UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 9, 2005
SYNERTECK INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 000-50754 20-0929024
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification Number)
28-32 Wellington Road, London, United Kingdom NW8 9SP
(Address of principal executive offices) (zip code)
44 20 7060 4372
(Registrant's telephone number, including area code)
Copies to:
Gregory Sichenzia, Esq.
Yoel Goldfeder, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
11585 South State, Suite 102, Draper, Utah 84020
(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 (see General Instruction A.2. below):
|_| 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 1.01 Entry into a Material Definitive Agreement.
On December 9, 2005, Synerteck Incorporated (the "Company") executed and
closed a Share Exchange Agreement (the "Agreement") with IFSA Strongman Ltd., a
United Kingdom corporation (IFSA") and the shareholders of IFSA (the "IFSA
Shareholders"). Pursuant to the Agreement, the Company acquired all of the
outstanding equity of IFSA from the IFSA Shareholders. As consideration for the
acquisition of IFSA, the Company issued 20,000,000 shares of the Company's
common stock to the IFSA Shareholders. This issuance is exempt from registration
requirements under Regulation D under the Securities Act of 1933, as amended.
BUSINESS OF IFSA
Organizational History
IFSA was incorporated in the United Kingdom on June 10, 2004 for the
purpose of acquiring and managing the material rights and other assets that
collectively form the strongman sport. Through these acquisitions and organic
growth, IFSA has become the exclusive manager of most of the top strongman
talent worldwide, is generally accepted as the world governing body of strongman
competitions and is involved in the televising of strongman events,
merchandising and other commercial activities.
Overview of Business
IFSA is an integrated media, entertainment and athlete representation
company, principally engaged in the development, production and marketing of
television programs, live events and the licensing and sale of branded consumer
products. The content of IFSA's entertainment and consumer products is centered
on the various strongman competitions and events world-wide.
Operations
The operations of IFSA are segmented into three principal business units:
o The World Governing Body: A body created to govern the strongman sport
worldwide with national member federations in over 30 countries;
o Athlete Management Division: Represents and manages strongman athletes
through exclusive commercial representation contracts; and
o Commercial Division: Organizes international strongman competitions and
handles the television production, sales and marketing operations and the
licensing of the IFSA brand.
IFSA is striving to consolidate the strongman sport and entertainment
globally and elevate it to the next level in terms of professionalism and
production values. IFSA is aiming to do this by creating a season-long narrative
to the sport via establishment of a single worldwide competition pyramid, by
trying to promote a handful of strongman athletes into superstardom, and by
supporting all aspects of the sport with professional, coherent and solid
infrastructure.
The World Governing Body
The International Federation of Strength Athletes was formed in by Dr
Douglas Edmunds and David Webster, OBE, as a governing body for international
strongman events. The International Federation of Strength Athletes became an
accepted and influential governing body by participants in the strongman sport
worldwide. IFSA acquired this governing body from IFSA Projects Ltd on June 10,
2004 and it currently operates as a division of IFSA called World Governing Body
(the "WGB").
IFSA has entered into agreements with different national strongman
federations in over 30 different countries, which mandate the national member
federations will follow the WGB's charter, implement its rules & regulations in
their respective countries and be recognized to act as legitimate governing
bodies in their regions.
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The WGB is governed by a Congress formed by Dr. Douglas Edmunds
(Chairman), Jamie Reeves, Marcel Mostert, Ilkka Kinnunen, Christian Fennell, Dr.
Teery Todd/Dr. Mauro de Pasquale (rotating), one representative elected by the
national member federations and one representative elected by the strongman
athletes.
The WGB has implemented a health policy that includes mandatory medical
examinations for all athletes competing in international level plus drug
testing. The drug policy is available for download at
http://ifsastrongman.com/worldbody/health/.
The WGB maintains a list of qualified strongman referees for various
levels of competition. The WGB also regulates the rules of the strongman sport
and disciplines, including specifications for equipment with which world records
are ratified by the WGB. Finally, the WGB maintains a worldwide strongman
athlete ranking through a points system, and designs each year's competition
calendar and the qualification pyramid for top title events. The WGB charges
sanction fees and referee fees from competition promoters to cover its costs.
Athlete Management Division
The Athlete Management Division ("AMD") has signed contracts with 88
strongman athletes from over 30 countries. These contracts make AMD the
exclusive representative of these athletes for all commercial dealings related
to their sports personalities. AMD controls all image and other rights of these
athletes, and earns a commission from all commercial contracts, appearance fees
and prize monies earned by the contracted athletes. In addition, athletes
contracted by AMD, as well as those contracted by the national member
federations of the WGB, can only compete in events sanctioned by the WGB or one
of the national member federations, unless otherwise agreed with the athlete on
a case-by-case basis.
In its first year of operation in 2005, AMD placed contracted athletes in
two feature-length movies, two television shows and one talk show. AMD intents
to enhance the profile and improve the earnings of the best contracted strongman
athletes and personalities through better media exposure, and to enhance the
profile of the strongman sport by introducing well-known athletes from other
sporting activities, such as professional football and wrestling, into
strongman.
Commercial Division
The Commercial Division is responsible for the following core activities:
o Event Deals: identifying and contracting event promoters for the main
international events organised by IFSA. In a typical contract, the event
promoter organizes the venue, ticket sales and local marketing and public
relations, whereas IFSA would organize the logistics, television
production, floor management and the competition.
o TV Production: IFSA produces a television series called "IFSA Strongman"
for international distribution. The format for the series is currently 13
half hour episodes. In 2005, the series was produced in a strategic
partnership with Octagon CSI, employing up to the minute entertainment
style presentation, enhanced photography and in-vision graphics. The
content for the series is drawn from continental and world championships
produced by IFSA, from national and subcontinental championships produced
by their respective national federations with rights for international
distribution by IFSA and from athlete profiles produced by IFSA. In
addition to the existing series, IFSA is attempting to produce a sports
reality television show format commissioned by a major television network
within the next two years.
o TV Distribution: IFSA has licensed Octagon CSI, in the United Kingdom, to
distribute the "IFSA Strongman" television series worldwide. With offices
in 33 countries, Octagon CSI is in a position to deliver 350,000,000
households in the first year.
o Sponsorship Acquisition: IFSA targets sponsorship revenues in three main
categories: broadcast sponsorship, event sponsorship and athlete
sponsorship. Sponsorship packages in each category are multi-dimensional
in the sense that they each include broadcast, promotional, and live
elements. Given IFSA's control of all key aspects of the strongman
platform it has created (athletes, events, venue, equipment, and formats),
tailored packages can be created for branding partners with particular
needs. The total sponsorship inventory can be valued at several million
dollars, and helping IFSA sell it are Octagon CSI's worldwide sponsorship
sales team with an exclusive retainer-based contract.
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o Gaming: 8-bit Ltd. has created a Java-based strongman game for mobile
phones using the IFSA brand, formats and athlete personalities and has
been granted worldwide distribution rights for it with royalties to be
paid to IFSA. IFSA is also in discussions with developers and distributors
about creating a console-based strongman game. The existing mobile phone
game uses IFSA's sponsors as advertisers and IFSA intends to continue
bringing its key sponsors in as advertisers into the strongman gaming
arena to offer them additional exposure.
o Licensing: InAphone A/S has been granted a license to the IFSA brand, top
IFSA contracted athletes' sports personalities and selected television
footage for mobile content distribution worldwide. IFSA is presented with
additional licensing opportunities from time to time, and intends to enter
into more licensing contracts in the future.
o Merchandising: IFSA has created a collection of approximately 50 Stock
Keeping Units of strongman clothing that has been used by athletes and
officials in major international title events throughout the 2005
strongman season. IFSA owns the designs and manufactures the clothing in
Brazil. IFSA intends to make this line of clothing available for retail.
IFSA also intends to produce a highlights DVD of the 2005 strongman season
for retail distribution. Other merchandising opportunities are being
discussed and IFSA intends to expand its merchandising offering.
Industry Overview
The combined world wide reach of all strongman television programs in the
past has been at an approximate level of half-a-billion viewers a year and
includes channels such as Eurosport, BBC, ESPN and FOX..The strongman sport
existed initially as a loose federation of enthusiasts worldwide, but that
changed in 1995 with the creation of International Federation of Strength
Athletes that quickly became the generally accepted world governing body of
Strongman.
The promoters of strongman events fall in two categories: ex-athletes and
strongman fans who have been promoting smaller events for years and professional
promoters in entertainment and sports in general who are just entering strongman
now. The first category dominated the marketplace prior to IFSA's entry, and
typically organizes events with budgets of less than $10,000. The latter
category, largely introduced by IFSA to the strongman sport and entertainment,
promote events with budgets in the $100,000 to $1,000,000 range.
Television production for strongman events is typically done by small
television production outfits with very limited budgets. The notable historical
exception to that is BBC, who used to produce the Trans-World International's
World's Strongest Man show every year until 2004, when they retired from
strongman events. Historically, IFSA estimates that the most widely distributed
strongman television show has been the World's Strongest Man show. In 2003, the
last year prior to IFSA's entry, the World's Strongest Man show was broadcast in
approximately 40 countries, and had a theoretical reach of 500 million
households. The second largest distribution was either United Strongman Series
or All-Strength, depending on whether number of countries, theoretical reach or
advertising equivalent values are used.
Acquisition Strategy
IFSA believes that there are significant opportunities to both further
consolidate its leadership position within the strongman sports and
entertainment industry and to diversify its revenue base without losing focus by
adding other sports and entertainment properties through selective acquisitions.
IFSA's officers and directors have the requisite skills and experience for
identifying, pursuing, negotiating and closing deals with potential acquisition
candidates, and integrating acquired operations. IFSA believes it can integrate
acquired companies into its management structure and business system
successfully without a significant increase in general and administrative
expenses. In addition, future acquisitions may enable IFSA to lower overhead
costs by centralizing key functions.
3
Seasonality
The strongman sport and entertainment is seasonal in nature due to the
fact that most activities and events take place from May to November.
Accordingly, IFSA hires dozens of contract workers during the main events of the
competition season with short-term contracts. During the off-season, IFSA's core
staff and officers work on sponsorship acquisition, television productions,
merchandising, licensing, television sales and athlete contracting and
development.
Competition
IFSA competes for advertising dollars with other media companies and faces
competition from professional and college sports, as well as from other forms of
live and televised entertainment and other leisure activities in a rapidly
changing and increasingly fragmented marketplace. For the sale of branded
merchandise, IFSA competes with entertainment companies, professional and
college sports leagues and other makers of branded apparel and merchandise.
In addition to general entertainment competition, IFSA directly competes
in the production and organization of strongman events. The major competitors
are:
o Trans-World International, which organizes the World's
Strongest Man event held annually in September or October;
o World-Class Entertainment AB, a subsidiary of World-Class
International AB, which organized three competitions branded
as The World's Strongest Man Super-Series;
o United Strongman Series which consists of 6-8 competitions
annually in different countries; and
o World Strongman Cup which also consists of 6-8 competitions
annually in different countries.
However, in relation to the competitors listed above, the combined prize purse
of the events organized by IFSA and its international member federation is
approximately five times more than the aggregate prize purse of all of the
competitors described above. IFSA and its international member federation
organize approximately eight times more strongman events than the number of
competitions organized by all of the competitors described above together. The
number of athletes taking part in events organized by IFSA and its international
member federations is approximately twenty times higher than the number of
athletes taking part in all of the events organized by all of the competitors
described above.
IFSA intends to establish itself as the premium product in strongman
sports and entertainment, and to develop its offering so that it is viewed as
superior to the other organizers of strongman events and at par with leading
international sports and entertainment titles in more established sports.
Intellectual Property
IFSA registered its corporate logo as a trade mark on October 21,
2004, in the United Kingdom and has since filed for registration in Canada, the
United States and the European Union using the registration in the United
Kingdom as the priority date.
Government Regulation
IFSA is subject to various government regulations including
environmental, employment, privacy and safety regulations. The cost of
compliance with these various regulations is not material; however, there are no
assurances that additional legislation or changes in the regulatory environment
will not limit IFSA's activities in the future or increase the cost of
compliance.
Employees
As of December 9, 2005 IFSA had 5 full-time employees and 3
consultants providing services to IFSA; however, during the main competition
season IFSA hires approximately 30 additional temporary employees. IFSA has not
experienced any work stoppages and IFSA considers relations with its employees
to be good.
4
Description of Property
The Company's principal executive offices are located at 28-32 Wellington
Road, London NW8 9SP, United Kingdom. This office consists of approximately 270
square feet which are rented on a monthly basis for $4,300.
In addition to the foregoing, the Company has a regional office located at
105 Robinson Street, Unit #3, Oakville, ON L6J 1G1. This office consists of
approximately 300 square feet which are rented on a monthly basis for $2,250.
The Company believes that its properties are adequate for its current and
immediately foreseeable operating needs. The Company does not have any policies
regarding investments in real estate, securities or other forms of property.
Legal Proceedings
From time to time, the Company may become involved in various lawsuits and
legal proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in these
or other matters may arise from time to time that may harm its business. Except
as disclosed below, the Company and PR-7 are currently not aware of any such
legal proceedings or claims that they believe will have, individually or in the
aggregate, a material adverse affect on its business, financial condition or
operating results.
RISK FACTORS
The Company's failure to continue to develop creative and entertaining programs
and events would likely lead to a decline in the popularity of our brand of
entertainment.
The creation, marketing and distribution of live and televised
entertainment is at the core of IFSA's business and is critical to its ability
to generate revenues across its media platforms and product outlets. The
Company's failure to continue to create popular live events and televised
programming would likely lead to a decline in IFSA's television ratings and
attendance at its live events, which would likely adversely affect the Company's
operating results.
The Company's failure to retain or continue to recruit key athletes could lead
to a decline in the appeal of the popularity of IFSA's brand of entertainment.
The Company's success depends, in large part, upon its ability to recruit
and retain athletes who have the physical presence to compete in IFSA's
strongman competitions. The Company cannot be sure you that it will be able to
continue to identify and retain these athletes in the future. Additionally, the
Company cannot be sure that it will be able to retain its current athletes
during the remaining terms of their contracts or when their contracts expire. In
particular, the Company is currently in the process of renegotiating the
contracts of its 22 member professional team for the next season and cannot be
sure that these renegotiations will be concluded successfully. The Company's
failure to attract and retain key athletes, or a serious or untimely injury to,
or the death of, or unexpected or premature loss or retirement for any reason of
any of its key athletes, could lead to a decline in the appeal and the
popularity of IFSA's brand of entertainment, which could adversely affect the
Company's operating results.
A decline in general economic conditions could adversely affect the Company's
business.
The Company's operations are affected by general economic conditions,
which generally may affect consumers' disposable income, the level of
advertising spending and the size and number of retail outlets. The demand for
entertainment and leisure activities tends to be highly sensitive to the level
of consumers' disposable income. A decline in general economic conditions could
reduce the level of discretionary income that IFSA's fans and potential the
Company's revenues. A decline in general economic conditions could also reduce
levels of advertising spending, which could impair the Company's ability to sell
advertising for its various media platforms at acceptable rates or at all.
5
Furthermore, a decline in the size or number of retail outlets for IFSA's
branded merchandise and consolidation in the retail industry as a result of
declining general economic conditions could harm the Company's distribution and
sales of merchandise. Any of the foregoing could adversely affect the Company's
operating results.
A decline in the popularity of IFSA's brand of sports entertainment, including
as a result of changes in the social and political climate, could adversely
affect the Company's business.
The Company's operations are affected by consumer tastes and
entertainment trends, which are unpredictable and subject to change and may be
affected by changes in the social and political climate. IFSA's programming is
created to evoke a response from its fans. A change in its fans' tastes or a
material change in the perceptions of its business partners, including its
sponsors, distributors and licensees, whether as a result of the social and
political climate or otherwise, could adversely affect the Company's operating
results.
Changes in the regulatory atmosphere and related private-sector initiatives
could adversely affect the Company's business.
While the production and distribution of television programming by
independent producers is not directly regulated by the federal or state
governments in the United States, the marketplace for television programming in
the United States is affected significantly by government regulations applicable
to, as well as social and political influences on, television stations,
television networks and cable and satellite television systems and channels. A
number of governmental and private-sector initiatives relating to the content of
media programming have been announced in response to certain events unrelated to
IFSA. Changes in governmental policy and private-sector perceptions could
further restrict program content and adversely affect IFSA's levels of
viewership and operating results.
The markets in which IFSA operates are highly competitive, rapidly changing and
increasingly fragmented, and the Company may not be able to compete effectively,
especially against competitors with greater financial resources or marketplace
presence.
IFSA competes for advertising dollars with other media companies. IFSA
faces competition from professional and college sports, as well as from other
forms of live and televised entertainment and other leisure activities in a
rapidly changing and increasingly fragmented marketplace. For the sale of
branded merchandise, IFSA competes with entertainment companies, professional
and college sports leagues and other makers of branded apparel and merchandise.
Many of the companies with whom IFSA competes have greater financial resources
than the Company does.
The failure of IFSA to compete effectively could result in a significant
loss of viewers, venues, distribution channels or performers and fewer
entertainment and advertising dollars spent on its form of sports entertainment,
any of which could adversely affect the Company's operating results.
IFSA face uncertainties associated with international markets.
IFSA's production of live events overseas subjects it to the risks
involved in foreign travel, local regulations, including regulations requiring
it to obtain visas for its athletes, and political instability inherent in
varying degrees in those markets. In addition, the licensing of IFSA's
television and branded merchandise in international markets exposes it to some
degree of currency risk. These risks could adversely affect the Company's
operating results and impair its ability to pursue its business strategy as it
relates to international markets.
IFSA may be prohibited from promoting and conducting its live events if it does
not comply with applicable regulations.
In various states in the United States and some foreign jurisdictions,
athletic commissions and other applicable regulatory agencies require IFSA to
obtain licenses for promoters, medical clearances and/or other permits or
licenses for performers and/or permits for events in order for IFSA to promote
and conduct its live events. In the event that IFSA fails to comply with the
regulations of a particular jurisdiction, it may be prohibited from promoting
and conducting its live events in that jurisdiction. The inability to present
IFSA's live events over an extended period of time or in a number of
jurisdictions could lead to a decline in the various revenue streams generated
from live events, which could adversely affect the Company's operating results.
6
The Company's insurance may not be adequate to cover liabilities resulting from
accidents or injuries that occur during IFSA's physically demanding events.
The events organized by IFSA exposes its athletes and its employees who
are involved in the production of those events to the risk of travel and
performance related accidents, the consequences of which may not be fully
covered by insurance. The physical nature of IFSA's events exposes its athletes
to the risk of serious injury or death. Liability to the Company resulting from
any death or serious injury sustained by one of IFSA's athletes while
performing, to the extent not covered by insurance, could adversely affect the
Company's operating results.
Because the Company depends on its senior management's experience and knowledge
of the industry, the Company would be adversely affected if senior management
left.
The Company is dependent on the continued efforts of its senior management
team. The Company does not currently have an employment contracts with some of
its senior executives. If, for any reason, senior executives do not continue to
be active in management, the Company's business, financial condition or results
of operations could be adversely affected. In addition, the Company does not
maintain key personnel life insurance on its senior executives and other key
employees.
The Company may need to raise capital to fund its operations, and its failure to
obtain funding when needed may force the Company to delay, reduce or eliminate
acquisitions and business development plans.
If in the future, if the Company is not capable of generating sufficient
revenues from operations and its capital resources are insufficient to meet
future requirements, the Company may have to raise funds to continue the
development, commercialization and marketing of its convenience stores.
The Company cannot be certain that funding will be available on acceptable
terms, or at all. To the extent that the Company raises additional funds by
issuing equity securities, its stockholders may experience significant dilution.
Any debt financing, if available, may involve restrictive covenants that impact
the Company's ability to conduct its business. If the Company is unable to raise
additional capital if required or on acceptable terms, it may have to
significantly delay, scale back or discontinue its planned acquisitions or
business development plans or obtain funds by entering into agreements on
unattractive terms.
MANAGEMENT
Executive Officers and Directors
Below are the names and certain information regarding the Company's
executive officers and directors following the acquisition of IFSA.
--------------------------------------------------------------------------
Name Age Position
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Stephen Townley 52 Chairman of the Board
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Jussi Laurimaa 38 Chief Executive Officer
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Christian Fennell 45 Chief Operating Officer and President
--------------------------------------------------------------------------
Jaime Alvarez 30 Chief Financial Officer
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Douglas Edmunds 61 Chairman of the World Governing Body's
Congress
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Clayton B. Barlow 34 Director
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Officers are elected annually by the Board of Directors (subject to the
terms of any employment agreement), at its annual meeting, to hold such office
until an officer's successor has been duly appointed and qualified, unless an
officer sooner dies, resigns or is removed by the Board.
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Background of Executive Officers and Directors
Stephen Townley, Chairman of the Board. Mr. Townley was appointed as
Chairman of the Board of the Company on December 9, 2005. From 1983 to August
2001 Mr. Townley was the founding and senior partner at the law firm of
Townleys. In August 2001 Townleys merged into the law firm of Hammond Suddards
Edge and Mr. Townley was a consultant to that firm until his agreement expired
in July 2004. Mr. Townley graduated from University College London in 1975 with
a LLM Degreee. Mr. Townley currently serves on the board of directors of Active
Rights Management Limited, International Motor Sports Association, Sport
Services Group Limited, Sports Lawyers Association, World Sport Football Pty,
Projector NetResult and various other organizations and entities.
Jussi Laurimaa, Chief Executive Officer. Mr. Laurimaa was appointed as
Chief Executive Officer of the Company on December 9, 2005. Prior to joining the
Company, Mr. Laurimaa was the chief executive officer of IFSA Strongman Ltd.
from June 2004 through December 2005. In addition, Mr. Laurimaa is currently,
and has been since March 2002 a general partner of InvestGroup Ventures, London
(UK), a venture capital firm. From January 1999 until March 2002 Mr. Laurimaa
was the managing partner of Enba, Dublin in Ireland. Mr. Laurimaa graduated from
London Business School in 1996 with a Masters in Finance (with distinction) and
in 1991 from the Helsinki University of Technology with a M.Sc. in Engineering
Physics (with distinction) and from University of Helsinki Faculty of Medicine
with a B.Medicine. Mr. Laurimaa currently serves on the board of directors of
Independent Risk Monitoring Ltd., a corporation in the United Kingdom.
Christian Fennell, Chief Operating Officer and President. Mr. Fennell was
appointed as Chief Operating Officer and President of the Company on December 9,
2005. Prior to joining the Company, Mr. Fennell was the Chief Operating Officer
and President of IFSA Strongman Ltd. from September 2005 through December 2005,
from May 2005 to September 2005 Mr. Fennell was the Commercial Director at IFSA
and from January 2005 to May 2005 Mr. Fennell was the head of television at
IFSA. From October 1999 to January 2005 Mr. Fennell worked for Wyndham Studios
Entertainment Inc. in connection with sporting event management and television
production. Mr. Fennell graduated from Queens University in Kingston, Ontario in
1983 with a Hon. B.A. in Political Science. Mr. Fennell currently serves on the
board of directors of Wyndham Studios Entertainment Inc.
Jaime Alvarez, Chief Financial Officer. Mr. Alvarez was appointed as Chief
Financial Officer of the Company on December 9, 2005. Prior to joining the
Company, Mr. Alvarez was the chief financial officer of IFSA Strongman Ltd. from
August 2004 through December 2005. Mr. Alvarez also served as the chief
operating officer of IFSA Strongman Ltd. from December 2004 through August 2005.
In addition, Mr. Alvarez is currently, and has been since August 2002 an
associate partner of InvestGroup Ventures, London (UK), a venture capital firm.
From July 2003 until August 2004 Mr. Alvarez was an associate banker at European
Bank of Reconstruction and Development (London). From June 2002 until September
2002 Mr. Alvarez was an advisor to the vice president of Pepsi Beverages
International in Shanghai. From July 1999 until August 2001 Mr. Alvarez was a
business analyst at McKinsey & Co. in Madrid. Mr. Alvarez graduated from Harvard
Business School in 2003 with an M.B.A., from U. Pontificia Comillas, Icade in
Madrid, Spain in 1999 with an advanced degree in Business and Economy and in
1998 with a Law degree and from Uned (Open University) with a degree in
Industrial Engineering.
Douglas Edmunds, Chairman of the World Governing Body. Mr. Edmunds was
appointed as Chairman of the World Governing Body on June 12, 2004. Prior to
joining the Company, Mr. Edmunds was a director of IFSA Projects in Glasgow,
Scotland from 1999 to June 2004. In addition, Mr. Edmunds worked at Drakemire
Dairy Ltd. from 1982 to April 2000 and retired as the managing director of milk
processing. Mr. Edmunds graduated from the University of Strathclyde in 1969
with a Phd, from Glasgow University in 1966 with a BSc from St. Josephs College
in 1962.
Clayton B. Barlow, Director. Until December 9, 2005 Mr. Barlow was the
President of the Company and is still a member of the Company's board of
directors. Mr. Barlow was appointed to the board of directors of the Company in
January, 2004. Mr. Barlow was the President of the Company prior to its
corporate formation (as a division of SportsNuts, Inc., the former parent
corporation of the Company) since December, 2000. Prior to his association with
the Company, from October, 1999 to December, 2000, Mr. Barlow was an
international project manager for STSN, Inc., a Salt Lake City-based provider of
high speed internet access for the hospitality industry with a focus on business
hotels. At STSN, Mr. Barlow was responsible for designing and integrating hotel
internet infrastructure with access units in each hotel room. From September,
1997 to October, 1999, Mr. Barlow was the President of Maxim Mortgage, Corp., a
residential mortgage broker based in Salt Lake City, Utah. Mr. Barlow holds MCSE
2000, MCP, and A+ certifications. Mr. Barlow is not a director of any other
company filing reports pursuant to the Securities Exchange Act of 1934.
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Executive Compensation
The following table sets forth all compensation paid in respect of the
Company's Chief Executive Officer and those individuals who received
compensation in excess of $100,000 per year (collectively, the "Named Executive
Officers") for the fiscal period ended September 30, 2004.
SUMMARY COMPENSATION TABLE
Annual Compensation
---------------------------------------------
Other
Name and Annual
Principal Position Year Salary ($) Bonus ($) Compensation ($)
--------------------------- ---- ---------- --------- ----------------
Clayton Barlow 2004 $58,910 $6,087 -0-
Former Chief Executive 2003 $42,000 $6,516 -0-
Officer 2002 $45,341 $628 -0-
There are no current employment agreements between any individuals and the
Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In December 2004, IFSA entered into an agreement with Wyndham Studios
Entertainment, Inc., a Canadian company, and Christian Fennell (the "Wyndham
Agreement"). The Wyndham Agreement provides for IFSA acquiring from Wyndham
Studios Entertainment the All-Strength brand and television property, related
sponsorship agreements, and all other assets of Wyndham Studios Entertainment
that in any way relate to strongman. Christian Fennell was a director of Wyndham
Studios Entertainment, and as part of the Wyndham Agreement, he joined IFSA as a
full-time employee.
Part of the acquisition consideration under the Wyndham Agreement is an
earn-out payable to Mr Fennell. Under the earn-out, Mr Fennell is entitled to a
percentage of Reference Turnover, which is defined as the sum of IFSA's
North-American TV broadcasting and merchandising fees plus 50% of global
sponsorship revenues. The percentage of the Reference Turnover due to Mr Fennell
is 20% in 2005, 13% in 2006 and 5% in 2005. IFSA estimates the total payments
under this earnout over the three years to be approximately $100,000 - $250,000.
Clayton Barlow, Director and former Chief Executive Officer of the
Company, was issued 175,000 shares of common stock of the Company in accordance
with the Company's stock incentive plan in 2005. Mr. Barlow holds a total of
186,228 shares of common stock of the Company.
Chene Gardner, former Chief Financial Officer and Director of the Company,
was issued 600,000 shares of common stock of the Company in accordance with the
Company's stock incentive plan in 2005. Mr. Gardner holds a total of 761,089
shares of common stock of the Company.
Kenneth Denos, former Director of the Company, was issued 650,000 shares
of common stock of the Company in accordance with the Company's stock incentive
plan in 2005. Mr. Denos holds a total of 658,893 shares of common stock of the
Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of December 9, 2005
with respect to the beneficial ownership of the outstanding common stock by (i)
any holder of more than five (5%) percent; (ii) each of the Company's executive
9
officers and directors; and (iii) the Company's directors and executive officers
as a group. Except as otherwise indicated, each of the stockholders listed below
has sole voting and investment power over the shares beneficially owned.
Common Stock Percentage of
Name of Beneficial Owner (1) Beneficially Owned Common Stock (2)
-------------------------------------------------------------------------------------------
Stephen Townley 0 0.0%
-------------------------------------------------------------------------------------------
Jussi Laurimaa (3) 8,786,851 2.85%
-------------------------------------------------------------------------------------------
Christian Fennell 489,892 1.66%
-------------------------------------------------------------------------------------------
Jaime Alvarez 220,684 0.75%
-------------------------------------------------------------------------------------------
Douglas Edmunds 1,299,210 4.39%
-------------------------------------------------------------------------------------------
Clayton Barlow 186,228 0.71%
-------------------------------------------------------------------------------------------
Jamie Reeves 1,557,214 5.26%
-------------------------------------------------------------------------------------------
InvestGroup Sports Management (4) 7,944,264 26.84%
-------------------------------------------------------------------------------------------
All officers and directors as a group (6 persons) 10,982,865 37.10%
(1) Except as otherwise indicated, the address of each beneficial owner
is c/o Synerteck Incorporated 28-32 Wellington Road, London NW8 9SP,
United Kingdom.
(2) Applicable percentage ownership is based on 29,600,000 shares of
common stock outstanding as of December 9, 2005, together with
securities exercisable or convertible into shares of common stock
within 60 days of December 9, 2005 for each stockholder. Beneficial
ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
that are currently exercisable or exercisable within 60 days of
December 9, 2005 are deemed to be beneficially owned by the person
holding such securities for the purpose of computing the percentage
of ownership of such person, but are not treated as outstanding for
the purpose of computing the percentage ownership of any other
person.
(3) Of the shares beneficially owned by Jussi Laurimaa, 7,944,264 shares
are owned by InvestGroup Sports Management, a company controlled,
but not owned, by Mr. Laurimaa.
(4) Jussi Laurimaa is a director of InvestGroup Sports Management and
has the voting and dispositive rights over the shares held by it.
o No Director, executive officer, affiliate or any owner of
record or beneficial owner of more than 5% of any class of
voting securities of the Company is a party adverse to the
Company or has a material interest adverse to the Company.
DESCRIPTION OF SECURITIES
The Company's authorized capital stock consists of 100,000,000 shares of
common stock at a par value of $0.001 per share and 10,000,000 shares of
preferred stock at a par value of $0.001 per share. As of December 9, 2005,
there were 29,600,000 shares of the Company's common stock issued and
outstanding that are held by approximately 278 stockholders of record and 50,000
shares of the Company's preferred stock issued and outstanding that are held by
approximately one stockholder of record.
Holders of the Company's common stock are entitled to one vote for each
share on all matters submitted to a stockholder vote. Holders of common stock do
not have cumulative voting rights. Therefore, holders of a majority of the
shares of common stock voting for the election of directors can elect all of the
directors. Holders of the Company's common stock representing a majority of the
voting power of the Company's capital stock issued, outstanding and entitled to
vote, represented in person or by proxy, are necessary to constitute a quorum at
any meeting of stockholders. A vote by the holders of a majority of the
Company's outstanding shares is required to effectuate certain fundamental
corporate changes such as liquidation, merger or an amendment to the Company's
articles of incorporation.
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Holders of the Company's common stock are entitled to share in all
dividends that the board of directors, in its discretion, declares from legally
available funds. In the event of a liquidation, dissolution or winding up, each
outstanding share entitles its holder to participate pro rata in all assets that
remain after payment of liabilities and after providing for each class of stock,
if any, having preference over the common stock. The Company's common stock has
no pre-emptive rights, no conversion rights and there are no redemption
provisions applicable to the Company's common stock.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is traded on the OTC Bulletin Board, referred
to herein as the OTCBB, under the symbol "SYNR.ob." The following table sets
forth the high and low bid prices of its Common Stock, as reported by the OTCBB
since trading commenced on March 4, 2005. The quotations set forth below reflect
inter-dealer prices, without retail mark-up, markdown or commission and may not
represent actual transactions.
2005
-------------------------
High* Low*
----- ----
1st Quarter (from March 4, 2005)............. $1.250 $1.010
2nd Quarter.................................. $1.010 $0.400
3rd Quarter ................................. $0.510 $0.150
4th Quarter (through December 9, 2005)....... $0.150 $0.300
As of December 9, 2005, there were approximately 278 holders of record of
the Company's common stock.
Dividends
The Company has never declared or paid any cash dividends on its common
stock. The Company currently intends to retain future earnings, if any, to
finance the expansion of its business. As a result, the Company does not
anticipate paying any cash dividends in the foreseeable future.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table shows information with respect to each equity
compensation plan under which the Company's common stock is authorized for
issuance as of the fiscal year ended December 31, 2004.
EQUITY COMPENSATION PLAN INFORMATION
- ------------------------------------ ------------------------ ----------------------- ---------------------------
Plan category Number of securities Weighted average Number of securities
to be issued upon exercise price of remaining available for
exercise of outstanding options, future issuance under
outstanding options, warrants and rights equity compensation plans
warrants and rights (excluding securities
reflected in column (a)
- ------------------------------------ ------------------------ ----------------------- ---------------------------
(a) (b) (c)
- ------------------------------------ ------------------------ ----------------------- ---------------------------
Equity compensation plans approved -0- -0- -0-
by security holders
- ------------------------------------ ------------------------ ----------------------- ---------------------------
Equity compensation plans not -0- -0- -0-
approved by security holders
- ------------------------------------ ------------------------ ----------------------- ---------------------------
Total -0- -0- -0-
- ------------------------------------ ------------------------ ----------------------- ---------------------------
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INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our bylaws provide for the indemnification of our directors to the fullest
extent permitted by the Delaware General Corporation Law. We are required to
advance, prior to the final disposition of any proceeding, promptly on request,
all expenses incurred by any director or executive officer in connection with
that proceeding on receipt of an undertaking by or on behalf of that director or
executive officer to repay those amounts if it should be determined ultimately
that he or she is not entitled to be indemnified under our bylaws or otherwise.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
Item 2.01 Completion of Acquisition or Disposition of Assets.
See Item 1.01.
Item 3.02 Unregistered Sales of Equity Securities.
Pursuant to a Share Exchange Agreement dated December 9, 2005, the Company
issued 20,000,000 shares of common stock to Prime Time. This issuance of common
stock is exempt from the registration requirements under Rule 4(2) of the
Securities Act of 1933, as amended.
Simultaneously with the closing of the Share Exchange Agreement, on
December 9, 2005, the Company completed a private placement offering of 3,15,000
shares our common stock, par value $0.001 per share, to accredited investors for
an aggregate purchase price of $1,260,000. The aforementioned securities were
sold in reliance upon the exemption afforded by the provisions of Regulation D,
as promulgated by the Securities and Exchange Commission under the Securities
Act of 1933, as amended. Furthermore, pursuant to the Subscription Agreements
executed in connection with the foregoing investments, the Company granted the
investors registration rights with respect to the shares of common stock
purchased. Pursuant to the Subscription Agreement, we will file a registration
statement with the Securities and Exchange Commission within 120 days of the
closing of the sale of the common stock.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of business acquired.
To be filed by amendment no later than 71 calendar days after December 9,
2005.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits
Exhibit
Number Description
- --------------------------------------------------------------------------------
10.1 Share Exchange Agreement by and between Synerteck Incorporated, and
IFSA Strongman Ltd. and the shareholders of IFSA Strongman Ltd.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SYNERTECK INCORPORATED
Dated: December 15, 2005 By: /s/ Jussi Laurimaa
------------------------------
Name: Jussi Laurimaa
Title: Chief Executive Officer
13