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, 2000
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[_] TRANSITION REPORT PURSUANT TO 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 it 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 pursuant to Section 12(b) of the 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 pursuant to Section 12(g) of the Act: None
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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 disclosure of no delinquent filers pursuant to Item 405 of
Regulation S-B is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-KSB or any amendment to
this Form 10-KSB. [ ]
Issuer's revenues for its most recent fiscal year were approximately
$10,536,000.
Based on the closing sales price on March 13, 2001, the aggregate
market value of the voting stock held by non-affiliates of the registrant was
approximately $539,000.
The number of shares outstanding of the registrant's common stock was
2,025,899 at March 13, 2001.
DOCUMENTS INCORPORATED BY REFERENCE: Part III - Definitive Proxy
Statement relating to April 30, 2001 Annual Meeting of Shareholders. Parts I and
II - Annual Report to Shareholders for the year ended December 31, 2000.
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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. Prior to May 4, 1999, the
Company's name was SBM Industries, Inc. The Company's principal executive
offices have been located in Larchmont, New York since 1992.
Star Struck, Inc.
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The Company's operating subsidiary is Star Struck, Inc. ("SSI"), a
Connecticut corporation, 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 has 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 2000, sales of sports apparel products were approximately $2.8 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 and print media advertising, and, since early 1999, 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 35% and 5%,
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.
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SSI has approximately 60 full-time employees.
RC Manufacturing, Inc.
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RC Manufacturing, Inc. ("RCM"), which the Company acquired in 1994,
ceased doing business in November 1999. Prior to its closing, RCM manufactured
and sold leather accessories and watch straps. The Company wrote off its entire
investment in RCM in 1999.
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 1999 or
2000.
Item 2. Properties.
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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 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.
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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 2000
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 1999 and 2000. That section is
incorporated herein by reference. As of March 13, 2001, the Company had
approximately 550 shareholders of common stock. No dividends were paid by the
Company in 1999 or 2000.
Item 6. Management's Discussion and Analysis or Plan of Operation.
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See pages 12 and 13 of the Company's 2000 Annual Report to
Shareholders. Those pages are incorporated herein by reference.
Item 7. Financial Statements and Supplementary Data.
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See pages 2 through 10 of the Company's 2000 Annual Report to
Shareholders. Those pages are incorporated herein by reference.
Item 8. Changes in and Disagreements on Accounting and Financial Disclosure.
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None.
PART III
Item 9. Directors and Executive Officers, Promoters and Control Persons;
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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 April 30, 2001 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 April 30, 2001 for information concerning executive
compensation. That section is incorporated herein by reference.
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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 April 30, 2001. 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 April 30, 2001. That section is incorporated
herein by reference.
Item 13. Exhibits, Lists 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, 2000 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, 2000, and the
Consolidated Statements of Income, Shareholders' Investment and Cash Flows and
Notes to Consolidated Financial Statements for each of the two years ended
December 31, 2000 and 1999, and the Auditors' Report covering the aforementioned
financial statements. These Financial Statements and the Auditors' Report
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
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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.
*(f) Form of 10% Promissory Note due August 31, 2003,
filed as Exhibit 10.1 to the Company's Report on
Form 8-K filed September 8, 2000, is incorporated
herein by reference.
*(g) Form of Common Stock Purchase Warrant, filed as
Exhibit 10.2 to the Company's Report on Form 8-K
filed September 8, 2000, is incorporated herein by
reference.
*(h) Registration Rights Agreement, dated August 7, 2000,
among Star Struck, Ltd., Kenneth Karlan, Marilyn
Karlan and Peter Nisselson, filed as Exhibit 10.3 to
the Company's Report on
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Form 8-K filed September 8, 2000, is incorporated
herein by reference.
*(I) Fifth Amendment Agreement, dated August 7, 2000,
among Kenneth Karlan, Keith Sessler, Star Struck,
Ltd. and People's Bank, filed as Exhibit 10.4 to the
Company's Report on Form 8-K filed September 8,
2000, is incorporated herein by reference.
*(j) Mortgage Modification Agreement, dated August 7,
2000, between Star Struck, Inc. and People's Bank
filed as Exhibit 10.5 to the Company's Report on
Form 8-K filed September 8, 2000, is incorporated
herein by reference.
*(k) Subordination Agreement, dated August 7, 2000, among
People's Bank, Kenneth Karlan, Marilyn Karlan, Peter
Nisselson and Star Struck, Inc. filed as Exhibit
10.6 to the Company's Report on Form 8-K filed
September 8, 2000, is incorporated herein by
reference.
*(11) Statement re: Computation of Per Share Earnings. See page 7
of the Company's 1999 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 2000 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.
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(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: /s/ Kenneth Karlan
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Kenneth Karlan, President
And Chief Executive Officer
March 30, 2001
By: /s/ Lawrence J. Goldstein
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Lawrence J. Goldstein,
Vice President and Treasurer
March 30, 2000
Dated: March 30, 2001
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 30, 2001
(Director)
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/s/ Kenneth Karlan
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Kenneth Karlan, March 30, 2001
(Director)
/s/ Robert Morris
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Robert Morris, March 30, 2001
(Director)
/s/ Peter Nisselson
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Peter Nisselson, March 30, 2001
(Director)
/s/ Arthur Salzfass
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Arthur Salzfass, March 30, 2001
(Director)
/s/ Keith Sessler
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Keith Sessler, March 30, 2001
(Director)
/s/ Michael Sweedler
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Michael Sweedler, March 30, 2001
(Director)
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