SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 6, 2012
(Exact name of registrant as specified in its
Commission File Number: 000-53049
|(State or other jurisdiction of
|1765 Oak Street, Torrance CA
||(Address of principal executive offices)
number, including area code)
(Former name or former address,
if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of Assets.
Smack Sportswear (the “Registrant” or the
“Company”) closed the purchase of Team Sports Superstore, Inc. (“Team Sports”) on December 6, 2012
(the "Closing"). Team Sports is a California corporation that markets and sells custom volleyball apparel and
equipment products through the internet, retail, club teams and schools.
The Closing of the purchase of Team Sports Superstore was dependent
upon Team Sports obtaining audited financials. On August 31, 2011, Mr. Bill Sigler, acquired 37,150,000 shares or 78.9% of the
issued and outstanding shares of the Registrant in exchange for his commitment to sell Team Sports to Smack Sportswear upon completion
of audited financials, as required by the U. S. Securities & Exchange Commission. He subsequently became the Chief Executive
Officer of the Company. Mr. Sigler is the major shareholder of Team Sports Superstore, Inc.
Simultaneously, Mr. Bill Sigler on behalf of Smack Sportswear entered
into an Irrevocable Business Sales Agreement whereby he agreed to transfer 100% equity ownership of Team
Sports to Smack Sportswear upon completion of the audit. This sale includes all the assets, liabilities, trade names, ,
equipment, fixtures, property, employee stock incentive plan and business operations of Team Sports Superstore, Inc. (See Business
Purchase and Sale Agreement, Exhibit 10.4)
Therefore, Smack Sportswear has purchased one hundred (100%) percent
ownership interest in Team Sports and has not issued any new shares to make this purchase. Current shareholders of Smack Sportswear
now own a proportional share of Team Sports based on their pro-rata ownership of Smack Sportswear.
SMACK Sportswear was organized was organized October 31, 2007 (date
of inception) under the laws of the State of Nevada, as Reshoot Production Company. The Company was incorporated as a subsidiary
of Reshoot & Edit, a Nevada corporation. The Company subsequently changed its corporate name from Reshoot Production Company
to SMACK Sportswear on December 15, 2011.
Through September, 2011, SMACK Sportswear worked with experienced
growers throughout the world that have a history of growing quality fresh produce. The Company’s business focuses on the
production and distribution of organic cucumbers, tomatoes, and peppers. After September, 2011, the Company abandoned this business
plan. It became management’s intention to purchase Team Sports Superstore, Inc., once audited financials have been prepared
by a PCOAB auditor.
TEAM SPORTS BUSINESS
Team Sports Super Store was organized on February 16, 2010 and incorporated
under the laws of the State of California, as Team Sports Superstore, Inc.
Team Sports Business Plan
The Team Sports primary focus is on the sport
of volleyball. Volleyball has experienced consistent growth since 1990, and is the second most popular sport in the world. It is
estimated that 800 million people worldwide play volleyball in 221 countries, while 46 million play in the U.S. It is also the
fastest growing sport among teenage girls, and is expected to grow even faster now that Sand Volleyball has become an NCAA scholarship
sport. Growth spurts often occur after the Olympics, which was the case in 2008 when the U.S. won gold in women’s & men’s
beach, as well as men’s indoor volleyball.
The Company has built sales with little investment
capital. The Company currently has two successful business segments which can be significantly grown with certain resources. The
two current segments are: Team Apparel sales and the E-Commerce/Catalog segment.
Team Apparel Segment
The SMACK Sportswear line was
established on the sands of Manhattan Beach in 1994. It holds approximately 10% of the Indoor Team Apparel market, and is poised
to become the leader in the newly created Beach Uniform market. Although Asics and Mizuno hold the majority of sales in this space,
the Company offers a number of benefits over these larger companies. The Company delivers a product which can be widely customized,
meets equal or better price points, is a superior product, and can be delivered in a much shorter time frame. Also the Company
offers a “One Stop Shop” opportunity by offering other services like decorating, equipment, and fundraising apparel,
which in turn saves coaches and club directors time and money. Historically the Company has not widely marketed to this segment
and most sales have resulted from reputation and word of mouth. For the upcoming season, the company intends to aggresively market
to this custumer base via numerous marketing strategies including E-Commerce, Digital Catologs, and direct contact methods.
The management of
Team Sports is developing a sophisticaed E-Commerce marketing program. This strategy includes
both SmackSportswear.com, as well as the existing web store VBSuperstore.com. It also includes
a market growth strategy utilizing certain internet marketing systems, social network marketing systems, and a cost reduction strategy
under which the printed and mailed catolog will be morphed over a short time into a fully on-line digital catalog. As a licensed
partner with the AVP Pro Volleyball Tour, USA Beach Volleyball, and the National Collegiate Sand Volleyball Association, the company
was able to gain email lists of over 400,000 active athletes that will help to grow the Ecommerce portion of the business. Other
areas the company has been pursuing include setting up Affiliate Web Stores for 4000 volleyball clubs around the U.S., as well
as setting up stores for the top pro volleyball tours and the National Collegiate Sand Volleyball Tour. Further expansion strategies
include international expansion of the brand taking advantage of the great acceptance of California brands worldwide and the huge
acceptance of volleyball internationally.
Management believes that Team Sports has a
number of competitive advantages, which include but are not limited to:
Vertical and horizontal integration
Key partnerships with premier organizations and athletes
Strong and diverse management team
Educated and experienced staff
Online design capabilities for customers
Unique fundraising programs and affiliate opportunities
Reach to a captive and brand-educated market in which to promote all properties
Management is not aware of any other Company
in the volleyball market which has achieved this combination. Management believes these factors, along with a history of achieving
its internal benchmarks, offers Team Sports good growth potential.
Team Sports is building a brand to be respected
and recognized. A capital infusion could be used explicitly for growing the Company via creative and aggressive marketing strategies
leveraging the existing brand and expanding the existing channels of distribution. The following briefly details management’s
path to growth in the respected business segments.
Indoor team apparel - there
exists an opportunity for growth in the team segment. Although the company has a decent share of the custom uniform market, the
stock uniform business is by far the largest segment and one in which Company has little participation. The present distribution
model is direct, however the company may expand distribution through the massive Team Dealer network, online suppliers, and other
wholesale avenues. Also massive growth opportunities can be achieved by financing and utilizing aggressive marketing strategies.
International expansion is a huge opportunity for growth. There are hundreds of pro indoor volleyball leagues throughout Europe,
Asia, South America and Australia – with volleyball being the 2nd most popular sport in the world, International
expansion will allow for drastic growth.
Sand team apparel - The NCAA
approved Sand Volleyball as a scholarship sport in 2011. This will provide another expanding market for the Company to exploit.
No other Company is making custom athletic
beach team wear. SMACK has been the first to market and promote beach team wear since 2009. It is important for SMACK
to capitalize on being the first to market and expand its ownership of this space thru strategic partnerships, and by using
the existing reach SMACK has thru mail order, email lists, and a comprehensive marketing plan. Marketing to
this demographic will fuel synergistic growth of Smack’s Beach Activewear.
Team Sports is enhancing and modifying its E-Commerce technology to take advantage over the competition’s very weak online
volleyball marketing. Management’s goal is to have multiple web-stores ranking on page 1 of Google (for all key volleyball
related search terms) by 2012. The Company is presently modifying its sites to maximize optimization, navigation, and aesthetics.
Implementing a targeted marketing campaign and leveraging strategic partnerships will assist in reaching the goals. The Affiliate
program will allow the Company to have stores on thousands of volleyball related websites, including large national organizations
like USA Volleyball.
BeachWear - The current two business segments are very successful and after years of growth can now be used to aggressively
launch a SMACK Active BeachWear Line to be sold thru multiple channels. Presently in terms of active beachwear,
there are the surf wear companies like Quiksilver and Roxy, which are viewed as cool but not necessarily functional, as well as
companies like Speedo and Nike, which when it comes to the beach, are not viewed as beach lifestyle brands. The
Smack line of sportwear will be specifically designed and directed at the active person who is seeking supportive and functional
active wear while simultaneously possessing the fashionality of the most current youthful and successful concepts. Smack’s
bikinis are worn by the 2010 World Champions as well as more pro athletes than any other company. With the NCAA launching beach
volleyball in 2012, Smack will aim to become positioned as the #1 player in this market, then expand to national retail chains.
The Company believes there is an opportunity to fill a niche in the Action Sports apparel market with
So Cal inspired performance beach/swim wear.
Business Strategy Opportunities
Management expects to grown
its brand in the next three years, not only from the segments discussed above, but from many other aspects where Team Sports has
establish core competancies, as well as other areas where the Team Sports feels there are opportunities as listed below:
Duplicate the current apparel and ecommerce models into other sports
International distribution – Volleyball is the 2nd most popular sport in the world. There are many opportunities
to leverage relationships with top pros playing internationally to gain revenues in team, beach, and ecommerce.
Opening a Flagship store, then other similar stores, where only the Company brands are sold.
Expand into footwear, sunglasses, accessories
Acquisition of synergystic companies/brands that allow for exponential growth
Strategic partnerships/licensing deals that allow for revenue/profit growth.
The Company is in direct competition with producers
of sport apparel. Many of these producers have significantly greater resources. The Company also expects the number of competitors
to increase. The sports apparel industry is highly competitive. Factors contributing to the industry's increasingly competitive
market include fashion changes, fashion trends, acceptability of different fabrics and other personal fashion factors. Most all
competitors, such as Asics and Mizuno have significantly greater financial, marketing, other resources, and larger customer bases
than we have and are more financially leveraged. As a result, these competitors may be able to adapt changes in customer requirements
more quickly; introduce new and more innovative products more quickly; better adapt to downturns in the economy or other decreases
in sales; better withstand pressure for cancelled services, take advantage of acquisition and other opportunities more readily;
devote greater resources to the marketing and sale of their products; and adapt more aggressive pricing policies. All of this may
contribute to intensifying competition and may affect our future revenue growth.
Patents, trademarks, franchises, concessions, royalty agreements
Team Sports currently has no pending or provisional patents or trademark
applications, although Smack brand has been operated since 1994.
We are subject to federal, state and local laws and regulations
affecting our business, including those promulgated under the Occupational Safety and Health Act, the Consumer Product Safety Act,
the Flammable Fabrics Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety
Commission and various environmental laws and regulations.
Team Sports has five full time employees, and twelve (12) independent
contract employees at this time.
The Team Sports corporate headquarters
are located at: 1765 Oak Street, Torrance, CA 90501. Team Sports does not own any real property.
TEAM SPORTS HAS A LIMITED OPERATING HISTORY.
Team Sports has a limited operating history. Prospective investors
should be aware of the difficulties encountered by such new enterprises, as management faces all of the risks inherent in any new
business. These risks include, but are not limited to, competition, the absence of an operating history, the need for additional
working capital, and the possible inability to adapt to various economic changes inherent in a market economy. The likelihood of
success of Team Sports must be considered in light of these problems, expenses that are frequently incurred in the operation of
a new business and the competitive environment in which Team Sports will be operating.
IF TEAM SPORTS'S BUSINESS PLAN IS NOT SUCCESSFUL, THERE IS SUBSTANTIAL
DOUBT THAT TEAM SPORTS MAY BE UNABLE TO CONTINUE OPERATIONS AS A GOING CONCERN AND IF WE DISCONTINUE
OPERATIONS STOCKHOLDERS MAY LOSE THEIR ENTIRE INVESTMENT.
As discussed in the Financial Statements included in this Current
Report, at the end of Team Sports fiscal year as at June 30, 2012, Team Sports had negative cash flow in
operating activities of $(201,649). As of June 30, 2012, Team Sports’
current assets exceeded its current liabilities by $115,863. For the year ending, June 30, 2012,
Team Sports had a net operating loss after taxes of $(227,401) and compared to a net operating
profit, after taxes of $1,365 for the same period last year. Unaudited results for the first quarter ending September 30, 2012
show Team Sports had a Team Sports had negative cash flow in operating activities of $(8,431)
. As of September 30, 2012, Team Sports’ unaudited current assets exceeded its current
liabilities by $7,337. For the quarter ending, September 30, 2012, Team Sports had an
unaudited net operating loss after taxes of $(71,406) and compared to a net loss, after taxes of $(5,140)
for the same period last year.
These factors raise substantial doubt that Team Sports will be able
to continue operations as a going concern, and Team Sports’ independent auditors included an explanatory paragraph regarding
this uncertainty in their report on the financial statements for the period from inception to June 30, 2011 and the three month
unaudited interim period ending September 30, 2012.
Team Sports ability to continue as a going concern is dependent
upon generating cash flow sufficient to fund operations and reducing operating expenses. Team Sports ' business plan may not be
successful in addressing these issues. If Team Sports cannot continue as a going concern, its stockholders may lose their entire
Failure to raise additional financing will cause us to go out of
business. Further, we cannot guarantee that we will be successful in generating revenues and profit in the future. Failure to generate
revenues and profit will cause us to suspend or cease operations. If this happens, you could lose all or part of your investment.
IT IS DIFFICULT TO EVALUATE THE LIKELIHOOD THAT TEAM SPORTS WILL
ACHIEVE OR MAINTAIN PROFITABILITY IN THE FUTURE.
Team Sports has prepared audited financial
statements for the year end for June 30, 2012. Team Sports ability to continue to operate as a going concern is fully dependent
upon Team Sports obtaining sufficient revenues or financing to continue its development and operational activities. The ability
to achieve profitable operations is in direct correlation to Team Sports ability to generate revenues or raise sufficient financing.
It is important to note that even if the appropriate financing is received, there is no guarantee that Team Sports will ever be
able to operate profitably or derive any significant revenues from its operation.
Risks Related to Team Sports Superstore’s
have a limited product and technology portfolio at the current time.
There can be no assurance that any of Team
Sports Superstore’s product concepts will be successfully developed, prove to be safe and efficacious, meet applicable regulatory
standards, be capable of being produced in commercial quantities at acceptable costs or be successfully marketed.
There can be no assurance that any Team Sports
Superstore’s concepts might license in or acquire in the future will be successfully developed, prove to be safe and efficacious,
meet applicable regulatory standards, be capable of being produced in commercial quantities at acceptable costs or be successfully
we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market products
we may develop, we may not be able to generate increased product revenue.
We do not currently have a well defined organization
for the sales, marketing and distribution of our apparel products. In order to market our products, we must build our sales, marketing,
managerial and other non-technical capabilities or make arrangements with third parties to perform these services. In addition,
we have no experience in developing, training or managing a sales force and will incur substantial additional expenses in doing
so. The cost of establishing and maintaining a sales force may exceed its cost effectiveness. Furthermore, we will compete with
many apparel companies that currently have extensive and well-funded marketing and sales operations. Our marketing and sales efforts
may be unable to compete successfully against these companies. If we are unable to establish adequate sales, marketing and distribution
capabilities, whether independently or with third parties, we may not be able to generate product revenue and may not become profitable.
are subject to various laws and regulations where we operate our business.
We are subject to federal, state and local
laws and regulations affecting our business, including those promulgated under the Consumer Product Safety Act, the Flammable Fabrics
Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety Commission as well
as environmental laws and regulations. This means we may be required to make significant expenditures to comply with governmental
laws and regulations, including labeling laws and privacy laws, compliance with which may require significant additional expense.
Complying with existing or future laws or regulations may materially limit our business and increase our costs. Failure to comply
with such laws may expose us to potential liability and have a material adverse effect on our results of operations.
sports apparel industry is subject to pricing pressures that may cause us to reduce the future gross margins for our products.
Average prices in the sports apparel industry
have been declining over the past several years, primarily as a result of the growth of the mass merchant channel of distribution,
increased competition, consolidation in the retail industry and a promotional retail environment.
To be competitive, we will be required to adjust
our prices in response to these industry-wide pricing pressures. Many of our competitors source their product requirements, from
lesser-developed countries to achieve lower operating costs. Our competitors may possibly source from regions with lower costs
than those of our sourcing partners and those competitors may apply such additional cost savings to further reduce prices.
Moreover, increased customer demands for markdown
allowances, incentives and other forms of economic support reduce our gross margins and affect our profitability. Our financial
performance may be negatively affected by these pricing pressures if we are forced to reduce our prices without being able to correspondingly
reduce our costs for finished goods or if our costs for finished goods increase and we cannot increase our prices.
may not be able to keep pace with constantly changing sports apparel fashion trends, and if we misjudge consumer preferences, the
image of one or more of our brands may suffer and the demand for our products may decrease.
Our success will depend, in part, on management's
ability to anticipate and respond effectively to rapidly changing fashion sport trends and consumer tastes and to translate market
trends into appropriate, saleable product offerings. If we are unable successfully to anticipate, identify or react to changing
styles or trends and misjudge the market for our products or any new product lines, our sales may be lower and we may be faced
with a significant amount of unsold finished goods inventory. In response, we may be forced to increase our marketing promotions,
to provide markdown allowances to our customers, or to liquidate excess merchandise, any of which could have a material adverse
effect on our net sales and profitability. Our brand image may also suffer if customers believe that we are no longer able to offer
innovative products, respond to the latest fashion trends or maintain the quality of our products.
Even if we are able to anticipate and respond
effectively to changing fashion sport trends and consumer preferences, our competitors may quickly duplicate or imitate one or
more aspects of our products, promotions, advertising, brand image and business processes, whether or not they are protected under
applicable intellectual property law, which may materially reduce our sales and profitability.
loss of one or more of our future suppliers of finished goods or raw materials may interrupt our supplies.
We purchase sport apparel from a limited number
of third-party manufacturers. We do not have any material or long-term contracts with any of our suppliers. Furthermore, our finished
goods suppliers also purchase the fabrics and accessories used in our products from a limited number of suppliers. The loss of
one or more of these vendors could interrupt our supply chain and impact our ability to deliver products to our customers, which
would have a material adverse effect on our net sales and profitability.
in the price of raw materials used to manufacture our sports apparel could materially increase our costs and decrease our profitability.
The principal fabrics used in our business
are made from cotton, synthetic fabrics and cotton-synthetic blends. The prices for these fabrics are dependent on the market price
for the raw materials used to produce them, primarily cotton and chemical components of synthetic fabrics, and there can be no
assurance that prices for these and other raw materials will not increase in the near future.
These raw materials are subject to price volatility
caused by weather, supply conditions, power outages, government regulations, economic climate and other unpredictable factors.
Fluctuations in crude oil or petroleum prices may also influence the prices of related items such as chemicals, dyestuffs, man-made
fiber and foam. Any raw material price increase would increase our cost of sales and decrease our profitability unless we are able
to pass higher prices on to our customers. In addition, if one or more of our competitors is able to reduce its production costs
by taking advantage of any reductions in raw material prices or favorable sourcing agreements, we may face pricing pressures from
those competitors and may be forced to reduce our prices or face a decline in net sales, either of which could have a material
and adverse effect on our business, results of operations and financial condition.
worldwide sports apparel industry is heavily influenced by general economic conditions.
The worldwide sports apparel industry is highly
cyclical and heavily dependent upon the overall level of consumer spending. Purchases of sports apparel and related goods tend
to be highly correlated with changes in the disposable income of consumers. Consumer spending is dependent on a number of factors,
including actual and perceived economic conditions affecting disposable consumer income (such as unemployment, wages and salaries),
business conditions, interest rates, availability of credit and tax rates in the general economy and in the international, regional
and local markets where our products are sold. As a result, any deterioration in general economic conditions, reductions in the
level of consumer spending or increases in interest rates could adversely affect the future sales of our products.
A return to recessionary or inflationary conditions,
whether in the United States or globally, additional terrorist attacks or similar events could have further adverse effects on
consumer confidence and spending and, as a result, could have a material adverse effect on our financial condition and results
may not be able to correctly estimate our future operating expenses, which could lead to cash shortfalls.
Because of the emerging nature of the apparel
markets in which we compete, our historical financial data is of limited value in estimating future operating expenses. Our budgeted
expense levels are based in part on our expectations concerning future revenues. However, our ability to generate any revenues
is solely dependent on our ability to market and sell our apparel products. The size of any future revenues depends on the choices
of individuals the Company intends to recruit to assist with the development and implementation of future sales and marketing programs,
which are difficult to forecast accurately. We may be unable to adjust our operations in a timely manner to compensate for any
unexpected shortfall in revenues. Accordingly, a significant shortfall in demand for our products could have an immediate and material
adverse effect on our business, results of operations, and financial condition. We may not be successful in addressing such risks,
and the failure to do so could have a material adverse effect on our business, operating results and financial condition.
Our operating results may fluctuate as a result
of a number of factors, many of which are outside of our control. For these reasons, comparing our operating results on a period-to-period
basis may not be meaningful, and you should not rely on our past results as any indication of our future performance. Our quarterly
and annual expenses are likely to increase substantially over the next several years. Our operating results in future quarters
may fall below expectations. Any of these events could adversely impact our business prospects and make it more difficult to raise
additional equity capital at an acceptable price per share. Each of the risk factors listed in this “Risk Factors”
section may affect our operating results.
Our business and the sport apparel industry
are constantly changing and evolving over time. Furthermore, we compete in an unpredictable industry and regulatory environment.
Our ability to succeed depends on our ability to compete in this fluctuating market. As such, our actual operating results may
differ substantially from our projections.
we lose or fail to retain the services of key management personnel, we may not be able to execute our business strategy effectively.
Our future success depends in a large part
upon the continued service of key members of our senior management team. In particular, our CEO, Bill Sigler is critical to our
overall management as well as the development of our technology, our culture and our strategic direction. All of our current executive
officers and key employees are at-will employees, and we do not maintain any key-person life insurance policies. The loss of any
of our management or key personnel could materially harm our business.
may not be able to find suitable employees, who can help us move our business forward.
The Company currently relies heavily upon the
services and expertise of Bill Sigler. In order to implement the aggressive business plan of the Company, management recognizes
that additional clerical staff will be required. The sole officer is the only personnel at the outset of operations. The sole officer
can manage the office functions and bookkeeping services until the Company can generate enough revenues to hire additional staff.
No assurances can be given that the Company
will be able to find suitable employees that can support the above needs of the Company or that these employees can be hired on
terms favorable to the Company.
We rely on trained personnel and, if we are
unable to retain or motivate key personnel or hire additional qualified personnel, we may not be able to grow effectively.
Our performance is largely dependent on the
talents and efforts of trained individuals. Our future success depends on our continuing ability to identify, hire, develop, motivate,
and retain trained personnel for all areas of our organization. Competition in the apparel industry for qualified employees is
intense, especially on the West Coast and it is likely that certain of our competitors will directly target certain of our employees
in the future. Our continued ability to compete effectively depends on our ability to retain and motivate those employees.
We may also need to hire additional qualified
personnel with expertise in the apparel industry, government regulation, manufacturing and sales and marketing. We compete for
qualified individuals with numerous companies and other emerging entrepreneurial companies. Competition for such individuals, particularly
in California is intense, and may not be able to successfully recruit or retain such personnel. Attracting and retaining qualified
personnel will be critical to our success.
may not successfully manage any growth that we may experience.
Our success will depend upon the expansion
of our operations and the effective management of any such growth, which will place a significant strain on our management and
on our administrative, operational, and financial resources. To manage any such growth, we must expand our facilities, augment
our operational, financial and management systems, and hire and train additional qualified personnel. If we are unable to manage
our growth effectively, our business would be harmed.
we engage in any acquisition, we will incur a variety of costs and may never realize the anticipated benefits of the acquisition.
We may attempt to acquire technologies, services
or products or in-license technologies that we believe are a strategic fit with our business. We have limited experience in identifying
acquisition targets, and successfully completing and integrating any acquired businesses, technologies, services or products into
our current infrastructure. The process of integrating any acquired business, technology, service or product may result in unforeseen
operating difficulties and expenditures and may divert significant management attention from our ongoing business operations. As
a result, we will incur a variety of costs in connection with an acquisition and may never realize its anticipated benefits.
Risks Related to Our Intellectual Property
agreements with employees and others may not adequately prevent disclosure of our trade secrets and other proprietary information
and may not adequately protect our intellectual property.
Because we operate in the highly competitive
sports apparel field, we need to protect our proprietary technology, processes and processes. However, trade secrets are difficult
to protect. We intend to enter into confidentiality and intellectual property assignment agreements with our corporate partners,
employees, consultants, outside scientific collaborators, sponsored researchers and other advisors. These agreements generally
require that the other party keep confidential and not disclose to third parties all confidential information developed by the
party or made known to the party by us during the course of the party’s relationship with us. These agreements also generally
provide that inventions conceived by the party in the course of rendering services to us will be our exclusive property. However,
these agreements may not be honored and may not effectively assign intellectual property rights to us. Enforcing a claim that a
party illegally obtained and is using our trade secrets is difficult, expensive and time consuming and the outcome is unpredictable.
In addition, courts outside the United States may be less willing to protect trade secrets. The failure to obtain or maintain trade
secret protection could adversely affect our competitive position.
Risks Related to Our Stock
WHEN BILL SIGLER, CEO OF THE COMPANY, BECAME THE LARGEST SHAREHOLDR
OF THE COMPANY, IT GAVE THEM THE ABILITY TO CONTROL THE COMPANY WITHOUT THE OTHER SHAREHOLDER’S APPROVAL.
Mr. Bill Sigler is the largest stockholder and has the right to
vote approximately 60.7%% of Smack Sportwear's outstanding common stock. As a result, he has the ability to control substantially
all matters submitted to the Company’s stockholders for approval including:
election of a board of directors;
removal of any director;
amendment of Articles of Incorporation or bylaws; and
adoption of measures that could delay or prevent a change in control or impede a merger, takeover
or other business combination involving the company.
As a result of this ownership, it has the ability to influence all
matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions.
In addition, the future prospect of sales of significant amounts of shares held by Bill Sigler could affect the market price of
its common stock if the marketplace does not orderly adjust to the increase in shares in the market and the value of shareholder
investment in the company may decrease. Management's stock ownership may discourage a potential acquirer from making a tender offer
or otherwise attempting to obtain control of the Company, which in turn could reduce the stock price or prevent the stockholders
from realizing a premium over the stock price.
may, in the future, issue additional common shares, which would reduce investors' percent of ownership and may dilute our share
The future issuance of common stock may result
in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock
issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate
actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any
trading market for our common stock.
common shares are subject to the "Penny Stock" Rules of the SEC, which makes transactions in our stock cumbersome and
may reduce the value of an investment in our stock.
The Securities and Exchange Commission has
adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer
approve a person's account for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement
to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
In order to approve a person's account for
transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience objectives
of the person; and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the
person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny
The broker or dealer must also deliver, prior
to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which,
in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) that the
broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less
willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for
investors to dispose of our Common shares and cause a decline in the market value of our stock.
Disclosure also has to be made about the risks
of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and the rights and remedies available to an investor in
cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for
the penny stock held in the account and information on the limited market in penny stocks.
we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to recIEve a return on their
shares unless they sell them.
We intend to retain any future earnings to
finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the
foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they
sell them. There is no assurance that stockholders will be able to sell shares when desired.
IN THE FUTURE, TEAM SPORTS WILL INCUR INCREMENTAL COSTS AS A
RESULT OF OPERATING AS A PUBLIC COMPANY, AND MANAGEMENT WILL BE REQUIRED TO DEVOTE SUBSTANTIAL TIME TO COMPLIANCE INITIATIVES.
Now that Team Sports is a fully reporting company with the SEC,
it will incur additional legal, accounting and other expenses. Moreover, the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley
Act"), as well as new rules subsequently implemented by the SEC, have imposed various new requirements on public companies,
including requiring changes in corporate governance practices. Our management will need to devote a substantial amount of time
to these new compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs
and will make some activities more time-consuming and costly. Management expects to incur approximately $40,000 of incremental
operating expenses in 2013.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K contains forward-looking statements
within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies
for the future, which Team Sports indicates by words or phrases such as "anticipate," "expect," "intend,"
"plan," "will," "management believes" and similar language. Except for the historical information
contained herein, the matters discussed in this "Management's Discussion and Analysis of Financial Condition and Results of
Operations," and elsewhere in this report are forward-looking statements that involve risks and uncertainties. The factors
listed in the section captioned "Risk Factors," as well as any cautionary language in this report, provide examples of
risks, uncertainties and events that may cause our actual results to differ materially from those projected. Except as may be required
by law, management undertakes no obligation to update any forward-looking statement to reflect events after the date of this Form
TEAM SPORTS OVERVIEW
Team Sports Superstore, Inc. markets and sells custom volleyball
apparel and equipment products through the Internet, retail, wholesale, club teams and schools.
RESULTS OF OPERATIONS
For the fiscal year ended June 30, 2012 (audited)
Team Sports Super Store was organized on February 16, 2010 and incorporated
under the laws of the State of California, as Team Sports Superstore, Inc. During the fiscal year ending June 30, 2012, Team Sports
recognized total revenues of $1,284,911 and compared to $1,209,947 for the same period last year. Total cost of goods were $816,145
(63.5%) and $641,209 (52.9%) respectfully. The cost of goods increased due to increased wholesaler activity. Gross profits for
the year ending June 30, 2012 were $468,765, as compared to $568,738 for the same period last year.
Team Sports incurred total operating expenses for the period for
the fiscal year ending June 30, 2012 was $793,711 as compared to $566,946 for the same period last year. This resulted in a net
operating loss of $(227,401) or $(0.01) per share after taxes for the year ending June 30, 2012 as compared to a net income after
taxes of $1,365 or $0.00 for the same period last year.
Expenses for the year ended June 30, 2011 were general and administrative
expenses of $486,465; professional fees of $16,165; e-commerce development fees of $64,317 and income tax expense of $427.
The big difference between the two calendar years with an increase
of professional fees expenses which increased from $16,165 (last year) to $178,012 (this year). The increase in professional expenses
was primarily due to increase in professional outside consultants in operations, accounting, sales, marketing and legal counsel
During the fiscal year ending June 30, 2012, Team Sports used net
cash of $(201,649) in operations, had no investing activities and
generated cash of $209,000 from financing activities.
For the three month period ended September 30, 2012 (unaudited)
During the three month period ending September 30, 2012, Team Sports
recognized total revenues of $130,990 and compared to $196,708 for the same period last year. Total cost of goods were $63,346
(48.3%) and $83,021 (42.2%) respectfully. The cost of goods increased due to increased wholesaler activity and increased conversion
costs. Gross profits for the three month period ending September 30, 2012 were $67,644, as compared to $113,687 for the same period
Team Sports incurred total operating expenses for the period for
the three month period ending September 30, 2012 was $139,050 as compared to $118,827 for the same period last year. This resulted
in a net operating loss of $(71,406) or $(0.00) per share after taxes for the quarter ending September 30, 2012 as compared to
a net loss after taxes of $(5,140) or $(0.00) for the same period last year.
Expenses for the three month period ending September 30, 2012 were
general and administrative expenses of $96,032 and compared to $77,371; and professional fees of $43,018 and compared to $19,113
for the same period last year.
During the three month period ending September 30, 2012, Team Sports
used net cash of $(8,431) in operations as compared to $(29,893) for the same last year, had
no investing activities nor financing activities.
LIQUIDITY AND CAPITAL RESOURCES
As at June 30, 2012, Team Sports had $11,333
in cash and cash equivalents, accounts receivable net of $36,172, employee advances of $300, inventory of $468,627 and due
related entity of $19,235 for total current assets of $535,668. At the same date, Team Sports
had total current liabilities of $457,924. Team Sports total assets as at June 30, 2012 were $545,668
with total liabilities of $466,924. For the unaudited period, as at September 30, 2012, Team Sports had $2,902
in cash and cash equivalents, accounts receivable net of $58,637, employee advances of $300, inventory of $480,654 and due
related entity of $(6,790) for total current assets of $549,283. At the same date, Team Sports
had total current liabilities of $542,946. Team Sports total unaudited assets as at September 30, 2012
were $559,283 with total liabilities of $551,946.
As of September 30, 2012, the company did not
enter or execute any major contracts or commitments with suppliers/vendors or customers or with any business partners for the delivery
of materials and sales of products. The company also has no contingency plan on the lease of the building but intends to renew
the contract of lease when it expires.
Team Sports has limited financial
resources available, which has had an adverse impact on the Team Sports' liquidity, activities
and operations. In order for Team Sports to remain a Going Concern it will need to find additional
capital or generate revenues. Additional working capital may be sought through additional debt or equity private placements, additional
notes payable to banks or related parties (officers, directors or stockholders), or from other available funding sources at market
rates of interest, or a combination of these. The ability to raise necessary financing will depend on many factors, including the
nature and prospects of any business to be acquired and the economic and market conditions prevailing at the time financing is
sought. No assurances can be given that any necessary financing can be obtained on terms favorable to Team
Sports, or at all.
Research and Development
Off-Balance Sheet Arrangements
The following table sets forth the names, ages, and positions of
our new executive officers and directors as of the Closing. Executive officers are elected annually by our Board of Directors.
Each executive officer holds his office until he resigns, is removed by the Board, or his successor is elected and qualified. Directors
are elected annually by our stockholders at the annual meeting. Each director holds his office until his successor is elected and
qualified or his earlier resignation or removal.
CURRENT DIRECTORS AND OFFICERS
The names, ages and positions of the Company's director and executive
officer are as follows:
||Position & Offices Held|
||Chief Financial Officer/Chief Information Officer|
Biography of Bill Sigler, CEO/President/Director
Mr. Sigler’s management of the business (since 1994), coupled
with his entrepreneurial experience and passion for the sport, makes him the ideal leader to drive this endeavor. His relationships
in the sport will be key to aligning strategic partners. He coached club volleyball from 2002-2009, coached some of the top players
on the beach, and has been running amateur volleyball classes and leagues since 1996. He is a member of Vistage, the Los Angeles
Venture Association, and has been on the board of 6 other companies. Mr. Sigler also established a non-profit called Southern California
Foundation for Children in 2001, which has raised over $300,000 for underprivileged kids. He has also been an appointed member
of the Hermosa Beach Parks and Rec Commission since 2002.
Mr. Sigler was hired by Stuart Pharmaceuticals (know Astra Zeneca).
At that time is was a division of ICI Americas (based in Delaware). One of the largest companies in the world, Mr. Sigler was recruited
in his senior year of college to participate in ICI’s Corporate Program, which included 25 of their top college hires across
all divisions. The program was designed to train future management. Mr. Sigler first worked in the MIS department supporting sales
and marketing senior management with PC Support, and systems development. He then was moved to marketing, where Mr. Sigler was
the company’s youngest Assistant Product Manager, where he helped launch an innovative new anesthetic called Propofol, as
well as prenatal vitamins. He was then transferred into sales in Raleigh, NC.
He then moved to California in 1992, where he became a Neonatal
specialist for a regional medical equipment company. From there Mr. Sigler followed his entrepreneurial instincts and partnered
with a Taiwanese durable medical equipment manufacturer to open a North American distribution center, where he established all
aspects of Nova Ortho Med. Within 2 years, the company had 16 independent reps nationwide, distribution to hundreds of dealers,
and sales of over $5 million. The company is now doing over $50 million in sales per year. Mr. Sigler sold his 30% equity in 1996
to focus entirely on Smack Sportswear.
Mr. Sigler taught himself to play volleyball at age 23, and rose
to the highest amateur rank (AAA) by age 32 (and was ranked in the top 100 players in California). Mr. Sigler’s passion for
the sport led him to starting Smack Sportswear, an apparel company devoted to So Cal inspired volleyball apparel. The company was
established in Manhattan Beach, CA in 1994. During the 90’s Mr. Sigler was able to build a brand that was sold in Sports
Chalet, as well as specialty stores nationwide. In 2001, Mr. Sigler focused attention on the indoor volleyball apparel market,
which allowed for higher profits thru a B2C model, as well as the ease at which one could gain volume orders.
Mr. Sigler graduated with a BS degree from University of Delaware
with honors in both Economics and Management Information Systems in 1988, with a 3.4 GPA.
Ramon Valdez – CFO and CIO
Mr. Ray Valdez has 14 years of experience and a strong financial
and technological background. He started his first online business while at California State University, where he received a Bachelor’s
of Science in Business Administration and Finance. He has built and owned various successful retail and e-commerce companies and
has received many awards including fastest growing companies by Inc. Magazine. Most recent company, which he was Co-Founder and
CEO, was www.bambooki.com which has over 200+ suppliers worldwide and is now the largest online retailer of Bamboo products.
In his financial experience he has held positions such as Controller
and CFO. He has developed various profitable drop ship, distribution center, big box and retail programs with major retailers including
Sears, K-Mart, Home Depot, Wal-Mart, etc. He has conducted business all over the world and also has extensive knowledge in international
trade, logistics and operations management.
Summary Compensation Table
The following summary compensation table sets forth all compensation
awarded to, earned by, or paid to the named executive officer paid by Team Sports for the last completed fiscal year in all capacities
for the accounts of our executives, including the Chief Executive Officer (CEO).
Team Sports Summary Compensation Table
We have no employment agreements in place with our officer/director.
We do not maintain key man insurance on any of management, but plan to in the near future.
Outstanding Equity Awards at Fiscal Year End
There are no outstanding equity awards at June 30, 2012.
SECURITY OWNERSHIP OF BENEFICIAL OWNERSHIP AND MANAGEMENT
The following table presents information, to the best of our knowledge,
about the ownership of our common stock on December 6, 2012relating to those persons known to beneficially own more than 5% of
our capital stock and by our named executive officer and sole director. Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission and does not necessarily indicate beneficial ownership for any other purpose. Under
these rules, beneficial ownership includes those shares of common stock over which the stockholder has sole or shared voting or
investment power. It also includes shares of common stock that the stockholder has a right to acquire within 60-days after December
6, 2012pursuant to options, warrants, conversion privileges or other right. The percentage ownership of the outstanding common
stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only
the person or entity whose ownership is being reported has converted options or warrants into shares of Smack Sportwear’s
We do not have any outstanding options, warrants or other securities
exercisable for or convertible into shares of our common stock.
|Title of Class
||Name of Beneficial Owner and Position
||Nature of Beneficial Ownership
||Percent of Class (1)
||Bill Sigler (2)
Directors and Officers as a Group
beneficially control (2 persons) 24,300,000
Percent of Class is based on 40,000,000 shares issued and outstanding.
Bill Sigler, 1765 Oak Street, Torrance, CA 90501. Bill Sigler also owns 1,000,000 Series A Voting Preferred
Shares that allows him to vote an additional 20,000,000 shares. If included with his current common share ownership, and taking
into effect the total shares that can be voted, i.e., (40,000,000 plus 20,000,000 = 60,000,000 shares), Mr. Sigler has voting control
of 73.8% of the Company’s shares.
3) Ramon Valdez, 1765 Oak Street,
Torrance, CA 90501
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Chief Executive Officer of Smack Sportswear is Bill Sigler.
At the same time, he was managing Team Sports Superstore, Inc., on a full time basis. As the major shareholder Team Sports Superstore,
Inc., on or about September 27, 2011, Mr. Sigler entered into a Stock Value Agreement whereby he obtained control ownership of
Smack Sportswear in exchange for his commitment to sell Team Sports Superstore, Inc. to Smack Sportswear upon completion of audited
financials, as required by the U. S. Securities & Exchange Commission. Simultaneously, Mr. Bill Sigler on behalf of Smack Sportswear
entered into an Irrevocable Business Sales Agreement whereby he agreed to transfer 100% equity ownership of Team Sports Superstore
to Smack Sportswear in the form of a tax free exchange of stock, upon completion of the audit. This sale includes all the assets,
liabilities, trade names, and business operations of Team Sports Superstore, Inc. Following the acquisition of Team Sports, Mr.
Sigler will serve as a director, Chairman, Chief Executive Officer of the Registrant and will remain the largest shareholder of
As of year end June 30, 2012 officer and director
Bill Sigler owes the Company $19,235. This unsecured obligation is due on demand and is non-interest bearing. The obligation is
included in the accompanying financial statements as Due from Related Entity. This receivable has been evaluated for impairment
and the Company has no doubt of being fully collected.
Item 3.02. Unregistered
Sales of Equity Securities
On December 4, 2012, Smack Sportswear agreed
to issue 1,000,000 shares of its unregistered Series A Preferred Voting Stock to sole officer of the Company in exchange the transference
of 2,500,000 restricted common shares from his personal holdings, to the Company’s Employee Stock Option Plan (“ESOP”).
These Series A voting shares carry the weight of twenty (20) votes for each share of common stock. The restricted preferred shares
will be issued pursuant to the exemption from registration provided by Section 4(2) of the Securities Act. We believed that Section
4(2) was available because the offer and sale did not involve a public offering, and there was not general solicitation or general
advertising involved in the offer or sale.
Item 5.03 Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year
On December 4, 2012, the Board of Directors of Smack Sportswear,
approved by unanimous written consent the designation of Series A Preferred Voting Shares. The voting shares have no liquidation
rights, pay no dividends, can be transferred, and carry the weight of twenty (20) votes for each share of common stock. (See attached
Certificate of Designation, Exhibit 3.4.)
Item 9.01 Financial Statements
(a): Financial Statements of Businesses Acquired. The required financial
statements of Team Sports for the periods specified in Rule 3-05(b) of Regulation S-X are included herein. This Current Report
includes the audited Team Sports financials for the years ended June 30, 2012 and 2001, and an unaudited review of the three months
ended September 30, 2012.
(b): Pro Forma Financial Information. The required Pro Forma financial
statements of Team Sports, for are included herein. This Current Report on Form 8-K includes the unaudited pro forma consolidated
financial information of Smack Sportswear and Team Sports.
||Certificate of Designation, Series A Preferred Voting Shares
||Business Purchase and Sale Agreement between Team Sports Super Store, Inc. and Smack Sportswear dated December 4, 2012.
||2012 Stock Incentive Plan
||Audited Financials for Team Sports for the years ended June 30, 2012 and June 30, 2011.
||Reviewed Financials for Team Sports for the nine months ended September 30, 2012.
||Pro forma Financials Smack Sportswear and Team Sports
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|Date: December 4, 2012
|| /s/ Bill Sigler|
||Name: Bill Sigler|
Title: Chief Executive Officer