U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB
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[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended December 31, 2001
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[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
Commission File Number 1-8912
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STAR STRUCK, LTD.
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(Name of Small Business Issuer in its Charter)
Delaware 36-1805030
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1865 Palmer Avenue
Larchmont, New York 10538
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(Address of principal executive offices) (Zip Code)
(914) 833-0649
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(Issuer's telephone number)
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange
Title of each class on which registered
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Common Stock, $1.00 par value American Stock Exchange
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Securities registered under Section 12(g) of the Exchange Act: None
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 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
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Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B not contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]
Issuer's revenues for its most recent fiscal year were
approximately $10,126,000.
Based on the closing sales price on March 21, 2002, the
aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $795,057.
The number of shares outstanding of the registrant's common
stock was 2,025,899 at March 14, 2002.
DOCUMENTS INCORPORATED BY REFERENCE: Part III - Definitive
Proxy Statement relating to May 7, 2002 Annual Meeting of Shareholders. Parts I
and II - Annual Report to Shareholders for the year ended December 31, 2001.
PART I
Item I. Description of Business
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General
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Star Struck, Ltd. (the "Company") is a holding company whose
operating subsidiary corporation is primarily engaged in the distribution of
watch batteries and related products, and sports apparel. The Company's
principal executive offices are located in Larchmont, New York.
Star Struck, Inc.
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The Company's operating subsidiary is Star Struck, Inc., a
Connecticut corporation ("SSI"), whose principal offices are in Bethel,
Connecticut. SSI is a distributor throughout the United States of watch
batteries and watch straps. SSI also sells related products, such as alkaline,
photo and hearing aid batteries, jewelry findings, tools and supplies.
SSI also distributes a line of sports apparel. These
products consist principally of caps and shirts bearing logos of various
professional and college sports teams. These products are manufactured for SSI
by various apparel manufacturers under license from the respective teams whose
logos are being used. In 2001, sales of sports apparel products were
approximately $2.4 million.
SSI sells its watch batteries and related products through
direct mail and telemarketing to jewelry stores, discount store chains and other
retail vendors. SSI sells its sports apparel products directly to customers
through direct mail, print media advertising and through its internet site,
www.starstruck.com.
SSI competes in competitive, but highly fragmented,
industries.
SSI's business does not depend on the availability of raw
materials. SSI distributes watch batteries for Sony, Eveready, Maxell, Renata,
Rayovac and Varta under the manufacturer's and SSI's private label. SSI sells
its watch straps under the Sahara and Town & Country tradenames. SSI sells its
sports apparel under the "Star Struck" trade name.
SSI has approximately 6,000 active customers for its watch
batteries and related products. SSI's two largest customers account for 43% and
3%, respectively, of its sales.
Governmental regulation is not a specific influence on the
business of SSI, and generally compliance with environmental regulations have
not been burdensome to SSI.
SSI has approximately 55 full-time employees.
RC Manufacturing, Inc.
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RC Manufacturing, Inc. ("RC"), which the Company acquired in
1994, ceased doing business in November 1999. Prior to its closing, RC
manufactured and sold leather accessories and watch straps. The Company wrote
off its entire investment in RC in 1999.
Acquisition
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On January 7, 2002, the Company's wholly owned subsidiary,
SSI, transferred its sports apparel business, including its sports apparel
inventory, to a newly formed corporation, Star Struck/Proteam, Inc. ("SSPT"). On
the same date, SSPT acquired from ProTeam.com, Inc. its sports apparel business,
including its sports apparel inventory, and a related mailing list. In
consideration of these transfers, SSI received 80% of the shares of SSPT, and
ProTeam.com, Inc. received 20% of the shares of SSPT, a payment of $300,000 and
a $200,000 promissory note due January 31, 2002. The funds were loaned to SSI by
People's Bank. The amount of consideration paid to ProTeam.com, Inc. was
determined through arm's length negotiations. SSPT intends to continue using the
assets acquired in the sports apparel business.
Investments
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The Company generally holds its liquid assets in government
securities. Government securities include only such securities as defined in the
Investment Company Act of 1940, as amended.
General
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The Company does not hold any patents, trademarks, licenses,
franchises or concessions in connection with its business, except as described
above.
The Company expended no money on research and development in
2001 or 2000.
Item 2. Description of Property.
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The Company leases offices in Larchmont, New York for use as
its executive offices.
SSI owns property located in the Francis J. Clarke Industrial
Park at 8 Francis J. Clarke Circle in Bethel, Connecticut. The property consists
of 2.344 acres of land and a warehouse/office building. The building comprises
approximately 20,500 square feet. Approximately sixty percent of the building is
used as a warehouse and the remaining forty percent is used as offices by SSI.
The warehouse space contains a loading dock. The property is encumbered by two
mortgages. SSI also leases a warehouse facility, comprising approximately 7,000
square feet, in the Francis J. Clarke Industrial Park.
In the opinion of management, the properties are adequately
covered by insurance.
Item 3. Legal Proceedings.
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The Company is not a party to any legal proceeding required to
be described in this Report.
Item 4. Submission of Matters to a Vote of Security Holders.
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None.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
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The principal United States market in which the Company's
common stock is traded is the American Stock Exchange. See page 14 of the
Company's 2001 Annual Report to Shareholders, in the section entitled "Market
and Dividend Information", for information concerning the high and low sales
prices for the Company's common stock for each quarter of 2000 and 2001. That
section is incorporated herein by reference. As of March 14, 2002, the Company
had approximately 550 shareholders of common stock. No dividends were paid by
the Company in 2000 or 2001.
Item 6. Management's Discussion and Analysis or Plan of Operation.
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See pages 12 through 13 of the Company's 2001 Annual Report to
Shareholders. Those pages are incorporated herein by reference.
Item 7. Financial Statements.
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See pages 4 through 11 of the Company's 2001 Annual Report to
Shareholders. Those pages are incorporated herein by reference.
Item 8. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.
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On April 20, 2001, the Company dismissed Arthur Andersen LLP
("Andersen") as its independent accountant. Neither of Andersen's reports on the
financial statements of the Company for the years ended December 31, 2000 and
December 31, 1999 contained any adverse opinion or disclaimer of opinion and
neither was qualified or modified as to uncertainty, audit scope or accounting
principles. The decision to change accountants was approved by the Audit
Committee of the Board of Directors.
Since December 31, 1998, the Company has had no disagreements
with Andersen on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement(s), if
not resolved to the satisfaction of Andersen, would have caused it to make a
reference to the subject mater of the disagreement(s) in connection with its
report. Since December 31, 1998, no event occurred that is required to be
disclosed pursuant to paragraph (a)(1)(iv) of Item 304 of Regulation S-K.
On April 20, 2001, the Company retained DiSanto Bertoline &
Company, P.C. ("DiSanto Bertoline") as the Company's new independent accountant
to audit the Company's financial statements. Since December 31, 1998, the
Company did not consult DiSanto Bertoline regarding any matter required to be
disclosed pursuant to paragraph (a)(2) of Item 304 of Regulation S-K.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
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See the sections entitled "Nominees for Election as Directors"
and "Executive Officers and Executive Compensation" and "Compliance with Section
16(a) of the Exchange Act" in the Company's Proxy Statement for the Annual
Meeting of Shareholders to be held on May 7, 2002 for information concerning
directors, executive officers, promoters and control persons of the Company.
Those sections are incorporated herein by reference.
Item 10. Executive Compensation.
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See the section entitled "Executive Officers and Executive
Compensation" in the Company's Proxy Statement for the Annual Meeting of
Shareholders to be held on May 7, 2002 for information concerning executive
compensation. That section is incorporated herein by reference.
Item 11. Security Ownership of Certain Beneficial Owners
and Management.
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See the sections entitled "Executive Officers and Executive
Compensation -- Stock Options," "Security Ownership of Management" and "Other
Principal Holders of Voting Securities" in the Company's Proxy Statement for the
Annual Meeting of Shareholders to be held on May 7, 2002. Those sections are
incorporated herein by reference.
Item 12. Certain Relationships and Related Transactions.
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See the section entitled "Nominees for Election as Directors
-- Additional Information" in the Company's Proxy Statement for the Annual
Meeting of Shareholders to be held on May 7, 2002. That section is incorporated
herein by reference.
Item 13. Exhibits and Reports on Form 8-K.
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(a) Financial Statements.
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(1) A copy of the Company's Annual Report to Shareholders for
the year ended December 31, 2001 has been furnished as an exhibit to this Annual
Report on Form 10-KSB. Pages 3 through 11 of such Annual Report to Shareholders
contain the Consolidated Balance Sheet as of December 31, 2001, and the
Consolidated Statements of Operations, Shareholders' Equity and Cash Flows and
Notes to Consolidated Financial Statements for each of the two years ended
December 31, 2001 and 2000, and the Auditors' Reports covering the
aforementioned financial statements. These Financial Statements and the
Auditors' Reports thereon are incorporated herein by reference.
Exhibits
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*(3) (a) The Articles of Incorporation and Bylaws of
the Company as amended, filed as Exhibit to a report on Form 8,
Amendment No. 1 to the Company's Form 10-K for the fiscal year ended
December 31, 1988 and filed May 26, 1989, are incorporated herein by
reference, and Amendment to the Articles of Incorporation of the
Company, changing the name of the Company to SBM Industries, Inc.,
filed as an exhibit to the Company's report on 8-K dated September 15,
1992 and filed September 29, 1992, is incorporated herein by reference.
*(3) (b) Amendment to the Articles of Incorporation of
the Company, changing the name of the Company to Star Struck, Ltd.
(10) Material Contracts.
*(a) Mortgage, Assignment of Lease and
Security Agreement, dated July 6,
1995, between Star Struck, Inc., as
mortgagor, and First Union National
Bank (formerly First Fidelity Bank),
as mortgagee, in the original amount
of $800,000, secured by property
known as 8 Francis J. Clarke Circle,
Bethel, Connecticut, filed as
Exhibit 10(e) to the Company's
report on Form 10-KSB for the fiscal
year ended December 31, 1995, filed
with Amendment No. 1 thereto on
April 3, 1996, is incorporated
herein by reference.
*(b) Loan Agreement, dated as of October
29, 1998, between Star Struck, Inc.
and People's Bank, filed as Exhibit
10(d)to the Company's Report on Form
10-KSB for the year ended December
31, 1998, filed March 31, 1999, is
incorporated herein by reference.
*(c) Open-End Mortgage Deed, Assignment
of Rents and Financing Statement,
dated as of October 29, 1998 from
Star Struck, Inc., as mortgagor, to
People's Bank, as mortgagee, filed
as Exhibit 10(e) to the Company's
Report on Form 10-KSB for the year
ended December 31, 1998, filed March
31, 1999, is incorporated herein by
reference.
*(d) Security Agreement, dated as of
October 29, 1998 between Star
Struck, Inc. and People's Bank,
filed as Exhibit 10(f) to the
Company's Report on Form 10-KSB for
the year ended December 31, 1998,
filed March 31, 1999, is
incorporated herein by reference.
*(e) Guaranty Agreement, dated as of
October 29, 1998 from the Company to
People's Bank, filed as Exhibit
10(g) to the Company's Report on
Form 10-KSB for the year ended
December 31, 1998, filed March 31,
1999, is incorporated herein by
reference.
*(11) Statement re: Computation of Per Share Earnings.
See page 8 of the Company's 2001 Annual Report to
Shareholders for a description of the computation of
the Company's per share earnings, which description is
incorporated herein by reference.
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*Incorporated by reference.
*(13) The Company's 2001 Annual Report to Shareholders
(which, except for those portions thereof incorporated
by reference in this Form 10-KSB Annual Report, is
furnished for the information of the Commission, but
is not deemed to be "filed" as part of this report).
(21) The Company owns 100% of the outstanding shares
of Star Struck, Inc., a Connecticut corporation.
*(99) Letter to Commission pursuant to Temporary Note
3T
*Incorporated by reference.
(b) Reports on Form 8-K
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No reports on Form 8-K were filed during the last quarter of
the period covered by this report.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
STAR STRUCK, LTD.
By:
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Kenneth Karlan, President
And Chief Executive Officer
March 29, 2002
By:
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Lawrence J. Goldstein,
Vice President and Treasurer
March 29, 2002
Dated: March 29, 2002
In accordance with the Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
/s/ Lawrence J. Goldstein
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Lawrence J. Goldstein, March 29, 2002
(Director)
/s/ Kenneth Karlan
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Kenneth Karlan, March 29, 2002
(Director)
/s/ Robert Morris
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Robert Morris, March 29, 2002
(Director)
/s/ Peter Nisselson
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Peter Nisselson, March 29, 2002
(Director)
/s/ Arthur Salzfass
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Arthur Salzfass, March 29, 2002
(Director)
/s/ Keith Sessler
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Keith Sessler, March 29, 2002
(Director)
/s/ Michael Sweedler
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Michael Sweedler, March 29, 2002
(Director)