has established a program to:

     o    Attract and retain key executives critical to the long-term success of
          the Company and each of its business groups.

     o    Reward   executives  for  long-term   strategic   management  and  the
          enhancement of stockholder value.

     o    Integrate  compensation  programs with both the  Company's  annual and
          long-term strategic planning and measuring processes.

     o    Support a  performance-oriented  environment that rewards  achievement
          with respect to the Company's  goals and also as compared to others in
          the industry.

     In making  compensation  decisions,  the Executive Committee focuses on the
individual contributions of executive officers to the Company's strategic goals,
including,  but not limited to, the  execution by such officers of the Company's
business  plan.  The Executive  Committee  uses its  discretion to set executive
compensation  where,  in its  judgment,  external,  internal or an  individual's
circumstances warrant it.

                                       32

<PAGE>

     The Executive Committee also periodically reviews the compensation policies
of other similarly situated  companies,  as set forth in the proxy statements of
such companies,  to determine whether the Company's  compensation  decisions are
competitive within the telecommunications and electronics industries, as well as
with a broader  group of  companies  of  comparable  size and  complexity.  This
comparison  group  includes the companies in the Standard & Poor's Small Cap 600
and the Standard & Poor's  Telephone  500. The  Executive  Committee  focuses on
companies  engaged in these  industries  because  these are the areas  where the
Company has recently  devoted,  and expects to continue to devote, a substantial
portion of its efforts and resources.

Executive Officer Compensation Program

     The Company's executive officer  compensation  program is comprised of base
salary, bonus, long-term incentive compensation in the form of stock options and
various  benefits,  including  medical and pension plans generally  available to
employees of the Company.

     Base  Salary,  Options  and Bonus.  Base  salary  levels for the  Company's
executive   officers  are   competitively  set  relative  to  companies  in  the
electronics industries and other comparable companies.  In determining salaries,
the  Executive  Committee  also takes into  account  individual  experience  and
performance  and  specific  issues  particular  to the  Company.  The  Executive
Committee generally sets base salary for executive officers at the median to low
end of the  range at  which  comparable  companies  compensate  their  executive
officers.  The Executive  Committee  believes  that  executive  officers  should
receive a significant portion of their compensation in the form of discretionary
bonuses and stock options as these types of compensation awards provide a better
incentive to executive  officers to achieve  long-term value for the Company and
its stockholders.  The Executive  Committee believes they have achieved a proper
balance  between  providing  enough  immediate cash  compensation  to retain and
attract top quality managers and providing long term incentives,  in the form of
stock options and cash bonuses,  to promote  long-term  growth for the Company's
stockholders.

     Benefits.  The  Company  provides  medical  and  pension  benefits  to  its
executive officers that are generally available to the Company's employees.  The
Executive  Committee  does  not  consider  benefits  and  perquisites  to  be  a
significant portion of the Company's executive officer compensation.

     Section 162(m) of the Internal Revenue Code. In general,  Section 162(m) of
the Internal  Revenue Code of 1986, as amended (the "Code"),  limits the ability
of public  corporations to deduct  remuneration in excess of certain  thresholds
paid  to  certain  executive  officers.  The  Executive  Committee  continuously
monitors and reviews the  compensation  of the Company's  highest paid executive
officers to ensure that the Company's  deduction for remuneration is not subject
to the  limitations  imposed  by  Section  162(m)  of  the  Code.  For  example,
remuneration  to executive  officers in the form of stock options is intended to
qualify as  performance-based  compensation within the meaning of Section 162(m)
of the Code and,  thus,  would not be subject to deduction  limitations  imposed
thereunder.

                                       33

<PAGE>

Chief Executive Officer Compensation

     Mr.  Peled,  who was  appointed  President and CEO as of February 22, 1996,
received an annual base salary of $150,000 in the fiscal year ended December 31,
1996.  A  minimum  annual  bonus  of  $50,000  will  be  paid  provided  certain
predetermined  annual  milestones have been met. These milestones are determined
and agreed upon by the Board and Mr. Peled, annually. Mr. Peled was also granted
175,000  Company stock options (for further  details  regarding  options granted
please refer to Part III, Employment Contracts). Mr. Peled has been granted rent
payments  in the amount of $2,000 per month,  a Company  car  including  related
business  expenses,  the ability to participate in various Company insurance and
pension  plans.  The  Compensation  Committee  believes  that Mr.  Peled's total
compensation  package is reasonable in light of the demands which were, and will
continue  to be,  placed on him during  the  coming  years.  In  addition,  this
compensation level reflects the Compensation Committee's confidence in Mr. Peled
and the Company's desire to attract and retain his talents, as the President and
Chief Executive Officer of the Company. (See "Item 11." - Employment Contracts.)

     The  foregoing  report  has  been  furnished  by  the  Executive  Committee
consisting of Messrs. Bibring, Eitan and Stern.

Performance Comparison Graph

     The following graph compares the cumulative total stockholder return on the
Registrant's Common Stock since October 5, 1995 (the first day of trading in the
Registrant's  Common Stock on the American  Stock  Exchange) with the cumulative
return on the S&P Smallcap  600 Index and the S&P  Telephone - 500 over the same
period  (assuming the investment of $100 in the Company's  Common Stock, the S&P
Smallcap  600  Index  and  the S&P  Telephone  - 500 on  October  5,  1995,  and
reinvestment  of all  dividends).  The cumulative  total of  stockholder  return
represents the value that such investments  would have had on December 31, 1996.
Total  return  calculations  for  the S&P  Smallcap  600  Index  and for the S&P
Telephone - 500 were performed for Standard & Poor's Compustat Services, Inc.

     This  graph  will not be  deemed to be  incorporated  by  reference  by any
general  statement  incorporating  by reference  this Annual Report on Form 10-K
into  any  filing  under  the  Securities  Act of 1933 or under  the  Securities
Exchange  Act of 1934,  except to the extent  that the  Registrant  specifically
incorporates this information by reference, and shall not otherwise be deemed to
be filed under such Acts.

                            TOTAL SHAREHOLDER RETURNS
                             (Dividends Reinvested)

                            ANNUAL RETURN PERCENTAGE
                                  Years Ending

Company/Index                      Dec-95         Dec-96
-------------                      ------         ------
Bogen Communications Intl          -40.98          18.39
S&P Telephone 500                   25.48           1.00
S&P Smallcap 600 Index               9.64          21.32

                                INDEXED RETURNS
                                  Years Ending

                                Base Period
Company/Index                 October 5, 1995     Dec-95         Dec-96
-------------                 ---------------     ------         ------
Bogen Communications Intl           100            59.02          69.87
S&P Telephone 500                   100           125.48         126.74
S&P Smallcap 600 Index              100           109.64         133.01

Prepared by Standard & Poor's Compustat
Custom Products Division - 3/28/97

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive  officers  and  directors to file  initial  reports of  ownership  and
reports of changes in ownership of the Company's  securities with the Securities
and Exchange Commission and the American Stock Exchange.  Executive officers and
directors are required by the SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.  Based solely on a review of the copies of
such  forms  furnished  to the  Company  and  written  representations  from the
Company's  executive  officers and directors,  the Company believes that each of
Messrs.  Mitchell  and  Stern  failed to file a report  in  connection  with the
release of shares of common stock of the Registrant from an escrow account.  The
Company  has been  advised  that  Messrs.  Mitchell  and Stern will make all the
necessary filings promptly.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following  table sets forth certain  information  regarding  beneficial
ownership (as  determined in accordance  with Rule 13d-3  promulgated  under the
Exchange Act of the Common

                                       34
<PAGE>

Stock as of March 1, 1996,  for (a)  directors  and  executive  officers  of the
Company,  (b) all directors and executive  officers of the Company,  as a group,
and (c) each person who is known by the  Registrant  to own  beneficially  5% or
more of the Registrant's  Common Stock.  Except as otherwise noted,  each person
listed below has sole voting and dispositive power with respect to the shares of
Common Stock listed next to such person's name.


                                 Total Number of Shares       Percentage of
Directors, Nominees and              of Common Stock      Class of Common Stock
Executive Officers                 Beneficially Owned     Beneficially Owned(1)
------------------                 ------------------     ---------------------
Yoram Bibring                                    0                 0
Yaron Eitan(2)                                   0                 0
Dr. Leonard Lodish                               0                 0
Michael McCoy                                    0                 0
David Jan Mitchell(3)                      170,001               2.95%
Yoav Stern(4)                              357,500               6.21%
Zvi Peled                                        0                 0
Yoav M. Cohen                                    0                 0
Kasimir Arciszewski                              0                 0
Hans Meiler                                      0                 0
All directors and
  executive officers
  as a group (12 persons)                  527,501               9.16%

Other Beneficial Owners
Geotek Communications, Inc.              3,901,919(5)           65.48%
   102 Chestnut Ridge Road
   Montvale, NJ 07645


(1)  The   percentage   column   represents   the  percentage  of  Common  Stock
     beneficially  owned  calculated in accordance with the Securities  Exchange
     Act of 1934,  whether  presently  issued and  outstanding  or reserved  for
     issuance pursuant to exercise of acquisition rights.

(2)  Mr.  Eitan is  President,  Chairman  of the Board of  Directors  of Geotek.
     Geotek is the record and  beneficial  owner of  3,701,919  shares of Common
     Stock and 200,000 Warrants. Due to his positions with Geotek, Mr. Eitan may
     be in a position to direct the voting and  disposition  of Common Stock and
     warrants held by Geotek. Mr. Eitan disclaims  beneficial  ownership of such
     shares and Warrants.

(3)  Consists of 75,001 shares  directly owned by Mr. Mitchell and 95,000 shares
     beneficially  owned by EGAC II.  Messrs.  Stern and  Mitchell  each own one
     third of the issued and outstanding  capital stock of EGAC II and, as such,
     may be deemed to beneficially own those securities held by EGAC II. EGAC II
     is the beneficial owner of 95,000 shares of Common Stock.

(4)  Consists of 262,500 shares  beneficially  owned by Helix Capital LLC, which
     may be
                                       35

<PAGE>

     deemed to be beneficially owned by Mr. Stern and 95,000 shares beneficially
     owned by EGAC II, which Mr. Stern may be deemed to beneficially own.

(5)  Includes 200,000 shares of Common Stock issuable upon exercise of currently
     exercisable warrants.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     During the 1996 fiscal year, the Company did not enter into any transaction
with any director,  officer, nominee for election, or any security holder who is
known to the Company to own more than five  percent of the  Registrant's  Common
Stock or any family member of any of the foregoing.

                                     PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) Financial  Statements See "Item 8. Financial Statements and Supplementary
                             Data."

(a)(2) Financial Statement Schedules:

       Schedule I:  Condensed  Financial  Information of Bogen  Communications
                    International, Inc. (Parent Company Only)

       Schedule II: Valuation and Qualifying Accounts

                                       36

<PAGE>

Schedule I - Condensed Financial Information of Bogen Communications
   International, Inc. (Parent Company Only)

                    BOGEN COMMUNICATIONS INTERNATIONAL, INC.
                              (Parent Company only)
                                 BALANCE SHEETS
                        AS OF DECEMBER 31, 1996 and 1995
                            (IN THOUSANDS OF DOLLARS)

                                     Assets
                                                           1996          1995
                                                           ----          ----
CURRENT ASSETS:
Cash and cash equivalents                                $    305      $    968
Prepaid expenses and other current assets                    --               3
                                                         --------      --------
         Total Current Assets                                 305           971


Organization costs, net                                        19            30
Investment in subsidiaries                                 17,643        15,945
Note Receivable from related party                            553          --
                                                         --------      --------

      TOTAL ASSETS                                       $ 18,520      $ 16,946
                                                         ========      ========

                       Liabilities & Stockholders' Equity

CURRENT LIABILITIES:
Accounts payable & accrued expenses                           181           453
Advances to related parties                                   169           209
                                                         --------      --------
      Total Current Liabilities                               350           662

Notes payable to related parties                              594         3,141

      TOTAL LIABILITIES                                       944         3,803
                                                         --------      --------
STOCKHOLDERS' EQUITY:
Preferred stock - $.001 par value;
  1,000,000 shares authorized; none
  issued and outstanding at December 31,
  1996 and 1995, respectively                                --            --
Common stock - $.001 par value; 50,000,000
shares authorized; 5,758,850 and 5,759,350
shares issued and outstanding at December 31,
1996 and 1995, respectively                                     6             6
Additional paid-in capital                                 21,774        19,175
Accumulated deficit                                        (4,177)       (6,185)
Currency translation adjustments                              (27)          147
                                                         --------      --------
      TOTAL STOCKHOLDERS' EQUITY                           17,576        13,143
                                                         --------      --------
      TOTAL LIABILITIES & STOCKHOLDERS' EQUITY           $ 18,520      $ 16,946
                                                         ========      ========

   The accompanying notes are an integral part of these financial statements.

                                       37
<PAGE>

Schedule I - Condensed Financial Information of Bogen Communications
             International, Inc. (Parent Company Only)

                    BOGEN COMMUNICATIONS INTERNATIONAL, INC.
                              (Parent Company only)
                             STATEMENT OF OPERATIONS
             FOR THE YEAR ENDED DECEMBER 31, 1996 and FOR THE PERIOD
                    FROM AUGUST 21, 1995 to DECEMBER 31, 1995
               (IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)

                                                       1996             1995
                                                       ----             ----

Revenues:                                          $      --        $      --

Operating Expenses:
  General and Administrative                               371              173
  Amortization expense                                      11                4
                                                   -----------      -----------

Loss From Operations                                      (382)            (177)

Other expenses:
  Equity in (income) loss of
           subsidiaries                                 (2,496)           2,740
  Acquisition costs                                       --              1,491
  Interest expense, net                                     42              135
                                                   -----------      -----------

   Income (loss) before provision for
     income taxes                                        2,072           (4,543)
   Provision for income taxes                               64             --
                                                   -----------      -----------

   Net Income (loss)                               $     2,008      $    (4,543)
                                                   ===========      ===========

   Net Income (loss) per common share:

   Net Income (loss)                               $      0.35      $     (1.37)
                                                   ===========      ===========

   Weighted average number of
     common shares outstanding                     $ 5,759,075      $ 3,311,668
                                                   ===========      ===========

   The accompanying notes are an integral part of these financial statements.

                                       38

<PAGE>

Schedule I - Condensed Financial Information of 
Bogen Communications International, Inc. (Parent Company Only)

                    BOGEN COMMUNICATIONS INTERNATIONAL, INC.
                              (Parent Company Only)
                 STATEMENT OF CHANGES IN COMMON STOCK SUBJECT TO
                  POSSIBLE REDEMPTION AND STOCKHOLDERS' EQUITY
                 (IN THOUSANDS OF DOLLARS EXCEPT SHARE AMOUNTS)
            For the Period August 21, 1995 through December 31, 1996

<TABLE>
<CAPTION>
                                                                 CUMULATIVE        
                                                 COMMON STOCK   COMMON  STOCK      
                                                 SUBJECT TO     -------------         ADDITIONAL                      CURRENCY
                                                  POSSIBLE     NUMBER                  PAID-IN       ACCUMULATED     TRANSLATION
                                                 REDEMPTION   OF SHARES     AMT        CAPITAL         DEFICIT       ADJUSTMENTS
                                                 ----------   ---------     ---        -------         -------       -----------
<S>                                               <C>         <C>         <C>          <C>           <C>             <C>
Balance at August 21, 1995
 (Date of Acquisition)                           $   1,575    1,615,155   $      2     $  6,613      $   (351)       $    --
                                                                                                                     
Accretion of redemption value                                                                                        
 of common stock                                        52         --         --            (52)         --               --
                                                                                                                     
Reclass of common stock subject to                                                                                   
 redemption to common stock upon                                                                                     
 the Company's acquisition of                                                                                        
 Bogen and Speech Design                            (1,627)     309,845       --          1,627          --               --
                                                                                                                     
Issuance of common stock and                                                                                         
 other adjustment to effect                                                                                          
 combination with Bogen and                                                                                          
 Speech Design                                        --      3,701,919          4       10,247        (1,291)              37
                                                                                                                     
Issuance of common stock and warrants                                                                                
 to purchase  60,000 shares of common stock                                                                          
 for services provided to facilitate the                                                                             
 acquisition of Bogen and Speech Design               --        132,431       --            740          --               --
                                                                                                                     
Translation adjustments                               --           --         --           --            --                110
                                                                                                                     
Net loss for the period                               --           --         --           --          (4,543)            --
                                                 ---------    ---------   --------     --------      --------        ---------
Balance at December 31, 1995                          --      5,759,350   $      6     $ 19,175      $ (6,185)       $     147
                                                                                                                 
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       39
<PAGE>

Schedule I - Condensed Financial Information of 
Bogen Communications International, Inc. (Parent Company Only)

                    BOGEN COMMUNICATIONS INTERNATIONAL, INC.
                              (Parent Company Only)
                 STATEMENT OF CHANGES IN COMMON STOCK SUBJECT TO
                  POSSIBLE REDEMPTION AND STOCKHOLDERS' EQUITY
                 (IN THOUSANDS OF DOLLARS EXCEPT SHARE AMOUNTS)
            For the Period August 21, 1995 through December 31, 1996
<TABLE>
<CAPTION>

                                                   CUMULATIVE
                                  COMMON STOCK   COMMON  STOCK
                                  SUBJECT TO     -------------        ADDITIONAL                     CURRENCY
                                   POSSIBLE     NUMBER                 PAID-IN       ACCUMULATED    TRANSLATION
                                  REDEMPTION   OF SHARES     AMT       CAPITAL         DEFICIT       ADJUSTMENT
                                  ----------   ---------     ---       -------         -------       ----------

<S>                                 <C>      <C>          <C>         <C>           <C>              <C>        
Restructuring of $3,000 related
 party note with related interest    --           --          --           2,602          --               --
                                                                                                   
Repurchased and canceled common                                                                    
 stock                               --           (500)       --            --              (3)            --
                                                                                                   
Translation adjustments              --           --          --            --            --               (174)
                                                                                                   
Net Income for the period            --           --          --            --           2,008             --
                                    -----   ----------    --------    ----------    ----------       ----------
                                                                                                   
Balance at December 31, 1996        $--      5,758,850    $      6    $   21,774    $   (4,177)      $      (27)
                                    =====   ==========    ========    ==========    ==========       ==========
</TABLE>
                                                                               
   The accompanying notes are an integral part of these financial statements.

                                       40

<PAGE>

Schedule  I  -  Condensed   Financial   Information   of  Bogen   Communications
International, Inc. (Parent Company Only)

                    BOGEN COMMUNICATIONS INTERNATIONAL, INC.
                              (Parent Company Only)
                             STATEMENT OF CASH FLOWS
                    FOR THE YEAR ENDED DECEMBER 31, 1996 AND
               FOR THE PERIOD AUGUST 21, 1995 to DECEMBER 31, 1995
                            (IN THOUSANDS OF DOLLARS)

                                                               1996        1995
                                                               ----       -----

NET CASH(USED IN)OPERATING ACTIVITIES                        $   (75)   $  (383)
                                                             -------    -------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Cash obtained in the acquisition of Bogen and
         Speech Design                                          --        8,149
   Notes receivable from subsidiary                             (553)      --
                                                             -------    -------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES             (553)     8,149
                                                             -------    -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Dividend paid to Geotek related to the combination           --       (7,000)
   Proceeds from debt issued to related parties                 --          317
   Payment on debt to non-related parties                       --         (115)
   Advances to subsidiaries                                      (40)      --
                                                             -------    -------
NET CASH (USED IN) FINANCING ACTIVITIES                          (40)    (6,798)
                                                             -------    -------
INCREASE (DECREASE) IN CASH                                     (668)       968
                                                             -------    -------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                 968       --
                                                             -------    -------
Effects of Exchange Rate on Cash                                   5       --

CASH AND CASH EQUIVALENTS AT END OF PERIOD                   $   305    $   968
                                                             =======    =======

SUPPLEMENTAL CASH FLOW INFORMATION:

Non-Cash Investing Activities

Restructuring of $3,000 related party note and
   related interest                                          $ 2,602    $  --
                                                             =======    =======
Common stock and warrants issued as consideration
   for certain services provided to the Company in
   connection with the combination                           $  --      $   740
                                                             =======    =======

   The accompanying notes are an integral part of these financial statements.

                                       41

<PAGE>

Schedule I -  Condensed Financial Information of Bogen Communications
           International, Inc.(Parent Company Only)

                    BOGEN COMMUNICATIONS INTERNATIONAL, INC.
                              (Parent Company Only)
                          Notes to Financial Statements

1.   Organization and Business Operations:

On April 6,  1995  Bogen  Communications  International,  Inc.  (The  "Company")
announced  that  it had  entered  into a  definitive  agreement  concerning  the
proposed acquisition by the Company of Geotek Communications,  Inc.'s ("Geotek")
67% interest in Speech Design GmbH  ("Speech  Design"),  a German  company which
focuses  on   telephone   peripherals   utilizing   digital   voice   processing
technologies,  and Geotek's 99% interest in Bogen Corporation  ("Bogen"),  a New
Jersey-based  corporation  which focuses on  telecommunications  peripherals and
sound and communications  equipment.  This combination was consummated on August
21, 1995 and results of operations are recorded since the date of acquisition.

2.   Summary of Significant Accounting Policies:

a.   Basis of Presentation

These  parent  company  only  comparative   financial   statements  reflect  the
operations and financial position of the Company for the year ended December 31,
1996 and for the period from August 21,  1995  through  December  31,  1995.  As
described  in  the  footnotes  to the  consolidated  financial  statements,  the
acquisition of Bogen and Speech Design on August 21, 1995 has been accounted for
as a reverse acquisition by Bogen and Speech Design,  companies under the common
control of Geotek.

b.   Organization Costs

Organization costs incurred in 1993 are being amortized over 60 months.

c.   Net Income (Loss) per Share

Net income  (loss) per common share is computed by dividing net income (loss) by
the weighted average number of common shares outstanding, including common stock
equivalents (unless anti-dilutive).

d.   Cash and Cash Equivalents

The Company  considers  all highly  liquid debt  instruments  purchased  with an
original maturity of three months or less to be cash equivalent.

                                       42

<PAGE>

BOGEN COMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>

Column A                                    Column B         Column C        Column C           Column D           Column E
--------                                    ---------       ----------      -----------         --------          ---------
                                            Balance at      Charged to                                            Balance at
                                            Beginning       Costs and                                               End of
 Description                                of Period        Expenses          Other            Deduction           Period
 -----------                                ---------        --------          -----            ---------           ------
<S>                                          <C>             <C>             <C>                <C>                <C>    
Year ended December 31, 1996:
 Allowance for doubtful
    accounts                                 $   424         $   153         $    (1)(d)        $  (106)(a)        $   470
 Reserve for inventory
    obsolescence                               2,552             257             (16)(d)         (1,667)(b)          1,126
 Allowance for tax valuation                   4,831            (694)           --                 --                4,137
                                             -------         -------         -------            -------            -------
                                             $ 7,807         $  (284)        $   (17)           $(1,773)           $ 5,733
                                             =======         =======         =======            =======            =======

Year ended December 31, 1995:
 Allowance for doubtful
    accounts                                 $   365         $   311         $  --              $  (252)(a)        $   424
 Reserve for inventory
    obsolescence                               1,267           2,216               6(d)            (937)(b)          2,552
Allowance for tax valuation                    3,132           1,631              68(c)            --                4,831
                                             -------         -------         -------            -------            -------
                                             $ 4,764         $ 4,158         $    74            $(1,189)           $ 7,807
                                             =======         =======         =======            =======            =======


Year ended December 31, 1994:
 Allowance for doubtful
    accounts                                 $   220         $   283          $    3(c)         $  (141)(a)        $   365
Reserve for inventory
    obsolescence                                  60           1,273            --                  (66)(b)          1,267
Allowance for tax valuation                    2,070           1,062            --                 --                3,132
                                             -------         -------         -------            -------            -------
                                             $ 2,350         $ 2,618         $     3            $  (207)           $ 4,764
                                             =======         =======         =======            =======            =======
</TABLE>

(a) Uncollectible accounts written off, net of recoveries.                     
(b) Write-off of obsolete inventory.
(c) Assumed through acquisition.
(d) Currency exchange effect.

                                       43

<PAGE>

     (b)  Reports on Form 8-K

          No reports on Form 8-K were filed during the fourth quarter of 1996.

     (c)  Exhibits

          The  following  exhibits  are  filed as part of this  report  (Exhibit
          numbers  correspond to the exhibits required by Item 601 of Regulation
          S-K for an Annual Report on Form 10-K):

             Exhibit
               No.      Description
              ----      -----------
              3.1       Certificate of Incorporation.1
              3.2       By-laws.1
              3.3       Certificate of Correction to the Certificate of
                        Incorporation,  dated  March 8, 1995 and
                        filed with the Secretary of State of the
                        State of Delaware on March 10, 1995.2
              3.4       Certificate of Amendment to the Certificate of
                        Incorporation, dated August 21, 1995 and filed with
                        the Secretary of State of the State of Delaware on
                        August 21, 1995.3
              4.1       Form of Common Stock Certificate.1
              4.2       Form of Warrant Certificate.1
              4.3       Unit Purchase Option Granted to GKN Securities Corp.1
              4.4       Warrant Agreement between Continental Stock Transfer
                        & Trust Company and the Company.1
              4.5       Voting Agreement, dated August 21, 1995, by and among
                        Geotek Communications, Inc., Yoav Stern, Joram D.
                        Rosenfeld and David Jan Mitchell.4
              4.6       Bogen Communications, International, Inc. 1996 Incentive
                        Stock Option Plan 7
             10.1       Form of Agency Agreement, dated as of June 28, 1993,
                        between the Company and GKN Securities Corp.
                        (without schedules).1
             10.2       Letter Agreement among each of the Stockholders of the
                        Company, the Company and GKN Securities Corp.
                        (without schedules).1
             10.3       Form of Investment Management Trust Agreement between
                        United States Trust Company of New York and the
                        Company.1
             10.4       Form of Share Escrow Agreement between the Company and
                        Continental Stock Transfer & Trust Company.1
             10.5       Form of Indemnification Agreement between the Company
                        and its officers, directors and advisors.4
             10.6       Stock Purchase Agreement, dated April 6, 1995, by and
                        between Geotek Communications, Inc. and European
                        Gateway Acquisition Corp.2
             10.7       Letter Amendment, dated May 10, 1995, to the Stock
                        Purchase Agreement.5
             10.8       Side Letter Agreement, dated May 10, 1995, between
                        Geotek Communications, Inc. and European Gateway
                        Acquisition Corp. regarding the issuance of certain
                        stock warrants.6

                                       44
<PAGE>

             10.9       Letter Amendment, dated May 30, 1995, to the Stock
                        Purchase Agreement.5
             10.10      Letter Amendment, dated June 27, 1995, to the Stock
                        Purchase Agreement.5
             10.11      Letter Amendment, dated August 21, 1995, to the Stock
                        Purchase Agreement.4
             10.12      Letter Agreement, dated August 21, 1995, to the Stock
                        Purchase Agreement.4
             10.13      Letter Agreement, dated May 8, 1996, to the Stock 
                        Purchase Agreement.
             10.14      Summary of Agreement for Business Credit between Speech
                        Design GmbH and Statelparkasse Munchen.
             10.15      Secured Revolving Promissory Note dated February 6, 1997
                        between Summit Bank and Bogen Communications, Inc.
             10.16      Loan and Security Agreement dated February 6, 1997 
                        between Summit Bank and Bogen Communications, Inc.
             10.17      Corporate Guaranty of Bogen Communications 
                        International, Inc.
             10.18      Corporate Guaranty of Bogen Corporation.

          *  21.1       Subsidiaries of the Company.
          *  23.1       Consent of Coopers & Lybrand L.L.P.

          ----------
          *Filed Herewith
          1.   Incorporated by reference to the Exhibits to the Company's
               Registration Statement on Form S-1 (File No. 33-65294), dated
               October 7, 1993.

          2.   Incorporated  by reference to the Exhibits to the Company's
               Annual  Report  on Form  10-K  for the  fiscal  year  ended
               December 31, 1994.

          3.   Incorporated  by reference to the Exhibits to the Company's
               Quarterly  Report on Form 10-Q for the fiscal quarter ended
               September 30, 1995.

          4.   Incorporated by reference to the Exhibits to the Company's 
               Current Report on form 8-K dated August 21, 1995.

          5.   Incorporated  by reference to the Exhibits to the Company's
               Proxy Statement, dated July 12, 1995, for a Special Meeting
               of  Stockholders,  as amended by  addendum,  dated July 18,
               1995.

          6.   Incorporated  by reference to the Exhibits to the Company's
               Quarterly  Report on Form 10-Q for the fiscal quarter ended
               March 31, 1995.

          7.   Incorporated by reference to the Exhibits to the Company's
               Registration Statement on Form S-8 (File No. 333-       ), 
               dated February 4, 1997.

                                       45
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.

BOGEN COMMUNICATIONS INTERNATIONAL, INC.

By: /s/ Zvi Peled
    -------------------------------
        Zvi Peled, President
        and Chief Executive Officer

Date:   March __, 1997

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report has been signed on March__,  1997 by the  following  persons on behalf of
the Registrant in the capacities indicated.

/s/ Zvi Peled                       President and Chief Executive Officer
--------------------------------
    Zvi Peled                       

/s/ Yoav M. Cohen                   Chief Financial Officer, and Secretary
--------------------------------
    Yoav M. Cohen

/S/ Yaron I. Eitan                  Director, Chairman of the Board of Directors
--------------------------------
    Yaron I. Eitan

/s/ Yoram Bibring                   Director
--------------------------------
    Yoram Bibring

/s/ Michael McCoy                   Director
--------------------------------
    Michael McCoy

/s/ David Jan Mitchell              Director
--------------------------------
    David Jan Mitchell

/s/ Yoav Stern                      Director
--------------------------------
    Yoav Stern

/s/ Dr. Leonard Lodish              Director
--------------------------------
    Dr. Leonard Lodish

                                       46

<PAGE>

                                  EXHIBIT INDEX

Exhibit
  No.
------
10.14  Summary of Agreement for Business Credit between Speech Design GmbH and
       Statelparkasse Munchen.
10.15  Secured Revolving Promissory Note dated February 6, 1997 between Summit
       Bank and Bogen Communications, Inc.
10.16  Loan and Security Agreement dated February 6, 1997 between Summit Bank 
       and Bogen Communications, Inc.
10.17  Corporate Guaranty of Bogen Communications International, Inc.
10.18  Corporate Guaranty of Bogen Corporation.
21.1   Subsidiaries of the Company
23.1   Consent of Coopers & Lybrand L.L.P.

                                       47