HLWD Almost Never Films Inc (CE)

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): January 15, 2016

 

(Exact name of registrant as specified in its charter)

 

 

    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))

 

TABLE OF CONTENTS

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EXPLANATORY NOTE

The Current Report on Form 8-K (this "Report") is being filed by Smack Sportswear ("we", "us" or the "Company") to disclose, primarily, our acquisition of a private company, Almost Never Films Inc. ("Almost Never"), a corporation organized under the laws of Indiana on July 8, 2015, pursuant to a share exchange agreement, effective as of January 15, 2016. As a result, Almost Never became a wholly-owned subsidiary of the Company.

We were incorporated in Nevada in October 2007 under the corporate name of Reshoot Production Company, 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 June 30, 2015, we were a manufacturer and seller of performance and lifestyle based indoor and sand volleyball apparel and accessories. As of July 31, 2015, we completed the disposition of certain assets of the Company to William Sigler, a former director of the Company; in connection with said transactions, Mr. Sigler resigned and had agreed to sell all his shares of common stock (“Common Stock”), par value $0.001 per share, in the Company. As a result of the sale of certain inventory from the Company to Mr. Sigler, the Company has been a “shell company” (as such term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).

On January 15, 2016, we entered into a Share Exchange Agreement (the "Exchange Agreement") with Almost Never and its two shareholders, Danny Chan and Derek Williams (the “Almost Never Shareholders”), pursuant to which we issued 1,000,000 shares of our Series A Convertible Preferred Stock (the “Series A Convertible Preferred Stock”), par value $0.001 per share to the Almost Never Shareholders on a pro rata basis in exchange for all 100,000,000 shares of the issued and outstanding common stock, par value $0.0001 per share, of Almost Never (the “Share Exchange”). As a result of the Share Exchange, Almost Never became our wholly-owned subsidiary, and the Almost Never Shareholders acquired a controlling interest in the Company. See Item 2.01, "The Share Exchange", below.

In accordance with "reverse acquisition" accounting treatment, our historical financial statements as of period ends, and for periods ended, prior to the Share Exchange will be replaced with the historical combined financial statements of Almost Never prior to the Share Exchange in all future filings with the SEC.

As a result of the Share Exchange, the Company intends to amend its Articles of Incorporation to change its name from “Smack Sportswear” to “Almost Never Films Inc.” to more accurately reflect its new business. We also intend to change the Company’s OTCQB trading symbol. We will announce our new trading symbol once it is approved by FINRA.  Our Common Stock will temporarily remain listed for quotation under the current symbol "SMAK" until the new symbol is assigned by FINRA.

As used in this Report, unless otherwise stated or the context requires otherwise, the terms the "Company," the "Registrant," "we," "us," and "our" refer to the parent company, after giving effect to the Share Exchange and the term "Almost Never" refers to Almost Never Films Inc. and its business prior to the Share Exchange and the business of the Company thereafter.

This Report is being filed in connection with the transaction consummated by the Company and certain related events and actions taken by the Company. This Report contains summaries of the material terms of the agreement and transaction entered into in connection with the Share Exchange, and related appointments of new directors and officers.  The summaries of these agreements are subject to, and are qualified in their entirety by, reference to these agreements, relating thereto, which are filed as exhibits hereto and incorporated herein by reference.

This Report responds to the following Items in Form 8-K:

 

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Item 1.01    Entry into a Material Definitive Agreement.

The information set forth below in Item 2.01 is hereby incorporated by reference into this Item 1.01.

Item 2.01    Completion of Acquisition or Disposition of Assets.

THE SHARE EXCHANGE AND RELATED ACTIONS

The Share Exchange

On January 15, 2016, the Company, Almost Never, and the Almost Never Shareholders, Danny Chan and Derek Williams, entered into the Exchange Agreement, a copy of which is filed herewith as Exhibit 2.1.

Pursuant to the Exchange Agreement, we issued 1,000,000 shares of our Series A Convertible Preferred Stock to the Almost Never Shareholders in exchange for all 100,000,000 shares of issued and outstanding common stock of Almost Never. As a result of the Share Exchange, Almost Never became our wholly-owned subsidiary, and the Almost Never Shareholders acquired a controlling interest in the Company.  Each holder of Series A Convertible Preferred Stock of the Company may convert such shares of Series A Convertible Preferred Stock of the Company into fully paid, non-assessable shares of Common Stock of the Company at a conversion rate calculated by multiplying the number of shares of Series A Convertible Preferred Stock of the Company to be converted by one hundred (100).

Holders of our Series A Convertible Preferred Stock are entitled to vote on all matters submitted to the Company’s stockholders and are entitled to such number of votes as is equal to the number of shares of the Common Stock of the Company into which such shares of Series A Convertible Preferred Stock are convertible. The Certificate of Designation of the Company’s Series A Convertible Preferred Stock was filed with the Secretary of State of Nevada on January 15, 2016, a copy of which is filed herewith as Exhibit 4.1.

The Certificate of Designation also provides that as long as any shares of Series A Convertible Preferred Stock are outstanding, the Company will not, without first obtaining the approval by vote or written consent of all the holders of then outstanding shares of Series A Convertible Preferred Stock, voting as a separate class:

·

Amendment of any Articles of Incorporation, certificate of designation or by-laws or other constitutional documents of the Company that adversely affect the Series A Convertible Preferred Stock;

·

Issuance of any securities and reclassification of any outstanding securities of the Company;

·

Any merger or consolidation of the Company with one or more other corporations in which the shareholders of the Company immediately after such merger or consolidation hold stock representing less than a majority of the voting power of the outstanding stock of the surviving company;

·

The liquidation or dissolution of the Company and any termination or material modification of the Company’s subsidiaries;

·

Acquisitions, divestments or disposals where the aggregate consideration, in one transaction or a series of related transactions, exceeds $1,000,000;

·

Any material change to the nature of the business and strategic direction of the Company;

·

Incurrence of any capital expenditures for any project which exceeds $1,000,000;

·

Incurrence of any new indebtedness which exceeds $1,000,000;

·

Entering any new related-party transactions or a series of related-party transactions within any 12-month period, contracts and arrangements which exceed $1,000,000 in consideration; and

·

Any payments outside the ordinary course of business and any payment of dividends.

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At the closing of the Share Exchange:

·

1,000,000 shares of our Series A Convertible Preferred Stock were issued to the Almost Never Shareholders on a pro rata basis in exchange for all 100,000,000 shares of issued and outstanding common stock of Almost Never;

·

each Almost Never Shareholder received 500,000 shares of our Series a Convertible Preferred Stock, and each share of Series a Convertible Preferred Stock of the Company is convertible, at the option of the holder, into 100 shares of our Common Stock; and

·

the 27,621,237 shares of our Common Stock issued and outstanding immediately prior to the Share Exchange, now only reflect approximately 20% of the voting rights our outstanding Common Stock as a result of the Share Exchange.

Immediately after the Share Exchange, the two Almost Never Shareholders have voting power equal to approximately 80% of the voting power of the Company.

Other than the Series A Convertible Preferred Stock issued in the Share Exchange, no other securities convertible into or exercisable or exchangeable for our Common Stock (including options or warrants) are outstanding.

The issuance of our Series A Convertible Preferred Stock to the two Almost Never Shareholders in connection with the Share Exchange was not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act, which exempts transactions by an issuer not involving any public offering.

The Exchange Agreement contains customary representations and warranties, pre- and post-closing covenants of each party and customary closing conditions.

The Exchange Agreement, including all exhibits and annexes, is filed as an exhibit to this Report.  All descriptions of the Exchange Agreement herein are qualified in their entirety by reference to the text thereof filed as an exhibit hereto, which is incorporated herein by reference.

Departure and Appointment of Directors and Officers

Our board of directors of the Company (the "Board") immediately prior to the Share Exchange consisted of (1) member, Doug Samuelson, who was also our interim Chief Executive Officer and Chief Financial Officer ("Samuelson").

Upon the closing of the transactions contemplated by the Exchange Agreement on January 15, 2016: (i) Danny Chan, the Chief Executive Officer of Almost Never, was appointed to serve as our Chief Executive Officer, Chief Financial Officer and a director of the Board; (ii) Derek Williams was appointed to serve as our Chief Operating Officer and ten (10) days after the filing and distribution of a Schedule 14f-1 Information Statement will become a director of the Board; and (iii) Samuelson resigned as our Interim Chief Executive Officer and Chief Financial Officer, and ten (10) days after the filing and distribution of a Schedule 14f-1 Information Statement will automatically resign as a director of the Board.  See "Management – Directors and Executive Officers" below for information about our new directors and executive officers.

Listing; Stock Symbol

Our Common Stock is quoted on the OTC Markets under the symbol "SMAK" (SMAK:OTCQB).  As a result of the Share Exchange, the Company intends to amend its Articles of Incorporation to change its name from “Smack Sportswear” to “Almost Never Films Inc.” to more accurately reflect its new business. We will also request a new OTCQB trading symbol which we will announce once it is approved by FINRA.  Our Common Stock will remain listed for quotation under the current symbol "SMAK" until the new symbol is assigned by FINRA. 

Accounting Treatment; Change of Control

The Share Exchange is being accounted for as a "reverse acquisition," and Almost Never is deemed to be the acquirer for accounting purposes.  Consequently, the assets and liabilities and the historical operations that will be reflected in the financial statements prior to the Share Exchange will be those of Almost Never and will be recorded at the historical cost basis of Almost Never, and the combined financial statements after completion of the Share Exchange will include the assets and liabilities of Almost Never, historical operations of Almost Never, and operations of Almost Never from the Closing Date of the Share Exchange.  As a result of the issuance of the shares of our Series A Convertible Preferred Stock pursuant to the Share Exchange, a change in control of the Company occurred as of the date of consummation of the Share Exchange.  Except as described in this Report, no arrangements or understandings exist among present or former controlling stockholders with respect to the election of members of our Board and, to our knowledge, no other arrangements exist that might result in a change of control of the Company.

The parties have taken all actions necessary to ensure that the Share Exchange is treated as a tax-free exchange under Section 351 of the Internal Revenue Code of 1986, as amended.

We continue to be a "smaller reporting company," as defined under the Exchange Act, following the Share Exchange. 

We continue to be a “shell company”, as defined under the Exchange Act, following the Share Exchange.

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DESCRIPTION OF BUSINESS

History

As described above, we were incorporated in Nevada in October 2007 under the name SMACK Sportswear under which we manufactured and sold performance and lifestyle based indoor and sand volleyball apparel and accessories. As a result of the sale of certain inventory from the Company to Mr. Sigler in July 2015, the Company became a “shell company” (as such term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended). As a result of the Share Exchange, we acquired the proposed business of Almost Never.

Almost Never, our wholly-owned subsidiary upon the closing of Share Exchange, was incorporated in the State of Indiana on July 8, 2015. As a result of the Share Exchange, the Company intends to amend its Articles of Incorporation to change its name from “Smack Sportswear” to “Almost Never Films Inc.” to more accurately reflect its new business. We will also request a change to the Company’s OTCQB trading symbol, which we will announce once it is approved by FINRA.  Our Common Stock will remain listed for quotation under the current symbol "SMAK" until the new symbol is assigned by FINRA. 

We currently have authorized 75,000,000 shares of capital stock, consisting of (i) 70,000,000 shares of Common Stock, and (ii) 5,000,000 shares designated as preferred stock containing such rights, privileges and designations as our Board of directors may, from time to time, determine. As of the date of this Report, an aggregate of 27,621,237 shares of our Common Stock and 1,000,000 shares of our Series A Convertible Preferred Stock are issued and outstanding.

After the Share Exchange, our principal executive office is now located at 13636 Ventura Blvd #475, Sherman Oaks, CA 91423.

Our Business

 

Motion Picture Property Acquisition Process 

Our acquisition process is the process by which we intend to acquire or license “underlying properties”. In turn, we expect to use those properties to attract creative talent (including writers, actors and directors) to the potential motion picture project. If successful, we will then grant or license out those rights to third party financiers of motion pictures, who will then contract with the creative talent we have attracted to the property as well as finance, produce and distribute/exploit the motion picture. 

Almost Never Feature Film Production

Government Regulation

The Company is not currently subject to any direct government regulations, other than the securities laws and the regulations thereunder applicable to all publicly owned companies and laws and regulations applicable to general businesses.  It is possible that certain laws and regulations may be adopted at the local, state, national and international level that could affect the Company's operations.  Changes to such laws could create uncertainty in the marketplace which could reduce demand for the Company's products or increase the cost of doing business as a result of costs of litigation or a variety of other such costs, or could in some other manner have a material adverse effect on the Company's business, financial condition, results of operations and prospects.  If any such law or regulation is adopted it could limit the Company's ability to operate and could force the business operations to cease, which would have a significantly negative effect on the Company.

 

Employees

The Company currently has no employees. Danny Chan, our Chief Executive Officer and Chief Financial Officer, and Derek Williams, our Chief Operating Officer, will operate the Company.

DESCRIPTION OF PROPERTIES

The Company does not have a principal office, but maintains a mailing address at 13636 Ventura Blvd #475, Sherman Oaks, CA 91423. When we commence operations, we will consider renting office space.

 

 

RISK FACTORS

AN INVESTMENT IN OUR SECURITIES IS HIGHLY SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK.  WE FACE A VARIETY OF RISKS THAT MAY AFFECT OUR OPERATIONS OR FINANCIAL RESULTS AND MANY OF THOSE RISKS ARE DRIVEN BY FACTORS THAT WE CANNOT CONTROL OR PREDICT.  BEFORE INVESTING IN THE SECURITIES YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS, TOGETHER WITH THE FINANCIAL AND OTHER INFORMATION CONTAINED IN THIS REPORT.  IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCURS, OUR BUSINESS, PROSPECTS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY AFFECTED.  IN THAT CASE, THE TRADING PRICE OF OUR COMMON STOCK WOULD LIKELY DECLINE AND YOU MAY LOSE ALL OR A PART OF YOUR INVESTMENT.  ONLY THOSE INVESTORS WHO CAN BEAR THE RISK OF LOSS OF THEIR ENTIRE INVESTMENT SHOULD CONSIDER AN INVESTMENT IN OUR SECURITIES.

THIS REPORT CONTAINS CERTAIN STATEMENTS RELATING TO FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF OUR COMPANY. PROSPECTIVE INVESTORS ARE CAUTIONED THAT SUCH STATEMENTS ARE ONLY PREDICTIONS AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY. IN EVALUATING SUCH STATEMENTS, PROSPECTIVE INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS IDENTIFIED IN THIS REPORT, INCLUDING THE MATTERS SET FORTH BELOW, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

If any of the following or other risks materialize, the Company's business, financial condition, and results of operations could be materially adversely affected which, in turn, could adversely impact the value of our Common Stock. In such a case, investors in our Common Stock could lose all or part of their investment.

Prospective investors should consider carefully whether an investment in the Company is suitable for them in light of the information contained in this Report and the financial resources available to them. The risks described below do not purport to be all the risks to which the Company or the Company could be exposed. This section is a summary of certain risks and is not set out in any particular order of priority. They are the risks that we presently believe are material to the operations of the Company. Additional risks of which we are not presently aware or which we presently deem immaterial may also impair the Company's business, financial condition or results of operations.

Risks Related to Our Business

Since our auditor has issued a going concern opinion regarding the Company, there is an increased risk associated with an investment in the Company.

We have earned no revenue since our inception on July 8, 2015, which makes it difficult to evaluate whether we will operate profitably. Operating expenses for the period from July 8, 2015 to October 31, 2015 was $1,090. As of October 31, 2015, we had cash in the amount of $8,910. We expect to continue to incur additional losses in the foreseeable future as a result of our film production activities. Our future is dependent upon our ability to obtain financing or upon future profitable operations. We reserve the right to seek additional funds through private placements of our Common Stock and/or through debt financing. Our ability to raise additional financing is unknown. We do not have any formal commitments or arrangements for the advancement or loan of funds. If we are unable to secure additional financing in the future on acceptable terms, or at all, we could be forced to reduce or discontinue film development, reduce or forego sales and marketing efforts, and forego attractive business opportunities in order to improve liquidity to enable the Company to continue its operations. There are also risks and uncertainties inherent to the film industry including the highly speculative nature of the industry, intense competition, the lack of industry experience of the stockholders of the Company. For these reasons, our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern. As a result, there is an increased risk that you could lose the entire amount of your investment in the Company.

 

Since we are a shell company with nominal operations, and we have not generated any revenues, there is no assurance that our business plan will ever be successful. We may never attain profitability.

Given the limited operating history, management has little basis on which to forecast future market acceptance of our services. It is difficult to accurately forecast future revenues because the business of the Company is new.  There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations.

We may not be able to obtain additional funding to meet our requirements.

Our ability to maintain and expand our development and production of feature films to cover our general and administrative expenses depends upon our ability to obtain financing through equity financing, debt financing (including credit facilities) or the sale or syndication of some or all of our interests in certain projects or other assets.  If our access to existing credit facilities is not available, and if other funding does not become available, there could be a material adverse effect on our business.

Our success depends on our personnel. Loss of key personnel may adversely affect our business.

Our success depends to a significant extent on the performance of a number of our senior management personnel.  In particular, we will depend on the services of such personnel as Danny Chan, our Chief Executive Officer and Chief Financial Officer, and Derek Williams, our Chief Operating Officer.  The loss of the services of key persons could have a material adverse effect on the Company's business, operating results and financial condition.

Budget overruns may adversely affect our business.

Actual motion picture costs may exceed their budget, sometimes significantly. Risks such as labor disputes, death or disability of star performers, rapid high technology changes relating to special effects or other aspects of production, shortages of necessary equipment, damage to film negatives, master tapes and recordings or adverse weather conditions may cause cost overruns and delay or frustrate completion of a production.  If a film incurs substantial budget overruns, we may have to seek additional financing from outside sources to complete production of a motion picture.  No assurance can be given as to the availability of such financing on terms acceptable to us.  In addition, if a film incurs substantial budget overruns, there can be no assurance that such costs will be recouped, which could have a significant impact on our business, results of operations or financial condition.

Distributors’ failure to promote our programs may adversely affect our business.

Decisions regarding the timing of release and promotional support of our films are important in determining the success of feature film. As with most production companies, for our product distributed by others we do not control the manner in which our distributors distribute our television programs or feature films.  Although our distributors have a financial interest in the success of any such feature films, any decision by our distributors not to distribute or promote one of feature films or to promote competitors' feature films to a greater extent than it promotes ours could have a material adverse effect on our business, results of operations or financial condition.

We may not be able to compete with larger sales contract companies, the majority of whom have greater resources and experience than we do.

We are very small and unproven entity as compared to our competitors.  As an independent production company, we will compete with major U.S. and international film studios.  Most of the major U.S. studios are part of large diversified corporate groups with a variety of other operations, including television networks and cable channels, that can provide both the means of distributing their products and stable sources of earnings that may allow them better to offset fluctuations in the financial performance of their motion picture and television operations.  In addition, the major studios have more resources with which to compete for ideas, storylines and scripts created by third parties as well as for actors, directors and other personnel required for production.  This may have a material adverse effect on our business, results of operations and financial condition.

Our lack of diversification may make us vulnerable to oversupplies in the market.

Most of the major U.S. film studios are part of large diversified corporate groups with a variety of other operations, including television networks and cable channels, which can provide both means of distributing their products and stable sources of earnings that offset fluctuations in the financial performance of their motion picture and television operations.  The number of films released by our competitors, particularly the major U.S. film studios, in any given period may create an oversupply of product in the market, and that may reduce our share of gross box-office admissions and make it more difficult for our films to succeed.

Our operating results depend on product costs, public tastes and promotion success.

We expect to generate our future revenue from the development and production of feature films.  Our future revenues will depend upon the timing and the level of market acceptance of our feature films, as well as upon the cost to produce, distribute and promote these feature films.  The revenues derived from the production of a feature film depend primarily on the feature film's acceptance by the public, which cannot be predicted and does not necessarily bear a direct correlation to the production costs incurred.  Our Company currently has no revenue or material market following. The commercial success of a feature film also depends upon promotion and marketing and certain other factors.  Accordingly, our revenues are, and will continue to be, extremely difficult to forecast.

Our business could be adversely impacted if we are unable to protect our intellectual property rights.

Our ability to compete depends, in part, upon successful protection of our intellectual property.  We do not have the financial resources to protect our rights to the same extent as major studios.  We will attempt to protect proprietary and intellectual property rights to our production through available copyright and trademark laws and licensing and distribution arrangements with reputable international companies in specific territories and media for limited durations.  Despite these precautions, existing copyright and trademark laws afford only limited practical protection in certain countries.  As a result, it may be possible for unauthorized third parties to copy and distribute our productions or certain portions or applications of our intended productions, which could have a material adverse effect on our business, results of operations and financial condition.

Litigation may also be necessary in the future to enforce our intellectual property rights, to protect our movie rights, or to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement or invalidity.  Any such litigation could result in substantial costs and the diversion of resources and could have a material adverse effect on our business, results of operations and financial condition.  We cannot assure you that infringement or invalidity claims will not materially adversely affect our business, results of operations and financial condition. Regardless of the validity or the success of the assertion of these claims, we could incur significant costs and diversion of resources in enforcing our intellectual property rights or in defending against such claims, which could have a material adverse effect on our business, results of operations and financial condition.

If we fail to maintain effective internal controls over financial reporting, we may be subject to litigation and/or costly remediation and the price of our Common Stock may be adversely affected.

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Failure to establish the required internal controls or procedures over financial reporting, or any failure of those controls or procedures once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations.  Upon review of the required internal control over financial reporting and disclosure controls and procedures, our management and/or our auditors may identify material weaknesses and/or significant deficiencies that need to be addressed.  Any actual or perceived weaknesses or conditions that need to be addressed in our internal control over financial reporting, disclosure of management's assessment of its internal control over financial reporting or disclosure of our public accounting firm's attestation to or report on management's assessment of our internal control over financial reporting could adversely impact the price of our Common Stock and may lead to claims against us.

Risks Related to Industry

Success depends on external factors in the film industry.

Operating in the film production industry involves a substantial degree of risk. Each motion picture is a unique piece of art that depends on unpredictable audience reaction to determine commercial success. There can be no assurance that our feature films will be favorably received.

Technological advances may reduce demand for films.

The entertainment industry in general, and the motion picture industry in particular, are continuing to undergo significant changes, primarily due to technological developments.  Because of this rapid growth of technology, shifting consumer tastes and the popularity and availability of other forms of entertainment, it is impossible to predict the overall effect these factors will have on the potential revenue from and profitability of feature-length motion pictures.

A decline in the popularity of entertainment, film and leisure activities could adversely impact our business.

Because our operations are affected by general economic conditions and consumer tastes, our future success is unpredictable. The demand for entertainment, film and leisure activities tends to be highly sensitive to consumers' disposable incomes, and thus a decline in general economic conditions could, in turn, have a material adverse effect on our business, operating results and financial condition and the price of our Common Stock.

Public tastes are unpredictable and subject to change and may be affected by changes in the country's political and social climate. A change in public tastes could have a material adverse effect on our business, operating results and financial condition and the price of our Common Stock.

A decline in general economic conditions could adversely affect our business.

Our operations are affected by general economic conditions, which generally may affect consumers' disposable income.  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 our fans and potential fans have to spend on our live and televised entertainment and consumer products, which could adversely affect our revenues.

Risks Related to Our Common Stock

We are a penny stock and shell company. Investing in our securities is considered a high risk and illiquid investment.

An investment in an early stage company such as ours involves a degree of risk, including the possibility that your entire investment may be lost. There can be no assurance that our business will be successful or profitable.

Because we are a penny stock company and shell company, even if we do fulfill our business goals, our stock may remain illiquid and a trading market may never develop.

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Investors will have little control over operations.

Management has complete authority to make decisions regarding day-to-day operations, and may take actions with which investors disagree.  Except for limited voting rights, investors will have no control over management and must rely exclusively upon their decisions.

Insiders have substantial control over us, and they could delay or prevent a change in our corporate control even if our other stockholders wanted it to occur.

Upon completion of the Share Exchange, our executive officers, Danny Chan and Derek Williams, hold approximately 40.5% and 39.2%, respectively, of the voting power of the Company.  These stockholders are able to exercise significant control over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions.  This could delay or prevent an outside party from acquiring or merging with us even if our other stockholders wanted it to occur.

We cannot assure you that a market will develop for our Common Stock or what the market price of our Common Stock will be.

There is a limited trading market for our Common Stock.  There is no assurance that an active market for our Common Stock will develop as a result of our operation of the Almost Never business even if we are successful.  If a market does not develop or is not sustained, it may be difficult for you to sell your shares of Common Stock at an attractive price or at all.  We cannot predict the prices at which our Common Stock will trade.  It is possible that, in future quarters, our operating results may be below the expectations of securities analysts or investors.  As a result of these and other factors, the price of our Common Stock may decline or may never become liquid.

In the event that we raise additional capital through the issuance of equity securities, or securities exercisable for or convertible into our equity securities, our stockholders could experience substantial dilution.

If we raise additional capital by issuing equity securities or convertible debt securities, our existing stockholders will likely incur immediate and substantial dilution.  Further, any shares so issued may have rights, preferences and privileges superior to the rights, preferences and privileges of our outstanding Common Stock.

Market conditions may adversely affect our Common Stock.

Some of the factors that may materially affect the market price of our Common Stock are beyond our control, such as changes in financial estimates by industry and securities analysts, conditions or trends in the film and entertainment industries, announcements made by our competitors or sales of our Common Stock.  These factors may materially adversely affect the market price of our Common Stock, regardless of our performance.

We will also be effected by market regulation and trends which may make trading in securities such as our, difficult or undesirable. In addition, the public stock markets have experienced extreme price and trading volume volatility.  This volatility has significantly affected the market prices of securities of many companies for reasons frequently unrelated to the operating performance of the specific companies. These broad market fluctuations may adversely affect the market price of our Common Stock.

Our Common Stock is considered a "penny stock" and may be difficult to sell.

The SEC has adopted regulations which generally define a "penny stock" to be an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to specific exemptions.  The market price of our Common Stock is less than $5.00 per share and, therefore, is a "penny stock" according to SEC rules.  This designation requires any broker or dealer selling these securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities.  These rules may restrict the ability of brokers or dealers to sell our Common Stock and may affect the ability of investors to sell their shares.

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Future sales of our Common Stock may depress our stock price.

Sales of a substantial number of shares of our Common Stock in the public market could cause a decrease in the market price of our Common Stock. We may issue additional shares of stock and securities convertible into or exercisable for stock in connection with our business.  If a significant portion of these shares were sold in the public market, the market value of our Common Stock could be adversely affected.

Restrictions on the use of Rule 144 by shell companies could affect the resale of our shares.

We are considered a “shell” company. Historically, the SEC has taken the position that Rule 144 under the Securities Act, as amended, is not available for the resale of securities initially issued by companies that are, or previously were, blank check companies like us, to their promoters or affiliates despite technical compliance with the requirements of Rule 144.  The SEC has codified and expanded this position in its amendments and releases which prohibit the use of Rule 144 for resale of securities issued by shell companies (other than business transaction related shell companies) or issuers that have been at any time previously a shell company.  The SEC has provided an important exception to this prohibition, however, if the following conditions are met:

·

the issuer of the securities that was formerly a shell company has ceased to be a shell company;

·

the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;

·

the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and

·

at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.

As such, due to the fact that we are a shell company, holders of "restricted securities" within the meaning of Rule 144 (e.g. the former Almost Never Shareholders) will be subject to the conditions set forth herein. Therefore, sales under Rule 144 are prohibited for at least one year until we file current Form 10 type information.

Our stock may be traded infrequently and in low volumes, so sales of our Common Stock at or near the quoted bid prices may not be possible.

Until our Common Stock is listed on a national securities exchange such as the New York Stock Exchange or the Nasdaq Stock Market, we expect our Common Stock to remain eligible for quotation on the OTC Markets, or on another over-the-counter quotation system, or in the "pink sheets." In those venues, however, the shares of our Common Stock may trade infrequently and in low volumes, meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively small or non-existent. An investor may find it difficult to obtain accurate quotations as to the market value of our Common Stock or to sell his or her shares at or near bid prices or at all. In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling our Common Stock, which may further affect the liquidity of our Common Stock. This would also make it more difficult for us to raise capital.

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We may not be able to attract the attention of major brokerage firms, which could have a material adverse impact on the market value of our Common Stock. 

Security analysts of major brokerage firms may not provide coverage of our Common Stock since there is no incentive to brokerage firms to recommend the purchase of our Common Stock. The absence of such coverage limits the likelihood that an active market will develop for our Common Stock. It will also likely make it more difficult to attract new investors at times when we require additional capital.

If securities analysts do not initiate coverage or continue to cover our Common Stock or publish unfavorable research or reports about our business, this may have a negative impact on the market price of our Common Stock.

The trading market for our Common Stock will depend on the research and reports that securities analysts publish about our business and the Company.  It is often more difficult to obtain analyst coverage for companies whose securities are traded on the OTC Markets.  We do not have any control over securities analysts.  There is no guarantee that securities analysts will cover our Common Stock.  If securities analysts do not cover our Common Stock, the lack of research coverage may adversely affect its market price.  If we are covered by securities analysts, and our stock is the subject of an unfavorable report, our stock price and trading volume would likely decline.  If one or more of these analysts cease to cover the Company or fails to publish regular reports on the Company, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

We will incur ongoing costs and expenses for SEC reporting and compliance, without revenue we may not be able to remain in compliance, making it difficult for investors to sell their shares, if at all.

In order for us to remain in compliance with the rules of the OTC Markets, we will require future revenues to cover the cost of filings with the SEC, which could comprise a substantial portion of our available cash resources.  If we are unable to generate sufficient revenues to remain in compliance it may be difficult for you to resell any shares you may purchase, if at all.

We do not anticipate paying dividends on our Common Stock, and investors may lose the entire amount of their investment.

To date, cash dividends have not been declared or paid on our Common Stock, and we do not anticipate such a declaration or payment for the foreseeable future. We expect to use future earnings, if any, to fund business growth. Therefore, stockholders will not receive any funds absent a sale of their shares of Common Stock, subject to the limitation outlined herein. If we do not pay dividends, our Common Stock may be less valuable because a return on your investment will only occur if our stock price appreciates. We cannot assure stockholders of a positive return on their investment when they sell their shares, nor can we assure that stockholders will not lose the entire amount of their investment.

The risks above do not necessarily comprise all of those associated with an investment in the Company.

This Report contains forward looking statements that involve unknown risks, uncertainties and other factors that may cause the actual results, financial condition, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Factors that might cause such a difference include, but are not limited to, those set out above in the Risk Factors commencing on page 12 above, as well as elsewhere in this Report.

As part of Share Exchange, Doug Samuelson, our sole officer, resigned from all his positions with the Company and Danny Chan was elected as our Chief Executive Officer, Chief Financial Officer and a director on our Board, and Derek Williams was elected as our Chief Operating Officer. Mr. Chan and Mr. Williams held the same executive office positions at Almost Never prior to the Share Exchange. Effectively ten (10) days after the filing and distribution of an Information Statement on Schedule 14f-1, Mr. Williams will become a director on our Board and Doug Samuelson, a current director, will resign.

Results of Operations

Fiscal period July 8, 2015 to October 31, 2015

During July 8, 2015 through October 31, 2015, the Company generated no revenues.

During July 8, 2015 through October 31, 2015, the Company incurred operating expenses of $1,090, all of which were general and administrative expenses.

Income Taxes

Financial Condition, Liquidity and Capital Resources

Since our inception, we devoted substantially all of our efforts to the development of motion picture projects that consisted of meeting with screenwriters, producers, directors, talent agencies, and other motion picture industry executives. We have not, as of the date of this Report, generated any revenues from our planned principal operations. 

Working Capital

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Cash Flows

During July 8, 2015 through October 31, 2015, the Company generated no cash from operations and received $10,000 cash by the way of issuance of common stock. The Company neither generated funds, nor used funds, in investing activities during July 8, 2015 through October 31, 2015.

Going Concern

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These conditions raise substantial doubt as to our ability to continue as a going concern.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management's efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

Since inception, we satisfied our operating cash requirements from investment from our founders Danny Chan and Derek Williams.

We anticipate we will rely on equity sales of our common shares in order to continue to fund our business operations.  Issuances of additional shares will result in dilution to our existing shareholders.  There is no assurance that we will achieve any of additional sales of our equity securities or arrange for debt or other financing to fund our exploration and development activities.

Off-Balance Sheet Arrangements

We have no "off-balance sheet arrangements" (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K).

Critical Accounting Policies, Estimates, and Judgments

Our financial statements are prepared in accordance with accounting principles that are generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. We continually evaluate our estimates and judgments, our commitments to strategic alliance partners and the timing of the achievement of collaboration milestones. We base our estimates and judgments on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known. Besides the estimates identified above that are considered critical, we make many other accounting estimates in preparing our financial statements and related disclosures. All estimates, whether or not deemed critical, affect reported amounts of assets, liabilities, revenues and expenses, as well as disclosures of contingent assets and liabilities. These estimates and judgments are also based on historical experience and other factors that are believed to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known, even for estimates and judgments that are not deemed critical.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Name and Address of Beneficial Owner		Title of Class		Amount and Nature of Beneficial Owner		Percent of Class(1)
5% Stockholders
Danny Chan		Common Stock		1,706,084			6.2	%
Fox Chase PO Box 233, Redondo Beach, CA 90277		Common Stock		1,666,667			6.0	%
Named Executive Officers and Directors
William Sigler(2), Former Director and Officer   1765 Oak Street, Torrance, CA 90501		Common Stock		3,418,999			12.4	%
Christopher Jenks, Former Officer 1211 8th St. Manhattan Beach, CA 90266		Common Stock		1,458,334			5.3	%
Doug Samuelson, Interim Chief Executive Officer and Chief Financial Officer, and Director 6025 Macadam Ct., Agoura Hills, CA		Common Stock		2,558,334			9.3	%
All directors and officers as a group (1 person)		Common Stock		2,558,334			9.3	%

Name and Address of Beneficial Owner		Title of Class		Amount and Nature of Beneficial Owner		Percent of Class(1)
5% Stockholder
Fox Chase PO Box 233, Redondo Beach, CA 90277		Common Stock		1,666,667			6.0	%
Named Executive Officers and Directors
Danny Chan, Chief Executive Officer, Chief Financial Officer and Director		Common Stock		51,706,084(2)			66.6	%(2)
Derek Williams, Chief Operating Officer		Common Stock		50,000,000(3)			64.4	%(3)
Doug Samuelson, Director and Former Officer 6025 Macadam Ct., Agoura Hills, CA		Common Stock		2,558,334			9.3	%
William Sigler(4), Former Officer 1765 Oak Street, Torrance, CA 90501		Common Stock		3,418,999			12.4	%
Christopher Jenks, Former Officer 1211 8th St. Manhattan Beach, CA 90266		Common Stock		1,458,334			5.3	%
All directors and officers as a group (3 persons)		Common Stock		104,264,418			81.7	%

Name and Address of Beneficial Owner		Title of Class		Amount and Nature of Beneficial Owner		Percent of Class(1)
Named Executive Officers and Directors
Danny Chan(1), Chief Executive Officer, Chief Financial Officer and Director		Series A Convertible Preferred Stock		500,000			50.0	%
Derek Williams(2), Chief Operating Officer		Series A Convertible Preferred Stock		500,000			50.0	%
All directors and officers as a group (2 persons)		Series A Convertible Preferred Stock		1,000,000			100.0	%

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Directors and Executive Officers

Effective as of the consummation of the transactions contemplated by the Exchange Agreement, Doug Samuelson resigned as our Interim Chief Executive Officer and Chief Financial Officer. Danny Chan became our Chief Executive Officer and Chief Financial Officer and a director of the Company. Derek Williams became our Chief Operating Officer. Ten (10) days after the filing and the distribution of a Schedule 14f-1 Information Statement, Mr. Williams will become a director of the Board and Mr. Samuelson will resign as a director.

Below are the names of and certain information regarding the Company's current executive officers and directors who were appointed effective as of the closing of the Share Exchange:

The principal occupation and business experience during the past five years for our executive officers and directors are as follows:

Danny Chan, 38, Chief Executive Officer, Chief Financial Officer, Director.  Danny Chan joined us as Chief Executive Officer, Chief Financial Officer and a director of our Board on January 15, 2016. Since October of 2012 to Present, Mr. Chan serves as a managing director of Iconic Private Equity Partners. From July of 2010 to September of 2012 Mr. Chan served as managing director of Raider Capital Corporation. Mr. Chan earned a bachelor's degree in finance from Indiana University.

Derek Williams, 34, Chief Operating Officer. Derek Williams joined us as Chief Operating Officer on January 15, 2016. Since February 2013 to present, Mr. Williams has been a private investor managing his family estate while also creating fine art for his private clientele

Mr. Williams has over thirteen years of experience working on visual effects in Hollywood.  While attending university he began his film career working on Looney Toons Back in Action and A Cinderella Story. From May of 2012 to January of 2013, Mr. Williams held a position with GS Entertainment working on visual effects.  From December of 2011 to May of 2012, Mr. Williams held a position at leading visual effects company Pixel Magic.  He was responsible for coordinating a multinational 3D conversion team with offices in Los Angeles, Lafayette Louisiana, and India. Films Mr. Williams has worked on for both visual effects and 3D conversion include movies such as Harry Potter Deathly Hollows Part I and II, Jonah Hex, Chronicles of Narnia: The Voyage of The Dawn Treader, The Help, Fright Night, The Twilight Saga: Breaking Dawn Part I, Ghost Rider Spirit of Vengeance, Men In Black 3, The Conjuring, Gangster Squad, Beautiful Creatures, Looper, After Earth, Secretariat and Thunderstruck.

Mr. Williams is a graduate of Occidental College.

Doug Samuelson, 56, Director. Doug Samuelson has his CPA license in California and has over 10 years of experience working for public accounting firms and over 10 years of experience as a CFO, Director and Controller of both private and publicly traded companies. Most recently, Doug was the CFO for two years at Medacta USA, an orthopedic distributor located in Camarillo, California. Before that, he had his own consulting practice, working as a contract CFO and assisting public companies with their Sarbanes-Oxley (SOX) compliance. From 2005 to 2010, he worked for JH Cohn LLP in their audit and consulting groups in Woodland Hills, California, primarily working with publicly traded companies with their SOX compliance, but also providing technical accounting and financial reporting guidance to those companies. He also managed audits for privately held companies. From 2002 to 2005, he worked for the RAND Corporation in Los Angeles, California, as a Director of Accounting. From 1998 to 2002, he worked for Spirent Communications as their Director of Accounting in Calabasas, California. From 1992 to 1998, he worked for Arthur Andersen LLP in their audit practice in Los Angeles, California.

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Doug has his Bachelor of Science degree in Accounting from the University of Utah and his Master of Science degree in Computer Science from the California State University, Northridge.

Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified.  Directors are elected by a plurality of the votes cast at the annual meeting of stockholders and hold office until the expiration of the term for which he or she was elected and until a successor has been elected and qualified. 

A majority of the authorized number of directors constitutes a quorum of the Board for the transaction of business. The directors must be present at the meeting to constitute a quorum. However, any action required or permitted to be taken by the Board may be taken without a meeting if all members of the Board individually or collectively consent in writing to the action.

Other Key Personnel

We have no significant employees other than the officers and directors described above.

Family Relationships

There are no family relationships among our directors or executive officers.

Involvement in Certain Legal Proceedings

Except for Mr. Derek William’s conviction of a “wet reckless” on September 26, 2011, a misdemeanor offense involving reckless driving under California Vehicle Code Section 23103, no executive officer or director of ours has been involved in the last ten years in any of the following:

·

Any bankruptcy petition filed by or against any business or property of such person, or of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

·

Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

·

Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;

·

Being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

·

Being the subject of or a party to any judicial or administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated relating to an alleged violation of any federal or state securities or commodities law or regulation, or any law or regulation respecting financial institutions or insurance companies, including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail, fraud, wire fraud or fraud in connection with any business entity; or

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·

Being the subject of or a party to any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act, any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires our directors, executive officers and greater than ten percent beneficial owners of our Common Stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Directors, executive officers and greater than ten percent stockholders are required by the rules and regulations of the Securities and Exchange Commission to furnish us with copies of all Section 16(a) reports they file. Based solely on a review of the copies of these reports furnished to us and written representations from such directors, executive officers and stockholders with respect to the period from June 30, 2014, through June 30, 2015, we are not aware of any required Section 16(a) reports that were not filed on a timely basis.

Board Committees

The Board currently does not have any committees. Until further determination by the Board, the full Board will undertake the duties of the audit committee, compensation committee and nominating committee.

Code of Ethics

The Company currently has not adopted a written code of ethics. We intend to implement a comprehensive corporate governance program, including adopting a Code of Ethics.

Director Independence

We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the Board be "independent" and, as a result, we are not at this time required to have our Board comprised of a majority of "Independent Directors."

 

Name and Principal Position		Year		Salary ($)				Bonus ($)				Stock Awards ($)				Option Awards ($)				Non-Equity Incentive Plan Compensation ($)				Nonqualified Deferred Compensation Earnings ($)				All Other Compensa-tion ($)				Total ($)
William Sigler,		2015			32,900				-				-				-				-				-				-				32,900
Director and former CEO (1)		2014			100,000				-				-				-				-				-				-				100,000
Doug Samuelson,		2015			64,500				-				37,500				-				-				-				-				102,000
Interim CEO and CFO (2)		2014			23,500				-				10,500				-				-				-				-				34,000
Christopher Jenks (3)		2015			-				25,000				9,731				-				-				-				-				34,731
		2014			-				-				-				-				-				-				-				-
Tom Mercer,		2015			52,500				-				-				-				-				-				-				52,500
President and Director (4)		2014			37,500				-				20,000				-				-				-				-				57,500
Charles A. Lesser,		2015			-				-				-				-				-				-				-				-
former CFO (5)		2014			40,000				-				80,000				-				-				-				-				120,000
Ray Valdez,		2015			-				-				-				-				-				-				-				-
former CIO (6)		2014			-				-				40,000				-				-				-				-				40,000

		(1)	William Sigler was appointed as our Chief Executive Officer and a director in April 2012. During FY 2015 and FY 2014, Mr. Sigler accrued a salary of $32,000 and $100,000, respectively. Mr. Sigler resigned as our Chief Executive Officer on September 22, 2014. Mr. Sigler resigned as our Corporate Secretary on November 12, 2014. Mr. Sigler resigned as a director of the Company on July 27, 2015.
		(2)	Doug Samuelson was appointed as our Interim Chief Executive Officer on February 16, 2015 and Chief Financial Officer on April 1, 2014. Mr. Samuelson was appointed Chairman of the Board on June 5, 2015. During FY 2015 and FY 2014, Mr. Samuelson accrued a salary of $64,500 and $23,500, respectively. Mr. Samuelson also earned stock awards of $37,500 and $10,500 during FY 2015 and FY 2014, respectively. Effective upon the closing date of the Share Exchange transaction on January 15, 2016, Mr. Samuelson resigned as our Interim Chief Executive Officer and Chief Financial Officer.
		(3)	Christopher Jenks was appointed Chairman of the Board on October 15, 2014, and our interim Chief Executive Officer on November 12, 2014. Mr. Jenks resigned as our interim Chief Executive Officer and President on February 13, 2015. Mr. Jenks resigned as a Chairman of our Board on June 5, 2015.
		(4)	Tom Mercer was appointed President and Director in February 2014. During FY 2015 and FY 2014, Mr. Mercer accrued a salary of $52,500 and $37,500, respectively. Mr. Mercer also earned stock awards of $20,000 during FY 2014. Mr. Mercer resigned as our President and a director on January 9, 2015.
		(5)	Charles A. Lesser was appointed as our CFO in December 2012. During FY 2014, Mr. Lesser accrued a salary of $40,000 and earned stock awards of $80,000.
		(6)	Ramon Valdez was CFO and subsequently Chief Information Officer for the Company. Mr. Valdez resigned his position during FY 2014. Mr. Valdez received stock awards of $40,000 in FY 2014.

Quarter Ended		High				Low
December 31, 2015		$	0.07			$	0.03
September 30, 2015		$	0.02			$	0.02
June 30, 2015		$	0.03			$	0.03
March 31, 2015		$	0.07			$	0.07
December 31, 2014		$	0.23			$	0.19
September 30, 2014		$	0.11			$	0.11
June 30, 2014		$	0.10			$	0.08
March 31, 2014		$	0.19			$	0.18
December 31, 2013		$	0.03			$	0.03
September 30, 2013		$	0.09			$	0.09

Share Purchase Warrants

We have not issued and do not have outstanding any warrants to purchase shares of our Common Stock.

Options

We have not issued and do not have outstanding any options to purchase shares of our Common Stock.

Registration Rights

The Company does not have any registration rights outstanding.

LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings or intellectual property infringement claims 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 business.

We are currently not aware of any pending legal proceedings to which we are a party or of which any of our property is the subject, nor are we aware of any such proceedings that are contemplated by any governmental authority.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our officers and directors are indemnified as provided by the Nevada Revised Statutes and our bylaws.  Under the Nevada Revised Statutes, director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a company's Articles of Incorporation. Our Articles of Incorporation do not specifically limit our directors' immunity. Excepted from that immunity are: (a) a willful failure to deal fairly with the company or its stockholders in connection with a matter in which the director has a material conflict of interest; (b) a violation of criminal law, unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful; (c) a transaction from which the director derived an improper personal profit; and (d) willful misconduct.

Our Articles and bylaws provide that we will indemnify our directors and officers to the fullest extent not prohibited by Nevada law; provided, however, that we may modify the extent of such indemnification by individual contracts with our directors and officers; and, provided, further, that we shall not be required to indemnify any director or officer in connection with any proceeding, or part thereof, initiated by such person unless such indemnification: (a) is expressly required to be made by law, (b) the proceeding was authorized by our board of directors, (c) is provided by us, in our sole discretion, pursuant to the powers vested in us under Nevada law or (d) is required to be made pursuant to the bylaws.

Our Articles and bylaws also provide that we may indemnify a director or former director of subsidiary corporation and we may indemnify our officers, employees or agents, or the officers, employees or agents of a subsidiary corporation and the heirs and personal representatives of any such person, against all expenses incurred by the person relating to a judgment, criminal charge, administrative action or other proceeding to which he or she is a party by reason of being or having been one of our directors, officers or employees.

Our directors cause us to purchase and maintain insurance for the benefit of a person who is or was serving as our director, officer, employee or agent, or as a director, officer, employee or agent or our subsidiaries, and his or her heirs or personal representatives against a liability incurred by him as a director, officer, employee or agent.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and control persons pursuant to the foregoing provisions or otherwise, we have been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy, and is, therefore, unenforceable.

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Item 3.02     Unregistered Sales of Equity Securities.

As of September 30, 2015 and June 30, 2015, the Company owed an officer of the Company $100,000 and $88,000, respectively, relating to unpaid compensation. As of September 30, 2015 and June 30, 2015, the Company also owed $25,000 of compensation to a former officer and director of the Company. On October 31, 2015, the amounts due to these related parties totaling $125,000 on that date was converted into 3,125,000 shares of the Company’s Common Stock. The foregoing issuances were deemed to be exempt from registration under Section 4(a)(2) of the Securities Act as not involving any public offering.

Pursuant to the terms of the Exchange Agreement, we issued an aggregate of 1,000,000 shares of our Series A Convertible Preferred Stock to the two Almost Never Shareholders. These transactions were deemed to be exempt from registration under Section 4(a)(2) of the Securities Act as not involving any public offering. Reference is also made to the information set forth in Item 2.01 "Completion of Acquisition or Disposition of Assets—The Share Exchange and Related Actions—The Share Exchange" above which provides additional information and details relating to foregoing issuances and is incorporated into this item by reference.

Item 3.03     Material Modification to Rights of Security Holders.

The information set forth in Item 2.01 "Completion of Acquisition or Disposition of Assets—The Share Exchange and Related Acts—The Share Exchange" above is incorporated into this item by reference.

Item 5.01     Changes in Control of Registrant.

Because each holder of our Series A Convertible Preferred Stock is entitled to vote on an “as converted” basis, together with our Common Stock, as a single class, in connection with any proposal submitted to our stockholders, the Almost Never Shareholders as a group hold approximately 80% of the voting control of the Company as a result of the Share Exchange transaction. The Company also agreed not to take certain actions without first obtaining the approval of all the holders of then outstanding shares of Series A Convertible Preferred Stock.  Reference is made to the information set forth in Item 2.01 "Completion of Acquisition or Disposition of Assets—The Share Exchange and Related Actions—The Share Exchange" above which provides additional information and details relating to this issuance and is incorporated into this item by reference.

The information set forth in Item 2.01 "Completion of Acquisition or Disposition of Assets—The Share Exchange and Related Acts—Departure and Appointment of Directors and Officers" and Item 2.01 "Completion of Acquisition or Disposition of Assets—Directors, Executive Officers, Promoters and Control Persons" above are incorporated into this item by reference.

Item 5.03.     Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The information set forth in Item 2.01 "Completion of Acquisition or Disposition of Assets—The Share Exchange and Related Actions—The Share Exchange" above is incorporated into this item by reference.

Item 9.01    Financial Statements and Exhibits.

 

 

 

 

 

 

 

		October 31,
		2015
Assets
Current Assets
Cash and cash equivalents			8,910
Total Current Assets			8,910
Total Assets		$	8,910
Liabilities and Stockholders’ Equity
Total Liabilities		$	-
Commitments and Contingencies (Note F)
Stockholders' Equity
Common stock, 100,000,000 shares issued and outstanding at October 31, 2015			10,000
Accumulated deficit			(1,090	)
Total Stockholders' Equity			8,910
Total Liabilities and Stockholders’ Equity		$	8,910

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		July 8, 2015 to
		October 31, 2015
Revenues		$	-
Operating Expenses
General and administrative			1,090
Total Operating Expenses			1,090
Loss from Operations			(1,090	)
Net Loss		$	(1,090	)
Net Loss Per Share:  Basic and Diluted		$	(0.00	)
Weighted Average Number of Shares Outstanding:
Basic and Diluted			100,000,000

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Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of October 31, 2015.  The carrying values of our financial instruments, including cash and cash equivalents, approximate their fair values due to the short-term maturities of these financial instruments.

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes.  Deferred taxes are recognized for the differences between the basis of assets and liabilities for financial statement and income tax purposes.  Those differences relate to the carryforward of the net operating loss for the period ended October 31, 2015.  The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled.  Deferred taxes are also recognized for any operating loss carryforwards, charitable contribution carryforwards, and tax credit carryforwards that are available to offset future income taxes.

 

	SMACK SPORTSWEAR
Dated: January 20, 2016	By:	/s/ Danny Chan
		Name: Danny Chan
		Title: Chief Executive Officer and Chief Financial Officer

Exhibit 2.1

 

THIS SHARE EXCHANGE AGREEMENT (this “Agreement”), dated as of January 15, 2016, is by and among Smack Sportswear, a Nevada corporation (“Smack”), Almost Never Films Inc., an Indiana corporation (“ANF”), and the shareholders of ANF identified on Exhibit A attached hereto (each, a “Shareholder” and together the “Shareholders”). Each of the parties to this Agreement is individually referred to herein as a “Party” and collectively, as the “Parties.” Capitalized terms used herein that are not otherwise defined herein shall have the meanings ascribed to them in Exhibit B attached hereto.

WHEREAS, each Shareholder currently owns the shares of common stock of ANF listed opposite such Shareholder’s name on Exhibit A attached hereto (collectively, the “ANF Shares”);

WHEREAS, the Shareholders own all of the issued and outstanding shares of common stock of ANF;

WHEREAS, each Shareholder desires to exchange his ANF Shares for the number of shares of Series A Convertible Preferred Stock of Smack, par value $0.001 per share (the “Series A Convertible Preferred Stock”), listed opposite such Shareholder’s name on Exhibit A attached hereto (collectively, the “Smack Shares”);

WHEREAS, Smack believes that it is in the best interest of Smack and its shareholders to exchange the Series A Convertible Preferred Stock for the ANF Shares, upon the terms and conditions set forth in this Agreement;

WHEREAS, as a result of the transactions contemplated hereby, ANF will become a wholly-owned subsidiary of Smack;

WHEREAS, the board of directors of each of Smack and ANF has determined that it is desirable to effect this share exchange.

NOW THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE I
EXCHANGE OF SECURITIES

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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS

Each Shareholder severally (and not jointly) represents and warrants to Smack, as follows:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF ANF

ANF represents and warrants to Smack, as follows:

3.13.            Absence of Certain Changes or Events. Except as disclosed in the ANF Financial Statements, from October 31, 2015 to the date of this Agreement, ANF has conducted its business only in the ordinary course.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF SMACK

Subject to the exceptions set forth herein or in its reports as filed with the SEC, Smack represents and warrants as follows to ANF and its Shareholders, as follows:

ARTICLE V
CONDITIONS TO CLOSING

ARTICLE VI

 

ARTICLE VII
MISCELLANEOUS

If to Smack, to:

If to ANF or the Shareholders, to:

[Remainder of Page Intentionally Omitted; Signature Page Follows]

IN WITNESS WHEREOF, the Parties hereto have caused this Share Exchange Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

SMACK SPORTSWEAR

ALMOST NEVER FILMS INC.

DANNY CHAN

DEREK WILLIAMS

 

EXHIBIT A

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EXHIBIT B

“Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or threatened in writing before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state, county, local or foreign), stock market, stock exchange or trading facility.

“ANF Constituent Instruments” means the articles or certificate of incorporation and by laws, each as amended to date of ANF and such other constituent instruments of ANF as may exist, each as amended to the date of this Agreement.

“Consent” means any consent, approval, license, permit, order or authorization.

“Contract” means any contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument.

“Damages” means any loss, liability, claim, damage, expense (including, but not limited to, costs of investigation and defense and attorneys' fees).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Governmental Entity” means any federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign.

“Intellectual Property Right” means any patent, patent right, trademark, trademark right, trade name, trade name right, service mark, service mark right, copyright and other proprietary intellectual property right and computer program.

“Law” means any statute, law, ordinance, rule, regulation, order, writ, injunction, judgment, or decree.

“Lien” means any lien, security interest, pledge, charge, equity and claim of any kind, voting trust, stockholder agreement or other encumbrance.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Smack Bylaws” means the Bylaws of Smack, as amended to the date of this Agreement.

“Smack Charter” means the Articles of Incorporation of Smack, as amended to the date of this Agreement.

“Taxes” means all forms of taxation, whenever created or imposed, and whether of the United States or elsewhere, and whether imposed by a local, municipal, governmental, state, foreign, federal or other Governmental Entity, or in connection with any agreement with respect to Taxes, including all interest, penalties and additions imposed with respect to such amounts.

“Tax Return” means all federal, state, local, provincial and foreign Tax returns, declarations, statements, reports, schedules, forms and information returns and any amended Tax return relating to Taxes.

“Transaction Documents” means this Agreement and any other documents or agreements executed in connection with the Transactions.

 

 

 

 

EXHIBIT C

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Consent of Independent Registered Public Accounting Firm

We hereby consent to the inclusion of our report dated December 28, 2015, with respect to the balance sheet of Almost Never Films Inc. as of October 31, 2015, and the related statements of operations, changes in stockholders' equity, and cash flows for the period July 8, 2015 to October 31, 2015, in which the report appears in the Form 8-K of Smack Sportswear dated January 20, 2016.

Indianapolis, Indiana

Exhibit 99.1

 

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