SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) November 5, 1997
SIGNAL APPAREL COMPANY, INC.
(Exact Name of Registrant as specified in its Charter)
Indiana 1-2782 62-0641635
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) No.)
200-A MANUFACTURERS ROAD, CHATTANOOGA, TN 37405
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code (423) 756-8146
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Pursuant to two Stock Purchase Agreements dated October 31, 1997
with three individuals (collectively, the "Purchase Agreements"),
Signal Apparel Company, Inc. (herein the "Company" or "Signal")
acquired, as of November 5, 1997, all of the outstanding capital
stock of Big Ball Sports, Inc., a Texas corporation ("Big Ball
Sports") and Print the Planet, Inc., a Texas corporation ("Print
the Planet") (Big Ball Sports and Print the Planet are
collectively referred to herein as the "Acquired Companies").
Under the first Purchase Agreement, between Signal, Mr. Lee Ellis
and Mr. Jimmy Metyko, Signal acquired (i) 666 2/3 shares (or
66-2/3%) of the issued and outstanding capital stock of Big Ball
Sports from Messrs. Ellis and Metyko and (ii) 1,000 shares (or
100%) of the issued and outstanding capital stock of Print the
Planet from Mr. Ellis. Under the second Purchase Agreement,
between Signal and Ms. Elizabeth Miller, Signal acquired 333 1/3
shares (or 33-1/3%) of the issued and outstanding capital stock of
Big Ball Sports from Ms. Miller.
Pursuant to the terms of the Purchase Agreements, Signal (i) paid
$10.00 in cash to each of Messrs. Ellis and Metyko; (ii) entered
into employment agreements with each of Messrs. Ellis and Metyko;
(iii) paid $250,000 in cash and issued a promissory note in the
amount of $250,000 (payable in 12 monthly installments of interest
only, followed by 36 monthly installments of principal and
interest beginning November 5, 1998 (in each case with interest on
the unpaid balance at prime) to Ms. Miller; and (iv) issued at
total of 855,194 shares of Signal's Common Stock (including
200,000 shares issued to a law firm retained by Ms. Miller) in
settlement of various outstanding claims of creditors pertaining
to the Acquired Companies.
All of the shares of Signal's Common Stock which were issued
pursuant to the Purchase Agreements were issued as unregistered,
restricted shares of Common Stock pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC").
Based upon the representations made to Signal by all of the
creditors who received such shares pursuant to the Purchase
Agreements, each such individual or entity meets the definition of
an "accredited investor" contained in Rule 501 of SEC Regulation D
under the Securities Act of 1933 (the "Securities Act"). As an
inducement to such creditors to accept the shares of Signal Common
Stock issued in satisfaction of the amounts owed to them by the
Acquired Companies, Signal entered into Registration Rights
Agreements with each such creditor. These Registration Rights
Agreements give each of the creditors certain "piggy back"
registration rights (subject to certain customary limitations)
with respect to registrations of shares under the Act by Signal
for a period of two (2) years following the closing of the
transactions under the Purchase Agreements.
Their were no prior material relationships between Signal and any
of the shareholders or creditors of the Acquired Companies. The
amount of consideration given by Signal in exchange for all of the
outstanding capital stock of the Acquired Companies was determined
as a result of arms-length negotiations between the parties, based
upon estimates of fair market values of the Acquired Companies'
assets and of the Acquired Companies' projected future sales and
earnings.
Big Ball Sports is a branded activewear company that sells to
Dillard's, J.C. Penney, Mercantile Stores, Kohl's, The Sports
Authority, and other upstairs market retailers. Its products are
sold under the Big Ball brand and feature various creative sports
related graphics. Print the Planet is the primary screen printer
for products of Big Ball Sports. The Acquired Companies have
combined total assets of approximately $4.5 million and estimated
1997 annual net sales of approximately $15 million.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
The financial statements of the Acquired Companies that are
required pursuant to Article 3 of Regulation S-X are not currently
available, but will be filed as an amendment to this Report
(together with any additional required exhibits) as soon as
practicable, but in no event later than sixty (60) days after the
latest date on which this Report is required to be filed.
(b) Pro Forma Financial Information.
The pro forma financial information required pursuant to Article
11 of Regulation S-X is not currently available, but will be filed
as an amendment to this Report (together with any additional
required exhibits) as soon as practicable, but in no event later
than sixty (60) days after the latest date on which this Report is
required to be filed.
(c) Exhibits.
(1) Listing of Exhibits Incorporated by Reference:
None.
(2) Listing of Exhibits Filed with this Report:
(2-1)Stock Purchase Agreement, dated October 31,
1997, by and among Signal Apparel Company, Inc.,
Lee Ellis and Jimmy Metyko.
(2-2)Stock Purchase Agreement, dated October 31,
1997, by and among Signal Apparel Company, Inc.
and Elizabeth Miller.
SIGNATURES
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 thereunto duly authorized.
SIGNAL APPAREL COMPANY, INC.
(Registrant)
Date: November 20, 1997 By: /s/ Robert J. Powell
_________________________
Robert J. Powell
General Counsel and Secretary