SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               -------------------

                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                               ------------------

FOR QUARTER ENDED JANUARY 31, 1997                  COMMISSION FILE NO. 33-19324


                              LOGIPHONE GROUP, INC.
               (Exact name of registrant as specified in charter)


          DELAWARE                                         75-0223079
(State or other jurisdiction                   (IRS Employer Identification No.)
   at incorporation)



607 WEST BROADWAY, SUITE 247
 FAIRFIELD, IOWA                                                 52556
(Address of principal                                         (Zip Code)
 executive offices)

       Registrant's telephone number, including area code: (515) 469-3044


                                       N/A
         (Former Name, Former Address and Former Fiscal Year, if Changed
                               Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                            YES  X        NO

As of May 1, 1997,  there were  outstanding  9,000,000  shares of common  stock,
$.0001 par value.

Transitional Small Business Disclosure Format (check one)

YES               NO  X

CORPDAL:64592.5  26308-00002
                                                         1

<PAGE>



                              LOGIPHONE GROUP, INC.

                                January 31, 1997

                                      INDEX

<TABLE>
<CAPTION>

                                                                                                           Page No.

<S>                                                                                                             <C>
PART I.            FINANCIAL INFORMATION
         Item 1.  Financial Statements
                  Consolidated Balance Sheet at January 31, 1997 and
                           April 30, 1996.......................................................................F-1
                  Consolidated Statement of Operations for the three and
                           nine months ended January 31, 1997 and 1996..........................................F-2
                  Consolidated Statement of Cash Flows for the three and
                           nine months ended January 31, 1997 and 1996..........................................F-3
                  Consolidated Statement of Changes in Stockholders' Equity
                           for the nine months ended January 31, 1997...........................................F-4
                  Summary Financial Information Schedule........................................................F-5
                  Notes to Financial Statements.................................................................F-6
         Item 2.  Management's Discussion and Analysis of Financial Condition and
                           Results of Operations..................................................................3

PART II.  OTHER INFORMATION.......................................................................................8
         Item 1.  Legal Proceedings...............................................................................8
         Item 2.  Changes in Securities...........................................................................8
         Item 3.  Default Upon Senior Securities..................................................................8
         Item 4.  Submission of Matters to a Vote of Security Holders.............................................8
         Item 5.  Other Information...............................................................................8
         Item 6.  Exhibits and Reports on Form 8-K................................................................8

SIGNATURES.......................................................................................................10
</TABLE>

CORPDAL:64592.5  26308-00002
                                        2

<PAGE>



PART I.           FINANCIAL INFORMATION

         ITEM 1.           FINANCIAL STATEMENTS.


                              LOGIPHONE GROUP, INC.
                           CONSOLIDATED BALANCE SHEETS
                 (UNAUDITED) JANUARY 31, 1997 AND APRIL 30, 1996

                                                        ASSETS
                                                        ------
<TABLE>
<CAPTION>

                                                                        JANUARY 31,                    APRIL 30,
CURRENT ASSETS                                                             1997                          1996
--------------                                                    -----------------------       -----------------------
<S>                                                                    <C>                         <C>                 
Cash                                                                   $           36,457          $             26,345
Accounts Receivable (Net)                                                          70,057                        86,480
Accrued Interest Receivable                                                         5,569                             -
Prepaid Expenses                                                                   33,191                             -
Other Current Assets                                                               45,081                             -
                                                                  -----------------------       -----------------------
     TOTAL CURRENT ASSETS                                                         190,355                       112,825

PROPERTY AND EQUIPMENT
Equipment                                                                         673,357                        78,280
Furniture                                                                          11,052                           924
Vehicles                                                                            2,880                         3,074
     Less:  Accumulated Depreciation                                             (166,794)                       (5,131)
                                                                  -----------------------       -----------------------
     TOTAL PROPERTY AND EQUIPMENT                                                 520,495                        77,147
Loans Receivable - Long Term                                                       97,224                             -
TOTAL ASSETS                                                          $           808,074           $           189,972
                                                                  =======================       =======================

                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable                                                      $           483,725          $             42,379
Loans Payable                                                                       6,716                             -
Accrued Interest Payable                                                            5,986                             -
Convertible Notes Payable                                                         550,000                             -
                                                                  -----------------------       -----------------------
     TOTAL CURRENT LIABILITIES                                                  1,046,427                        42,379

LONG TERM LIABILITIES
Capital Leases                                                                      5,855                             -
Long-Term Debt                                                                          -                       218,347
                                                                  -----------------------       -----------------------
     TOTAL LONG TERM LIABILITIES                                                    5,855                       218,347
                                                                  -----------------------       -----------------------
TOTAL LIABILITIES                                                                   5,855                       218,347

STOCKHOLDERS' EQUITY
Common Stock
     20,000,000 shares authorized 9,000,000 shares issued and
     outstanding, par value $0.0001 at January 31, 1997                               900                             -
Additional Paid-in-Capital                                                      1,370,657                             -
Retained Deficit                                                               (1,615,765)                      (70,754)
                                                                  -----------------------       -----------------------
     TOTAL STOCKHOLDER'S EQUITY                                                  (244,208)                      (70,754)
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                              $           808,074          $            189,972
                                                                  =======================       =======================
</TABLE>

                 See accompanying notes to financial statement.

CORPDAL:64592.5  26308-00002
                                      F - 1

<PAGE>


                              LOGIPHONE GROUP, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
    (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 1997 AND 1996

<TABLE>
<CAPTION>

                                                         THREE MONTHS ENDED                     NINE MONTHS ENDED
                                                             JANUARY 31,                           JANUARY 31,
                                                       1997               1996               1997                 1996
                                                ------------------ ------------------ ------------------  -----------------

<S>                                                    <C>              <C>                  <C>            <C>            
SALES                                                  $   263,355      $           -        $   417,642    $             -

COST OF SALES
Cost of goods sold                                         288,962                360            507,291                360
                                                       -----------      -------------        -----------    ---------------

GROSS PROFIT                                               (25,597)              (360)           (89,649)              (360)

OPERATING EXPENSES
Auto Expenses                                               16,121                  -             45,704                  -
Bad Debt                                                     3,687                  -              3,687                  -
Bank Charges                                                   710                  -              3,044                  -
Commissions                                                 22,982                  -             25,750                  -
Consulting                                                  41,433                  -             41,433                  -
Depreciation                                                82,826                  -            158,989                  -
Dues & Subscriptions                                         3,676                 52              6,186                 52
Fees                                                        41,298                  -            205,783                  -
Insurance                                                    1,358                  -              1,358                  -
Legal & Accounting                                          36,148                  -             70,676                  -
Marketing                                                   18,119                810             55,792                810
Meals & Entertainment                                          274                  -                274                  -
Human Resource Expense                                       2,315                  -              2,315                  -
Office Expenses                                             10,475                  -             38,184                  -
Payroll Taxes                                                1,869                  -              1,869                  -
Postage                                                      7,446                  -             14,642                  -
Printing                                                     1,650                766              3,942                766
Rent - Equipment                                             7,597                  -              7,597                  -
Rent                                                         8,693              1,200             33,146              1,200
Repairs & Maintenance                                        1,250                  -              1,925                  -
Salaries                                                   149,607              2,754            223,672              2,754
Telephone                                                   20,497                  -             38,114                  -
Travel                                                      16,636                241             82,160                241
Utilities                                                       28                  -                 28                  -
                                                       -----------      -------------        -----------    ---------------
TOTAL OPERATING EXPENSES                                   496,695              5,823          1,066,270              5,823

Interest Income                                              2,170                  -              2,170                  -
Interest Expense                                            (6,319)                 -             (6,319)                 -

NET LOSS                                              $   (526,441)     $      (6,183)      $ (1,160,068)      $     (6,183)
                                                       -----------      -------------        -----------    ---------------
WEIGHTED AVERAGE LOSS
         PER SHARE                                    $    (0.0585)     $           -      $     (0.1289)      $          -
                                                       -----------      -------------        -----------    ---------------
</TABLE>



                 See accompanying notes to financial statement.

CORPDAL:64592.5  26308-00002
                                      F - 2

<PAGE>


                              LOGIPHONE GROUP, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
    (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 1997 AND 1996

<TABLE>
<CAPTION>

                                                                                     NINE MONTHS ENDED
                                                                          JANUARY 31,                JANUARY 31,
                                                                              1997                       1996
                                                                     ----------------------    ------------------------
CASH FROM OPERATING ACTIVITIES:

<S>                                                                      <C>                     <C>                    
Net Loss                                                                 $       (1,160,068)     $               (6,183)

     Adjustment to Reconcile Net Loss to
         Net Cash Provided by Operating Activities:

     Add back non cash expenses
         Depreciation and Amortization                                              158,989                           -

     Change in Certain Working Capital Items:
         Accounts Receivable                                                         16,424                           -
         Accrued Interest Receivable                                                 (5,569)                          -
         Loans Receivable                                                                 -                     (22,917)
         Prepaid Expenses and Other Current Assets                                  (78,272)                          -
         Accounts Payable and Accrued Expenses                                      447,332                           -
         Loan Payables                                                                6,716                           -
                                                                         ------------------       ---------------------

     Net Cash Used by Operating Activities                                         (614,449)                    (29,100)
                                                                         ------------------       ---------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds used for equipment, furniture and vehicles                           (602,337)                          -
     Proceeds used in issuance of long term note receivable                         (97,224)                          -
     Currency translation adjustment in acquisition                                (300,692)                          -
                                                                         ------------------       ---------------------

     Net Cash Used for Investing Activities                                      (1,000,253)                          -
                                                                         ------------------       ---------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of long term debt                                                                    69,192
     Proceeds from long-term capital leases                                           5,855                           -
     Addition to paid-in-capital                                                    550,000                           -
     Conversion of long-term debt to paid-in-capital                              1,068,959                           -
                                                                         ------------------       ---------------------

     Net Cash Provided by Financing Activities                                    1,624,814                      69,192
                                                                         ------------------       ---------------------

     Net Increase (Decrease) in Cash                                                 10,112                      40,092

CASH AT BEGINNING OF PERIOD                                                          26,345                           -
                                                                         ------------------       ---------------------

CASH AT END OF PERIOD                                                     $          36,457      $               40,092
                                                                         ------------------       ---------------------
</TABLE>


                 See accompanying notes to financial statement.

CORPDAL:64592.5  26308-00002
                                      F - 3

<PAGE>


                              LOGIPHONE GROUP, INC.
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
              UNAUDITED FOR THE NINE MONTHS ENDED JANUARY 31, 1997

<TABLE>
<CAPTION>

                                        COMMON STOCK                ADDITIONAL           RETAINED             TOTAL
                                   SHARES           AMOUNT        PAID-IN-CAPITAL        DEFICIT          STOCKHOLDERS'
                                                                                                             EQUITY
                              --------------  ----------------  -------------------  ----------------  -------------------  

<S>                                <C>        <C>                <C>                    <C>                  <C>
Balance January 31, 1996                   -  $              -   $                -     $     (6,183)        $     (6,183)

Net loss for the quarter
     ended April 30, 1996                  -                 -                    -          (64,571)             (64,571)
                              --------------  ----------------  -------------------  ----------------  -------------------
Balance April 30, 1996                     -                 -                    -          (70,754)             (70,754)

Issuance of Stock                        400            24,400                    -                -               24,400

Net loss for the quarter
     ended July 31, 1996                   -                 -                    -         (316,286)            (316,286)
                              --------------  ----------------  -------------------  ----------------  -------------------
Balance July 31, 1996                    400            24,400                    -         (387,040)            (362,640)

Issuance of Stock                     10,000           590,000                    -                -              590,000

Net loss for the quarter
     ended October 31,                     -                 -                    -         (374,768)            (374,768)
     1996
                              --------------  ----------------  -------------------  ----------------  -------------------
Balance October 31, 1996              10,400           614,400                    -         (761,808)            (147,408)

Effect of consolidation
     with ICA, BV                    (10,400)         (614,400)                   -          761,808              147,408

Acquisition of ICA, BV             4,500,000               450            1,371,107       (1,089,324)             282,233

Stock Dividend                     4,500,000               450                 (450)               -                    -

Net loss for the quarter
     ended January 31,                     -                 -                    -         (526,441)            (526,441)
     1997
                              --------------  ----------------  -------------------  ----------------  -------------------

Balance January 31, 1997           9,000,000    $          900           $1,370,657      $(1,615,765)        $   (244,208)
                              ==============  ================  ===================  ================  ===================
</TABLE>

                 See accompanying notes to financial statement.

CORPDAL:64592.5  26308-00002
                                      F - 4

<PAGE>



                     SUMMARY FINANCIAL INFORMATION SCHEDULE

         THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
    FROM LOGIPHONE GROUP, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
                          TO SUCH FINANCIAL STATEMENTS


<TABLE>
<CAPTION>

                                                                              JANUARY 31,             APRIL 30,
                                                                                  1997                   1996
                                                                         ---------------------- ----------------------
<S>                                                                        <C>                       <C>              
Cash and cash items                                                        $             36,457      $          26,345
Notes and accounts receivable-trade                                                      73,744                 91,032
Allowances for doubtful accounts                                                          3,687                  4,552
Total current assets                                                                    190,355                112,825
Property, plant and equipment                                                           687,289                 82,278
Accumulated depreciation                                                                166,794                  5,131
Total assets                                                                            808,074                189,972
Total current liabilities                                                             1,046,427                 42,379
Common stock                                                                                900                      -
Other stockholder's equity                                                             (245,108)               (70,754)
Total liabilities and stockholder's equity                                              808,074                189,972
Total revenues                                                                          265,535                 25,727
Total costs and expenses applicable to sales and revenues                               785,657                 96,481
Interest expense                                                                         (6,319)                     -
Loss before taxes and other items                                                      (526,441)               (70,754)
Income tax expense                                                                            -                      -
Loss from continuing operations                                                        (526,441)               (70,754)
Net loss                                                                               (526,441)               (70,754)
Loss per share-primary                                                     $            (0.0585)     $               -
Loss per share-fully diluted                                               $            (0.0410)     $               -
</TABLE>


CORPDAL:64592.5  26308-00002
                                      F - 5

<PAGE>



                              LOGIPHONE GROUP, INC.
                                 AND SUBSIDIARY
                          NOTES TO FINANCIAL STATEMENTS
                                January 31, 1997


Note 1.  BASIS OF PRESENTATION:

     The  accompanying  unaudited  financial  statements  have been  prepared in
accordance  with the  instructions  to Form 10-QSB and do not include all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) necessary for a fair presentation have
been  included.  Operating  results for the three  months and nine months  ended
January  31, 1997 are not  necessarily  indicative  of the  results  that may be
expected for the year ending April 30, 1997.

     On November 1, 1996, ICA Marketing,  L.C.  acquired  4,000,000  shares (the
"Shares") of common stock, par value $.0001 per share (the "Common  Stock"),  of
Logiphone  Group,  Inc.  (formerly  Star  Resources,  Inc.),  which  constituted
approximately  89% of the  issued  and  outstanding  shares of  Common  Stock of
Logiphone Group, Inc. in exchange for all of the stock of International  Callers
Association,  B.V. ("ICA BV") as well as an assignment of all the debt issued by
ICA BV to ICA Marketing,  L.C. Prior to the acquisition of the Shares, Logiphone
Group,  Inc.,  effective  as of October  25,  1996,  (i)  reduced  the number of
authorized  shares  of  Common  Stock  from  120,000,000  to  20,000,000;   (ii)
effectuated a 1:82.85  reverse stock split (the "Reverse  Stock Split") with any
fractional shares resulting from the Reverse Stock Split being rounded up to the
nearest  whole share of Common  Stock;  and (iii)  changed its name to Logiphone
Group,  Inc.  from Star  Resources,  Inc. In  connection  with the Reverse Stock
Split, the President and principal stockholder of Logiphone Group, Inc. prior to
the acquisition of the Shares,  contributed to Logiphone Group, Inc. such number
of  post-split  shares  of  Common  Stock  necessary  to  reduce  the  number of
outstanding  shares of Common Stock  immediately  after the Reverse  Stock Split
(but prior to the  acquisition of the Shares) to 500,000 shares of Common Stock.
The  acquisition  of the Shares and the Reverse Stock Split have been  accounted
for as a reverse  merger  whereby  ICA BV is deemed to have  acquired  Logiphone
Group, Inc. Accordingly, the results of operations and financial position of the
Company for periods  and dates  prior to the  acquisition  of the Shares are the
historical  results of  operations  and  financial  position  of ICA BV for such
periods and dates.  The  acquisition of Logiphone  Group,  Inc. (for  accounting
purposes) is not expected to have a material impact on the Company's  results of
operations or financial position.

Note 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

         Business Activity:

     Logiphone Group,  Inc. is a reseller of long distance  services through its
own series of  telephone  switches.  Currently,  the Company is operating in the
Netherlands through its wholly owned subsidiary ICA BV.

         Cash and Cash Equivalents:

     For  purposes of the  consolidated  statement  of cash  flows,  the Company
considers  cash in bank accounts,  cash on hand,  and marketable  securities due
within 30 days as cash and cash equivalents.

         Property and Equipment:

     Property  and  equipment  are  stated  at cost and  depreciated  using  the
straight-line  method over their estimated lives, which for U.S. assets are five
years for  office  equipment,  automobile  and  computers,  and seven  years for
furniture and fixtures.  ICA BV property and equipment  estimated  lives are two
years for routers  and lines,  three years for  telephone  equipment,  hardware,
software, and automobile, and five years for furniture.

         Principles of Consolidation:

     The consolidated  financial statements include the financial information of
Logiphone Group, Inc. and its wholly owned subsidiary ICA BV, accounted for as a
pooling  of  interests.   All  material  intercompany   transactions  have  been
eliminated.

CORPDAL:64592.5  26308-00002
                                      F - 6

<PAGE>



         Use of Accounting Estimates:

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions that affect certain  reported amounts and disclosures.  Accordingly,
actual results could differ from those estimates.

         Foreign Currency Translation:

     Financial  statements of ICA BV have been  converted from Dutch Guilders to
US Dollars  using the  exchange  rates of 0.543  Dollars  per Guilder at January
31,1997,  0.58  Dollars  per  Guilder at April 30,  1996,  and 0.60  Dollars per
Guilder at January 31, 1996.

Note 3.  MERGER AND ACQUISITION:

     On November 1, 1996 Logiphone Group, Inc.  (formerly Star Resources,  Inc.)
acquired  from ICA  Marketing,  L.C. all of the capital  stock of  International
Callers Association,  B.V. ("ICA BV") and certain assets of ICA Marketing,  L.C.
Logiphone  Group,  Inc. issued  4,000,000 shares (the "Shares") of common stock,
par value  $.0001 per share (the "Common  Stock"),  to ICA  Marketing,  L.C. ICA
Marketing,  L.C. was then  liquidated,  and the Shares were  distributed  to its
members.

     Prior to the  acquisition of the Shares by ICA Marketing,  L.C.,  Logiphone
Group,  Inc.,  effective  as of  October  25,  1996 (i)  reduced  the  number of
authorized  shares  of  Common  Stock  from  120,000,000  to  20,000,000;   (ii)
effectuated a 1:82.85 reverse stock split with any fractional  shares  resulting
from the  reverse  stock split  being  rounded up to the nearest  whole share of
Common  Stock;  and (iii)  changed its name to Logiphone  Group,  Inc. from Star
Resources,  Inc. In connection  with the reverse stock split,  the President and
principal  stockholder of Logiphone Group,  Inc. prior to the acquisition of the
Shares, contributed to Logiphone Group, Inc. such number of post-split shares of
Common  Stock  necessary  to reduce the number of  outstanding  shares of Common
Stock immediately after the reverse stock split (but prior to the acquisition of
the Shares) to 500,000 shares of Common Stock.

     On November 15, 1996, the Board of Directors of the Company  declared a 1:1
stock dividend to stockholders of record on November 29, 1996.

Note 4.  RELATED PARTY TRANSACTIONS:

     An officer, director and stockholder of the Company received loans from the
Company in the amount of $97,224.  These  loans bear  interest at 10% per annum,
are secured by 100,000 shares of Common Stock of Logiphone Group,  Inc., and are
due with interest on January 5, 1999.

     The  Company  has  a  contingent   obligation   to  provide  under  certain
circumstances  debt  financing  to  Logiphone  Israel of up to $1  million  with
interest at 10% per annum in exchange for the  development of certain  equipment
[and the use of the Logiphone name]. Logiphone Israel has the right of repayment
at any time or, at its option,  may  convert  the debt to equity.  There were no
such loans outstanding at January 31, 1997 and April 30, 1996.

Note 5.  DEBT OBLIGATIONS:

         Loan Payable:

     The Company owes an employee  $6,716 on an open account  basis,  unsecured,
with interest at prime rate plus 2%.

                                      F - 7
CORPDAL:64592.5  26308-00002
<PAGE>

         Capital Leases:

     The  Company  has lease  obligations  for office  equipment  with  payments
including interest of $275.22 per month. Lease obligations for certain telephone
routing  equipment equals 3% of monthly sales from the use of that equipment for
a period of 36 months ending July 31, 1999.

     Future minimum lease payments under  capitalized  lease  obligations are as
follows at January 31, 1997

                                    4/30/97   $   826
                                    4/30/98     3,303
                                    4/30/99     2,261
                                    4/30/00       638

Note 6.  ALLOWANCE FOR DOUBTFUL ACCOUNTS:

     The Company  currently  maintains an allowance for doubtful  accounts which
was $3,687 at January 31, 1997 and $4,552 at April 30, 1996.

Note 7.  STOCK OPTION PLAN

     Each  director  and  executive  officer of the Company has been  granted an
option to purchase  100,000  shares of Common Stock at an exercise  price of $10
per share during a two-year  exercise  period.  A total of 600,000  options have
been granted  pursuant to and subject to a Stock Option Plan to be considered by
the Board of Directors.

     The majority  stockholder of the Company has additional  options to acquire
1,400,000  shares of Common Stock at a price of $25.00 per share, and options to
acquire  1,500,000 shares of Common Stock at a price of $50.00 per share. All of
these options expire on November 11, 1998.

Note 8.  CONTINGENCY

     A vender to ICA BV of certain  dialers has made a claim in the  approximate
amount of $100,000 against ICA BV for non-payment of approximately  1,000 dialer
units.  In addition,  such vendor has made a claim against ICA BV for additional
damages for an alleged breach of contract.

CORPDAL:64592.5  26308-00002
                                      F - 8

<PAGE>



 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF OPERATIONS.

                       MANAGEMENT DISCUSSION AND ANALYSIS
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

REVERSE ACQUISITION

         On November 1, 1996, ICA Marketing LLC purchased  4,000,000 shares (the
"Shares") of common stock, par value $.0001 per share of Logiphone  Group,  Inc.
(formerly Star Resources, Inc.), representing approximately 89% of the Company's
outstanding  shares,  in exchange for all the issued and  outstanding  equity in
International  Callers'  Association,  B.V., a Dutch limited liability  company.
("ICA BV") In connection with this transaction, Star Resources, Inc. amended its
Certificate of  Incorporation  to change its name to Logiphone  Group,  Inc. ICA
Marketing then dissolved and distributed the Shares to its members. The purchase
was treated as a reverse  acquisition  so all  information  prior to November 1,
1996  refers to ICA BV,  and all  information  from and after  November  1, 1996
refers to the Company or the Registrant and ICA BV on a consolidated basis.

OVERVIEW

         The Company currently sells  international  long distances  services to
small to medium sized  businesses in the  Netherlands  through its subsidiary in
Holland, ICA B.V. The European telecommunications market is undergoing a radical
transformation.  The United Kingdom was the first European  country to introduce
competition  in this  market  in  1984.  Competitive  activity  on the  European
continent  is  beginning  to  develop,  and the  Company has chosen to start its
European  service  activity in the  Netherlands.  Today,  PTT Netherlands  still
enjoys a dejure  monopoly  on  international  transmission,  but a number of new
telecommunications service providers are now competing with it.

         Access to the  Company's  service  is, in the main,  over the  domestic
public switched telephone network requiring the customer to dial a local number,
an  authorization  code,  and the number he is calling.  The Company uses either
dialers or  programmable  PBXs with least cost  routing  capability  in order to
minimize this inconvenience. The Company has purchased three switches, which are
installed in Amsterdam, Rotterdam and Raamsdonksveer,  to process its customer's
calls.  These switches are connected by leased lines to large switches  provided
by Esprit Telecom whose services the Company uses to complete calls.

         The Company plans to expand its long distance  business into Belgium in
the third (3rd) quarter of 1997. The Company has investigated relationships with
PBX dealers near  Brussels in order to establish a  relationship  similar to the
Company's Dutch marketing plan.

         The Company is currently  developing a relationship(s) with one or more
technology  suppliers in order to provide fax service using the Internet  and/or
intranet on a real time basis.  The Company's prior  relationship  with RadLinx,
Ltd. of Tel Aviv, Israel described in the Company's Report on Form 8-K, filed on
November 13, 1996, was terminated.

RESULTS OF OPERATIONS

         From its inception ICA B.V. has been  developing and  implementing  its
Dutch business plan, which has included establishing a relationship with a Dutch
Telecom  provider,  locating  an office  and  hiring  staff in the  Netherlands,
installing  switches,  developing a  telemarketing  operation and negotiating of
agreements necessary to its proposed business operations.

         Initial sales  activities were  accomplished  and tested by three sales
representatives  who were  hired  to test  this  market  for  acceptance  of the
Company's product and to fine tune the marketing  approach.  The Company hired a
salaried  telemarketing  sales staff in September  1996, and currently there are
eight  telemarketers  working  thirty-two hours per week. The Company also sells
its services  through PBX dealers to the dealers  customers.  The Company pays a
commission to the dealers on these sales for as long as the customer  remains on
the service.  The Company's customer base doubled in the third quarter,  and the
Company had 790 customers billing on January 31, 1997.

CORPDAL:64592.5  26308-00002
                                        3

<PAGE>

     The Company has  experienced  network  failures in the past  quarter  which
resulted in a loss of customers. While there is no assurance that there will not
be network or switch  failures in the future,  the network has  improved in this
quarter and is currently working at acceptable levels. The Company is working to
develop a  relationship  with an outside  party to provide  seven day a week, 24
hours a day facilities  management.  Until such service is provided,  the inside
technical personnel are managing the network.

COMPARISON OF RESULTS

         In the three months and nine months ending January 31, 1996, there were
no sales and only  minimal  expenses  associated  with  preparing  to commence a
business. In the three month and nine months ending January 31, 1997, there were
sales and associated operation expenses as service began in September, 1996.

         Cost of sales consists of the wages of the  telemarketers,  manager for
telesales and phone costs for telemarketing.  Cost of sales exceeded revenues in
the third quarter but costs of sales as a percentage of revenues are starting to
come down as the telemarketers mature in their sales skill levels.

OPERATING EXPENSES

         Auto expenses include the leasing of eight automobiles in Holland along
with fuel costs. Approximately five of the automobiles are used by employees who
install dialers at customer sites. It is customary and normal business  practice
in Holland to provide auto's and fuel for employees.

         Commissions  are paid to PBX dealers for customers they provided to the
network.

         Consulting  includes  money paid to Managing  Director  and one outside
consultant.

         Fees and  salaries  cover the costs for 25 people  working  within  the
company,  including the Chief Executive  Officer,  President,  Chief  Operations
Officer, Engineering,  Accountant, Secretarial, Customer Services and dialer/PBX
installers.

         Legal and  Accounting  cover legal  costs of SEC filings and  services,
corporate legal, and costs of outside accountants.

         Marketing covers telephone costs of telemarketers and  postage/supplies
for sales marketing.

         Office  Expenses  include the costs of a computer and necessary  office
network expansion in Holland Office.

         Rent  includes  cost of office space in United  States and Holland.  It
also  includes  rental of office  equipment  in the  United  States  office  and
phone/lease line rentals in Holland.

         Travel is  primarily  the  costs of  airfare  and  hotels  incurred  in
conjunction with the development of a new fax service.

LIQUIDITY AND CAPITAL RESOURCES

         The Company has funded  operations to date  primarily  through  private
sales of securities, convertible notes, loans and cash flow from operations. The
Company's  cash and cash  equivalents  at January 31, 1997 were  $36,457.  As of
January 31, 1997, the Company had outstanding payables of $483,725.  The Company
has outstanding  $550,000  principal  amount of convertible  notes (the "Notes")
that bear interest at the annual rate of nine percent (9%). The Notes matured on
May 1, 1997 and are in default. Holders of $275,000 in principal amount of Notes
have elected to convert their Notes into 165,000 shares of Company common stock,
par value $.0001.  In addition,  the Company's  agreement with Logiphone  Israel
contemplates that the Company under certain circumstances will make a loan of up
to $1 million to Logiphone Israel.

CORPDAL:64592.5  26308-00002
                                        4

<PAGE>

         Accordingly,  the  Company  will  not  be  able  to  pay  its  existing
obligations  and to implement its business plan,  including the expansion of its
European  international  long distance  business and start-up,  development  and
marketing  costs for real time Internet  services  without  raising  substantial
additional funds.

         During   the   next   12   months,    the    Company's    international
telecommunications  business  will likely  require  approximately  $7 million to
cover  operational/marketing/and  administrative costs, to pay certain payables,
to purchase additional dialers and other equipment and to expand its business to
new countries.

         During the next 12 months,  the  Company's  Internet fax business  will
likely require  approximately  $3 million to commence its Internet fax business,
to  expand  this  business  to a number  of  countries  and to cover  operating,
marketing and administrative costs.

         The  Company  is  currently  exploring  the  possibility  of a  private
placement that will be used to pay existing debt, fund the Company's  operations
and  administration  and fund expansion for its European long distance  business
and start-up  costs for real time  Internet  fax  services for the  remainder of
calendar  1997.  In addition,  pending such  private  placement,  the Company is
actively pursuing bridge financing  consisting of convertible  debentures in the
approximate amount of $1 million to be used,  depending on the amount raised, to
pay certain  existing  obligations  to creditors,  to purchase  equipment and to
expand its customer base, to advance funds to Logiphone Israel,  and to fund the
operation of the Company while it pursues a major financing  intended to provide
long term funding for the Company.  There is no assurance  that the Company will
be able to  raise  the  necessary  funds  at all or on  terms  favorable  to the
Company.

Forward Looking Information

         This  document  includes  "forwarding  looking"  statements  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the  Securities  Exchange Act of 1934,  as amended.  Although the Company
believes that the expectations  reflected in such forward looking statements are
based  upon  reasonable   assumptions,   it  can  give  no  assurance  that  its
expectations will be achieved. Important factors ("Cautionary Disclosures") that
could  cause  the  actual  results  to  differ  materially  from  the  Company's
expectations  are set forth below.  Subsequent  written and oral forward looking
statements  attributable  to the  Company  or  persons  acting on its behalf are
expressly qualified in their entirety by the Cautionary Disclosures.

         The Company's  operating  subsidiary,  ICA BV, was only formed in early
1995 and only acquired its first customers in May 1996. Accordingly, the Company
has only a short history of providing  long distance  services.  The Company has
never provided a fax over the Internet services.

         The  telecommunications  industry is competitive  and is  significantly
affected  by the  introduction  of  new  discount  concepts  and  the  marketing
activities  of industry  participants.  Some of the Company's  competitors  have
greater name recognition, greater marketing capability, and have, or have access
to, substantially  greater financial and personal resources than is available to
the Company.  The largest  participant in the  international  telecommunications
resale  business  in the  Netherlands  market is the Dutch Post,  Telegraph  and
Telephone organization ("PTT"), which controls over ninety-five percent (95%) of
the  market.  In  response  to recent  competition  the PTT has  begun  offering
discount  services.  The second  largest  provider in the  Netherlands is Esprit
B.V.,  which has been operating in the  Netherlands for over three (3) years and
also operates in at least four (4) other European  countries.  Other competitors
are subsidiaries of telephone companies of other countries. These include Global
One, a  consortium  of Deutsche  Telekom,  France  Telecom  and Sprint;  British
Telecom;  and  Telegate,  a subsidiary of Telecom  Finland.  While to date these
companies have targeted  different markets than the Company has targeted,  there
is no assurance that they will not pursue the Company's target market. There are
also  competitors  who are  targeting  the same  markets as the  Company.  These
include Worldom B.V.,  Versatel and Viatel.  These companies are affiliated with
large companies and are  substantially  better financed than the Company.  There
are also smaller switched and switchless  resellers who operate in the Company's
target  market.  The Company  can expect to face  similar  competition  in other
European  countries.  Since the Company's  equipment can be programmed to direct
calls to the least  expensive  carrier  for that call,  it can be used to direct
traffic away from the Company and to a competitor. Accordingly, the Company will
need to be very sensitive in responding to competitive offerings. The ability of
the Company to compete effectively in the telecommunication industry will depend
on its ability to provide  high  quality,  market-driven  services at  effective
prices,

CORPDAL:64592.5  26308-00002
                                        5

<PAGE>

generally less than those charged by the competitors.  There can be no assurance
that the Company will be able to compete  successfully  with  existing or future
companies.

         The Fax over the Internet  business will compete with  established long
distance carriers who provide conventional fax services, as well as existing Fax
over the Internet  services.  These  services are provided by companies that are
substantially larger and more financially secure than the Company. Management is
not aware of any  barriers  to other  persons  creating a real time Fax over the
Internet  business similar to that the Company plans to establish.  In addition,
fax service competes with e-mail as a form of document  delivery.  To the extent
e-mail is perceived as a better method of transmitting documents, the use of the
Company's services can be expected to decline.

         The   telecommunication   industry  has  been  characterized  by  rapid
technological  change,  frequent new service introductions and evolving industry
standards. New competitors may enter the telecommunications industry with new or
add-on technology.

         Competition  has only recently been  introduced in European  countries.
Consequently,  there is no  history  of  European  consumers  changing  the long
distance companies to which they subscribe.  As in the early days of competition
in the United  States  long  distance  market,  the main factor that the Company
intends to use to attract  customers is lower  prices.  There is no history that
confirms  that  lower  prices  alone will  convince  large  numbers of  European
consumers  to use a new long  distance  carrier.  There are other  factors  that
consumers may consider in choosing to remain customers of the PTT. These include
the need to dial additional  digits to make a telephone call using services of a
competitive  provider  and  the  poorer  quality  of  service  afforded  by  the
connections that the Company is required to use. While the Company users dialers
and PBXs to offset the dialing disadvantage and while the growing use of digital
connections  reduces  quality  problems,  there is no  assurance  that  European
consumers will embrace competitive long distance services.

         The  Company's  fax  business  is a new  business.  The  Company has no
historical basis on which to judge consumer  acceptance of an international  fax
product.  It is always difficult to persuade  consumers to change from a product
that works, traditional faxing, to a new product.

         The Company is  dependent  on its  suppliers,  The Company uses its own
switches  and  access  equipment  and other  international  carriers  to provide
telephone  service to small to  medium-sized  customer.  The  Company  can offer
competitive rates to most  international  destinations by using its carriers and
equipment  programmed for least cost routing.  The Company is dependent upon the
PTT, its largest  competitor,  for  connections  between its  customers  and its
switches.   While  the  PTT  is  not   expected  to  be   permitted   to  refuse
interconnection,  it may seek to price  its  services  in a way that  makes  the
Company's  cost  structure  disadvantageous  vis-a-vis  the PTT's long  distance
offerings.

         The  Company  is also  dependent  upon  Esprit  Telecomp  Benelux  B.V.
("Esprit") to carry calls from its switches to their international destinations.
While  other  international  carriers  are  available,  the  Company  could face
increased  costs  in  completing  its  customers'  calls in the  event  that its
agreements with Esprit were terminated for any reason.

         Rather than maintain a staff to perform back office  functions  such as
billing,  collection and providing certain management  reports,  the Company out
sources these services.  Presently,  these are provided by Intertech  Management
Group,  Inc.  ("Intertech"),  a St.  Louis-based  company that provides  similar
services to several long distance  resellers in the United States.  In the event
that these services were  interrupted for any reason,  the Company would provide
those services itself, but there could be disruption during any transition.

         The Company's fax business is entirely  dependent on obtaining software
licenses and a piece of proprietary  equipment  from RapidNet,  Inc., a Bahamian
corporation  ("RapidNet")  located  in New  York.  The  Company  does not have a
written license agreement with RapidNet.  The software is licensed under license
from CMR  Communications  Ltd. of Israel  ("CMR"),  which developed the reindeer
technology the Company will use. If for any reason RapidNet or CMR was unable or
refused to supply the proprietary  equipment software to the Company,  or if the
software did not work as expected,  the  Company's  business  would be adversely
affected.  In  addition,  the Company will rely on RapidNet to manage its global
network of providing fax over the Internet services. If RapidNet were to fail to
do its job,  the Company  would be slow to learn of and correct  problems on its
network, which would cause customer dissatisfaction.

CORPDAL:64592.5  26308-00002
                                        6

<PAGE>

         Changes in the  regulatory  or  political  environment  in those places
where the  Company  conducts or plans to conduct its  business  could  adversely
affect  the  Company  and its  ability  to  implement  its  business  plan.  The
regulatory climate in the Netherlands and in other European countries is subject
to change.  While the Company is not at this time subject to price regulation in
the Netherlands,  it may face price  regulation in other  countries.  Similarly,
while the PTT is currently  regulated in its offerings,  the level of regulation
may be  reduced  and in other  countries  the  dominant  carrier  may face  less
regulation.  There is not assurance that a regulatory climate unfavorable to the
Company  will not  develop  in one or more  countries  into which it may seek to
expand.

         In addition,  regulatory  agencies  could take other actions that could
adversely  affect the fax business by, for example,  imposing  sensitive  access
charges for calls to Internet service providers,  which may be considered by the
Federal Commuications  Commission and which would increase the cost of providing
the fax service.

         In order for the Company to implement  its business  plan,  it needs to
raise substantial  funds within 12 months and additional funds  thereafter.  The
ability  and  costs of such  financing  will  depend on a  variety  of  factors,
including  macroeconomic  forces beyond the Company's control, and the Company's
performance  during the period in which it is  seeking  financing.  There is not
assurance that such financing will be available at all or on terms  favorable to
the Company.

CORPDAL:64592.5  26308-00002
                                        7

<PAGE>



PART II. OTHER INFORMATION

         ITEM 1.  LEGAL PROCEEDINGS.

                  None

         ITEM 2.  CHANGES IN SECURITIES.

                  (a)      None

                  (b)      None

                  (c) On  November  1, 1996,  the  Company  completed  a sale of
         4,000,000  shares (the "Star Shares") of common stock, par value $.0001
         per share (the "Common Stock"), to ICA Marketing Company, L.C., an Iowa
         limited  liability  company  ("ICA-Iowa"),  in exchange  for all of the
         issued and outstanding  equity in  International  Callers  Association,
         B.V.  ("ICA BV"),  a Dutch  limited  liability  company,  as well as an
         assignment of all of the debt owed by ICA BV to ICA-Iowa. This sale was
         exempt from  registration  under the Securities Act of 1933, as amended
         (the "Securities Act"), pursuant to Section 4(2) of the Securities Act.

                  In the quarter  ended  January  31,  1997,  the  Company  sold
         $550,000 in principal amount of 9% Convertible Notes (the "Notes"). The
         Notes were sold in a  transaction  exempt from  registration  under the
         Securities  Act pursuant to Section 4(2)  thereunder  and  Regulation D
         thereunder.  The Notes were sold to twenty  (20)  accredited  investors
         without any public  solicitation.  The Notes were sold by officers  and
         directors of the Company without any sales  compensation  being paid to
         them or to any other person.  The Notes are convertible  into shares of
         Common  Stock  at  the  rate  of  three  (3)  pre-Stock   Dividend  (as
         hereinafter  defined)  shares  of Common  Stock for each $10  invested.
         After  the  Stock  Dividend  (as  hereinafter  defined),  the Notes are
         convertible  into shares of Common  Stock at the rate of six (6) shares
         of Common Stock for each $10 invested. See Item 5.

         ITEM 3.  DEFAULT UPON SENIOR SECURITIES.

                  None

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

                  None.

         ITEM 5.  OTHER INFORMATION.

                  On November  15,  1996,  the Board of Directors of the Company
         declared a one-for-one stock dividend (the "Stock Dividend") payable to
         stockholders  of record as of the close of  business  on  November  29,
         1996.

                  On March 7, 1997, Mr. Bert Cornelisse,  the Managing  Director
         of ICA BV, was elected to the Board of Directors of the Company.

                  Effective March 19, 1997,  Michael  Hilsenrath  resigned as an
officer of the Company and ICA BV.

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

EXHIBITS.  The following  exhibits are furnished in accordance  with Item 601 of
Regulation S-B.

10.1     Strategic  Alliance  Agreement,  dated as of November 10, 1996,  by and
         between  Logiphone  Telephone  Communications,  Ltd.;  Logiphone Group,
         Inc., and ICA B.V.  (Filed with the SEC on November 13, 1996 as Exhibit
         10.2 to the Company's Form 8-K and incorporated herein by reference).

27       Financial Data Schedule


CORPDAL:64592.5  26308-00002
                                        8

<PAGE>



Form 8-K: The following  reports on Form 8-K have been filed with the Securities
and Exchange Commission in the quarter ended January 31, 1997:

1.       The  Company  filed a  Report  on Form 8-K (the  "Initial  Report")  on
         November  13,  1996  reporting  that the  Company  completed  a sale of
         4,000,000  shares of Common  Stock,  (the  "Common  Stock"),  par value
         $.0001,  to ICA  Marketing  Company,  L.C.,  an Iowa limited  liability
         company,  in exchange for all of the issued and  outstanding  equity in
         ICA BV, Dutch limited  liability  company,  as well as an assignment of
         all the debt owed by ICA BV to ICA-Iowa.

2.       The  Company  filed a  Report  on  Form  8-K/A  on  November  20,  1996
         correcting the address and telephone  number for the Company  following
         the acquisition of ICA BV.

3.       The Company  filed a Report on Form 8-K on November 27, 1996  reporting
         the  declaration  of a one-for-one  stock  dividend with respect to the
         Common  Stock  payable  to  stockholders  of  record as of the close of
         business on November 29, 1996.

4.       The Company  filed a Report on Form 8-K on January  30, 1997  reporting
         the termination of the Strategic  Alliance Agreement between ICA BV and
         RadLinx, Ltd.

5.       The Company filed a Report  on Form 8-K/A on  April 3, 1997  containing
         the financial statements required by the Initial Report.

CORPDAL:64592.5  26308-00002
                                        9

<PAGE>


SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the Registrant has duly caused this Quarterly  Report to be signed on its behalf
by the undersigned thereunto duly authorized.

                                       LOGIPHONE GROUP, INC.
                                       (Registrant)



Date:    May 23, 1997                  By:/s/Marc Schechtman
                                          --------------------------------------
                                          Marc Schechtman, Chairman and
                                          Chief Executive Officer (Principal
                                          Executive Officer)



Date:  May 23, 1997                    By:/s/ Ronald D. Gardner
                                          --------------------------------------
                                          Ronald D. Gardner, Treasurer
                                          (Principal Financial Officer)





CORPDAL:64592.5  26308-00002
                                       10