SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
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14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
CHAMPIONLYTE HOLDINGS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required
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1) Title of each class of securities to which transaction
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computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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[ ] Check box if any part of the fee is offset as provided by Exchange
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fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
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CHAMPIONLYTE HOLDINGS, INC.
2999 NE 191st Street, Penthouse 2
North Miami Beach, Florida 33180
(561) 394-8881
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 26, 2003
Notice is hereby given that the Annual Meeting of Shareholders of CHAMPIONLYTE
HOLDINGS, INC, a Florida corporation (the "Company"), will be held between 3:00
to 6:00 p.m. Eastern Standard Time on Friday, September 26, 2003, at Raintree
Golf Resort located at 1600 S. Hiatus Road, Pembroke Pines, Fl 33025 for the
following purposes:
1. To ratify the filing of our Form SB-2 Registration Statement
filed with the SEC;
2. To ratify our 2003 Stock Incentive Plan, 2003 Stock Incentive
Plan #2 and 2003 Stock Incentive Plan #3 and ratify the filing
of the S-8 Registration Statements for such Plans;
3. To ratify the appointment of our new directors and the
appointment of Donna Bimbo as a Director of our subsidiary,
Championlyte Beverages, Inc.;
4. To ratify the creation of our Series III and Series IV
Preferred Stock;
5. To ratify the settlement of our Old Fashioned Syrup Company
Lawsuit;
6. To ratify the agreement for our funding with Advantage Fund;
7. To ratify the appointment of Massella Roumbos, LLP as our new
independent auditors;
8. To ratify the relocation of our corporate offices; and
9. To ratify the changing of our corporate name.
The Board of Directors has fixed the close of business on September 5, 2003 as
the record date for determining the shareholders entitled to notice of, and to
vote at, the meeting or any adjournment thereof.
It is important that all shareholders be represented at the Annual Meeting. We
urge you to sign and return the enclosed Proxy as promptly as possible, whether
or not you plan to attend the meeting. The Proxy should be returned in the
enclosed postage prepaid envelope. If you do attend the Annual Meeting, you may
then withdraw your Proxy. The Proxy may be revoked at any time prior to its
exercise.
By Order of the Board of Directors,
DAVID GOLDBERG, President
North Miami Beach, Florida
August , 2003
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CHAMPIONLYTE HOLDINGS, INC.
2999 NE 191st Street, Penthouse 2
North Miami Beach, Florida 33180
(561) 394-8881
PROXY STATEMENT
SEPTEMBER 8, 2003
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 26, 2003
GENERAL INFORMATION
This Proxy Statement is furnished by the Board of Directors (the "Board
of Directors") of Championlyte Holdings, Inc., a Florida corporation (the
"Company"), to the shareholders of the Company in connection with a solicitation
of proxies for use at the Annual Meeting of Shareholders (the "Annual Meeting")
to be held at 3:00 p.m. Eastern Standard Time on Friday, September 26, 2003 at
Raintree Golf Resort located at 1600 S. Hiatus Road, Pembroke Pines, Fl 33025
and at any and all adjournments thereof. This Proxy Statement and the
accompanying materials are first being mailed to shareholders on or about
September 8, 2003. The Company's principal executive office is located at 2999
NE 191st Street, Penthouse 2, North Miami Beach, Florida 33180.
You may revoke the proxy at any time prior to its use by delivering a written
notice to the Secretary of the Company, by executing a later-dated proxy or by
attending the meeting and voting in person. Proxies in the form enclosed, unless
previously revoked, will be voted at the meeting in accordance with the
specifications made by you thereon, or, in the absence of such specifications
for, the election of directors nominated herein for one year.
Holders of record of shares of Common Stock, par value $.001 per share, ("Common
Stock") of the Company at the close of business on September 5, 2003, will be
entitled to one vote per share. The Common Stock will be voted together as one
class. On August 27, 2003, there are approximately 28,687,064 outstanding shares
of Common Stock of the Company. Other than the Common Stock, there are no other
outstanding voting securities outstanding.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of
the outstanding shares of Common Stock by persons known by the Company to
beneficially own more than 5% of the outstanding shares of Common Stock, by each
director and officer, by nominees for directors of the Company, and by all
directors and executive officers of the Company as a group:
NAMES AND ADDRESS OF
DIRECTORS, OFFICERS, AND NUMBER OF PERCENT
5% SHAREHOLDERS SHARES OWNED OF CLASS
- --------------- ------------ --------
Thad Kaplan 20,000 *
David Goldberg 20,000 *
Steven Fields 20,000 *
Marshall Kanner 920,000 3.35%
All Executive Officers and Directors 980,000 3.42%
as a Group (4 persons)
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PROPOSALS FOR SHAREHOLDER APPROVAL
The following material sets forth nine proposals. The current Board of Directors
controls the voting of approximately 980,000 shares of Common Stock or 3.42% of
the shares issued and outstanding and entitled to vote. The Directors intend to
vote all of their shares in favor of each proposal.
PROPOSAL #1:
TO RATIFY THE FILING OF THE SB-2 REGISTRATION STATEMENT
FILED WITH THE SEC FOR THE SALE OF 42,550,268 SHARES
HELD BY SELLING SECURITY HOLDERS
AND AN ADDITIONAL 6,666,667 SHARES OF COMMON STOCK AT $0.15 PER SHARE
Proposal #1 is to ratify the filing of an SB-2 Registration Statement
with the SEC registering 42,550,268 shares of common stock held by selling
security holders and warrant holders. In addition, we registered an additional
6,666,667 shares of our common stock to be sold at an offering price of $0.15
per share. Our selling security holders are offering to sell 42,550,268 shares
of our common stock currently held by them or issuable in connection with their
conversion of our warrants. We will receive no proceeds from the sale of the
shares by the selling security holders, however, we will receive the proceeds
from the sale of the additional 6,666,667 shares and the conversion of the
outstanding warrants. We plan on using the proceeds raised in the offering for
general working capital and other related expenses. The shares being registered
for the selling security holders will allow these selling security holders to
sell their stock on the public market without any restrictions. Many of our
shareholders who own restricted stock being registered herewith are our
investors and/or individuals who perform services for our benefit. The filing of
this registration statement is required pursuant to the terms of our financing
agreement and we would not have received the financing if we did not agree to
file such registration statement. Without the filing of the SB-2 Registration
Statement we would not have the financing necessary to recommence our
operations.
The Board recommends a vote "For" ratification of the filing of the
SB-2 Registration Statement registering 42,550,268 shares of common stock for
selling security holders and an additional 6,666,667 shares of common stock at
$0.15 per share.
PROPOSAL #2
TO RATIFY THE 2003 STOCK INCENTIVE PLAN, 2003 STOCK INCENTIVE PLAN #2 AND 2003
STOCK INCENTIVE PLAN #3 AND RATIFY THE FILING OF
THE S-8 REGISTRATION STATEMENTS
PURSUANT TO THE STOCK INCENTIVE PLANS
Proposal # 2 is a proposal to ratify the 2003 Stock Incentive Plan, the
2003 Stock Incentive Plan #2 and the 2003 Stock Incentive Plan #3 and to ratify
the filing of the S-8 Registration Statements for such Stock Incentive Plans.
The 2003 Stock Incentive Plans and Form S-8s registered a total of 5,250,000
shares of our common stock. The purpose of the Employee Stock Incentive Plan (i)
was to provide long term incentives for employees and rewards to employees,
directors, consultants, independent contractors or agents of Championlyte and
our subsidiaries; (ii) assist us in attracting and retaining employees,
directors, independent contractors or agents with experience and/or ability on a
basis competitive with industry practices; and (iii) associate the interests of
such employees, directors, independent contractors or agents with those of our
stockholders. Pursuant to these Plans our Board was authorized to issue a total
of 5,250,000 shares of our common stock. These incentive plans have assisted us
in hiring qualified individuals to consult and work with us as we have
recommenced our operations. In addition, these incentive plans have enabled us
to hire qualified and well respected professionals to assist us in various legal
and consulting matters. Our Board of Directors has been granted sole power to
issue the 5,250,000 shares of common stock.
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The Board recommends a vote "For" ratification of the Stock Incentive
Plans and the filing of the S-8 Registration Statements for 5,250,000 shares of
Championlyte common stock.
PROPOSAL #3
APPOINTMENT OF OUR NEW DIRECTORS
AS WELL AS APPOINTMENT OF DONNA
BIMBO AS DIRECTOR FOR CHAMPIONLYTE BEVERAGES, INC.
Proposal #3 is to elect our new Board of Directors which will consist
of our four current directors and one director of our subsidiary, Championlyte
Beverages, Inc. to hold office until the next annual meeting of our shareholders
or until their respective successors are elected and qualified.
The Board has unanimously approve the following five nominees, all of
whom are members of the current Board: David Goldberg, Steven Fields, Thad
Kaplan, and Marshall Kanner as our directors and Donna Bimbo as the director of
our subsidiary, Championlyte Beverages. If any nominees declines to serve or
becomes unavailable for any reason, or if any vacancy occurs before the election
(although the Company knows of no reason that this would occur), the proxies may
be voted for such substitute nominees as the Company may designate.
BOARD OF DIRECTORS AND OFFICERS
Our operations are managed under the broad supervision and direction of
the Board of Directors, which has the ultimate responsibility for the
establishment and implementation of our general operating philosophy,
objectives, goals and policies.
Set forth below are the names, ages, and positions of the Directors and
Executive Officers of the Company.
NAME AGE POSITION
David Goldberg 41 President, Chief Executive Officer, Chief
Financial Officer and Director
Steven Fields 57 Director
Thad Kaplan 36 Director
Marshall Kanner 48 Director
Donna Bimbo 44 President and Director, ChampionLyte
Beverages, Inc.
The following is a biographical summary of our directors and officers:
DAVID GOLDBERG was appointed to our Board of Directors on February 11, 2003 and
was appointed as our President on April 14, 2003. Mr. Goldberg has fifteen years
of sales and marketing experience in real estate and property management
industry. From November 1999 to present, Mr. Goldberg has been the Vice
President of marketing, sales and distribution for All Star Packaging. From May
1996 to May 2000, Mr. Goldberg was property manager and leasing agent of Camco
Inc. In such capacity, he managed and directed all operations of Camco Inc.'s
one million square foot retail industrial portfolio. He also oversaw management
of various residential communities and ran the company's daily operations. From
August 1995 to May 2000, he was the principal owner of Gold's Gym Fitness &
Health Center in Middletown, New York. Mr. Goldberg holds a Bachelor of Science
degree in Business Administration from the State University of Delhi, New York.
THAD KAPLAN was appointed to our Board of Directors on January 7, 2003. Mr.
Kaplan is currently an independent food & beverage industry consultant. From
1997 to 2002, Mr. Kaplan was the owner of BS Holdings, Inc., a food and beverage
industry holding company. BS Holdings acquired a food service business in 1997
that was primarily in the wholesale baking business. Mr. Kaplan increased the
customer base exponentially and increased revenues ten fold during his
ownership. He sold the business during the second quarter of 2002. Prior to
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owning BS Holdings, Mr. Kaplan was the purchaser and manager of a number of
departments for the largest independent supermarket chain in Middletown New
York. Mr. Kaplan's responsibilities included multimillion dollar purchasing
decisions, management of dozens of employees, marketing and profit and loss
responsibility. Mr. Kaplan holds an Associates degree from Sullivan County
Community College, New York with studies in Food Service, Restaurant Management
and the Culinary Arts.
STEVEN FIELDS was appointed to our Board of Directors on February 11, 2003. Mr.
Field is a senior executive with varied manufacturing and management experience.
He has experience in "turn around" situations, increasing profitability and
bringing profitability to a company. His accounting and entrepreneurial
background gives him a unique prospective in both the manufacturing and service
businesses. He is experienced in reorganization situations. Mr. Field's last
position was with Security Plastics, a 43-year-old company seeking bankruptcy
protection under Chapter 11. Mr. Field was engaged as the Acting Chief Operating
Officer and Assistant to the President, assisting in the design and guiding the
company through a controlled reorganization. In addition, as a member of the
Triarc advisory committee, Mr. Field consulted and directed management in
various manufacturing operations within their bottling and distribution of Royal
Crown Cola, Snapple Drinks, and smaller bottling operations.
From 1993 to 1998 he was employed by Serta Mattress Co as the Director, Vice
President of Manufacturing. His position with Serta was to consolidate the
operations from 25 manufacturing locations to 17, while increasing productivity
by 270% and bringing outsourced products in-house. He was instrumental in the
packaging and sale of the company to a Triarc Group Subsidiary. He has extensive
sales and marketing experience and uses his accounting background to assist in
analysis of financial information and decision-making processes. Mr. Field has a
Bachelors of Science in Accounting and has taken many graduate level courses in
manufacturing, management and process as well as various seminars.
MARSHALL KANNER was elected as our Interim Chief Operating Officer, Director and
Chairman of our Board of Directors on January 7, 2003. He resigned as Interim
Chief Operating Officer and Chairman on April 14, 2003 but remains one of our
directors. Mr. Kanner's career of over 20 years covers corporate development,
corporate finance, mergers & acquisitions, strategic planning, strategic
alliances, corporate restructuring, management consulting, venture financing,
and forming entrepreneurial ventures in numerous industries. He possesses
executive leadership skills and experience in operations, finance, due
diligence, corporate strategic planning, sales, marketing, branding,
fulfillment, business development and logistics. His experience spans industries
including construction, apparel, transportation, financial consulting,
insurance, real estate brokerage, logistics and technology and internet
development. Mr. Kanner served as Chief Operating Officer and Vice President of
Business Development for MyCity Holdings, Corp., an internet technology
development and infrastructure company from January 1997 until March 2002. He
currently serves as Managing Director of BK Generalli, LLC, a financial
consulting company. Mr. Kanner earned his Bachelor of Science Degree in
Economics from the University of Florida in 1977.
DONNA BIMBO was appointed as President of our subsidiary, Championlyte Beverage,
Inc., on April 16, 2003. Prior to her employment with us, she had been the
Director of International Business for Snapple Beverage Group in White Plains,
New York since January 1995. In such capacity, she has been responsible for the
development of new business as well as the maintenance of the established
business base. She assisted in the creation of policies and procedures for
Snapple's worldwide operations and was involved in all legal aspects of the
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worldwide business such as trademarks and negotiation of contracts. She was the
sole Triarc representative on the acquisition team for the purchase of Snapple
and assisted in the establishment of new business in 26 countries.
Prior to working in such position, she was the Senior Manager of International
Business at Snapple Beverage Corporation in East Meadow, New York since December
1992. Her responsibilities included the management of all activities supporting
the $40 million annual international business including all rate negotiations,
overseeing all phases of import/export business, FDA regulations and business
terms and tariffs.
She received a Bachelor of Arts degree from Kean College of New Jersey in 1980
and attended the International Business Courses held at the World Trade
Institute in New York from 1984 to 1986. Ms. Bimbo was the guest speaker at the
BWN Summit on Globalization in Washington, DC in 2002.
Unless otherwise instructed, it is the intention of the persons named
in the accompanying form of proxy to vote shares represented by properly
executed proxies for the five nominees of the Board named above. If a quorum is
present and voting, the five nominees for director receiving the highest number
of votes will be elected as directors. Abstentions and "broker non-votes" will
not have any effect on the outcome of this proposal.
The Board recommends a vote "For" the election of all of the nominees
named above.
PROPOSAL #4
RATIFY THE CREATION OF THE SERIES III AND
SERIES IV PREFERRED STOCK
Proposal #4 is to ratify the creation of new two classes of
Championlyte's Preferred Stock as follows: (i) 500,000 shares of its preferred
stock, $1.00 par value, designated as "blank check" Series III Preferred Stock
("the Series III Preferred Stock") and (ii) 250,000 shares of its preferred
stock, par value $1.00, designated as Series IV Preferred Stock (the "Series IV
Preferred Stock").
Blank Check Series III Preferred Stock
The Company is authorized to issue 500,000 shares of preferred stock,
par value $1.00. The following is a statement of the designations, and powers,
of preferences and rights, and the qualifications, limitations or restrictions
with respect to the Preferred Stock of the Corporation: The shares of Preferred
Stock may be issued in one or more series, and each series shall be so
designated as to distinguish the shares thereof from the shares of all other
series. Authority is hereby expressly granted to the Board of Directors of the
Corporation to fix, subject to the provisions herein set forth, before the
issuance of any shares of a particular series. The number, designation, and
relative rights, preferences and limitations of the shares of such series
including (1) voting rights, if any, which may include the right to vote
together as a single class with the Common Stock and any other series of the
Preferred Stock with the number of votes per share accorded to shares of such
series being the same as or different from that accorded to such other shares,
(2) the dividend rate per annum, if any, and the terms and conditions pertaining
to dividends and whether such dividends shall be cumulative, (3) the amount or
amounts payable upon such voluntary or involuntary liquidation, (4) the
redemption price or prices, if any, and the terms and conditions of the
redemption, (5) sinking fund provisions, if any for the redemption or purchase
of such shares, (6) the terms and conditions on which such shares are
convertible, in the event the shares are to have conversion rights, and (7) any
other rights, preferences and limitations pertaining to such series which may be
fixed by the Corporation's Board of Directors pursuant to the Florida Business
Corporation Act.
Series IV Preferred Stock
The Corporation is authorized to issue up to 250,000 shares of
preferred stock at $1.00 par value. Such shares are based on a convertible
promissory note entered into between the Corporation and Triple Crown
Consulting, Inc. The promissory note is convertible at the option of Triple
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Crown Consulting based on the following conversion formula: the conversion price
per share shall be equal to the lesser of (i) the average of the lowest of three
trading day trading prices during the five trading days immediately prior to the
conversion date multiplied by .70, or (ii) the average of the lowest of the
three day trading prices during the five trading days immediately prior to the
funding date. Each outstanding share of Series IV Preferred Stock is convertible
into one share of common stock.
The creation of both of these Preferred Shares will assist in various
forms of financing which are necessary for us to continue to expand our business
operations.
The Board recommends a vote "For" ratification of the creation of the
Series III and Series IV Preferred Shares.
PROPOSAL #5
RATIFY THE SETTLEMENT
OF THE OLD FASHIONED SYRUP COMPANY LAWSUIT
Proposal #5 is a proposal to approve the settlement that was reached
between defendants InGlobalvest, Inc., Steve Sherb, Barry Patterson, Uche Osuji,
John Doe #1, Alan Posner and Christopher A. Valleau and us. We claimed that the
defendants fraudulently conveyed our subsidiary, the Old Fashioned Syrup
Company, Inc. The complaint was filed against the above named defendants in the
Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida
and was for monetary damages, injunctive declaratory and equitable relief. The
lawsuit further claimed that we have suffered irreparable damage and we were
seeking to rescind the sale of the securities in the Syrup Company to
InGlobalVest and restore to ChampionLyte, the Syrup Company and InGlobalVest to
their respective positions prior to the time the transaction was entered.
On July 21, 2003, we reached a settlement with Defendants,
InGlobalVest, Steve Sherb, Barry Patterson, Uche Osuji and Christopher A.
Valleau ("Defendants") in this matter. In addition negotiations with Defendant
Alan Posner are ongoing and if a settlement is not reached within a reasonable
period of time we will proceed with the litigation against Mr. Posner in a
timely manner.
Pursuant to a Settlement Agreement with the other Defendants, the
parties agreed to stay the case pending the completion of the certain
obligations prior to August 20, 2003. Such obligations were performed by such
date and we have dismissed all claims against these Defendants. The lawsuit
against Defendants, InGlobalvest, Steve Sherb, Barry Patterson and Uche Osuji
was dismissed with prejudice and the lawsuit against Defendant, Christopher
Valleau, was dismissed without prejudice.
Pursuant to the terms of the Settlement Agreement, InGlobalvest
delivered any and all stock certificates in the Old Fashioned Syrup Company as
well as all books and records to the Company to our counsel. In addition,
InGlobalvest appointed a representative to assist in the change in control and
management and entered into a non-interference agreement with us with respect to
the Old Fashioned Syrup Company. InGlobalvest has warranted and represented to
us that the financial conditions depicted in the books and records tendered to
us on July 15, 2003 were true, accurate and complete as of that date to the best
of InGlobalvest's knowledge and that no known liabilities were omitted from
disclosure in such records.
In consideration for the return of the Old Fashioned Syrup Company we
agreed to pay $125,000 to InGlobalVest in the following manner: $20,000 by the
close of business on July 21, 2003 and the balance of the funds no later than
August 20, 2003. Such payment has been made in full. Our decision to pay
$125,000 for the return of the Old Fashioned Syrup Company was as a result of
the infusion of capital into the Old Fashioned Syrup Company by InGlobalvest,
the outstanding original loan made to Championlyte by InGlobalvest and a
restructuring of the Old Fashioned Syrup Company by InGlobalvest, during their
ownership of such business, which reduced some of the outstanding liabilities of
such entity. Based on these factors, we believe that the payment of $125,000 for
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the Old Fashioned Syrup Company was warranted and that the return of such
business to us will increase our shareholder value.
We also agreed to the following conditions for such settlement:
1. As part of the payment of the $125,000, Churchhill
Investments, Inc. which provides factoring for us, assigned
its UCC-1 Financing Statement for the first $50,000 on our
Accounts Receivable, Equipment, Inventory and General
Intangibles of Championlyte Beverages, Inc. which it currently
holds as security pursuant to its Factoring Agreement with us
dated June 30, 2003. Based on the payment in full of the
$125,000, a UCC-3 was recently filed with the State of Florida
terminating the UCC-1 financing statement;
2. We dismissed the lawsuit with prejudice and issued releases to
Defendants, InGlobalvest, Steve Sherb, Barry Patterson and
Uche Osuji and dismissed the lawsuit without prejudice against
Christopher Valleau;
3. We issued a written statement which exculpated InGlobalVest,
Inc. Steve Sherb, Barry Patterson and Uche Osuji from any
fraudulent acts as alleged in the complaint. This statement
does not apply to Defendants, Christopher Valleau and Alan
Posner;
4. We agreed to pay Christopher Valleau the sum of $3,000 via six
(6) equal monthly installments and Mr. Valleau agreed to
forfeit the balance of his unpaid salary and retire all stock
options. Mr. Valleau has issued a full release to us and the
holders of the US Bancorp Series II Preferred Stock for such
payments although such amount is a relatively small portion of
the back payroll owed to Mr. Valleau; and
5. We agreed that, after 24 hours notice to us, the Old Fashioned
Syrup Company can enter into agreements, in the ordinary
course of its business, to facilitate its capital requirements
and the settlement figure will be increased based on such
amounts.
The Old Fashioned Syrup Company
The Old Fashioned Syrup Company ("Syrup Company") manufactures and sells a
sugar-free, fat-free chocolate flavored syrup. Commencing in 1998, the Syrup
Company sold its syrup under its trademark The Old Fashioned Syrup Company(R).
In 1998, the Syrup Company entered into a ten (10) year license agreement with
Cumberland Packing Corp. in which it was granted the exclusive license to
utilize the well-known Sweet 'N Low(R) brand name for its sugar-free, fat-free
chocolate syrup product. The license agreement has an initial term of ten (10)
years, expiring December 31, 2008. The Syrup Company has the right to renew the
agreement for two (2) additional seven (7) year terms, so long as we are not in
default under the agreement. The agreement contains minimum royalty and
marketing expenditure requirements during each year of the term. The Syrup
Company has two wholly-owned subsidiaries, The Old Fashioned Egg Cream Company,
Inc. and The Original Egg Cream Company, Inc., both of which are Florida
corporations. We have been advised that there are outstanding issues which must
be resolved with Cumberland Packing Corp. with regard to this license agreement.
Until we obtain the books and records and receive authorization to contact
Cumberland directly, we can not resolve these issues at this time. It is our
intention to work diligently with Cumberland to resolve any issues regarding
these licenses as soon as we have authority to do so.
Since its inception the Syrup Company made various attempts to formulate and
manufacture an acceptable suitable sugar-free chocolate syrup. Finally, in 1998,
the Syrup Company obtained the right mix and arranged through a co-packer in New
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Jersey to manufacture, bottle and ship the chocolate syrup under its registered
trademark. However, the since it was difficult to obtain shelf space in food
stores for the new product, the Syrup Company concluded that the success of this
product would be significantly enhanced if it could obtain a recognized brand
name. Therefore, in November 1998, the Syrup Company succeeded in obtaining an
exclusive license for the trademark Sweet 'N Low for use on chocolate syrups.
Sweet 'N Low is the trademark under which the world's most popular sugar
substitute is sold, most recognizably in the small, pink packets. Cumberland had
licensed its trademark to candy and cookie manufacturers, but this agreement was
the first license for syrup. In January 1999, the Syrup Company made its first
shipments of Sweet 'N Low brand chocolate syrup. The name recognition was
helpful in attracting new customers, as well as food brokers to sell on its
behalf. By the end of 1999, the Syrup Company had expanded its customer base to
more than 150 customers and is currently available in over 16,000 food outlets
in the U.S. In early 2000, the Syrup Company expanded its product line to
include two new flavors: strawberry and vanilla creme. The expansion of its
product line also enabled it to produce "rainbow packs" of our three flavors,
which has been a productive marketing technique.
We believe that this settlement and the reacquisition of the Old
Fashioned Syrup Company will have an immediate and positive impact on us since
such subsidiary has historically represented us up to 90% of our revenues. The
Old Fashioned Syrup Company will not only add revenues to our ongoing operations
but it will open up a number of valuable opportunities to enhance the
distribution and sales of our sugar-free isotonic products.
The Board recommends a vote "For" ratification of the settlement of the
lawsuit regarding the Old Fashioned Syrup Company.
Proposal #6
TO RATIFY THE APPROVAL OF THE AGREEMENT
FOR FUNDING WITH ADVANTAGE FUND
Proposal #6 calls for the ratification of the funding agreements
entered into between us and Advantage Fund I, LLC. In January 2003, we agreed to
issue a total of 2,857,143 shares of our common stock to Advantage Funds I, LLC
pursuant to a funding arrangement for $300,000. This $300,000 financing
arrangement is secured by a Series A 6.5% Convertible Promissory Note "Note".
This Note is convertible in part or whole at the option of the holder at 70% of
the average of the lowest of three day trading prices during the five trading
days prior to the conversion. Within thirty days of the full funding of this
Note the Company shall file a registration statement to register 250% of the
then shares to be issued as if the Note was converted. The failure by us to
obtain such an effective registration within ninety days from the date of its
initial filing, then we shall pay a penalty equal to 2% of the outstanding
principal and accrued interest. The beneficial conversion feature attributed to
this financing arrangement will be calculated and expensed ratably over
twenty-four months upon receipt of financing under this Note. The issuance of
such shares is in issued in reliance on the exemptions from registration
provided by Section 4(2) of the Securities Act of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.
In April 2003, we entered into a $1,000,000 Common Stock Purchase Agreement was
entered into between us and Advantage Fund I, LLC for an aggregate installment
payment purchase price of $1,000,000. The purchase price of the common stock is
to be calculated based upon the closing price of the common stock on the date
that it is placed in escrow. The Purchaser intends on purchasing this common
stock in 40 equal installments of $25,000 each. In addition to the purchased
stock, we shall deliver to the designated escrow agent 200% of the number of
shares being purchased with each $25,000 installment. Upon resale of such common
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shares purchased if the Purchaser does not yield a 30% return on the investment
then the Purchaser shall be entitled to utilize the excess escrowed shares to
yield the 30% return on the investment by the Purchaser. All escrowed shares not
utilized to generate the 30% return shall be returned to our treasury. Pursuant
to such agreement we have agreed to issue a total of 11,428,571 shares of our
common stock. Our shares were issued in reliance on the exemptions from
registration provided by Section 4(2) of the Securities Act of the Securities
Act of 1933. No commissions were paid for the issuance of such shares.
This initial funding from Advantage Fund allowed us to pay off
negotiating and settle our outstanding debts with our various creditors and to
recommence our operations and the current financing has allowed us to expand our
operations.
The Board recommends a vote "For" ratification of the funding agreement
between Championlyte Holdings, Inc. and Advantage Fund I, LLC.
Proposal #7
RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board has selected Massella Roumbos LLP as the new independent
auditors to audit the financial statements of the Company for the fiscal year
ending December 31, 2003. Representatives of Massella Roumbos LLP are expected
to attend the Annual Meeting, with opportunity to make a statement is the
representatives desire to do so, and will have an opportunity to respond
appropriate questions from shareholders. (PLEASE CONFIRM)
Unless otherwise instructed, it is the intention of the persons named
in the accompanying form of proxy to vote shares represented by properly
executed proxies for the ratification of the appointment of Massella Roumbos as
independent auditors for the Company for fiscal 2003. Approval of proposal
requires the affirmative vote of a majority of the shares voted affirmatively or
negatively on the proposal at the Annual Meeting either in person or by proxy.
Abstentions and broker non-votes will not have any effect on the outcome of this
proposal.
The Board recommends a vote "For" ratification of Massella Roumbos, LLP
as our independent auditors for the fiscal year ending December 31, 2003.
Proposal #8
RATIFICATION OF THE RELOCATION OF THE
CORPORATE OFFICES
Proposal #8 calls for the shareholders to ratify the change of address
of the corporate offices. Before the move the corporate office was located at
1356 NW 191st Street, Boca Raton, Florida. The official corporate office has
been moved to 2999 NE 191st Street, Penthouse 2, North Miami Beach, Florida
33180.
The new office allows us to have the office space and resources
necessary to recommence our operations while allowing us to keep our overhead
costs low.
The Board recommends a vote "For" ratification of 2999 NE 191st Street,
Penthouse 2 North Miami Beach, Florida 33180 as the address of the new corporate
office.
Proposal #9
RATIFICATION OF CHANGING THE CORPORATE NAME
TO CHAMPIONLYTE HOLDINGS, INC
Proposal #9 calls for the shareholders to ratify the Board of
Director's decision to change the corporate name from "Championlyte Products,
Inc." to "Championlyte Holdings, Inc."
We believe that this name change better reflects our current business
strategy and operations.
The Board recommends a vote "For" ratification of the corporate name
change to "Championlyte Holdings, Inc."
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CHAMPIONLYTE HOLDINGS, INC.
Annual Meeting of Shareholders
September 26, 2003
3:00 p.m. E.S.T.
You May Vote by Mail
(see instructions on reverse side)
YOUR VOTE IS IMPORTANT
PROXY
CHAMPIONLYTE HOLDINGS, INC.
This Proxy is Solicited on Behalf of the Board of Directors.
David Goldberg with the power of substitution, is hereby authorized to represent
the undersigned at the Special Meeting of Shareholders of Championlyte Holdings,
Inc. to be held in Pembroke Pines, Florida, on Friday, September 26, 2003, at
3:00 p.m., Eastern Standard Time, and to vote the number of shares which the
undersigned would be entitled to vote if personally present on the matters
listed on the reverse side hereof and in their discretion upon such other
business as may properly come before the Annual Meeting and any and all
adjournments thereof, all as set out in the Notice and Proxy Statement relating
to the meeting, receipt of which is hereby acknowledged.
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS, SIGN
AND DATE THIS CARD IN THE SPACES ON THE REVERSE SIDE; NO BOXES NEED TO BE
CHECKED.
[SEE REVERSE] CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE]
[ SIDE ] [ SIDE ]
DETACH HERE
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[ X ] Please mark votes as in this sample.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE ARTICLES OF
INCORPORATION. THIS PROXY WILL BE VOTED AS YOU DIRECT: IN THE ABSENCE OF SUCH
DIRECTION, IT WILL BE VOTED "FOR" THESE MATTERS.
FOR AGAINST
[ ] [ ] 1. Ratify the filing of the SB-2 Registration Statement;
[ ] [ ] 2. Ratify the creation of 2003 Stock Incentive Plan, 2003
Stock Incentive Plan #2, 2003 Stock Incentive Plan
#3 and filing of the S8 Registration Statement for
these plans;
3. To approve the appointment of the following
directors of the Company and the appointment of
Donna Bimbo as the Director of the Company's
subsidiary, Championlyte Beverages, Inc.
[ ] [ ] (a) David Goldberg
[ ] [ ] (b) Thad Kaplan
[ ] [ ] (c) Steven Fields
[ ] [ ] (d) Marshall Kanner
[ ] [ ] (e) Donna Bimbo
[ ] [ ] 4. Ratify the creation of the Series III and Series IV
Preferred Shares
[ ] [ ] 5. Ratify the approval of the settlement agreement for the
lawsuit for the Old Fashioned Syrup Company;
[ ] [ ] 6. Ratify the agreement for funding with Advantage Fund;
[ ] [ ] 7. Ratify the appointment of Massella Roumbos, LLP as the new
independent auditors of the Company;
[ ] [ ] 8. Ratify the relocation of the corporate offices; and
[ ] [ ] 9. To approve the changing of the corporate name.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign your name as it appears hereon. Joint owners should each sign.
Executors, administrators, trustees, etc., should give full title as such. If
the signer is a corporation, please sign in full corporate name by duly
authorized officer.
Signature:__________________________________ Date: ________________________
Signature:__________________________________ Date: ________________________
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