As filed with the Securities and Exchange Commission on

October 3, 2003

REGISTRATION NO.
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 2 TO FORM SB-2

REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933

CHAMPIONLYTE HOLDINGS, INC.
(Name of Small Business Issuer in its Charter)

FLORIDA 2060 65-0510294
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)

2999 NE 191ST STREET, PENTHOUSE 2
NORTH MIAMI BEACH, FLORIDA 33180

(866)438-5983

(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

DAVID GOLDBERG
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CHAMPIONLYTE HOLDINGS, INC.
2999 NE 191ST STREET, PENTHOUSE 2
NORTH MIAMI BEACH, FLORIDA 33180

(866) 438-5983

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copies of communications to:

RICHARD I. ANSLOW, ESQ.

ANSLOW & JACLIN, LLP
4400 ROUTE 9, 2ND FLOOR
FREEHOLD, NEW JERSEY 07728
TELEPHONE NO.: (732) 409-1212
FACSIMILE NO.: (732) 577-1188

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. |X|

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act of 1933, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|

CALCULATION OF REGISTRATION FEE

PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED AMOUNT TO BE REGISTERED PER SHARE OFFERING PRICE FEE
- ---------------------------- ----------------------- ---------------- ---------------- ------------

Common Stock, par value
$.001 per share (1) 41,473,869 $.26 $ 10,783,206 $ 992.05

Common Stock, par value 1,076,400 $.26 $ 279,864 $ 25.75
$.001 per share (2)

Common Stock, par value 6,666,667 $.15 $ 1,000,000 $ 92.00
$.001 per share (3)
---------- -------
Total 49,216,936 $ 12,063,070 $1,109.80

(1) Represents Selling Security Holders shares being sold to the public. The
price of $.26 per share is being estimated solely for the purpose of
computing the registration fee pursuant to Rule 457(c) of the Securities
Act and based on the last trade price reported on the OTC Bulletin Board on
June 9, 2003.

(2) Represents shares of common stock issuable in connection with the
conversion of warrants and options issued to Knightsbridge Capital, Peter
Nasca, Donna Bimbo, David Goldberg and R&T Sports Management. The price of
$.26 is being estimated solely for the purpose of computing the
registration fee pursuant to Rule 457(c) of the Securities Act and based on
the last trade price reported on the OTC Bulletin Board on June 9, 2003.

(3) Represents shares being sold to the public. The price of $.15 per share is
based on the closing sales price of the shares to the public. On September
18, 2003, our share price closed at $0.15 per share.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED , 2003

CHAMPIONLYTE HOLDINGS, INC.

6,666,667 SHARES OF COMMON STOCK
41,473,869 SELLING SECURITY HOLDER SHARES OF COMMON STOCK
1,076,400 SHARES OF COMMON STOCK ISSUABLE IN

CONNECTION WITH CONVERSION OF OPTIONS AND WARRANTS

We are offering 6,666,667 shares of our common stock at $0.15 per share. In
addition, our selling security holders are offering to sell 41,473,869 shares of
our common stock and 1,076,400 shares of our common stock issuable in connection
with their conversion of our options and warrants.

THE SECURITIES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING "RISK FACTORS"
BEGINNING ON PAGE 3.

NEITHER THE SECURITES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this prospectus is ________________, 2003

PRICE TO PUBLIC PROCEEDS TO
COMPANY

Per Share $ .15 $.15
Total $1,000,000 $1,000,000

Currently, we have not established an underwriting arrangement for the sale of
these shares. David Goldberg, Championlyte's, Chairman of the Board, President,
Chief Financial Officer and Chief Accounting Officer will be the only person
that will conduct the best-efforts offering. He intends to offer and sell the
shares in the primary offering through his business and personal contacts. All
funds that are received by us in the offering are available for immediate use.
There is no minimum number of shares that must be sold before we can utilize the
proceeds of the offering. Funds will not be placed in an escrow or similar
account until a minimum amount has been raised.

Our common stock is listed on the OTC Bulletin Board under the symbol "CPLY."
The last reported sale price of our common stock on September 29, 2003 was
$0.14.

This prospectus also relates to the resale by the selling stockholders of up to
41,473,869 shares of common stock and 1,076,400 shares of our common stock
issuable in connection with the conversion of our options and warrants. The
selling stockholders may sell the stock from time to time at the prevailing
market price or in negotiable transactions.

We will receive no proceeds from the sale of the shares by the selling
stockholders. However, we will receive proceeds from the sale of the 6,666,667
shares as well as the exercise of the outstanding options and warrants.

TABLE OF CONTENTS

ABOUT US 1

RISK FACTORS 6

USE OF PROCEEDS 11

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 11

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OR OPERATION 13

BUSINESS 18

LEGAL PROCEEDINGS 24

MANAGEMENT 26

PRINCIPAL STOCKHOLDERS 31

DILUTION 32

SELLING STOCKHOLDERS 34

PLAN OF DISTRIBUTION 37

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 39

DESCRIPTION OF SECURITIES 40

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 42

TRANSFER AGENT 42

EXPERTS 42

LEGAL MATTERS 42

INDEX TO FINANCIAL STATEMENTS F-1

-i-

ABOUT US

We created a sugar, carbohydrate, and calorie free isotonic sports beverage. An
isotonic sports beverage is a sports drink that replenishes minerals in a
person's body that the person loses when it exerts energy. Our Championlyte
product provides the electrolytes needed for replacement after exercise, work or
any sport. It does so without any of the negative ingredients such as sugar,
caffeine, or carbonation. This reformulation has enabled us to produce a product
without the use of preservatives. Our products are delivered in five different
flavor beverages.

We have incurred significant losses since our inception on August 14, 1994 and
we have limited assets on hand. We will be unable to sustain operations for more
than 12 months unless we receive additional funding. We presently have negative
cash flows of $30,000 month. If we raise funds from this offering, we will be
able to continue our operations for at least 3 years, assuming that our burn
rate of $30,000 per month remains the same and we do not receive any revenues.
This scenario is not likely if we raise the proceeds from this offering because
we intend to expand our operations, which would increase our burn rate. We have
received and will continue to receive some short term financing.

Based on our outstanding liabilities, our new management has already
significantly reduced overhead, including the downsizing and moving of our
corporate headquarters. In the past few months, we have slowed our operations
while we have been negotiating and reaching settlements with many of our
creditors. Until we commence generating revenues, we will continue to reduce our
spending on marketing and advertising, as well as budgeting additional cost
cutting measures to ensure that our working capital may be sufficient to
continue to carry out our business plan. Our present goal of producing and
relaunching our reformulated product was accomplished on July 30, 2003.

HOW WE ARE ORGANIZED

We were incorporated in Florida in August 1994 as Meridian Holdings, Inc. for
the purpose of merging, as the surviving entity, with a then public "shell"
entity, MHI Telecommunications, Inc. ("MHI Telecom"). MHI Telecom was a Delaware
corporation that had sold shares to the public pursuant to a Regulation A
exemption from registration during 1969 under its original corporate name of
Pilgrim Mills, Inc. From 1985 through August 1994, MHI Telecom had not actively
been engaged in any business operations.

In August 1994, the shareholders of MHI Telecom and Meridian approved a merger
of MHI Telecom into Meridian and a simultaneous 1 for 40 reverse stock split of
Meridian's outstanding shares. At the same time, the shareholders also
authorized Meridian to raise working capital through an appropriate financing,
and to acquire an operating business or otherwise engage in or conduct active
business operations. Through the end of 1998, we did not engage in any fund
raising, other than the issuance of shares to certain shareholders in exchange
for services and the advancement of minimal funds on our behalf.

On December 3, 1999, we changed our name to Meridian USA Holdings, Inc. On
October 1, 2001, we changed our name to ChampionLyte Products, Inc. Finally, on
April 7, 2003, we changed our name to Championlyte Holdings, Inc. to reflect our
newly restructured direction towards possible acquisitions or strategic
partnerships in both the beverage and food services industries. Over the past
five years (more specifically since October 2001), we have engaged in the
beverage and food service industries only.

WHERE YOU CAN FIND US

We are located at 2999 NE 191st Street, Penthouse 2, North Miami Beach, Florida
33180. Our telephone number is (866) 438-5983 and our facsimile number is
(305)692-1762.

SECURITIES OFFERED BY US

We are offering a maximum amount of 6,666,667 shares of common stock, $.001 par
value at $.15 per share. Currently, we have not established an underwriting
arrangement for the sale of these shares. All funds that are received by us in
the offering are available for immediate use. The shares are being offered on a
best efforts basis by David Goldberg, our officer, and director. There is no
minimum number of shares that must be sold before we can utilize the proceeds of
the offering. Funds will not be placed in an escrow or similar account until a
minimum amount has been raised.

TRANSACTIONS RELATED TO OFFERS/SALES OF SECURITIES TO BE REGISTERED FOR RESALE

The following is a summary of the transactions that we have undertaken for the
issuance of our securities that we are registering for resale in this offering:

(1) Knightsbridge Holdings, LLC doing business as Knightsbridge Capital - Alyce
Schreiber is a representative of Knightsbridge Capital and has investment
control of Knightsbridge Capital. We are registering 1,052,800 shares based on
526,400 shares owned by Knightsbridge. Such shares were issued on June 24, 2003.
We customarily register 200% of the shares owed. We relied on the exemption from
registration provided under Section 4(2) of the 1933 Securities Act for the
issuance of the shares. We signed an agreement with Knightsbridge Capital on
January 6, 2003 and amended such agreement on April 7, 2003. Knightsbridge is a
business consultant that we retained to assist us in a variety of areas relating
to our financial, strategic and related development growth. The term of the
engagement is six months and automatically renews on a month-to-month basis,
subject to termination by either party with a twenty-four month follow on
period, whereby transactions consummated within the subsequent twenty-four
months following the termination of this agreement the transaction may have fees
due and payable to the financial was increased to advisory firm. The terms of
the agreement, as amended in April 2003, are as follows: a monthly payment of
$7,500 per month was increased to $10,000 per month. The financial advisory firm
may, at its discretion, accept shares of discounted registered stock in lieu of
cash. We shall issue a warrant to purchase 2.99% or 526,400 shares of our common
stock at 80% of the closing bid price on January 6, 2003, exercisable for five
years, various sliding scale compensation amounts for equity and debt financings
consummated from an introduction by the financial advisory firm, sliding scale
compensation amounts due for a merger or acquisition candidate introduced to us
and the reimbursement of out-of-pocket expenses not to exceed $500 a month
unless agreed upon by us. The sliding scale compensation is as follows: Equity
Financing: (i) up to $250,000: $10,000 minimum fee; (ii) $250,001-500,000:
$20,000 fee; (iii)$500,001 - $5,000,000: 8% of consideration; and (iv)
$5,000,000 plus: $400,000 plus 1.5% of consideration in excess of $5,000,000.
Debt Financing: (i) up to $250,000: $20,000 fee; (ii) $250,001-500,000: $30,000
fee; (iii)$500,001 - $5,000,000: 6% of consideration; and (iv) $5,000,000 plus:
$300,000 plus 3% of consideration in excess of $5,000,000. For any securities
issued by or to us, 5% consideration in kind. For any merger or acquisition
transaction, the compensation is as follows: (i) up to $500,000: $30,000 minimum
fee; (ii) $500,001 - $5,000,000: 5% of consideration; and (iii) $5,000,000 plus:
$250,000 plus 3% of consideration in excess of $5,000,000.

(2) Stedman Walker, Ltd. - In April 2003, we signed an agreement with Little
Cobbler Corp. doing business as Stedman Walker, Ltd. We have no relationship
with this company or Raymond Bloom. Raymond Bloom is a representative of Stedman
Walker, Ltd. and has investment control of Stedman Walker, Ltd. The agreement
provides that Little Cobbler Corp. shall provide the following consulting
services for us: development of a business plan, budgets, capitalization
structure and strategic plans. We relied on the exemption from registration
provided under Section 4(2) of the 1933 Securities Act for the issuance of the
2,000,000 shares to Stedman Walker. Such shares were issued on June 24, 2003.

(3) Advantage Fund I, LLC - Robert Press is a representative of Advantage Fund
I, LLC, however, investment control of Advantage Fund I, LLC is shared by a
number of members. We are registering a total of 25,714,286 shares for Advantage
Fund I, LLC which is 200% of the amount of the shares that we have agreed to
issue to Advantage Fund I, LLC pursuant to the following: (i) $350,000
convertible promissory note originated in January 2003 extending the maturity
date to December 31, 2004 - 6,666,667 shares being registered; (ii) $1,000,000
Common Stock Purchase Agreement (see details below) - 19,047,619 shares being
registered. To date, we have not issued such shares. We will rely on Section
4(2) of the Securities Act for the issuance of the shares to the Advantage Fund
I, LLC. In April 2003, we entered into a $1,000,000 Common Stock Purchase
Agreement with the Advantage Fund I, LLC, that has common management with the
financial advisory firm, Knightsbridge Holdings, LLC. The sale is for an
aggregate installment payment purchase price of $1,000,000. There is no
requirement of the Advantage Fund to purchase a minimum amount of shares. 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. There is no time frame as to when the $25,000 installment payments have to
be made. 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 shares purchased if the Advantage Fund
does not yield a 30% return on the investment then the Advantage Fund shall be
entitled to utilize the excess escrowed shares to yield the 30% return on the
investment by the Advantage Fund. All escrowed shares not utilized to generate
the 30% return shall be returned to our treasury.

(4) Triple Crown Consulting - Ben Kaplan is a representative of Triple Crown
Consulting and has investment control of Triple Crown Consulting. We are
registering a total of 1,904,762 shares for Triple Crown Consulting which is
200% of the amount of the shares that we have agreed to issue to Triple Crown
Consulting pursuant to the terms of its agreement with us. To date, we have
issued 95,171 such shares. We will rely on Section 4(2) of the Securities Act
for the issuance of the shares to Triple Crown Consulting. On April 15, 2003 and
June 30, 2003, we executed convertible promissory notes in the amount of $50,000
each or an aggregate of $100,000 in favor of Triple Crown Consulting. The
promissory notes are convertible at the option of Triple 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. The notes were converted to preferred stock in April and June 2003.

(5)SOS Resources Services, Inc. - Salvatore Russo is a representative of SOS
Resources and has investment control of SOS Resources. In April 2003, we signed
an agreement with SOS Resource Services, Inc. We have no relationship with this
company. The agreement provides that SOS Resource Services shall provide the
following consulting services for us: corporate planning and business
strategies. We relied on the exemption from registration provided under Section
4(2) of the 1933 Securities Act for the issuance of the 1,000,000 shares to SOS
Resource Services, Inc. on June 24, 2003.

(6) Championlyte Asset Acquisition Corp. - Bob Press is a representative of
Championlyte Asset Acquisition Corp., however, investment control of
Championlyte Asset Acquisition Corp. is shared by a number of its shareholders.
Beverage Acquisition Corp. is the only shareholder holding more than 5% of
Championlyte Asset Acquisition Corp. We are registering a total of 750,000
shares for Championlyte Asset Acquisition Corp. which is one-half the amount of
shares that we have agreed to issue to Championlyte Asset Acquisition Corp.
pursuant to the terms of its agreement with us. On June 19, 2003, we issued
1,500,000 shares to Championlyte Asset Acquisition Corp. We relied on Section
4(2) of the Securities Act of 1933 for the issuance of the shares to
Championlyte Asset Acquisition Corp. Our agreement with Championlyte Asset
Acquisition Corp. was signed on April 4, 2003. It provides that Championlyte
Asset Acqusition Corp. has agreed to convert our preferred shares it owns into
common stock to fulfill obligations that we have under certain agreements. In
consideration for this, we have agreed to issue the 750,000 shares to
Championlyte Asset Acquisition Corp.

(7) Peter Nasca - On June 24, 2003, we issued 200,000 shares of our common stock
to Peter Nasca pursuant to an agreement for settlement of obligations owed in
excess of $30,000. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. As part of
his total of 250,000 shares that are being registered, Peter Nasca has 50,000
warrants which are convertible into shares of common stock.

(8) Marshall Kanner - On April 4, 2003, Marshall Kanner resigned as our Chairman
of our Board of Directors and Interim Chief Operating Officer and accepted the
position of non-executive Vice Chairman and member of our Board of Directors. We
authorized the issuance of 820,000 shares of our common stock in recognition of
his past and future services. On June 24, 2003, we issued 820,000 shares to Mr.
Kanner. Our shares were issued in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act of 1933. Accordingly, we accrued
salary compensation of $32,200 using the stock market value of $.07 per share
for past services. Part of the issuance of the 820,000 shares included the
issuance of 360,000 shares of our common stock to Mr. Kanner for future
services. These shares shall vest on a pro-rata basis in 30,000 share increments
each month beginning with April 2003 through March 2004.

(9) Ed Donato - On June 24, 2003, we issued 10,000 shares to Ed Donato pursuant
to an agreement for consulting services rendered to us. Our shares were issued
in reliance on the exemption from registration provided by Section 4(2) of the
Securities Act of 1933. We have no relationship with Mr. Donato.

(10) Joan Ann Forneiro - On April 28, 2003, we agreed to issue 571,429 shares to
Joan Ann Forniero pursuant to a $250,000 convertible promissory note executed on
January 7, 2003. Our shares will be issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. To date, we
have not issued such shares. We have no relationship with Ms. Forniero.

(11) Donna Bimbo - Donna Bimbo, the officer of our subsidiary, Championlyte
Beverages, Inc., has 150,000 options which are convertible into 150,000 shares
of our common stock. Therefore, we are registering the shares underlying the
options. The options were received pursuant to Ms. Bimbo's employment
agreement with Championlyte Beverages, Inc. dated March 15, 2003. We will rely
on Section 4(2) of the Securities Act of 1933 for the issuance of these shares.

(12) Christopher Knapp - On June 24, 2003, we issued 500,000 shares to
Christopher Knapp pursuant to an agreement as a marketing and sales
representative for us. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. We have no
relationship with Mr. Knapp.

(13) Momentum Trader Network - On June 24, 2003, we issued 500,000 shares of our
common stock to Momentum Traders Network pursuant to an agreement for services
to develop a program for us for dissemination of our information. Our shares
were issued in reliance on the exemption from registration provided by Section
4(2) of the Securities Act of 1933. Mark Malone is a representative of Momentum
Trader Network and has investment control of Momentum Trader Network. We have no
relationship with Mr. Malone.

(14) DML Marketing - On June 24, 2003, we issued 500,000 shares of our common
stock to DML Marketing pursuant to an agreement for services for dissemination
of information under the 1934 Exchange Act. Our shares were issued in reliance
on the exemption from registration provided by Section 4(2) of the Securities
Act of 1933. Donna Levy is a representative of DML Marketing and has investment
control of DML Marketing. We have no relationship with Ms. Levy.

(15) 2003 Stock Incentive Plan #4 - On September 22, 2003, we adopted our 2003
Stock Incentive Plan #4 which authorizes the issuance of 2,000,000 shares. To
date, we have not issued any shares pursuant to this Plan.

(16) Richard I. Anslow and Gregg E. Jaclin, principals of Anslow & Jaclin, LLP -
Richard I. Anslow and Gregg E. Jaclin are principals of Anslow & Jaclin, LLP,
our legal counsel. We will issue 140,000 shares of our common stock to Richard
I. Anslow and 60,000 shares of our common stock to Gregg E. Jaclin for legal
services rendered to us. Our shares will be issued in reliance on the exemption
from registration provided by Section 4(2) of the Securities Act of 1933. To
date, we have not issued such shares.

(17) Mark Streisfeld - On July 9, 2003, we issued 1,650,000 shares to Mark
Streisfeld, our former officer and director pursuant to a settlement agreement
we signed with Mr. Streisfeld. Our shares were issued in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act of
1933.

(18) Elaine Streisfeld - On March 27, 2003, we entered into a settlement
agreement with Elaine Streisfeld, the mother of Mark Streisfeld, our former
officer and director. Ms. Streisfeld has loaned us $140,000. We are registering
a total of 2,196,992 shares for Ms. Streisfeld which is the amount of shares we
have calculated she is owed in accordance with the settlement agreement. To
date, we have issued 1,142,776 shares to Ms. Streisfeld. Our shares were issued
in reliance on the exemption from registration provided by Section 4(2) of the
Securities Act of 1933. For the balance of shares issued to Ms. Streisfeld, we
will rely on Section 4(2) of the Securities Act of 1933.

(19) David Goldberg - David Goldberg, our officer and director, has 200,000
options which are convertible into 200,000 shares of our common stock.
Therefore, we are registering the shares underlying the options. The options
were received pursuant to Mr. Goldberg's employment agreement with us effective
June 1, 2003. We will rely on Section 4(2) of the Securities Act of 1933 for the
issuance of shares to Mr. Goldberg.

(20) Andre Dawson - On June 19, 2003, we issued 50,000 shares to Andre Dawson
pursuant to a consulting agreement with us to act as a spokesperson and sponsor
for our products. We also agreed to issue an additional 50,000 shares to Mr.
Dawson. Our shares were issued in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act of 1933. For the balance of
shares issued to Mr. Dawson, we will rely on Section 4(2) of the Securities Act
of 1933.

(21) Larry Little - On June 19, 2003, we issued 50,000 shares to Larry Little
pursuant to a consulting agreement with us to act as a spokesperson and sponsor
for our products. We also agreed to issue an additional 50,000 shares to Mr.
Little. Our shares were issued in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act of 1933. For the balance of
shares issued to Mr. Little, we will rely on Section 4(2) of the Securities Act
of 1933.

(22) Alonzo Highsmith - On June 19, 2003, we issued 50,000 shares to Alonzo
Highsmith pursuant to a consulting agreement with us to act as a spokesperson
and sponsor for our products. We also agreed to issue an additional 50,000
shares to Mr. Dawson. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. For the
balance of shares issued to Mr. Highsmith, we will rely on Section 4(2) of the
Securities Act of 1933.

(23) R&T Sports Management Inc. - In June, 2003, we agreed to issue 30,000
shares to R&T Sports Management Inc. pursuant to a consulting agreement with us
to introduce us to professional athletes to sponsor our products and act as
spokesperson for our products. Pedro Rosadl is the principal of R&T Sports
Management Inc. On June 19, 2003, we issued 15,000 shares to R&T Sports
Management Inc. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. For the
balance of shares issued to R&T Sports Management Inc., we will rely on Section
4(2) of the Securities Act of 1933. We also issued 150,000 warrants which are
convertible into 150,000 shares of our common stock. We will rely on Section
4(2) of the Securities Act of 1933 for the issuance of shares to R&T Sports
Management Inc.

PLAN OF DISTRIBUTION

This offering of a maximum of 6,666,667 of our shares of common stock is being
made on a self-underwritten basis by us through David Goldberg, our Chairman,
President, Chief Financial Officer and Chief Accounting Officer, who will not be
paid any commissions or other compensation and without the use of securities
brokers.

Selling shareholders may also be selling up to 41,473,869 additional shares and
1,076,400 shares issuable in connection with the conversion of our options and
warrants. Such shares of our common stock may be sold from time to time to
purchasers directly by the selling shareholders. Alternatively, the selling
shareholders may from time to time offer shares through underwriters, dealers or
agents, who may receive compensation in the form of underwriting discounts,
concessions or commissions from the selling security holders for whom they may
act as agent. The selling shareholders and any underwriters, dealers or agents
that participate in the distribution of our common stock may be deemed to be
underwriters, and any commissions or concessions received by any such
underwriters, dealers or agents may be deemed to be underwriting discounts and
commissions under the Securities Act. Shares may be sold from time to time by
the selling shareholders in one or more transactions at a fixed offering price,
which may be changed, or at varying prices determined at the time of sale or at
negotiated prices. We may indemnify any underwriter against specific civil
liabilities, including liabilities under the Securities Act. We will bear all
expenses of the offering of shares of our common stock by the selling
shareholders other than payment that they may agree to make to underwriters.

The selling security holder offering will run concurrently with the primary
offering. In addition, David Goldberg, our officer and director, who is
undertaking the sale of the primary offering at the price of $.15 per share,
will also be selling his own shares at prevailing market prices since he is
listed as a selling security holder. All of the stock owned by the selling
security holders, including our officers and directors, will be registered by
the registration statement of which this prospectus is a part. The selling
security holders may sell some or all of their shares immediately after they are
registered. There is no restriction on the selling security holders to address
the negative effect on the price of your shares due to the concurrent primary
and secondary offering. In the event that the selling security holders sell some
or all of their shares, which could occur while we are still selling shares
directly to investors in this offering, trading prices for the shares could fall
below the offering price of the shares. In such event, we may be unable to sell
all of the shares to investors, which would negatively impact the offering. As a
result, our planned operations may suffer from inadequate working capital.

RISK FACTORS

An investment in our common stock is highly speculative and involves a high
degree of risk. Therefore, you should consider all of the risk factors discussed
below, as well as the other information contained in this document. You should
not invest in our common stock unless you can afford to lose your entire
investment and you are not dependent on the funds you are investing.

Please note that throughout this prospectus, the words "we", "our" or "us" refer
to Championlyte Holdings, Inc. and not to the selling shareholders.

WE WILL REQUIRE ADDITIONAL FUNDS TO ACHIEVE OUR CURRENT BUSINESS STRATEGY AND
OUR INABILITY TO OBTAIN ADDITIONAL FINANCING COULD CAUSE US TO CEASE OUR
BUSINESS OPERATIONS

Even with the proceeds from this offering, we will need to raise additional
funds through public or private debt or sale of equity to achieve our current
business strategy. Such financing may not be available when needed. Even if such
financing is available, it may be on terms that are materially adverse to your
interests with respect to dilution of book value, dividend preferences,
liquidation preferences, or other terms. Our capital requirements to implement
our business strategy will be significant. However, at this time, we can not
determine the amount of additional funding necessary to implement such plan. We
intend to assess such amount at the time we will implement our business plan.
Furthermore, we intend to effect future acquisitions with cash and the issuance
of debt and equity securities. The cost of anticipated acquisitions may require
us to seek additional financing. We anticipate requiring additional funds in
order to fully implement our business plan to significantly expand our
operations. We may not be able to obtain financing if and when it is needed on
terms we deem acceptable. Our inability to obtain financing would have a
material negative effect on our ability to implement our acquisition strategy,
and as a result, could require us to diminish or suspend our acquisition
strategy.

If we are unable to obtain financing on reasonable terms, we could be forced to
delay, scale back or eliminate certain product and service development programs.
In addition, such inability to obtain financing on reasonable terms could have a
material negative effect on our business, operating results, or financial
condition to such extent that we are forced to restructure, file for bankruptcy,
sell assets or cease operations, any of which could put your investment dollars
at significant risk.

OUR INDEPENDENT AUDITORS HAVE ISSUED A REPORT WHICH MAY HURT OUR ABILITY TO
RAISE ADDITIONAL FINANCING AND DECREASE THE PRICE OF OUR COMMON STOCK

The report of our independent auditors on our financial statements for the year
ended December 31, 2002 contains an explanatory paragraph which indicates that
we have recurring losses from operations. The deficit accumulated as of June 30,
2003 was $14,908,245. This report states that, because of these losses, there
may be a substantial doubt about our ability to continue as a going concern.
This report and the existence of these recurring losses from operations may make
it more difficult for us to raise additional debt or equity financing needed to
run our business and is not viewed favorably by analysts or investors.
We urge potential investors to review this report before making a decision to
invest in us. In addition, this report may have the effect of decreasing our
common stock price.

WE HAVE INCURRED SIGNIFICANT OPERATING LOSES SINCE INCEPTION, ARE NEGOTIATING
WITH OUR CREDITORS, HAVE A LIMITED OPERATING HISTORY AND HAVE RECENTLY
RECOMMENCED OPERATIONS MAKING AN EVALUATION OF OUR BUSINESS DIFFICULT

Since our inception on August 14, 1994, we have incurred significant operating
losses. We have limited assets on hand and will be unable to sustain operations
for more than 12 months unless we receive the additional funding set forth in
this document. Due to our existing liabilities, we will have to obtain
additional capital or generate additional revenue in order to continue
operations. Our management has indicated that if we are unable to successfully
raise additional capital or unable to generate additional revenue in the near
future, we may cease operations. These conditions raise substantial doubt about
our ability to continue as a going concern.

In the event we are unable to obtain additional financing in the coming months
or negotiate a settlement with our creditors, we will have to curtail operations
significantly or possibly cease operations.

As a result of our limited operating history and our recent consolidation of our
operations, we do not have meaningful historical financial data upon which to
forecast quarterly annual revenues and results of operations leading to
difficulty in evaluating our business. Before investing in us, you should
evaluate the risks, expenses and problems frequently encountered by companies
such as ours that are in the early stages of operation.

WE MAY NOT BE ABLE TO DEVELOP SUCCESSFUL NEW PRODUCTS IMPORTANT TO OUR GROWTH
AND THE INTRODUCTION OF NEW PRODUCTS MAY BE COSTLY WHICH MAY PREVENT US FROM
BECOMING PROFITABLE

An important part of our strategy is to increase our sales through the
development of new sugar-free, fat-free food products. We cannot assure you that
we will be able to develop, market and distribute future products that will
enjoy market acceptance. The failure to continue to develop new food products
that gain market acceptance could have a negative impact on our growth and
prevent us from becoming profitable. We may have higher obsolescent product
expense if new products fail to perform as expected due to the need to write off
excess inventory of the new products.

Our results of operations may be impacted negatively in various ways by the
introduction of new products, even if they are successful. We may incur higher
cost of goods sold and selling, general and administrative expenses in the
periods when we introduce new products due to increased costs associated with
the introduction and marketing of new products, most of which are expensed as
incurred. In addition, when we introduce new product or bottle sizes, we may
experience increased freight and logistics costs as our co-packers adjust their
facilities for the new products.

WE HAVE A LIMITED PRODUCT RANGE WHICH MUST BE EXPANDED OR WE MAY NOT BE ABLE TO
EFFECTIVELY COMPETE IN OUR INDUSTRY

To effectively compete in our industry, we need to continue to expand our
business and product line and generate greater revenues so that we have the
resources to timely develop new products. We must continue to market our
products and services through our direct sales force and expand our distribution
channels. At the present time, we have no other products in the development
process.

OUR QUARTERLY OPERATING RESULTS FOR OUR BEVERAGE PRODUCT MAY FLUCTUATE
SIGNIFICANTLY BECAUSE OF THE SEASONALITY OF OUR BUSINESS WHICH MAY CAUSE
INCONSISTENCY IN OUR REVENUES

We believe that the market for our isotonic beverage product will obtain most of
its revenues during the spring and summer, the second and third quarters of each
fiscal year. This seasonality may cause our financial performance to fluctuate.
In addition, beverage sales can be negatively affected by sustained periods of
bad weather.

OUR RELIANCE ON CO-PACKERS MAY DECREASE OUR REVENUES DUE TO TERMINATION OR
NON-RENEWAL OF OUR RELATIONSHIP OR PRODUCTION OF AN INFERIOR PRODUCT

All of our products are currently produced for us by co-packers. This exposes us
to various risks. One such risk is that two co-packers are responsible for all
of our refresher drink production. If any of these co-packers were to terminate
or fail to renew our contract, or have difficulties in producing beverages for
us, our ability to produce our products would be negatively affected until we
were able to make alternative arrangements. Another risk is that our business
reputation would be negatively affected if any of the co-packers were to produce
inferior quality products.

OUR BUSINESS DEPENDS ON A LIMITED NUMBER OF KEY PERSONNEL, THE LOSS OF WHOM
COULD NEGATIVELY AFFECT US

David Goldberg and Donna Bimbo, our senior executives are important to our
success. If they become unable or unwilling to continue in their present
positions, our business and financial results could be materially negatively
affected.

IF WE FAIL TO ADEQUATELY MANAGE OUR GROWTH, WE MAY NOT BE SUCCESSFUL IN GROWING
OUR BUSINESS AND BECOMING PROFITABLE

We expect our business and number of employees to grow over the next 12 months.
In particular, we intend to hire additional sales, marketing and administrative
personnel and to increase expenditures for advertising and marketing. We expect
that our growth will place significant stress on our operation, management,
employee base and ability to meet capital requirements sufficient to support our
growth. Any failure to address the needs of our growing business successfully
could have a negative impact on our chances of success.

WE MAY INCUR LOSSES AS A RESULT OF PRODUCT LIABILITY CLAIMS THAT MAY BE BROUGHT
AGAINST US OR AS A RESULT OF ANY PRODUCT RECALLS WE HAVE TO MAKE

We may be liable if the consumption of any of our products causes injury,
illness or death. We may also be required to withdraw or recall some of our
products if they become contaminated or are damaged or mislabeled. A significant
product liability judgment against us or a widespread product withdrawal or
recall could cause us to have substantial losses.

COMPETITION FROM OTHER BEVERAGE COMPANIES THAT HAVE GREATER RESOURCES THAN WE DO
COULD PREVENT US FROM EXPANDING AND BECOMING PROFITABLE

The sports refresher drink industry is highly competitive. Many of our
competitors have substantially greater financial, marketing, personnel and other
resources than we do. Moreover, we expect that competition will increase as
larger beverage companies seek to compete more intensely with us in our
fat-free, sugar-free end of the market. This could cause us to fail to obtain
market share in order to become profitable.

OUR RELIANCE ON ISSSUANCES OF SHARES OF OUR COMMON STOCK FOR SERVICES PERFORMED
FOR US IN LIEU OF PAYING FOR SUCH SERVICES WILL RESULT IN DILUTION OF YOUR
INVESTMENT AND A DEPRESSED MARKET PRICE FOR OUR SHARES OF COMMON STOCK

We have entered into agreements with companies that perform services for us.
Under the terms of such agreements, we pay for such services by issuing shares
of our common stock in lieu of making cash payments. The issuance of such shares
will result in the dilution of your investment in us. Furthermore, since such
shares are normally registered in a Form S-8 registration statement and such
registration statement has the effect of being able to issue such shares as
unrestricted shares, or freely tradable upon receipt, the sale of such shares
can have the effect of decreasing the price for our shares of common stock.

SALES BY SELLING SECURITY HOLDERS, INCLUDING OUR OFFICER AND DIRECTOR, BELOW THE
$.15 OFFERING PRICE MAY CAUSE OUR STOCK PRICE TO FALL AND DECREASE DEMAND IN THE
PRIMARY OFFERING WHICH MAY DECREASE THE VALUE OF YOUR INVESTMENT

SELLING SHAREHOLDERS MAY IMPACT OUR STOCK VALUE THROUGH THE EXECUTION OF SHORT
SALES WHICH MAY DECREASE THE VALUE OF OUR COMMON STOCK

Short sales are transactions in which a selling shareholder sells a security it
does not own. To complete the transaction, a selling shareholder must borrow the
security to make delivery to the buyer. The selling shareholder is then
obligated to replace the security borrowed by purchasing the security at the
market price at the time of replacement. The price at such time may be higher or
lower than the price at which the security was sold by the selling shareholder.
If the underlying security goes down in price between the time the selling
shareholder sells our security and buys it back, the selling shareholder will
realize a gain on the transaction. Conversely, if the underlying security goes
up in price during the period, the selling shareholder will realize a loss on
the transaction. The risk of such price increases is the principal risk of
engaging in short sales. Such short selling could impact the value of our stock
in an extreme and volatile manner to the detriment of other shareholders.

THE PRICE OF OUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY BASED ON THE NUMBER OF
SHARES WE ARE REGISTERING FOR SELLING SECURITY HOLDERS AND YOU MAY FIND IT
DIFFICULT TO SELL YOUR SHARES AT OR ABOVE THE PRICE YOU PAID FOR THEM

Until our restructuring, there was a thin trading market in our common stock. We
do not know the extent to which that market will expand or contract upon the
resale of the shares registered under this prospectus. Therefore, your ability
to resell your shares may be limited. Actions or announcements by our
competitors, regulatory developments and economic conditions, as well as
period-to-period fluctuations in our financial results, may have significant
effects on the price of our common stock and prevent you from selling your
shares at or above the price you paid for them.

SHARES ELIGIBLE FOR PUBLIC SALE IN THE FUTURE COULD DECREASE THE PRICE
OF OUR COMMON SHARES AND REDUCE OUR FUTURE ABILITY TO RAISE CAPITAL

Sales of substantial amounts of our common stock in the public market could
decrease the prevailing market price of our common stock and our ability to
raise equity capital in the future.

WE HAVE NOT ESTABLISHED AN ESCROW ACCOUNT FOR THE OFFERING WHICH ALLOWS US TO
USE THE PROCEEDS UPON RECEIPT AND MAY RESULT IN THE PROCEEDS UTILIZED TO PAY
OPERATING EXPENSES BEFORE SALES AND MARKETING

The offering is being undertaken on a "best efforts" basis. This allows us to
use the proceeds of the offering upon receipt of the funds raised. Therefore, if
we do not raise the maximum amount of funds in this offering, we can utilize the
funds raised for the categories listed in the Use of Proceeds section. The two
main categories are our operating expenses and sales/marketing. Sales and
marketing help our business grow. However, we may use the funds raised initially
for operating expenses which will not allow us to use such funds for sales and
marketing to help our business grow.

WE HAVE ENTERED INTO AN AGREEMENT WITH ADVANTAGE FUND I, LLC TO PURCHASE SHARES
OF OUR COMMON STOCK WHICH, BASED ON THE PRICING MECHANISM, CAN RESULT IN
ISSUANCE OF A SIGNIFICANT AMOUNT OF SHARES OF OUR COMMON STOCK AND DEPRESSION OF
OUR STOCK PRICE UPON SALE OF SUCH SHARES

We have entered into an agreement with Advantage Fund I, LLC whereby it will
purchase shares of our common stock equal to $1,000,000. The agreement provides
that Advantage Fund must receive a 30% return on a quarterly basis for any
shares purchased. In addition, we are required to deliver 200% of the shares
purchased to be held in escrow by our legal counsel, Anslow & Jaclin, LLP. This
agreement and the issuance of a $350,000 convertible promissory note to the
Advantage Fund may result in the issuance of a significant amount of our shares
which will result in dilution of your interest in us. In addition, the shares
are being registered in this offering and the sale of such shares will have a
depressing effect on the price of our shares of common stock.

WE HAVE AUTHORIZED SERIES IV PREFERRED STOCK EXCLUSIVELY FOR OUR OPTION
AGREEMENT WITH TRIPLE CROWN CONSULTING WHICH HAS A CONVERSION MECHANISM THAT CAN
RESULT IN THE ISSUANCE OF A SIGNIFICANT AMOUNT OF SHARES OF OUR COMMON STOCK TO
ONE ENTITY AND DEPRESSION OF OUR STOCK PRICE UPON SALE OF SUCH SHARES

We have authorized 250,000 shares of Series IV Preferred Stock exclusively for
Triple Crown Consulting, Inc. based on our promissory note with them. The
promissory note converts at the lesser of the average 3 day trading price (in
the 5 day period) prior to conversion multiplied by 70% or the average of the 3
day trading price (in the 5 day period) prior to funding. Upon conversion by
Triple Crown Consulting, this may result in the issuance of a significant amount
of shares of our common stock resulting in dilution of your shares of our common
stock. Furthermore, the shares of common stock underlying the Series IV
Preferred Stock is being registered in this offering. The sale of such shares
will have the effect of depressing our shares of common stock. To date, Triple
Crown has received 93,675 shares of our common stock based on conversion.

"PENNY STOCK" RULES MAY MAKE BUYING OR SELLING OUR COMMON STOCK DIFFICULT

Trading in our securities is subject to the "penny stock" rules. The SEC has
adopted regulations that generally define a penny stock to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. These rules require that any broker-dealer who recommends
our securities to persons other than prior customers and accredited investors,
must, prior to the sale, make a special written suitability determination for
the purchaser and receive the purchaser's written agreement to execute the
transaction. Unless an exception is available, the regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated with trading
in the penny stock market. In addition, broker-dealers must disclose commissions
payable to both the broker-dealer and the registered representative and current
quotations for the securities they offer. The additional burdens imposed upon
broker-dealers by such requirements may discourage broker-dealers from effecting
transactions in our securities, which could severely limit the market price and
liquidity of our securities. Broker-dealers who sell penny stocks to certain
types of investors are required to comply with the Commission's regulations
concerning the transfer of penny stocks. These regulations require
broker-dealers to:

- Make a suitability determination prior to selling a penny stock to the
purchaser;

- Receive the purchaser's written consent to the transaction; and

- Provide certain written disclosures to the purchaser.

These requirements may restrict the ability of broker-dealers to sell our common
stock and may affect your ability to resell our common stock.

WE DO NOT EXPECT TO PAY DIVIDENDS AND INVESTORS SHOULD NOT BUY OUR COMMON STOCK
EXPECTING TO RECEIVE DIVIDENDS

We have not paid any dividends on our common stock in the past, and do not
anticipate that we will declare or pay any dividends in the foreseeable future.
Consequently, you will only realize an economic gain on your investment in our
common stock if the price appreciates. You should not purchase our common stock
expecting to receive cash dividends.

USE OF PROCEEDS

The selling stockholders are selling shares of common stock covered by this
prospectus for their own account. We will not receive any of the proceeds from
the resale of these shares. The gross proceeds to us from the sale of up to the
additional 6,666,667 shares of our common stock at a price of $0.15 per share,
are estimated to be $1,000,000. We expect to use the net proceeds from this
offering, if any, for working capital needs, including officer salaries, product
development, marketing and legal and accounting fees. We have agreed to bear the
expenses relating to the registration of our own shares as well as for the
selling security holders.

Gross Proceeds $500,000 $1,000,000
Dollar Dollar

Amount Percentage Amount Percentage

Offering Expenses .......... $ 50,000 10% $ 50,000 5.00%

Officer salaries
$ 50,000 10% $ 125,000 12.50%
Legal and Accounting Fees .. $ 50.000 10% 75,000 7.50%

Product
development ................ $ 50,000 10% $ 100,000 10%

Sales and Marketing ........ $ 300,000 60% $ 650,000 65%

Gross Proceeds ............. $ 500,000 100% 1,000,000 100%

Less Offering Expenses ..... 50,000 50,000

Net Proceeds ............... $ 450,000 $ 950,000

Any funds that we receive from the exercise of the warrants or in exchange for
any securities that we have not yet issued, will be used solely for sales and
marketing.

DETERMINATION OF OFFERING PRICE

The price of $.15 per share for the offering of 6,666,667 shares has been
determined based on the closing price of our shares of common stock as
reported on the OTC Bulletin Board on September 18, 2003.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is currently traded on the OTC Bulletin Board under the symbol
"CPLY." The following table sets forth the high and low bid prices for our
common stock since the first quarter of 2000.

YEAR QUARTER HIGH LOW

2000 First 2.8125 1.4375
2000 Second 3.0625 1.0313
2000 Third 3.25 1.5
2000 Fourth 2.4375 1.5
2001 First 2.3125 1.375
2001 Second 2.07 0.51
2001 Third 1.48 0.52
2001 Fourth 1.05 0.51
2002 First 0.85 0.40
2002 Second 0.70 0.35
2002 Third 0.45 0.12
2002 Fourth 0.45 0.04
2003 First 0.24 0.07
2003 Second 0.53 0.065

As of September 22, 2003, we had in excess of 500 shareholders holding shares of
our common stock.

The above quotations reflect the inter-dealer prices without retail mark-up,
mark-down or commissions and may not represent actual transactions.

EQUITY COMPENSATION PLAN INFORMATION

Plan Category Number of Securities to be Weighted Average Exercise Number of Securities
Issued upon exercise of price of outstanding options, remaining available
outstanding options, warrants warrants and rights for future issuance
and rights

1999 Stock Incentive 1,000,000 $0.65 700,000 (1)
Plan (approved by
security holders)

(1) As of September 22, 2003

DIVIDENDS

We have never paid a cash dividend on our common stock. It is our present policy
to retain earnings, if any, to finance the development and growth of our
business. Accordingly, we do not anticipate that cash dividends will be paid
until our earnings and financial condition justify such dividends. There can be
no assurance that we can achieve such earnings.

PENNY STOCK CONSIDERATIONS

Trading in our securities is subject to the "penny stock" rules. The SEC has
adopted regulations that generally define a penny stock to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. These rules require that any broker-dealer who recommends
our securities to persons other than prior customers and accredited investors,
must, prior to the sale, make a special written suitability determination for
the purchaser and receive the purchaser's written agreement to execute the
transaction. Unless an exception is available, the regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated with trading
in the penny stock market. In addition, broker-dealers must disclose commissions
payable to both the broker-dealer and the registered representative and current
quotations for the securities they offer. The additional burdens imposed upon
broker-dealers by such requirements may discourage broker-dealers from effecting
transactions in our securities, which could severely limit their market price
and liquidity of our securities. Broker-dealers who sell penny stocks to certain
types of investors are required to comply with the Commission's regulations
concerning the transfer of penny stocks. These regulations require
broker-dealers to:

- Make a suitability determination prior to selling a penny stock to the
purchaser;
- Receive the purchaser's written consent to the transaction; and

- Provide certain written disclosures to the purchaser.

These requirements may restrict the ability of broker-dealers to sell our common
stock and may affect your ability to resell our common stock.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of our results of
operations and financial condition. The discussion should be read in conjunction
with our financial statements and notes thereto appearing in this prospectus.
The following discussion and analysis contains forward-looking statements, which
involve risks and uncertainties. Our actual results may differ significantly
from the results, expectations and plans discussed in these forward-looking
statements.

We market sugar-free, calorie-free, sports refresher beverages under the
ChampionLyte brand name. In April 2003, we formed a subsidiary, Championlyte
Beverages, Inc., to engage in the production and sale of the Championlyte
products. Net sales revenue for the three months ended June 30, 2003 was
$17,956. In the comparable period of 2002, net sales revenue was $192,135.
During the second quarter of 2003, we continued in the process of restructuring
ourselves, our management team, reformulating our product and creating a new
marketing, as well as distribution system. We recommenced our operations during
the second quarter 2003 and we reformulated our product by switching flavor
houses, reducing sweetener levels, adding flavor and taking out preservatives.
We have re-launched our product and have begun manufacturing the product through
co-packers and selling it through our distributors.

We have contracted with a co-packer in New York for our production which
recommenced the week of June 23, 2003. We will continue to manufacture and
bottle our products under co-packing arrangements. We are currently
investigating additional regional co-packing facilities and have identified and
approved an additional facility in New Jersey. We have also recommenced
distributing our products through a series of brokers and distributors who for a
fee find customers to purchase products from us.

Results of Operations (exclusive of discontinued operations)
- ------------------------------------

Three Months Ended June 30, Six Months Ended June 30
2002 2003 2002 2003
---- ---- ---- ----

Net Sales $ 192,135 $17,956 $238,153 $17,956

Cost of Goods Sold 132,037 8,186 143,206 8,186

Gross Profit 60,098 9,771 94,947 9,771

Selling, General and
Administrative
Expenses 947,536 449,393 1,561,049 730,684

Revenues from operations during the three months ended June 30, 2003 were
$17,956 compared to $192,135 for the three months ended June 30, 2002. Revenues
from operations during the six months ended June 30, 2003 were $17,956 compared
to $238,153 for the six months ended June 30, 2002. The decrease in sales was
due to our restructuring, including but not limited to, our whole management
team as well as reformulating our product and creating a new marketing and
distribution system. We had nominal operations during the three months and six
months ended June 30, 2003. We were reformulating our product and ceased
distribution of the product until reformulation was complete. We reformulated
our product by switching flavor houses, reducing sweetener levels, adding flavor
and taking out preservatives. Since we have reformulated our product, we expect
to increase sales in the future.

Gain from discontinued operations amounted to $57,420 for the six months ended
June 30, 2003 versus a loss from discontinued operations of $314,449 for the six
months ended June 30, 2002. Gain from discontinued operations amounted to $-0-
for the three months ended June 30, 2003 versus a loss from discontinued
operations of $120,347 for the three months ended June 30, 2002. Discontinued
operations reflect the prior year results of operations for the Old Fashioned
Syrup Company.

Our indebtedness at June 30, 2003 consists of the following:

Notes payable- related party (a) $105,000
Convertible note (b) 281,462
--------
$386,462

(a) On March 27, 2003, we entered into an agreement to repay a relative of a
former employee $140,000 in four equal installments with $35,000 of our common
stock based on a 20% reduction to the average closing price of our common stock
for the three trading days prior to the issuance date of such common stock for
the six months ended June 30, 2003. At our option, we may repay such
indebtedness with cash for a 20% premium to the face value of such quarterly
payments due. The average stock price, net of the 20% discount, at the close of
the first quarter was $0.06 per share, resulting in the issuance of 570,683
shares of our common stock.

(b) Convertible notes at June 30, 2003, consist of two promissory notes from an
individual and an investment fund (Advantage Fund I, LLC), which is a related
party to the financial services firm (Knightsbridge Holdings, LLC). The notes
were for a maximum borrowing of $250,000 each, with funds to be disbursed to
satisfy obligations of the Company as needed. The notes were originated in
January 2003, and bear interest at a rate of 6.5% per annum. The notes are
convertible into shares of our common stock with a conversion price per share
equal to the lesser of the average of the lowest of three day trading prices
during the five trading days immediately prior to the conversion date multiplied
by .70 or, the average of the lowest of three day trading prices during the five
trading dates immediately prior to the funding dates. The holders of the notes
have the right to convert the note, in whole or in part, at any time after the
issuance of the notes. At June 30, 2003, amounts owed to the individual note
holder aggregated $30,000, and amounts owed to the investment fund aggregated
$251,462. We have borrowed above their line limit to the investment fund by
$1,462. The note was subsequently amended to extend the maturity date to
December 31, 2004 and to account for additional borrowings.

Interest expense on these notes totaled $5,159 for the six months ended June 30,
2003, and is included in accrued expenses on the accompanying balance sheet.

As part of our reorganization, during the first six months of 2003, we
substantially reduced our selling, general and administrative costs.
Specifically, we reduced the following: (i) our spending on cost of goods and
ingredients; (ii) label costs; (iii) co-packing fees; and hard packing (bottles
and caps) costs. For the six months ended June 30, 2003, these costs amounted to
$449,393, as compared to $947,536 for the same period in 2002. The net result of
these efforts was to reduce the loss from continuing operations before other
income of $1,466,102 for the six months ended June 30, 2002 to a loss of
$720,913 for the six months ended June 30, 2003; and reduce the loss from
continuing operations of $887,438 for the three months ended June 30, 2002 to a
loss of $439,622 for the three months ended June 30, 2003.

Selling, general and administrative expenses decreased from $1,561,049 for the
six months ended June 30, 2002 to $730,684 for the six months ended June 30,
2003. The decrease in selling, general and administrative expenses is primarily
the result of decreased payroll and payroll related expenses of approximately
$444,000, advertising and marketing expenses of approximately $348,000, and
office and office related expenses of approximately $104,000. Offsetting such
decrease is an increase in professional fees of approximately $94,000.

Interest expense amounted to $197,394 for the six months ended June 30, 2003
versus $0 for the six months ended June 30, 2002. Included in interest expense
for the six months ended June 30, 2003 is $152,500 related to the beneficial
conversion feature of the $350,000 convertible promissory note entered into by
the Company with an investment fund in January 2003, $38,750 in financing
expenses and $5,159 in accrued interest expense related to the $350,000
convertible promissory note.

Championlyte does not know of any trends, event or uncertainties that will
impact on its net sales, revenues, income from continuing operations, or
short-term or long-term liquidity. The reformulation of our products caused us
to cease operations which effected our results of operations and financial
condition.

We have signed a settlement agreement to settle a lawsuit to receive all of the
shares of the Old Fashioned Syrup Company which historically represented up to
90% of our revenues. Pursuant to the terms of the settlement agreement, we have
paid $125,000 and other consideration for the delivery of all of the outstanding
shares in the Old Fashioned Syrup Company. We agreed to this amount in
consideration for the loans made to Old Fashioned Syrup Company by the
defendants in the lawsuit, the initial loan to us, as well as the restructuring
efforts undertaken by the defendants during their tenure of management. The Old
Fashioned Syrup Company manufactures and sells a sugar-free, fat-free chocolate
flavored syrup pursuant to a license agreement with Cumberland Packing Corp. for
use of the Sweet 'N Low trademark for its syrup product. Once this agreement is
finalized, we will have additional revenues as well as expenses from such
business operations. We expect that this will immediately have a major impact on
our revenues.

In addition, on April 1, 2003 a settlement agreement was entered into for a
lawsuit filed against us in 2001 alleging that our trademark corporate name,
ChampionLyte, violated the plaintiff's trademark. The terms of the settlement
included granting us an exclusive license to use the ChampionLyte mark in
connection with the sugar-free drinks in the United States, Mexico and Canada. A
licensing agreement providing this mark was established for an initial five-year
term, with two additional five-year terms at our option. It does require a
royalty of three percent until sales reach $10,000,000 annually. The royalty
then increases to five percent on all sales after sales reach $10,000,000
annually and six percent on all sales after sales reach $15,000,000 annually.

As part of our reorganization, during the second quarter of 2003, even though we
recommenced operations, we continued to reduce our selling, general and
administrative costs. For the three months ended June 30, 2003, these costs
amounted to $449,393, as compared to $947,536 for the same period in 2002. The
net result of these efforts was to reduce the loss from continuing operations of
$439,622 for the three months ended June 2003 compared to a loss of $887,438 for
the three months ended June 30, 2002.

The net effect of reducing costs and renegotiating payables resulted in a loss
available to common shareholders for the second quarter ended June 30, 2003 of
$522,755. This compares to the comparable period in 2002 of a loss of
$1,007,785. We have recently reached a settlement with Velda Farms, LLC. Velda
Farms agreed that it would dispose of the balance of the products/ingredients
and hard packaging that it was holding without any liability to Championlyte.
Furthermore, the $143,000 debt to Velda Farms is to be extinguished. The parties
are in the process of signing an agreement confirming same.

LIQUIDITY AND CAPITAL RESOURCES

Our available cash at June 30, 2003 was $1,254. All of our funding requirements
were paid by use of a $250,000 funding agreement established in January of 2003
(and increased to $350,000) and others established in the second quarter ending
June 2003. The first funding agreement is from Advantage Fund I, LLC which is an
entity in which Knightsbridge Capital, LLC and Triple Crown Consulting, Inc. are
investors.

Additionally, the investment fund providing the funding agreement is the same
investment fund that has entered into the $1,000,000 financing agreement
previously mentioned. This $350,000 financing arrangement is secured by a Series
A 6.5% Convertible Promissory Note. As of June 30, 2003, we had drawn against
this funding agreement the sum of $251,462. The second funding agreement with
Triple Crown Consulting, Inc. resulted in convertible loans made to us that were
subsequently converted into our Series IV Convertible Preferred Stock. As of
June 30, 2003, there was 93,675 in Series IV preferred stock outstanding and a
financing agreement with a firm affiliated with the investment fund to
provide up to $500,000 in accounts receivable and purchase order financing. As
of June 30, 2003 there was -0- in factored assets funded under this Agreement.

At this time, we are actively seeking additional sources of capital that will
enable us to achieve the long-term objectives of nationally marketing the
product lines and new distribution system. There can be no assurance that this
additional funding will become available. Should such funding not become
available we may have to cease operations and liquidate.

Results of Operations (exclusive of discontinued operations)
- -----------------------------------------

Years Ended December 31,
2002 2001
---------- ----------
Net Sales $ 266,336 $ 368,631
Cost of Goods Sold 165,909 360,754
Gross Profit 100,427 7,877
Selling, General and
Administrative Expenses 1,956,991 4,153,599

Revenues from operations during the year ended December 31, 2002 were $266,336,
as compared to $368,631 for the year ended December 31, 2001. The decrease in
sales was due to the decline in our ability to market our products.

Selling, general and administrative expenses decreased to $1,956,991 for the
year ended December 31, 2002 as compared to $4,153,599 for the year ended
December 31, 2001. This decrease is almost entirely a result of a large
reduction in marketing and advertising expenses.

Liquidity
- ------------------------

Year Ended December 31,
2002 2001
----------- -----------
Net Cash (Used in)
Provided by Operations $ (950,132) $(3,410,540)

Working Capital (deficiency) $(1,016,803) $ 882,272

Net cash flows from operations increased from $(3,410,540)during the year ended
December 31, 2001 to $(950,132) during the year ended December 31, 2002. This
decrease is almost entirely a result of a large reduction in marketing and
advertising expenses. Until our restructuring is complete and working capital
improves, we have significantly reduced our spending on marketing and
advertising.

Other income (expense) for the year ended December 31, 2002 "2002" as compared
to the year ended December 31, 2001 "2001" changed for the following reasons:
investment income decreased from $234,405 for 2001 to $11,732 for 2002 or 95%
due to less cash and marketable securities on hand, since over $5 million of
cash and marketable securities were utilized over the last years to fund
operations. Gains on sale of investment securities for 2002 of $10,860 compared
to none for 2001 is the result of selling the remaining marketable securities on
hand from 2001. Interest expense increased mildly from $14,291 in 2001 to
$16,278 in 2002 or 14%. The increase in interest expense is primarily the result
of the additional short term financing obtained from a related party during
2002.

We had a working capital deficit of $1,016,803 as of December 31, 2002 as
compared to a working capital surplus of $882,272 as of December 31, 2001. This
decline in working capital deficit is due to our continuing losses from
operations.

Future Outlook
- --------------

We are continuing to negotiate with our creditors as well as negotiating the
settlement of litigation, particularly with Sara Lee Products. Based on our
settlement with Sara Lee Products, we believe that we will enter into a
licensing agreement with Sara Lee within the next thirty days for the use of the
Championlyte name. We are restructuring our corporate structure, moving
ChampionLyte into a beverage subsidiary. We have also reformulated the
ChampionLyte product by switching flavor houses, reducing sweetener levels,
adding flavor and taking out preservatives. On July 30, 2003, we relaunched the
new version with additional flavors. All of these changes will require
additional financing for us and there can be no assurances that we will obtain
any of the additional financing needed to accomplish our plans. If we are unable
to secure additional financing to complete our restructuring and implement our
plans, we may be forced to cease operations.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States
of America. The preparation of these financial statements requires us to make
estimates and judgements that affect the reported amount of assets and
liabilities, revenues and expenses, and related disclosure on contingent assets
and liabilities at the date of our financial at the date of our financial
statements. Actual results may differ from these estimates under different
assumptions and conditions.

Critical accounting policies are defined as those that are reflective of
significant judgements and uncertainties, and potentially result in materially
different results under different assumptions and conditions. We believe that
our critical accounting policies are limited to those described below. For a
detailed discussion on the application of these and other accounting policies
see our note 3 to our consolidated financial statements.

Equity Issuances for Services

We account for all transactions under which employees, officers and directors
receive shares of stock in accordance with the provisions of Accounting
Principles Board Opinion No.25 "Accounting for Stock Issued to Employees". In
accordance with Statement of Financial Accounting Standards No. 123 ("SFAS
123"), "Accounting for Stock -Based Compensation", we adopted the pro-forma
disclosure requirements of SFAS 123. Accordingly, no compensation has been
recognized in the results of operations for the employees, officers and
directors stock option plan other than for those options issued to non-employees
for other services. Issuances of stock to employees are valued at the fair
market value at the time of issuance or earned by the agreement and then
expensed over the respective term of such agreement.

We account for non-employee equity transactions in accordance with SFAS No. 123
and EITF 96-18. The valuing of such equity considers the fair value of the stock
at issuance or contract date, the volatility of the stock, risk free rates of
return, the term for which services are to be rendered and the date upon earning
such equity. We may utilize the Black Scholes formula to arrive at the intrinsic
value of certain equity rights issued for services for non-employee issuances.

Accounting for Income Taxes

As part of the process of preparing our consolidated financial statements we are
required to estimate our income taxes. Management judgment is required in
determining our provision of our deferred tax asset. We recorded a valuation for
the full deferred tax asset from our net operating losses carried forward due to
us not demonstrating any consistent profitable operations. In the event that the
actual results differ from these estimates or we adjust these estimates in
future periods we may need to adjust such valuation recorded.

BUSINESS - OUR COMPANY

A SUMMARY OF WHAT WE DO

We were incorporated as Meridian Holdings, Inc. ("Meridian") in Florida in
August 1994 for the purpose of merging, as the surviving entity, with a then
public "shell" entity, MHI Telecommunications, Inc. ("MHI Telecom"). MHI Telecom
was a Delaware corporation that had sold shares to the public pursuant to a
Regulation A exemption from registration during 1969 under its original
corporate name of Pilgrim Mills, Inc. From 1985 through August 1994, MHI Telecom
had not actively been engaged in any business operations.

In August 1994, the shareholders of MHI Telecom and Meridian approved a merger
of MHI Telecom into Meridian and a simultaneous 1 for 40 reverse stock split of
Meridian's outstanding shares. At the same time, the shareholders also
authorized Meridian to raise working capital through an appropriate financing,
and to acquire an operating business or otherwise engage in, or conduct, active
business operations. Through the end of 1998, Meridian did not engage in any
fund raising, other than the issuance of shares to certain shareholders in
exchange for services and the advancement of minimal funds on behalf of
Meridian.

On December 3, 1999, Meridian changed its name to Meridian USA Holdings, Inc. On
October 1, 2001, we changed our name to ChampionLyte Products, Inc.

Our new management has significantly reduced overhead, including the downsizing
and moving of our corporate headquarters and is currently negotiating with our
various creditors. Until our working capital improves, we have significantly
reduced our spending on marketing and advertising, as well as budgeting
additional cost cutting measures to ensure that our working capital may be
sufficient to continue to carry out our business plan. We continue to expect to
be able to maintain operations as we attempt to cut expenses and negotiate with
our creditors.

PRODUCT OVERVIEW

We created a sugar, carbohydrate, and calorie free isotonic sports beverage. The
product is a sports drink that provides the electrolytes needed for replacement
after exercise, work or any sport. It does so without any of the negative
ingredients such as sugar, caffeine, or carbonation. This reformulation has
enabled us to produce a product without the use of preservatives. Our product
is delivered in five different flavor beverages.

We recently reformulated the sports drink with the sweetener Splenda(R), the
trade name for Sucralose produced by McNeil Nutritionals, a Johnson & Johnson
company. We also switched flavor houses, reduced sweetener levels, added flavor
and took out preservatives. ChampionLyte(R) will continue to have no label
warnings. The products that currently dominate the market have between 33 and 38
grams of sugar and up to 150 calories in a 20 ounce bottle. ChampionLyte(R),
which is available in lemon-lime, orange, fruit punch, pink lemonade and blue
raspberry, is a "no guilt" sports drink (meaning no calories, no carbohydrates,
no sugar and no preservatives) with electrolyte replacement without sugar, fat,
calories or carbohydrates. ChampionLyte(R) is currently available at a limited
number of the nation's mass-market retail locations as well as a limited number
of governmental institutions.

The major advantage of ChampionLyte(R) is that it replaces electrolytes,
especially after exercise, without the ingredients, which would cause weight
gain - particularly sugar. For example: if a man or woman runs on a treadmill
for 30 minutes they would burn about 150 calories. By drinking one of the
popular major brand sports drinks that contain 33 to 37 grams of sugar (that's
33 to 37 individual one-gram packs of sugar) after working out on the treadmill,
they would either cancel out the calories they just burned off, or actually gain
more calories than burned during the workout. Our goal is to accelerate our
sales efforts to a variety of outlets, both retail and institutional, that have
the capacity to put us in a cash-flow positive situation as quickly and cost
efficiently as possible.

SUPPLY ARRANGEMENTS

All raw materials for our products are purchased on an as needed basis to
fulfill orders. Terms are net 30 days for all suppliers. Each component is
purchased from different suppliers. As our inventory levels are depleted by
production, we place additional orders with suppliers to keep inventory on hand.

CO-PACKING ARRANGEMENTS

We have not finalized agreements with co-packers as of this date as we are
researching logistics and geographic areas to determine where to set up long
term co-packing arrangements. The two co-packers we currently work with cover
the southeast and northeast of the United States. We have $1 million of
liability insurance and co-packers are responsible for their own liability
insurance. The co-packer is paid according to the work they do for us.

Notwithstanding the above, we have identified and contracted with a co-packer

in Southern Florida for our initial production run which commenced the week of
May 27, 2003. We will continue to manufacture and bottle our products under
co-packing arrangements. We are currently investigating additional regional
co-packing facilities. We have identified and approved two additional
facilities, one in Northern Florida and one in New York.

This process involves us providing the co-packers with proprietary concentrates,
formulas, and labels for our products. This work is performed on a per case
basis cost.

We have chosen to operate through co-packing arrangements to enable us to
produce and deliver our products without the capital costs required to build
full-time production facilities. We need not pay employees during down-time in
production or to invest capital in inventory.

We have already commenced our first full production run of all 5 flavors of 20
ounce 12 packs. In addition, we will produce 3 flavors of clear products for a
mass merchandiser. Subsequent runs are being scheduled based upon sufficient
inventory as well as new distributors being signed. We anticipate that we will
expand into both the New York production facility and the northern Florida
production facility in the last quarter of 2003. In addition, we expect that
further expansion will continue on a regional basis if sales volume increases.

SALES

Using a food broker network, as well as our in-house sales team, we will utilize
our relationship with previous distributors to recapture lost business due to
lack of product availability to the market.

In order

to attain a solid foundation, we will maximize our efforts towards the South
East region of the United States. Once we have achieved this success, we can
then replicate this sales model into other areas such as New York, New Jersey,
Connecticut (North East). This approach will help us create the model needed to
move forward towards our anticipated national distribution of our products.

Our product is distributed through a series of brokers and distributors. A
broker, for a fee, will find customers to purchase products from the
manufacturer. The broker will not take in product, but is merely a sales
conduit. The distributor does take possession of the product and is responsible
for payment of the product, whereby the broker, does not take possession of the
product, nor is he responsible for payment, as the customer will pay the
manufacturer directly. Our in house sales team is composed of 4 people with
extensive sales backgrounds. Our advertising efforts will be kept to a minimum
until distribution is strengthened and our product is visible on shelves to
consumers. Our contracts with distributors are all volumetric/performance based
contracts.

TARGET CONSUMER

Championlyte communicates premium or an upscale product.
America's number one shopper is

"Coach Mom" who buys for herself, her children, and her parents which is three
generations of consumers.

The target consumer is the actual people involved in sports, and/or everyday
outdoor activities, as well as all who are concerned with calorie intake, those
on sugar restricted and/or weight loss diets. In addition, we have the diabetic
community with 17 million known diabetics.

Sugar free diet carbonated beverage sales have already escalated to 30% of total
carbonated beverage sales..

The Weston A. Price Foundation has encouraged Congress to call for a ban on the
sale of soft drinks and snack foods in school vending machines. Soft drinks
contain high levels of sugar or artificial sweeteners, caffeine and phosphoric
acid, that contribute to obesity, diabetes and poor bone health in growing
children. Therefore, we believe that we can supply a healthful alternative to
sugar laden beverages.

MARKET

Our customers are supermarket chains, convenience stores, drug chains and
independent and mass marketers. In addition, we believe that we will be able to
market our product to food service customers such as schools, hospitals,
prisons, gyms, and health food outlets. We are not dependent on one or a few
major customers.

Our management believes that our productsand our network of brokers should
enable us to penetrate the retail and food service market. Through our food
brokers, we are attempting to place our product in multiple supermarket
locations, i.e. next to other sugared drink beverages, as well as health
sections, dietetic and diabetic sections.

Our research indicates that no products exist in the market with the same
qualities as Championlyte. Therefore, Championlyte would not destroy existing
marketplace. Our Product would increase sales, not replace sales.

PRIVATE LABEL/LICENSING

Private label opportunities have already presented themselves and others are
being sought out. A private label opportunity is when another party wants us to
produce our product, but distribute it under another name. In addition, we are
in the process of pursuing licensing opportunities both domestically and in the
foreign markets.

MARKETING

Internal marketing will be done through a broker network, with on sight sampling
support, in store flyer programs, point of sales print and radio. In an ongoing
effort to continue marketing our product, we will be attending trade shows and
conventions, conducting in store promos and using collateral materials such as
posters, flyers, sell sheets, etc.

When it becomes financially feasible, we will bolster this marketing through
increased radio and print advertising. This will continue to support our grass
roots sales and marketing effort.

PRODUCTS AND PACKAGING

Our product is a 20 ounce PET bottle with locking caps which comes in cases of
12/20 ounce bottles per case. PET is defined as polyethlyne terephthablote. It
is a certain type of plastic. The product is available in 5 Flavors: Lemon Lime,
Fruit Punch, Orange, Pink Lemonade and Blue Raspberry. A clear version of three
of the flavors has also been developed for a mass merchandiser. We anticipate
that in the future 32 ounce bottles will be produced. Multiple bottle sizes,
including 8 ounce bottles for multi-pack options and single serve food service
are in development. New retail and food service packaging applications are being
developed to expand sales and availability of the product and to increase sales
in all areas of the Isotonic sports drink market.

NEW PRODUCT DEVELOPMENT

We are in the process of developing new flavors such as Grape, Kiwi Strawberry,
Peach Tea and Tropical Citrus. Using natural fruit flavors, we are testing
multiple blends to create innovative and delicious alternatives to the standard
flavors now produced. The basis for expanding our product line is to watch for
trends and re-evaluating current flavor sales. In addition, in response to
inquiries by national corporate accounts in the diet and health industries, we
have completed research and development on flavors devoid of coloring which we
started to ship on July 30, 2003.

SARA LEE LICENSE AGREEMENT

We are in the process of finalizing a license agreement with Sara Lee for the
use of the "Champion Lyte" name. A lawsuit was commenced by Sara Lee against us.
The details of the lawsuit are contained in the "Legal Proceedings" section of
this document. On April 1, 2003, the parties to this case signed a settlement
agreement. The settlement agreement provides that we will assign the "Champion
Lyte" trademark to Sara Lee and Sara Lee will grant us an exclusive license of
the "Champion Lyte" trademark for sugar-free sports drinks only in the United
States, Canada and Mexico. The terms of the license agreement are for an initial
term of five (5) years and two renewal terms of (5) years each, subject to us
meeting all minimum sales and royalty requirements. If we meet all requirements
after the first 3 five year terms, the parties agree to negotiate in good faith
for two additional five year terms. Minimum calendar year sales are as follows:
2003 (measured from 4/1/03 to 3/31/04) - $500,000; 2004 - $750,000; 2005 -
$1,000,000; 2006 - $1,250,000; 2007 - $1,500,000; there will be renewal for the
second 5 years if sales in years 2005-2007 average at least $1,500,000; 2008 -
2,000,000; 2009; $2,500,000; 2010 - $3,000,000; 2011 - $3,500,000; 2012 -
4,000,000; there will be renewal for the third 5 years if sales in years
2010-2012 average at least $5,000,000; 2013 - $5,000,000, 2014 - $6,000,000;
2015 - $7,000,000; 2016 - $8,000,000; and 2017 - $9,000,000. The failure to meet
the minimum sales requirements in any year will result in termination of the
license agreement. The failure to meet average stated results will result in
non-renewal. The royalties for the license agreement are as follows: 3% on all
sales until sales reach $10,000,000 annually; 5% on all sales after sales reach
$10,000,000; and 6% on all sales after sales reach $15,000,000 annually.

OLD FASHIONED SYRUP COMPANY

On January 8, 1999, when we were called Meridian Holdings, Inc., we entered into
an acquisition agreement with The Old Fashioned Syrup Company, Inc. (the "Syrup
Company"), under which we issued 3,026,794 shares of our common stock to the
shareholders of the Syrup Company in a tax-free exchange of shares. At the same
time, we entered into a Stock Purchase Agreement with one of our founders and
current directors whereby we purchased 100,000 shares of our common stock from
him for the sum of $50,000. The shares repurchased were retired by us.

The Syrup Company, which was incorporated in Florida in November 1996, was
founded by Alan Posner and Mark Streisfeld to manufacture and sell a sugar-free,
fat-free chocolate flavored syrup they had developed. Commencing in 1998, the
Syrup Company sold its syrup under its trademark The Old Fashioned Syrup
Company(R). Shortly prior to the acquisition by us, the Syrup Company entered
into a license agreement with Cumberland Packing Corp. for use of the Sweet 'N
Low trademark for its syrup product. 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.

On November 27, 2002, Alan Posner, our previous Chief Executive Officer and
Chairman of our Board of Directors entered into a promissory note with
InGlobalVest, Inc. in which we received $15,000 which was payable on December
13, 2002 at a 10% interest rate. The promissory note was entered into without
the approval of our Board of Directors and allowed InGlobalVest to receive a 66
2/3% interest in our wholly owned subsidiary, The Old

Fashioned Syrup Company, Inc. upon default of the promissory note. We
subsequently defaulted on the promissory note on or about December 14, 2002 and
InGlobalVest took the shares of the Syrup Company as well as the books and
records of the Syrup Company from our previous corporate counsel. The issuance
of the promissory note and subsequent release of the interest in the Syrup
Company could have been deemed to be a breach of the terms of our outstanding
preferred stock and the terms of the Security Holder Agreement attached to our
preferred stock. Such agreement did not allow us to incur indebtedness, the sale
of assets or the creation of liens on our assets without the consent of the
holders of our preferred stock.

Since we failed to receive the consent of US Bancorp., the holder of the
preferred stock at the time the promissory note was entered into, we were in
default under the terms of our preferred stock. In addition, our new management
has been advised that we received offers from several potential investors to pay
this debt and avoid the default of the promissory note. On May 28, 2003 we filed
a complaint against InGlobalVest, Inc., Steve Sherb, Barry Patterson, Uche
Osuji, John Doe #1, Alan Posner and Christopher A. Valleau alleging the
fraudulent conveyance of our Old Fashioned Syrup Company, Inc. subsidiary. Such
complaint was filed in the Circuit Court of the 15th Judicial Circuit in Palm
Beach County, Florida and was for monetary damages, injunctive, declaratory and
equitable relief.

The suit alleged the defendants engaged in a fraudulent scheme to deprive us of
our principal asset and primary source of revenue for grossly inadequate
consideration (only $15,000) without notice of approval of our Board of
Directors, without notice and approval of U.S. Bancorp Investments, Inc. (the
holder of our preferred stock), as required by the terms of certain agreements
and our Amended Articles of Incorporation, without notice and approval by the
shareholders at large as required by Florida statutes for sales of assets of a
corporation other than in the regular course of business and in violation of the
antifraud provisions of the Florida Securities Investor Protection Act.

We have settled this lawsuit. The terms of the settlement are as follows: (i) we
paid Inglobalvest, Inc. the sum of $125,000 as follows: $20,000 upon execution
of the settlement agreement; (ii) assignment of a promissory note and UCC-1 in
the amount of $50,000; (iii) the remaining balance paid by August 20, 2003; (iv)
payment of $3,000 to Christopher A. Valleau in six equal monthly installments of
$500 each; (v)Inglobalvest delivered all stock certificates for the Old
Fashioned Syrup Company to us and entered into a non-interference agreement with
us relating to the Old Fashioned Syrup Company.

BEVSYSTEMS INTERNATIONAL, INC.

We entered into a Strategic Marketing Agreement ("SMA") in January 2003 with
BevSystems International, Inc. ("BEVI") another small publicly traded company in
the business of beverage products, whereby BEVI agreed to issue shares of its
common stock to us in an amount equal to $125,000 per month. We agreed to issue
50,000 shares of our restricted stock per month to BEVI under this agreement.
These shares carry piggyback registration rights, which do not have an
expiration date. We also agreed to pay BEVI up to $100,000 per month for
services rendered by BEVI relating to the use of their beverage knowledge and
distribution resources. Each entity was entitled to 50% of the profits derived
from distributing the other firm's beverage product. Such agreement has been
cancelled by the parties with no additional consideration due to either party.
The agreement was cancelled on May 20, 2003. Upon cancellation, Bevsystems had
issued 50,000 shares of its common stock. No money was exchanged pursuant to
the SMA.

COMPETITION

In the soft drink category, our leading competition account for more than 85% of
the entire market. These companies are substantially larger and better
established than we are. This allows them not only to commit more money to
marketing and advertising, but affords them access to greater shelf space and
prominence in food stores, which is a key to success in the food industry. We
believe that the ability to compete successfully with these companies is
dependent primarily upon our ability to produce a tasty, sugar-free alternative
to the existing sugared drinks and to persuade food retailers to carry our
products. We continue to refine the taste of our products. However, the
competition for shelf space in food retail establishments is extremely intense
and the ability to obtain such shelf space is essential to the potential success
of these products.

EMPLOYEES

We employ four people on a full-time basis. We will employ additional people as
we continue to implement our plan of operation. None of our employees are
covered by a collective bargaining agreement, and we believe that our
relationship with our employees is satisfactory.

DESCRIPTION OF PROPERTY

We presently sublease approximately 800 square feet of office space located at
2999 NE 191st Street, Penthouse 2, North Miami Beach, Florida on a month to
month basis for $1,750 per month. We sublease our office space from
Knightsbridge Holdings LLC (a financial advisory firm) that we have retained as
a business consultant. Our space is part of a larger office space that is also
subleased to an investment fund Advantage Fund I, LLC and political lobbyist.

LEGAL PROCEEDINGS

Sara Lee Global Finance LLC v. Championlyte Products, Inc., et, al. In November
2001, Sara Lee Global Finance, LLC ("Sara Lee") commenced an action in United
States District Court for the

Middle District of North Carolina (Civil Asction No. 1:01CV01053) against us
seeking to enjoin us from infringing Sara Lee's "Champion" trademark used by
Sara Lee's Champion Athleticwear division. Simultaneously, Sara Lee commenced a
proceeding in the U.S. Patent & Trademark Office to cancel our trademark
registration for the mark ChampionLyte. Sara Lee claimed that our use of the
ChampionLyte trademark for our dietary refresher drink infringed Sara Lee's
Champion trademark used for various sporting goods and clothing. On April 1,
2003, the parties to this case signed a settlement agreement. In addition to the
above- referenced case being dismissed, the case before the United States Patent
and Trademark Office was cancelled - TTAB Cancellation No. 92032691. The
settlement agreement provides that we will assign the ChampionLyte trademark to
Sara Lee and Sara Lee will grant us an exclusive license of the ChampionLyte
trademark for sugar-free sports drinks only in the United States, Canada and
Mexico. The terms of the license agreement are for an initial term of five (5)
years and two renewal terms of (5) years each, subject to us meeting all minimum
sales and royalty requirements. If we meet all requirements after the first 3
five year terms, the parties agree to negotiate in good faith for two additional
five year terms. Minimum calendar year sales are as follows: 2003 (measured from
4/1/03 to 3/31/04) - $500,000; 2004 - $750,000; 2005 - $1,000,000; 2006 -
$1,250,000; 2007 - $1,500,000; there will be renewal for the second 5 years if
sales in years 2005-2007 average at least $1,500,000; 2008 - 2,000,000; 2009:
$2,500,000; 2010 - $3,000,000; 2011 - $3,500,000; 2012 - 4,000,000; there will
be renewal for the third 5 years if sales in years 2010-2012 average at least
$5,000,000; 2013 - $5,000,000, 2014 - $6,000,000; 2015 - $7,000,000; 2016 -
$8,000,000; and 2017 - $9,000,000. The failure to meet the minimum sales
requirements in any year will result in termination of the licenses agreement.
The failure to meet average stated results will result in non-renewal. The
royalties for the license agreement are as follows: 3% on all sales until sales
reach $10,000,000 annually; 5% on all sales after sales reach $10,000,000; and
6% on all sales after sales reach $15,000,000 annually.

Champion Performance Products, Inc. d/b/a Champion Nutrition v. ChampionLyte,
Inc. In August 2002, Champion Performance Products commenced the above
referenced cancellation proceeding in the U.S. Patent and Trademark Office
against ChampionLyte, Inc., in which the petitioner seeks to cancel our
registration for our Champion Lyte trademark. As part of the settlement with
Sara Lee in the action above, this case was cancelled in the United States
Patent and Trademark office, TTAB Cancellation No. 92040440.

Championlyte Holdings, Inc. f/k/a Championlyte Products, Inc. v. Inglobalvest,
Inc., Steve Sherb, Barry Patterson, Uche Osuji, John Doe No. 1, Alan Posner and
Christopher A. Valleau, Case No. 2003 CA 005662AF. On May 28, 2003, we commenced
an action against the above named defendants in the Circuit Court of the 15th
Judicial Circuit in and for Palm Beach County, Florida alleging the fraudulent
conveyance of our Old Fashioned Syrup Company, Inc. subsidiary. Alan Posner is
our former officer, director and employee.

The suit alleges the defendants engaged in a fraudulent scheme to deprive us of
our principal asset and primary source of revenue for grossly inadequate
consideration (only $15,000) without notice of approval of our Board of
Directors, without notice and approval of U.S. Bancorp Investments, Inc. (the
holder of our preferred stock), as required by the terms of certain agreements
and our Amended Articles of Incorporation, without notice and approval by the
shareholders at large as required by Florida statutes for sales of assets of a
corporation other than in the regular course of business and in violation of the
antifraud provisions of the Florida Securities Investor Protection Act.

The suit further alleges that Posner, acting in concert with Valleau, by and
through InGlobalVest and its representatives devised a fraudulent plan to
improperly and unlawfully strip us of our ownership and control of our valuable,
wholly-owned subsidiary, the Syrup Company, as well as other valuable property,
equipment and assets that were owned by the Syrup Company including long-term
licensing agreements, specifically Cumberland Farms for the rights to name
Sweet'N Low(R) worth hundreds of thousands of dollars.

On July 21, 2003, we reached a settlement with Inglobalvest, Inc., Steve Sherb,
Barry Patterson, Uche Osuji and Christopher A. Valleau. We are still attempting
to negotiate a settlement with Alan Posner. The settlement agreement provides
that Inglobalvest must deliver all stock certificates in the Old Fashioned Syrup
Company ("OFSC") as well as its books and records to our legal counsel by August
20, 2003. In consideration for this, we paid Inglobalvest, Inc.

the sum of $125,000 as follows: $20,000 upon execution of the settlement
agreement and $105,000 by no later than August 20,2003. As part of the
settlement, we agreed to the following conditions: (i) Churchill Investments,
Inc., which provides factoring for us, has agreed to assign its UCC-1 financing
statement for the first $50,000 on our accounts receivable, equipment, inventory
and general intangibles which it currently holds as security; (ii) issue a
written statement which exculpates Inglobalvest, Inc., Steve Sherb, Barry
Patterson and Uche Osuji from any fraudulent acts in the complaint; (iii)
payment of $3,000 to Christopher A. Valleau in six equal monthly installments of
$500 each and Mr. Valleau will forfeit the balance of his unpaid salary and
retire all stock options.

On July 1, 2003, we received a letter from the attorney for Diabetes Research
Institute Foundation, Inc. providing formal notice of termination of a license
agreement that The Old Fashioned Syrup Company entered into and claiming that we
owe the following pursuant to such license agreement: (i) an aggregate of
$30,000 in base royalties for 2001, 2002 and 2003; (ii) 0.25% of net sales in
2001; 0.50% of net sales in 2002, of all products using the mark "Diabetes
Research Institute," as well as late payment charges, which are at a rate of 3%
above prime rate. We are presently determining the validity of this claim.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information about our executive officers and
directors.

NAME AGE POSITION

David Goldberg 41 President, Principal Financial Officer,
Principal Accounting Officer and Chairman
of the Board of Directors

Steven Field 57 Director
Thad Kaplan 36 Director
Marshall Kanner 48 Director
Donna Bimbo 44 President, ChampionLyte
Beverages, Inc., our
subsidiary

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. He was recently appointed our
Principal Financial Officer and Principal Accounting Officer. He devotes his
full time to Championlyte.

Mr. Goldberg has fifteen years of sales and marketing experience in the 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, a packaging company in the poultry and egg industry. 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. He sold the business during
the second quarter of 2002. Prior to owning BS Holdings, Mr. Kaplan was the
purchaser and manager for an independent supermarket chain in Middletown, New
York. Mr. Kaplan's responsibilities included purchasing decisions, management 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 FIELD was appointed to our Board of Directors on February 11, 2003. Mr.
Field has varied manufacturing and management experience. He has experience in
"turn around" situations, increasing profitability and bringing profitability to
a company. He is experienced in reorganization situations. Mr. Field's last
position from June 2000 until September 2001 was with Security Plastics, a 43
year-old company seeking bankruptcy protection under Chapter 11. Security
Plastics was in the plastic injection molding business. It filed for bankruptcy
in September 2001. 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 reorganization. In addition, Mr. Field served as a member of The
Triarc Group's advisory committee during 1998 only. The Triarc Group is based In
Westchester, New York. Mr. Field consulted and directed management of Triarc 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
and bringing outsourced products in-house. He was involved in the packaging and
sale of the company to a Triarc Group Subsidiary. He has sales and marketing
experience and uses his accounting background to assist in analysis of financial
information and decision-making processes. Mr. Field has a Bachelor of Science
degree in Accounting and has taken many graduate level courses in manufacturing,
management and processes as well as various seminars.

Since Mr. Field left Serta Mattress Co., he has been semi-retired, excluding his
positions set forth above.

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 includes
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. From April 2002 until the present,
he currently serves as a principal and Managing Director of BK Generalli, LLC, a
financial consulting company based in Miami, Florida. 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. She devotes her full time to Championlyte Beverage,
Inc. Prior to her employment with us, she had been the Director of International
Business for Snapple Beverage Group in White Plains, New York (owned by the
Triarc Companies) from January 1992 until February 2003. 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 worldwide business such as trademarks and negotiation
of contracts. She was the sole Triarc Companies 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 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. She spoke at Temple
University in June 2003 on Global Trends and Opportunities.

EXECUTIVE COMPENSATION

The following table sets forth information concerning annual and long-term
compensation, on an annualized basis for the 2002 fiscal year, for our Chief
Executive Officer and for each of our other executive officers (the "Named
Executive Officers") whose compensation on an annualized basis is anticipated to
exceed $100,000 during fiscal 2003.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG TERM COMPENSATION
RESTRICTED SECURITIES
NAME AND PRINCIPAL FISCAL ANNUAL STOCK UNDERLYING OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION AWARDS (NO. OF SHARES) COMPENSATION
- -------- ---- ------ ----- ------------ ------ -------------- ------------

David Goldberg, President, 2003 (1) (1) $42,000 -0- 200,000 (1)
Principal Financial Officer
And Principal Accounting Officer

Donna Bimbo, President 2003 $82,500 (2) (2) (2) -0- 150,000 (2)
Championlyte Beverage, Inc. (2)

Mr. Goldberg and Ms. Bimbo were not employed by us prior to January 1, 2003.

Mark Streisfeld,
Former President 2000 $133,334 -0- -0- -0- 50,000
And Director 2001 $175,000 1,500 -0- -0- 20,000
2002 $175,000 -0- -0- -0- -0-

Marshall Kanner 2003 $-0- -0- 25,000 -0- -0-
Former Interim Chief Operating
Officer and Director

(1) Effective June 1, 2003, we entered into a two year employment agreement with
our President, Principal Financial Officer and Principal Accounting Officer,
David Goldberg. Pursuant to such agreement, Mr. Goldberg is to receive the
following consideration for his services:

(i) $3,500 per month of our common stock in the first year;

(ii) $4,000 per month of our common stock in the second year;

(iii) Within thirty days of execution of this agreement, Mr Goldberg will
receive 100,000 options to purchase our common stock with a term of
two years at a price equal to $.25 per share;

(iv) If Mr. Goldberg is employed with us for 180 days from the effective
date of the Agreement, he shall receive options to purchase an
additional 100,000 shares of our common stock and each 90 day period
thereafter, he will receive additional options to purchase 100,000
shares of our common stock at an exercise price of 100% of our closing
stock price as of such date. The term of each of these options is two
years.

(v) Mr. Goldberg will also receive a personal performance commission based
on sales made as a direct result of his own efforts, equal to 1% of
our Gross Sales, payable on a quarterly basis.

(2) Effective March 15, 2003, our wholly owned subsidiary, ChampionLyte
Beverages, Inc. entered into a two year employment agreement with Ms. Bimbo. The
employment agreement provides for the following compensation:

(i) Annual base salary of: $96,000 pro-rated for the period March 15, 2003-June
14, 2003; (ii) Annual base salary of: $108,000 pro-rated for the period June 14,
2003-September 14, 2003; (iii) Annual base salary of: $120,000 pro-rated for the
period September 15, 2003-March 14, 2005;

If the employment agreement is renewed on or before March 14, 2005, the
base salary shall be no Less than $132,000 per annum.

Pursuant to the employment agreement, Ms. Bimbo shall be entitled to
the following bonuses:

(i) Warrant Bonus: 50,000 options to purchase our common stock
for a term of 2 years at a price equal to $.10 per share. If
Ms. Bimbo is employed for 90 days from execution of the
agreement, which she has been, she is entitled to 100,000
additional shares of our stock at an exercise price equal to
100% of our closing stock price on the date of issuance. The
options have a 2 year term and piggyback registration rights.
(ii) Stock Bonus: (a) annual bonus equal to 3% of ChampionLyte
Beverages annual net pre-tax profits as reported on its annual
report. The initial bonus is payable on March 31, 2004; (b)
personal performance commission based on sales made as a
direct result of Ms. Bimbo's efforts, equal to 1% of Gross
Sales, payable on a quarterly basis; (c) override commission
of sales personnel reporting to Ms. Bimbo equal to 1/2% of
Gross Sales, payable on a quarterly basis.

STOCK OPTIONS

We did not grant stock options in 2002.

The following table sets forth information with respect to stock options granted
to the Named Executive Officers during fiscal year 2003:

OPTION GRANTS IN FISCAL 2003
(INDIVIDUAL GRANTS)(1)

NUMBER OF % OF TOTAL OPTIONS

SECURITIES UNDERLYING GRANTED TO EMPLOYEES IN EXERCISE EXPIRATION
NAME OPTIONS GRANTED FISCAL PRICE DATE
2003
----

David Goldberg 100,000 28.57% $.25 June 30, 2005
David Goldberg 100,000 28.57% (2) November 26, 2005
Donna Bimbo 50,000 14.29% $.10 March 15, 2005
Donna Bimbo 100,000 28.57% (3) June 13, 2005

(1) No Executive Officer held options during the 2002 fiscal year.

(2) The exercise price is equal to 100% of our closing stock price on
November 27, 2003.

(3) The exercise price is equal to 100% of our closing stock price which
was $.28 on June 14, 2003.

The following table sets forth information as to the number of shares of
common stock underlying unexercised stock options and the value of unexercised
in-the-money stock options projected at the 2002 fiscal year end:

None

PRINCIPAL STOCKHOLDERS

The following table sets forth, as of September 22, 2003, certain
information with respect to the beneficial ownership of the common stock by (1)
each person known by us to beneficially own more than 5% of our outstanding
shares, (2) each of our directors, (3) each named executive officer and (4) all
of our executive officers and directors as a group. Except as otherwise
indicated, each person listed below has sole voting and investment power with
respect to the shares of common stock set forth opposite such person's name.

NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING SHARES(1)

--------------------- -------------------

Thad Kaplan 25,000 *

David Goldberg 160,000 *

Steven Field 25,000 *

Marshall Kanner 845,000 2.93%

Donna Bimbo 0 *

Stedman Walker, Ltd. (2) 2,000,000 6.94%

Beverage Acquisitions Ltd.(3) 1,500,000 5.20%

Championlyte Asset Acquisition Corp. 1,500,000 5.20%

Alan Posner 1,690,291 5.86%

Mark Streisfeld 1,840,000 6.38%

All Executive Officers and Directors 1,055,000 3.66%
as a Group (4 persons)

* - Less than one percent

(1) Based on 28,824,749 shares issued and outstanding as of September 9, 2003.

(2) Little Cobbler Corp. doing business as Stedman Walker, Ltd. Raymond Bloom is
a representative of Stedman Walker, Ltd. and has investment control of Stedman
Walker, Ltd.

(3) James Dale Davidson is a representative of Beverage Acquisitions Ltd. and
has investment control of Beverage Acquisitions Ltd.

(4) Robert Press is a representative of Championlyte Asset Acquisition Corp.;
however investment control is shared by a number of its shareholders.

The following table sets forth, as of September 22, 2003, certain information
with respect to the beneficial ownership of our Series I Convertible Preferred
Stock Series II Convertible Preferred Stock (1) each person known by us to
beneficially own more than 5% of our outstanding shares, (2) each of our
directors, (3) each named executive officer and (4) all of our executive
officers and directors as a group. Except as otherwise indicated, each person
listed below has sole voting and investment power with respect to the shares of
common stock set forth opposite such person's name.

SERIES I CONVERTIBLE PREFERRED STOCK

Number of
Shares of Percent of Number of Shares of
Series I Series I Common Stock Into
Convertible Convertible Which Series I
Preferred Stock Preferred Stock Convertible Preferred
Beneficially Beneficially Stock are
Name of Shareholder Owned(1) Owned Convertible(2)
- --------------------- ---------------- ---------------- ----------------------

None

(1) Unless otherwise indicated, the persons or entities identified in these
tables have sole voting and investment power with respect to all shares shown as
beneficially held by them, subject to community property laws where applicable.

(2) As of September 22, 2003

SERIES II CONVERTIBLE PREFERRED STOCK

Number of
Shares of Percent of Number of Shares of
Series II Series II Common Stock Into
Convertible Convertible Which Series II
Preferred Stock Preferred Stock Convertible Preferred
Beneficially Beneficially Stock are
Name of Shareholder Owned(1) Owned Convertible(2)
- --------------------- ---------------- ---------------- ----------------------
None

(2) As of September 22, 2003

SERIES III CONVERTIBLE PREFERRED STOCK

None

(2) As of September 22, 2003

SERIES IV CONVERTIBLE PREFERRED STOCK

Triple Crown Consulting,
Inc.(3) 93,675 100% 93,675

(2) As of September 22, 2003

(3) Benjamin Kaplan is the owner of Triple Crown Consulting, Inc.

DILUTION

As of September 22, 2003, we had issued and outstanding 28,824,749 shares of
common stock. In addition, we have 1,076,400 warrants being registered in this
offering that convert into shares of our common stock; 31,709,693 shares being
registered in this offering that have not been issued; and 6,666,667 shares
being offered in this offering. Therefore, the dilution tables below are based
on 68,277,509 shares of our common stock on a fully diluted basis.
Dilution is a reduction in the net tangible book value of a purchaser's
investment measured by the difference between the purchase price and the net
tangible book value of the shares after the purchase takes place. The net
tangible book value of common stock is equal to stockholders' equity applicable
to the common stock as shown on our balance sheet divided by the number of
shares of common stock outstanding. As a result of such dilution, in the event
we liquidated, a purchaser of shares may receive less than their initial
investment and a present stockholder may receive more.

The following calculations assume that all of the shares we are registering are
issued pursuant to the outstanding warrants and shares to be issued pursuant to
the outstanding agreements. Our net tangible book value as of June 30, 2003 was
$(1,328,487) or $(.0461) per share. The adjusted pro forma net tangible book
value after this offering (assuming the issuance of all shares as set in the
selling shareholders table and all of the shares are sold in the offering) will
be ($378,487) or ($.0055) per share based on a per share price of $0.15.
Therefore, the increase in the net tangible book value per share attributable to
the offering is $.0270. There is no minimum or maximum amount of shares that
must be sold in this offering. Therefore, purchasers of shares of common stock
in this offering will realize immediate dilution of $(.1555) per share or over
103.66% of their investment assuming all of our shares offered in this
prospectus are sold. The following table describes the dilution effect if: 10%
of the shares are sold in this offering; 50% of the shares are sold in this
offering and if 100% of the shares are sold in this offering:

Championlyte Holdings, Inc.
Dilution calculation
As of June 30, 2003

- -------------------------------------------------------------------------------

100% of shares 50% of shares
----------------------------------------- -------------------------------------------
Amounts Per share Amounts Per share

Tangible book value before offering $(1,328,487) $(.0461) $(1,328,487) $(.0461)

Offering to new investors $1,000,000 $ .15 $ 500,000 $ .15

Less expenses $ 50,000 $ 50,000

Net proceeds $ 950,000 $ 450,000

Tangible book value after offering $ (378,487) $ (.0055) $(878,487) $(.0129)

Increase in Net Tangible

Book value by old investors $ .0270 $.0332

Offering price paid by new investors $ .15 $ .15

Dilution for new investor $ .1555 $.1629

10% of shares
-----------------------------------------
Amounts Per share Amounts

Tangible book value before offering $(1,328,487) $(.0461)

Offering to new investors $ 100,000 $ .15

Less expense $ 50,000

Net proceeds $ 50,000

Tangible book value after offering $(1,278,487) $(.0187)

Increase in Net Tangible
Book value by old investors $.0274

Offering price paid by new investors $ .15

Dilution for new investor $.1687

SELLING STOCKHOLDERS

The shares being offered for resale by the selling stockholders consist of the
total of 41,473,869 shares of our common stock and 1,076,400 shares of our
common stock issuable in connection with their conversion of our warrants.
Except for Donna Bimbo and Marshall Kanner, none of the selling stockholders
have and, within the past three years have not had, any position, office or
other material relationship with us or any of our predecessors or affiliates.

The following table sets forth the name of the selling stockholders, the number
of shares of common stock beneficially owned by each of the selling stockholders
as of September 22, 2003 and the number of shares of common stock being offered
by the selling stockholders. The shares being offered hereby are being
registered to permit public secondary trading, and the selling stockholders may
offer all or part of the shares for resale from time to time. However, the
selling stockholders are under no obligation to sell all or any portion of such
shares nor are the selling stockholders obligated to sell any shares immediately
upon effectiveness of this prospectus. All information with respect to share
ownership has been furnished by the selling stockholders.

Shares of Percent of Shares of Percent of
common stock common common stock Number of shares
owned prior shares owned to be sold shares owned owned
Name of selling to the prior to the in the after the after
stockholder offering offering offering(1) offering(1) offering
- ------------------------------ ----------- ---------- ----------- --------- --------

Knightsbridge Holdings, LLC dba
Knightsbridge Capital (2) 526,400 1.83%% 1,052,800 0 0
Stedman Walker, Ltd. (3) 2,000,000 6.94% 2,000,000 0 0
Advantage Fund I, LLC(4) 0 0% 19,047,619 0 0
Advantage Fund I, LLC (4) 0 0% 6,666,667 0 0
Triple Crown Consulting (5) 95,171 .33% 1,904,762 0 0
SOS Resources Services, Inc.(6) 1,000,000 3.47% 1,000,000 0 0
Championlyte Asset Acquisition 750,000 2.60% 750,000 0 0

Corp.(7)

Peter Nasca (8) 200,000 .69% 250,000 0 0
Marshall Kanner 845,000 2.93% 820,000 25,000 0.08%
Ed Donato 10,000 .03% 10,000 0 0
Joan Ann Forneiro (9) 0 0 571,429 0 0
Donna Bimbo (10) 0 0 150,000 0 0

Christopher Knapp 500,000 1.74% 500,000 0 0
Momentum Trader Network (11) 500,000 1.74% 500,000 0 0
DML Marketing (12) 500,000 1.74% 500,000 0 0
Employee Stock Option Plan (13) 0 0% 2,000,000 - -
Richard I. Anslow(14) 0 0% 140,000 0 0
Gregg E. Jaclin(14) 0 0% 60,000 0 0
Mark Streisfeld (15) 1,840,000 6.38% 1,650,000 190,000 .27%
Elaine Streisfeld (16) 1,142,776 3.96% 1,142,776 0 0
Elaine Streisfeld (16) 0 0% 1,054,216 0 0
Andre Dawson 50,000 .17% 100,000 0 0
Larry Little 50,000 .17% 100,000 0 0
Alonzo Highsmith 50,000 .17% 100,000 0 0
R&T Sports Management Inc.(17) 15,000 .05% 180,000 0 0

David Goldberg (18) 0 0% 200,000 0 0

(1) Assumes that all of the shares of common stock offered in this prospectus
are sold and no other shares of common stock are sold during the offering
period. The percentage of shares is based on 28,824,749 shares issued and
outstanding as of September 22, 2003.

(2) Alyce Schreiber is a representative of Knightsbridge Capital and has
investment control of Knightsbridge Capital. As part of its total of
1,052,800 shares that are being registered, Knightsbridge Capital has
526,400 warrants which are convertible into shares of common stock.

(3) The shareholder is Little Cobbler Corp. doing business as Stedman Walker,
Ltd. Raymond Bloom is a representative of Stedman Walker, Ltd. and has
investment control of Stedman Walker, Ltd.

(4) Robert Press is a representative of Advantage Fund I, LLC, however,
investment control of Advantage Fund I, LLC is shared by a number of
members. We are registering a total of 19,047,619 and 6,666,667
shares for Advantage Fund I, LLC which is 200% of the amount of the shares
that we have agreed to issue to Advantage Fund I, LLC pursuant to the
terms of its agreement with us. To date, we have not issued such shares.

(5) Ben Kaplan is a representative of Triple Crown Consulting and has
investment control of Triple Crown Consulting. We are registering a total
of 1,904,672 shares for Triple Crown Consulting which is 200% of the amount
of the shares that we have agreed to issue to Triple Crown Consulting
pursuant to the terms of its agreement with us. To date, we have not issued
such shares.

(6) Salvatore Russo is a representative of SOS Resources and has investment
control of SOS Resources.

(7) Bob Press is a representative of Championlyte Asset Acquisition Corp.,
however, investment control of Championlyte Asset Acquisition Corp. is
shared by a number of its shareholders. Beverage Acquisition Corp. is the
only shareholder holding more than 5% of Championlyte Asset Acquisition
Corp. We are registering a total of 750,000 shares for Championlyte Asset
Acquisition Corp. which is the amount of shares that we have
agreed to issue to Championlyte Asset Acquisition Corp. pursuant to the
terms of its agreement with us.

(8) As part of his total of 250,000 shares that are being registered, Peter
Nasca has 50,000 warrants which are convertible into shares of common
stock.

(9) We are registering a total of 571,429 shares to Joan Ann Forniero which is
the amount of the shares that we have agreed to issue to Joan Ann Forniero,
pursuant to the terms of her agreement with us. To date, we have not issued
such shares.

(10) Donna Bimbo has 150,000 options which are convertible into shares of
common stock.

(11) Mark Malone is a representative of Momentum Trader Network and has
investment control of Momentum Trader Network.

(12) Donna Levy is a representative of DML Marketing and has investment control
of DML Marketing.

(13) Represents shares to be issued under an Employee Stock Option Plan adopted
on September 22, 2003. To date, such shares have not been issued.

(14) The shares to Richard I. Anslow and Gregg E. Jaclin have not been issued,
but will be issued prior to this registration statement being declared
effective.

(15) Represents shares issued to Mr. Streisfeld pursuant to a settlement
agreement signed with us.

(16) Represents shares issued to Ms. Streisfeld pursuant to a settlement
agreement signed with us. Elaine Streisfeld also owns 16,800 free trading
shares; and her husband, Stanley Streisfeld owns 27,200 free trading
shares. Such shares are not related to the 1,054,216 shares being
registered herein.

(17) Pedro Rosadl is a representative of R&T Sports Management Inc. and has
investment control of R&T Sports Management. R&T Sports Management is
entitled to 15,000 additional shares and has 150,000 warrants which are
convertible into shares of our common stock.
(18) David Goldberg has 200,000 options which are convertible into shares
of our common stock.

PLAN OF DISTRIBUTION

We are offering our shares of common stock on a "best efforts" basis. There is
no minimum number of shares that we must sell before we can utilize the proceeds
of the offering. We are making the offering through our officers, directors and
employees who will not be compensated for offering the shares. David Goldberg,
Championlyte's, Chairman of the Board, President, Chief Financial Officer and
Chief Accounting Officer will be the only person that will conduct the
best-efforts offering. He intends to offer and sell the shares in the primary
offering through his business and personal contacts. We will, however, reimburse
Mr. Goldberg for all expenses incurred by him in connection with the offering.
The shares may also be offered by participating broker-dealers which are members
of the National Association of Securities Dealers, Inc. We may, in our
discretion, pay commissions of up to 10% of the offering price to participating
broker-dealers and others who are instrumental in the sale of shares.

David Goldberg, our Chairman, President, Principal Financial Officer and
Principal Accounting Officer is the only person that plans to sell Championlyte
common stock. He is not a registered broker-dealer. He intends to claim reliance
on Exchange Act Rule 3a4-1 which provides an exemption from the broker-dealer
registration requirements of the Exchange Act for persons associated with an
issuer. Specifically, Mr. Goldberg(i)at the time of sale, he will not be subject
to a statutory disqualification as that term is defined in section 3(a)39 of the
Securities Act; (ii) will not be compensated in connection with his
participation in the offering by payment of commissions or other remuneration;
at the time of participation in the sale of shares, he will not be an associated
person of a broker or a dealer; (iv) pursuant to Rule 3a4-1(a)(4)(ii), Mr.
Goldberg will meet all of the following requirements: at the end of the
offering, Mr. Goldberg will perform substantial duties for Championlyte, other
than in connection with transactions in securities; Mr. Goldberg was not a
broker or dealer, or an associated person of a broker or dealer within the last
12 months; and Mr. Goldberg has not participated in, or does not intend to
participate in, selling an offering of securities for any issuer more than once
every 12 months other than in reliance on paragraph(a)(4)(i) or (iii) of Rule
3a4-1.

The selling security holders shares may be sold or distributed from time to time
by the selling stockholders or by pledgees, donees or transferees of, or
successors in interest to, the selling stockholders, directly to one or more
purchasers (including pledgees) or through brokers, dealers or underwriters who
may act solely as agents or may acquire shares as principals, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices or at fixed prices, which may be changed. The
distribution of the shares may be effected in one or more of the following
methods:

o ordinary brokers transactions, which may include long or short sales,

o transactions involving cross or block trades on any securities or
market where our common stock is trading,

o purchases by brokers, dealers or underwriters as principal and resale
by such purchasers for their own accounts pursuant to this prospectus,
"at the market" to or through market makers or into an existing market
for the common stock,

o in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected
through agents,

o through transactions in options, swaps or other derivatives (whether
exchange listed or otherwise), or

o any combination of the foregoing, or by any other legally available
means.

In addition, the selling stockholders may enter into hedging transactions with
broker-dealers who may engage in short sales, if short sales were permitted, of
shares in the course of hedging the positions they assume with the selling
stockholders. The selling stockholders may also enter into option or other
transactions with broker-dealers that require the delivery by such
broker-dealers of the shares, which shares may be resold thereafter pursuant to
this prospectus.

Brokers, dealers, underwriters or agents participating in the distribution of
the shares may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders and/or the purchasers of shares for
whom such broker-dealers may act as agent or to whom they may sell as principal,
or both (which compensation as to a particular broker-dealer may be in excess of
customary commissions). The selling stockholders and any broker-dealers acting
in connection with the sale of the shares hereunder may be deemed to be
underwriters within the meaning of Section 2(11) of the Securities Act of 1933,
and any commissions received by them and any profit realized by them on the
resale of shares as principals may be deemed underwriting compensation under the
Securities Act of 1933. Neither the selling stockholders nor we can presently
estimate the amount of such compensation. We know of no existing arrangements
between the selling stockholders and any other stockholder, broker, dealer,
underwriter or agent relating to the sale or distribution of the shares.

We will not receive any proceeds from the sale of the shares of the selling
security holders pursuant to this prospectus. We have agreed to bear the
expenses of the registration of the shares, including legal and accounting fees,
and such expenses are estimated to be approximately $50,000.

We have informed the selling stockholders that certain anti-manipulative rules
contained in Regulation M under the Securities Exchange Act of 1934 may apply to
their sales in the market and have furnished the selling stockholders with a
copy of such rules and have informed them of the need for delivery of copies of
this prospectus. The selling stockholders may also use Rule 144 under the
Securities Act of 1933 to sell the shares if they meet the criteria and conform
to the requirements of such rule.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As of December 31, 2002, we had $140,000 of payables to Elaine Streisfeld, the
mother of one of our former officers, Mark Streisfeld. During 2002, we entered
into three short-term loans with this individual. Such notes were due thirty
days from the dates of issuance of July and September 2002, respectively. On
March 27, 2003, we entered into an agreement to repay such indebtedness of
$140,000 in four equal installments with $35,000 of common stock based on a 20%
reduction to the then average closing price of the common stock for three
trading days prior to the issuance date of such common stock for the quarter. We
may at our option repay such indebtedness on a quarterly basis with cash for a
20% premium to the face value of such quarterly payment due. As of June 30,
2003, we issued 570,683 shares of our common stock to Ms. Streisfeld.

In January 2003, we retained a financial advisory firm, Knightsbridge Holdings,
LLC as a business consultant to assist in a variety of areas relating to our
financial, strategic and related development growth. The term of the engagement
is six months and shall automatically renew on a month-to-month basis, subject
to termination by either party with a twenty-four month follow on period,
whereby transactions consummated within the subsequent twenty-four months
following the termination of this agreement the transaction may have fees due
and payable to the financial advisory firm. The terms of the agreement, as
amended in April 2003, are as follows: a monthly payment of $7,500 per month as
of April 1, 2003; a monthly retainer of $10,000 per month as of September 1,
2003.The financial advisory firm may, at its discretion, accept shares of
discounted registered stock in lieu of cash. We shall issue a warrant to
purchase 2.99% or 526,400 shares of our common stock at 80% of the closing bid
price on January 6, 2003, exercisable for five years, various sliding scale
compensation amounts for equity and debt financings consummated from an
introduction by the financial advisory firm, sliding scale compensation amounts
due for a merger or acquisition candidate introduced to us and the reimbursement
of out-of-pocket expenses not to exceed $500 a month unless agreed upon by us.
The sliding scale compensation is as follows: Equity Financing: (i) up to
$250,000: $10,000 minimum fee; (ii) $250,001-500,000: $20,000 fee; (iii)$500,001
- - $5,000,000: 8% of consideration; and (iv) $5,000,000 plus: $400,000 plus 1.5%
of consideration in excess of $5,000,000. Debt Financing: (i) up to $250,000:
$20,000 fee; (ii) $250,001-500,000: $30,000 fee; (iii)$500,001 - $5,000,000: 6%
of consideration; and (iii) $5,000,000 plus: $300,000 plus 3% of consideration
in excess of $5,000,000. For any securities issued by or to us, 5% consideration
in kind. For any merger or acquisition transaction, the compensation is as
follows: (i) up to $500,000: $30,000 minimum fee; (ii) $500,001 - $5,000,000: 5%
of consideration; and (iii) $5,000,000 plus: $250,000 plus 3% of consideration
in excess of $5,000,000. The agreement also contains full rachet anti-dilutiion
provisions. In connection with such provisions, we issued 526,400 shares of our
common stock.

In January 2003, we originated a promissory note with the Advantage Fund I, LLC,
that has common management with Knightsbridge Holdings, LLC. The note was
amended in July 2003 increasing the maximum borrowing amount to $350,000 and
extending the maturity date to December 31, 2004.

In April 2003, our Board of Directors passed a resolution to compensate our
directors and officers an amount equal to 150,000 shares of our
common stock on a quarterly basis.

In April 2003, we entered into a $1,000,000 Common Stock Purchase Agreement with
an investment fund, the Advantage Fund I, LLC, that has common management with
the financial advisory firm, Knightsbridge Holdings, LLC, ("the Purchaser"). The
sale is for an aggregate installment payment purchase price of $1,000,000. There
is no requirement of the Purchaser to purchase a minimum amount of shares. 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. There is no time frame as to when the $25,000 installment payments have to
be made. 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 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.

On April 4, 2003, Marshall Kanner resigned as our Chairman of our Board of
Directors and Interim Chief Operating Officer and accepted the position of
non-executive Vice Chairman and member of our Board of Directors. We authorized
the issuance of 820,000 shares of our common stock in recognition of his past
services and future services. Accordingly, we accrued salary compensation of
$32,200 using the stock market and future services value of $.07 per share for
past services. Part of the issuance of the 820,000 shares included the issuance
of 360,000 shares of our common stock to Mr. Kanner for future services. These
shares shall vest on a pro-rata basis in 30,000 share increments each month
beginning with April 2003 through March 2004.

DESCRIPTION OF SECURITIES

The following is a summary description of our capital stock and certain
provisions of our certificate of incorporation and by-laws, copies of which have
been incorporated by reference as exhibits to the registration statement of
which this prospectus forms a part. The following discussion is qualified in its
entirety by reference to such exhibits.

GENERAL

Our authorized capital stock consists of 200,000,000 shares of common stock,
$.001 par value per share, and 1,000,000 shares of Preferred Stock, of which
100,000 have been designated as Series I, par value $1.00, 8,500 have been
designated as Series II, par value $.01, 500,000 have been designated as Series
III, par value $1.00, 250,000 have been designated as Series IV, par value
$1.00,and as to the balance of which, the Board has the power to designate the
rights, terms and preferences.

COMMON STOCK. As of September 22, 2003, 28,824,749 shares of $.001 par value
common stock were issued and outstanding. Holders of common stock are entitled
to one vote for each share of common stock owned of record on all matters to be
voted on by stockholders, including the election of directors. The holders of
common stock are entitled to receive such dividends, if any, as may be declared
from time to time by the Board of Directors, in its discretion, from funds
legally available. The common stock has no preemptive or other subscription
rights, and there are no conversion rights or redemption provisions. All
outstanding shares of common stock are validly issued, fully paid and
non-assessable.

PREFERRED STOCK. We are authorized to issue up to 1,000,000 shares of preferred
stock upon such terms and conditions as the Board of Directors may determine at
the time of issuance, without further action of the stockholders being required.
Such preferred shares may or may not be: issued in series, convertible into
shares of common stock, redeemable by the corporation and entitled to cumulative
dividends. Other terms and conditions may be imposed at the time of issuance. In
the event that some or all of the preferred stock is issued with a conversion
privilege, any future conversion will cause an increase in the number of issued
and outstanding shares of common stock, and may or may not have a depressive
effect on the market value of the common stock. The following series of
preferred stock have been designated by the Board of Directors:

SERIES I PREFERRED STOCK. In January 1999, 100,000 shares of Preferred Stock
were designated as $1.00 Par Value Series I Convertible Preferred Stock, and a
total of 3,500 of such shares were issued to new management in consideration for
their efforts in developing the business operations from inception. Each
outstanding share of Series I Preferred Stock is convertible into 330 shares of
common stock

(increased from 300 as a result of the September 1999 stock dividend), without
further condition or consideration. In December 2001, all outstanding shares of
Series I Preferred Stock were converted into 1,155,000 shares of our $.001 par
value common stock and there are currently no shares of Series I Preferred Stock
outstanding.

SERIES II PREFERRED STOCK. In June 2000, we designated 8,500 shares of Preferred
Stock as $.01 par value Series II Convertible Preferred Stock. Each share of
Series II Preferred Stock is convertible into common stock at the rate of one
share of common stock for each $1.70 of the purchase price of the preferred
stock (equal to the principal and accrued interest under the note at the time of
conversion into Series II Preferred Stock), plus the 5% cumulative dividend
under the Preferred Stock at the time of conversion into common stock. The
holder of each share of Series II Preferred Stock has the right to one vote for
each share of common stock into which the holder's Series II Preferred Stock
could be converted, thereby entitling the Series II Preferred stockholders to
vote together as a single class with the holders of common stock. In addition,
the holders of Series II Preferred Stock have the right to vote as a single
class to elect one member of our Board of Directors at each annual meeting of
shareholders and to approve certain corporate actions to be taken by us. The
Series II Preferred Stock has priority over all other classes of our securities
in the event we are liquidated. In addition, there is mandatory redemption of
the Series II Preferred Stock in the event of a sale of all or substantially all
of our shares or assets, the acquisition by us of another entity through merger,
reorganization or consolidation, or a change in our control. There is also
mandatory redemption of all shares of Series II Preferred Stock still
outstanding on June 30, 2010. As of September 22, 2003, there are 395 shares
issued and outstanding owned by Championlyte Asset Acquisition Corp.

SERIES A CONVERTIBLE NOTE. On June 16, 2000, we issued our Series A Convertible
5% Note due June 15, 2010 in the principal amount of $8,000,000 to U.S. Bancorp.
On January 10, 2001, the Note was converted into 8,230 shares of Series II
Preferred Stock in accordance with the terms of the Note. These 8,230 shares
were subsequently sold to an investment company which has distributed these
shares amongst its members.

SERIES III PREFERRED STOCK. In April 2003, we designated 500,000 shares of
Preferred Stock as $1.00 par value Series III Convertible Preferred Stock, none
of which are outstanding. 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 our Board of Directors 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 our Board of Directors pursuant to the Florida Business Corporation
Act.

SERIES IV PREFERRED STOCK. In April 2003, we designated 250,000 shares of
Preferred Stock as $1.00 par value Series IV Preferred Stock. As of September
22, 2003, 100,000 shares are issued and outstanding to Triple Crown Consulting,
Inc. We are 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 us and Triple Crown Consulting,
Inc. The promissory note was convertible at the option of Triple 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 Triple Crown convertible promissory note
was converted into these Series IV Preferred Shares and the common shares
underlying these preferred shares are being registered pursuant to this
registration statement.

The holders of the Series IV Preferred Stock and the holders of our common stock
shall vote together as a single class on all actions to be taken by our
shareholders. At all meetings of the shareholders and in the case of any actions
of shareholders in lieu of a meeting, each holder of the Series IV Preferred
Stock shall have twenty times that number of votes on all matters submitted to
the shareholders that is equal to the number of shares of common stock (rounded
to the nearest whole number) into which such holder's shares of Series IV
Preferred Stock are then convertible, at the record date for the determination
of the shareholders entitled to vote on such matters or, if no such record date
is established, at the date such vote is taken or any written consent of such
shareholders is effected. This provision for determination of the number of
votes to which each holder of the Series IV Preferred Stock is entitled shall
also apply in cases in which the holders of the Series IV Preferred Stock have
the right to vote together as a separate class.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

During the two most recent fiscal years and interim period subsequent to
December 31, 2002, there have been no disagreements with Radin Glass & Co., LLP,
our former accountant, on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure. On June 25,
2003, Radin Glass & Co., LLP was dismissed as our independent auditor and we
appointed Massella Roumbos LLP as our new independent auditor.

TRANSFER AGENT

The Transfer Agent and Registrar for our common stock is Florida Atlantic Stock
Transfer 7130 Nob Hill Road, Tamarac, Florida 33321. Its telephone number is
(954) 726-4954.

EXPERTS

The financial statements included in this prospectus have been audited by Radin
Glass & Co, LLP, independent auditors, as stated in their report appearing
herein and elsewhere in the registration statement (which report expresses an
unqualified opinion and includes an explanatory paragraph referring to our
recurring losses from operations which raise substantial doubt about our ability
to continue as a going concern), and have been so included in reliance upon the
reports of such firm given upon their authority as experts in accounting and
auditing.

LEGAL MATTERS

The validity of our common shares offered will be passed upon for us by Anslow &
Jaclin, LLP, Freehold, New Jersey 07728.

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED

JUNE 30, 2003

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
INDEX
JUNE 30, 2003

Page Number
-----------

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets at June 30, 2003 (unaudited) F-1

Consolidated Statements of Operations and Comprehensive Loss
for the three and six months ended June 30, 2003
and 2002 (unaudited) F-2

Consolidated Statements of Cash Flows for the six months ended
June 30, 2003 and 2002 (unaudited) F-3 - F-4

Notes to Consolidated Financial Statements F-5 - F-20

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, 2003
(UNAUDITED)

ASSETS
------

Current Assets:
Cash and cash equivalents $ 1,254
Accounts receivable 17,956
Inventory 18,813
Deposits 16,000
Prepaid expenses 14,963
------------
Total current assets 68,986
------------

Property and equipment, net 22,028
------------
Total assets $ 91,014
============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
----------------------------------------

Current liabilities:
Accounts payable $ 440,443
Net liabilities of discontinued operations 57,420
Notes payable - related party 105,000
Convertible notes payable 281,462
Accrued expenses 140,176
------------
Total current liabilities 1,024,501
------------

Series II redeemable convertible preferred stock, par value $.01 - authorized
8,500 shares, 395 shares issued and outstanding (liquidation value $395,000) 395,000
------------

Commitments and contingencies

Stockholders' deficiency:
Series I convertible preferred stock, par value $1.00 - authorized
1,000,000 shares, 0 shares issued and outstanding --
Series III blank check preferred stock, par value $1.00 - authorized
500,000 shares, 0 shares issued and outstanding --
Series IV convertible preferred stock, par value $1.00 - authorized
250,000 shares, 93,675 shares issued and outstanding (liquidation value $93,675) 93,675
Common stock, par value $0.001 - authorized 200,000,000 shares,
24,570,420 shares issued and outstanding 24,570
Additional paid-in capital 14,104,473
Common stock due for services rendered 8,000
Deferred services (642,971)
Deferred compensation (7,989)
Accumulated deficit (14,908,245)
------------
Total stockholders' deficiency (1,328,487)
------------

Total liabilities and stockholders' deficiency $ 91,014
============

See accompanying notes to consolidated
financial statements (unaudited).

F-1

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)

Three Months Ended June 30, Six Months Ended June 30,
------------------------------ ------------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------

Net sales $ 17,956 $ 192,135 $ 17,956 $ 238,153
Cost of sales 8,185 132,037 8,185 143,206
------------ ------------ ------------ ------------
Gross profit 9,771 60,098 9,771 94,947
------------ ------------ ------------ ------------

Selling, general and
administrative 449,393 947,536 730,684 1,561,049
------------ ------------ ------------ ------------

Loss from continuing operations
before other income (expense) (439,622) (887,438) (720,913) (1,466,102)

Other income (expense):
Gain on forgiveness of
trade payable -- -- 158,998 --
Interest and financing expense (83,133) -- (197,394) --
------------ ------------ ------------ ------------
Other income (expense) net (83,133) -- (38,396) --
------------ ------------ ------------ ------------
Net loss before
discontinued operations (522,755) (887,438) (759,309) (1,466,102)
Net gain (loss) from
discontinued operations -- (120,347) 57,420 (314,449)
------------ ------------ ------------ ------------
Net loss available to common
shareholders $ (522,755) $ (1,007,785) $ (701,889) $ (1,780,551)
============ ============ ============ ============

Other comprehensive loss:
Net loss $ (522,755) $ (1,007,785) $ (701,889) $ (1,780,551)
Unrealized loss from
marketable securities -- (1,840) -- --
------------ ------------ ------------ ------------

Comprehensive loss $ (522,755) $ (1,009,625) $ (701,889) $ (1,780,551)
============ ============ ============ ============

Weighted average number of
common shares outstanding - basic 13,436,541 7,520,149 10,838,595 7,513,113
============ ============ ============ ============
Basic income (loss) per share:
Loss from continuing
operations available to
shareholders $ (.04) $ (.12) $ (.07) $ (.20)
Income (loss) from
discontinued operations -- (.01) .01 (.04)
------------ ------------ ------------ ------------
$ (.04) $ (.13) $ (.06) $ (.24)
============ ============ ============ ============

See accompanying notes to consolidated
financial statements (unaudited)

F-2

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)

2003 2002
----------- -----------

Cash flows from operating activities:
Net loss $ (701,889) $(1,780,551)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 27,532 32,929
Operating expenses paid through convertible notes payable 344,798 --
Issuance of common stock, warrants and options for services
and financing 530,587 141,602
Changes in operating assets and liabilities:
Increase in accounts receivable (17,956) (82,112)
Decrease in other receivables -- 100,000
Decrease (increase) in inventory (18,813) 6,656
Increase in advances to employees -- (268)
Decrease in prepaid expenses -- 35,395
(Decrease) increase in accounts payable (148,600) 489,031
Decrease in net liabilities of discontinued operations (57,420) --
Increase in accrued expenses 42,944 79,639
----------- -----------

Net cash provided by (used in) operating activities 1,183 (977,679)
----------- -----------

Cash flows from investing activities:
Sale of marketable securities -- 977,598
----------- -----------

Net cash provided by investing activities -- 977,598
----------- -----------

Cash flows from financing activities:
Payments on notes payable -- (1,639)
Proceeds from exercise of options -- 250
----------- -----------

Net cash used in financing activities -- (1,389)
----------- -----------

Net (decrease) increase in cash and cash equivalents 1,183 (1,470)

Cash and cash equivalents, beginning of period 71 64,326
----------- -----------

Cash and cash equivalents, end of period $ 1,254 $ 62,856
=========== ===========

Supplemental disclosure of non-cash information

Cash paid during the year for:
Interest $ -- $ 527
=========== ===========
Income taxes $ -- $ --
=========== ===========

See accompanying notes to consolidated
financial statements (unaudited).

F-3

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)

2003 2002
---- ----

Schedule of non-cash investing and financing activities:

Conversion of redeemable convertible preferred stock $7,834,727 $ --
========== ===========

Issuance of common stock for settlements of amounts due $ 130,324 $ --
========== ===========

Third party payments charged to balance sheet $ 30,339 $ --
========== ===========

Conversion of convertible notes payable to Series IV
Preferred Stock $ 93,675 $ --
========== ===========

Issuance of common stock for services to be provided $ 760,948 $ --
========== ===========

Issuance of options for services to be provided $ 8,500 $ --
========== ===========
Issuance of common stock due to options exercised $ 3,334 $ --
========== ===========

See accompanying notes to consolidated
financial statements (unaudited).

F-4

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 1 - ORGANIZATION, HISTORY AND NATURE OF BUSINESS

Championlyte Holdings, Inc. (the "Company") markets sugar-free,
calorie-free, sports refresher beverages under the ChapionLyte brand
name and, up to mid December 2002, the Company sold and marketed
sugar-free, fat-free, cholesterol-free, flavored syrups through its
subsidiary The Old Fashioned Syrup Company, Inc. ("Old Fashioned").
Both of these products are sold to retailers and food service customers
throughout the United States. In December 2002, a 67% ownership of Old
Fashioned was relinquished as part of a foreclosure action on a $15,000
advance made to the Company in November 2002. As a consequence of
losing control of such business the Company recorded the Old Fashioned
Syrup business as a discontinued business. In July 2003, the Company
executed a Settlement Agreement, which is intended to return Old
Fashioned to the Company (see Note 14).

In mid-December 2002, the Series II Convertible Preferred Stock was
sold to another investment firm. The new shareholders began to exercise
their influence over the Company in December 2002 and ultimately
replaced the management of the Company in early 2003.

On March 18, 2003, the Company amended its Articles of Incorporation to
change the authorized stock structure such that the common stock
authorized was increased from 40,000,000 to 200,000,000 shares, and
it's preferred stock authorized from 100,000 shares to 1,000,000
shares.

In April 2003, the Company created a subsidiary, Championlyte
Beverages, Inc., to engage in the production and sale of the
Championlyte products.

NOTE 2 - BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles in the United
States of America for interim financial information, the instructions
to Form 10-QSB and Items 303 and 310(B) of Regulation S-B. In the
opinion of management, the unaudited financial statements have been
prepared on the same basis as the annual financial statements and
reflect all adjustments, which include only normal recurring
adjustments, necessary to present fairly the financial position as of
June 30, 2003 and the results of the operations and cash flows for the
six months ended June 30, 2003 and 2002. The results for the six months
ended June 30, 2003, are not necessarily indicative of the results to
be expected for any subsequent quarter or the entire fiscal year ending
December 31, 2003.

Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles in the United States of America have been
condensed or omitted pursuant to the Securities and Exchange
Commission's ("SEC") rules and regulations.

These unaudited financial statements should be read in conjunction with
the Company's audited financial statements and notes thereto for the
year ended December 31, 2002 as included in the Company's report on
Form 10-KSB filed on March 31, 2003.

F-5

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 2 - BASIS OF PRESENTATION (cont'd)

Income (loss) per common share is computed pursuant to Financial
Accounting Standards Board, Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings Per Share" ("EPS"). Basic income (loss) per
share is computed as net income (loss) available to common shareholders
divided by the weighted average number of common shares outstanding for
the period. Diluted EPS reflects the potential dilution that could
occur from common stock issuable through stock based compensation
including stock options, restrictive stock awards, warrants and other
convertible securities.

Certain amounts have been reclassified and restated in the prior year
consolidated financial statements to present them on a basis consistent
with the current year.

NOTE 3 - GOING CONCERN

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern, which contemplates
continuity of operations, realization of assets, and liquidation of
liabilities in the normal course of business. At June 30, 2003, the
Company's accumulated deficit was $14,908,245 and its working capital
deficiency was $955,515. In addition, the Company has had losses from
operations of $2,327,610 and $5,569,162 for the years ended December
31, 2002 and 2001, respectively, and as a result, the auditor's report
on the December 31, 2002 financial statements included a paragraph
indicating that there was substantial doubt about the Company's ability
to continue as a going concern.

The Company is aggressively attempting to increase revenues in order to
mitigate future losses. Management is seeking to raise additional
capital and to renegotiate certain liabilities in order to alleviate
the working capital deficiency. However, there can be no assurance that
it will be able to increase revenues, or to raise additional capital.

These factors raise substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include
adjustments relating to the recoverability and realization of assets
and classification of liabilities that might be necessary should the
Company be unable to continue in operation.

NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS

In April 2002, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical Corrections" ("SFAS
No. 145"). This statement eliminates the requirement to report gains
and losses from extinguishment of debt as extraordinary unless they
meet the criteria of APB Opinion 30. SFAS No. 145 also requires
sale-leaseback accounting for certain lease modifications that have
economic effects that are similar to sale-leaseback transactions. The
changes related to lease accounting are effective for transactions
occurring after May 15, 2002 and the changes related to debt
extinguishment are effective for fiscal years beginning after May 15,
2002. The adoption of SFAS No. 145 did not have a material impact on
the Company's financial position or results of operations.

F-6

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS (cont'd)

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" ("SFAS No. 146"). SFAS No.
146 nullifies Emerging Issues Task Force Issue No. 94-3 and requires
that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred. This statement
also establishes that fair value is the objective for initial
measurement of the liability. SFAS No. 146 did not have a material
impact on the Company's financial position or results of operations.

In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure, an amendment of
FASB Statement No. 123" ("SFAS No. 148"). SFAS No. 148 amends SFAS No.
123, "Accounting for Stock-Based Compensation," to provide alternative
methods of transition for an entity that voluntarily changes to the
fair value based method of accounting for stock-based employee
compensation. It also amends the disclosure provisions of that
Statement to require prominent disclosure about the effects on reported
net income of an entity's accounting policy decisions with respect to
stock-based employee compensation. During the quarter ended June 30,
2003, the Company adopted a fair value method of accounting for
stock-based compensation. The adoption of SFAS No. 148 did not have a
material impact on the Company's financial position or results of
operations.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity" ("SFAS No. 150"). SFAS No. 150 is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period beginning
after June 15, 2003, except for mandatorily redeemable financial
instruments of nonpublic entities. The adoption of SFAS No. 150 is not
expected to have a material impact on the Company's financial position
or results of operations.

NOTE 5 - PROPERTY AND EQUIPMENT

The property and equipment consists of the following:

Cooling equipment $ 34,199
Computer software 11,017
--------
45,216
Less: accumulated depreciation (23,188)
--------
$ 22,028
========

Total depreciation expense for the six months ended June 30, 2003 and
2002 was $5,256.

F-7

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 6 - CONVERTIBLE NOTES PAYABLE

Convertible notes at June 30, 2003, consist of two promissory notes to
an individual and an investment fund. The notes were for a maximum
borrowing of $250,000 each, with funds to be disbursed to satisfy
obligations of the Company as needed. The notes were originated in
January 2003, and bear interest at a rate of 6.5% per annum. The notes
are convertible into shares of the Company's common stock with a
conversion price per share equal to the lesser of the average of the
lowest of three day trading prices during the five trading days
immediately prior to the conversion date multiplied by .70 or, the
average of the lowest of three day trading prices during the five
trading dates immediately prior to the funding dates. The holders of
the notes have the right to convert the note, in whole or in part, at
any time after the issuance of the notes. At June 30, 2003, amounts
owed to the individual note holder aggregated $30,000, and amounts owed
to the investment fund aggregated $251,462. The Company has borrowed
above their line limit to the financial services firm by $1,462. The
note was subsequently amended to extend the maturity date to December
31, 2004 and to account for additional borrowings (see Note 14).

Interest expense on these notes totaled $5,159 for the six months ended
June 30, 2003, and is included in accrued expenses on the accompanying
balance sheet.

NOTE 7 - ACCRUED EXPENSES

Accrued expenses consist of the following at June 30, 2003:

Salaries $ 129,434
Interest 6,142
Payroll taxes 4,600
-----------
Total $ 140,176
===========

NOTE 8 - DISCONTINUED OPERATIONS

In December 2002, a 67% ownership of Old Fashioned was relinquished as
part of a foreclosure action on a $15,000 advance made to the Company
in November 2002, which matured on December 14, 2002. No value has been
recorded for the 33% minority interest in Old Fashioned, since there
was no net equity in such business segment. In addition, due to the
lack of control over the minority share of Old Fashioned, lack of
cooperation with the successor management, the Company and the Old
Fashioned business segment has not had profitable operations in the
last four years, management does not expect any future cash flows from
such minority ownership interest in the immediate future. The Company,
subsequent to June 30, 2003, has entered into a Settlement Agreement
with certain parties involved in the foreclosure action (See Note 14).

F-8

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 9 - COMMITMENTS AND CONTINGENCIES

Operating leases
----------------

The Company has canceled all operating leases as of December 31, 2002.
The Company currently rents and shares office space with a
conslultant/shareholder on a month-to-month basis at $1,750 per month.
Total rent expense under this arrangement for the six months ended June
30, 2003 was $10,500.

Lack of Insurance
-----------------

The Company has not maintained any workmen's compensation, disability,
or directors' and officers' liability insurance as of June 30, 2003.
Management plans to obtain coverage by the end of 2003. Although the
Company is not aware of any claims resulting from periods of
non-coverage, there is no assurance that none exist.

NOTE 10 - STOCKHOLDERS' DEFICIENCY

Convertible Preferred Stock
---------------------------

The Company is authorized to issue 1,000,000 shares of preferred stock
at $.001 par value, the terms of which may be determined at the time of
issuance by the Board of Directors without further action by the
shareholders. The Company has desingated 100,000 shares of convertible
preferred stock as Series I. Each outstanding share of Series I
Preferred Stock is convertible into 330 shares of common stock. In
December 2001 Series I Preferred Stock was converted into 1,155,000
shares of the Company's common stock.

On June 16, 2000, the Company amended its articles of incorporation to
designate Series II Convertible Preferred Stock ("Series II"). The
Series II preferred dividends entitle the holder to a preferred
dividend based upon 5% per annum of the liquidation value. Initially
the holder may convert each preferred share into the Company's common
stock based upon a $1.70 conversion price. The conversion price may be
adjusted one year from the date of issuance. Subsequent to the one year
period, the holder may convert the preferred shares into common stock
of the Company at a conversion price of the lower of $1.70 or the
average of the closing prices of the common stock for the ten-day
period ending one year from the date of issuance. Additionally, these
shares have the right of mandatory redemption ten years from the date
of issuance.

During the quarter ended June 30, 2003, the holders of the Series II
preferred stock waived all preferred dividends due and in the future,
and agreed to a fixed conversion price of $1.50 to convert to common
stock.

During the six months ended June 30, 2003, thirteen holders of Series
II redeemable convertible preferred stock exercised their option and
converted 7,835 shares of preferred stock into 5,221,486 shares of
common stock pursuant to the preferred stock covenants.

In April 2003, the Company created two new series of preferred stock as
follows: (1) 500,000 shares of Blank Check Series III Preferred Stock
("Series III"), $1.00 par value, and (2) 250,000 shares of Series IV
convertible Preferred Stock ("Series IV"), par value $1.00.

F-9

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 10 - STOCKHOLDERS' DEFICIENCY (cont'd)

The Series III preferred stock may be issued in one or more series, and
each series will be so designated as to distinguish the shares thereof
from the shares of all other series. The Board of Directors has express
authority to fix, 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.

Each share of the Series IV preferred stock is convertible into one
share of the Company's common stock. Each holder of the Series IV
preferred stock has twenty times that number of votes on all matters
submitted to shareholders that is equal to the number of shares of
common stock into which such holder's shares of Series IV preferred
stock are then convertible. In addition, the holders of the Series IV
preferred stock are entitled to receive noncumulative cash dividends at
an annual dividend rate as determined by the Board of Directors. The
Series IV preferred stock has a liquidation price of $1.00 per share in
the event of any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary.

In April and June 2003, the Company entered into two agreements with
Triple Crown Consulting, Inc., whereby it was agreed to exchange two
$50,000 Series B Convertible Promissory Notes between Triple Crown
Consulting, Inc. and the Company for consulting services. These notes
provided the holder with the right at any time to convert into common
stock of the Company as follows: The Conversion Price per share shall
be equal to the lesser of (1) the average of the lowest of three-day
trading prices during the five trading days immediately prior to the
Conversion Date multiplied by .70, or (2) the average of the lowest of
three-day trading prices during the five trading days immediately prior
to the funding date(s). In April and June 2003, the convertible notes
were exchanged for 93,675 shares of Series IV preferred stock.

Marketing Agreement
-------------------

The Company entered into a Strategic Marketing Agreement "SMA" in
January 2003 with BevSystems International, Inc. ("BEVI") another small
publicly traded company in the business of beverage products, whereby
BEVI agreed to issue shares equal to $125,000 per month of its common
stock to the Company. These shares shall be fully paid and
non-assessable and shall bear no restrictive legend. BEVI shall
register these shares prior to each issuance on Form S-8 or some other
applicable registration form. The Company shall issue 50,000 shares of
its restricted stock per month to BEVI under this agreement. These
shares shall carry piggyback registration rights. The Company shall pay
BEVI up to $100,000 per month for services rendered by BEVI relating to
the use of their beverage knowledge and distribution resources. Each
entity shall be entitled to 50% of the profits derived from
distributing the other firm's beverage product. The net economic effect
of the revenues and expenses from this cross-selling arrangement shall
be recorded as a cost or other revenue each month and each reporting
period. In the month of February, 50,000 shares were issued at a value
of eleven cents per share, resulting in an expense of $5,500 to the
Company. On May 20, 2003, the Company and BEVI mutually agreed to
terminate this agreement.

F-10

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 10 - STOCKHOLDERS' DEFICIENCY (cont'd)

Issuance of Stock for Services
------------------------------

In January 2003, the Company retained a financial advisory firm as a
business consultant to assist in a variety of areas relating to
financial, strategic and related development growth of the Company.
This financial advisory firm has common management with the current
Series II Preferred stockholders in that some of the members of the
financial advisory firm are also some of the holders of the Series II
Preferred Shares. The term of the engagement is six months and shall
automatically renew on a month-to-month basis, subject to termination
by either party with a twenty-four month follow on period, whereby
transactions consummated within the subsequent twenty-four months
following the termination of this agreement may have fees due and
payable to the financial advisory firm. The terms of the agreement, as
amended in April 2003, are as follows; a monthly payment of $10,000 per
month, as amended, is due, the financial advisory firm, which at its
discretion may accept shares of discounted registered stock in lieu of
cash, the Company shall issue a warrant to purchase 2.99% or 526,400
shares of common stock of the Company at 80% of the closing bid price,
as amended, on January 6, 2003, exercisable for five years, various
sliding scale compensation amounts for equity and debt financings
consummated from an introduction by the financial advisory firm,
sliding scale compensation amounts due for a merger or acquisition
candidate introduced to the Company and the reimbursement of
out-of-pocket expenses not to exceed $500 a month unless agreed upon by
the Company. In April 2003, the agreement was further amended to extend
the term of the agreement for a period of twelve months from the
original January 2003 contract date. The agreement also contains full
rachet anti-dilution provisions. In connection with the anti-dilution
provisions of the agreement, the firm was issued 526,400 shares of the
Company's common stock valued at $0.07 per share.

In February 2003, the Company entered into an agreement with an
individual who is an employee of a shareholder. The agreement is for a
term of one year and as compensation, the Company has issued 125,000
shares of the Company's common stock, valued at $0.11 per share, in
consideration for consulting services provided and to be provided.

In January 2003, the Company engaged a business consulting firm to
assist in a variety of areas relating to strategic and related
development growth of the Company. The term of the engagement is twelve
months with a twelve month follow on period, whereby fees may be due
and payable to the business consulting firm for transactions
consummated within the subsequent twelve months following the
termination of the agreement. The Company has issued 400,000 shares of
common stock in lieu of cash compensation. These 400,000 shares were
issued at a market value of $0.11 per share, or $44,000. The agreement
was subsequently amended on April 15, 2003 to extend the term of the
contract for one year from the date of amendment. In consideration for
the additional services to be provided, the Company agreed to issue an
additional 1,000,000 shares of the Company's common stock, of which
980,000 have been issued at June 30, 2003. The shares were valued at
$0.09 per share, or $88,200.

In March 2003, the Company entered into an agreement wherein the
Company agreed to issue 300,000 shares of the Company's common stock at
a market value of $0.07 per share for legal services provided and to be
provided. As of June 30, 2003, all 300,000 shares have been issued
valued at $0.07 per share, or $21,000.

F-11

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 10 - STOCKHOLDERS' DEFICIENCY (cont'd)

Issuance of Stock for Services (cont'd)
---------------------------------------

In April 2003, the Company contracted the services of a consultant in
order to facilitate the introduction of professional athletes to the
Company in order for the athletes to act as spokespeople and sponsors
for the Company's products. The term of the agreement is for a period
of twelve months. In consideration for the consultant's services, the
Company has issued warrants to purchase 75,000 shares of the Company's
common stock with an exercise price of $0.12 per share and which expire
two years from the date of issuance. The Company has valued the
warrants at $0.11 per share. The consultant is also entitled to
additional warrants to purchase 75,000 shares of the Company's common
stock at an exercise price of $0.12 per share to be issued on the six
month anniversary of the agreement. Additionally, the consultant shall
receive 10% of any compensation given to spokespersons or sponsors that
were introduced to the Company through the consultant to be paid in the
same form as payment is made to the spokesperson/sponsor. In May 2003,
the consultant introduced the Company to three professional athletes
with whom the Company entered into agreements with (see below). The
consultant received 15,000 shares of the Company's common stock as
compensation for the introductions in accordance with the above
described agreement, valued at $0.23 per share, or $3,450.

In May 2003, the Company entered into agreements with three
professional athletes to provide endorsement services to the Company.
The term of the agreements are for a period of one year. As
consideration for the future services, each party received 50,000
shares of the Company's common stock valued at $0.23 per share, or
$11,500, and an additional 50,000 shares will be issued upon the sixth
month anniversary of the agreement.

In April 2003, the Company entered into an agreement with a consultant
for financial planning services. The term of the agreement is for a
one-year period. As consideration for the consultant's services to be
rendered the Company has issued 2,000,000 shares of the Company's
common stock valued at $0.08 per share, or $160,000.

In April 2003, the Company entered into an agreement with a consultant
for corporate planning and business strategies services for a period of
one year. In exchange for the services to be rendered, the consultant
received 1,000,000 shares of the Company's common stock valued at $0.07
per share. This resulted in the Company expensing $17,500 related to
this agreement for the quarter ended June 30, 2003.

In April 2003, the Company entered into an agreement with a consultant
for investor relations' services for a period of one year. In exchange
for the services to be rendered, the consultant was to receive
1,000,000 shares of the Company's common stock valued at $0.16 per
share. The agreement was terminated in August 2003 and the shares
reverted back to the Company.

In April 2003, the Company entered into an agreement with a consultant
for dissemination of information services for a period of thirteen
months. In exchange for the services to be rendered, the consultant has
received 500,000 shares of the Company's common stock valued at $0.08
per share and, as per the agreement, is due an additional 100,000
shares. This resulted in the Company expensing $48,000 related to this
agreement for the quarter ended June 30, 2003.

F-12

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 10 - STOCKHOLDERS' DEFICIENCY (cont'd)

Issuance of Stock for Services (cont'd)
---------------------------------------

In April 2003, the Company entered into an agreement with a consultant
for financial planning services for a period of twelve months. In
exchange for the services to be rendered, the consultant has received
500,000 shares of the Company's common stock valued at $0.16 per share,
or $80,000.

In April 2003, the Company issued 460,000 shares of the Company's
common stock valued at $0.07 per share for consideration of past
employment services of a key employee. Additionally, the individual,
who is remaining in a consulting capacity, was issued an additional
360,000 shares of the Company's common stock valued at $0.07 per share
for future services. The additional shares will vest in 30,000 share
increments per month through March 2004.

In April 2003, the Company entered into an agreement with a consultant
for marketing under the 1934 Exchange Act services for a period of one
year. In exchange for the services to be rendered, the consultant is to
receive 1,000,000 shares of the Company's common stock, of which
500,000 shares have been issued as of June 30, 2003, valued at $0.09
per share.

In April 2003, the Board of Directors resolved to issue shares of the
Company's common stock to directors and officers of the Company as
compensation for services provided. Total shares issued were 150,000
shares valued at $0.08 per share, which resulted in the Company
expensing $12,000. It was determined by the Board that the same amounts
of shares will be issued quarterly to the same officers and directors
as compensation.

In June 2003, the Company issued 10,000 shares of the Company's common
stock in lieu of a cash payment for consulting services provided. The
shares were valued at $0.28 per share, which resulted in the Company
expensing $2,800 for these shares of stock.

Issuance and Exchange Agreement
-------------------------------

In April 2003, the Company entered into an agreement with a corporation
which is under the ownership of shareholders of the Company. The
shareholders of the corporation agreed to convert their convertible
preferred stock into 1,500,000 shares of the Company's common stock
valued at $0.07 per share. The issuance of these shares to the
corporation will be used to fulfill past obligations of the Company,
which required compensation in the form of unrestricted shares of
common stock. The issuance of these shares resulted in the Company
expensing $105,000 of consulting fees.

F-13

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 10 - STOCKHOLDERS' DEFICIENCY (cont'd)

Common Stock Purchase Agreement
-------------------------------

In April 2003, a $1,000,000 Common Stock Purchase Agreement was entered
into between the Company and an investment fund that has common
management with the Financial Advisory Firm ("the Purchaser") (See
Note 12). The sale is 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, the Company 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 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 the
Company's treasury.

Issuance of Stock for Settlement of Debt
----------------------------------------

In April 2003, the Company entered into an agreement to settle amounts
owed for services related to a prior contract. The Company in February
2003, issued 25,000 shares of common stock, valued at $0.11 per share
towards this debt, and in April 2003, the Company, in a separate
agreement, agreed to issue 200,000 shares of it's common stock in
satisfaction of the remaining debt. In addition, the Company issued
warrants to purchase 50,000 shares of the Company's common stock at an
exercise price of $0.10 per share. The warrants have a term of two
years. No amounts have been expensed as of June 30, 2003 related to
these warrants.

In April 2003, the Company entered into an agreement with a creditor
wherein the debt owed of $42,224 was settled by the issuance of 114,118
restricted shares of the Company's common stock as full settlement of
the debt.

Issuance of Stock For Accrued Compensation
------------------------------------------

The Company was indebted to a former employee in the amount of $44,333.
In April 2003, the Company and the former employee entered into an
agreement whereby the remaining debt would be settled through the
issuance of common stock in lieu of cash payments. Monthly issuances
valued at $6,333 would be given to the former employee until the debt
has been satisfied. At June 30, 2003, the Company has issued 70,000
shares of common stock towards the settlement of the debt.

Issuance of Stock Options
-------------------------

In February 2002, the Company entered into a formal employment
agreement with a key employee of the Company. The agreement terminated
on April 30, 2002. The employee, however, qualified to participate in
the Company's 1999 Incentive Stock Option Plan and received an option
to purchase 100,000 shares of the Company's common stock at $0.10 per
share. The employee became fully vested during fiscal 2002. The
employee had previously been issued 33,000 shares relating to this
agreement and has exercised 33,334 shares in May 2003. The remaining
33,666 options expired unexercised.

F-14

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 11 - STOCK OPTIONS

Stock Incentive Plan
--------------------

In August 1999, the Company's stockholders approved the adoption of an
Incentive Stock Option Plan ("1999 Option Plan"), which allows the
Board of Directors to grant options to employees and members of the
Board of Directors. The 1999 Option Plan provided the Board of
Directors the right to grant options to purchase up to a total of
100,000 shares of the Company's common stock. On August 17, 2000, with
the approval of the shareholders of the Company the number of shares
available under the 1999 Option Plan was increased to 1,000,000. As of
June 30, 2003 and December 31, 2002, 250,000 options were outstanding
under the 1999 Option Plan. As of June 30, 2003 and December 31, 2002,
694,810 and 511,810 non-plan options, respectively were outstanding.

The following information summarizes the Company's stock option
activity for the six months ended June 30, 2003:

Average
Number of Exercise
Options Price
-------- --------
Options outstanding at
beginning of the period 250,000 $ 1.04

Granted -- --
Exercised -- --
Forfeited -- --
-------- --------

Options outstanding at
end of the period 250,000 $ 1.04
======== ========

At June 30, 2003, an aggregate of 250,000 nonqualified stock options
were outstanding with exercise prices ranging between $0.60 and $1.38.
The options vest upon issuance.

In February 2003, the Company's shareholders approved the adoption of
the 2003 Stock Incentive Plan ("2003 Plan"). In May 2003, the Company's
shareholders approved the adoption of the 2003 Stock Incentive Plan #2
("2003 Plan #2"). The plans allow the Board of Directors to grant
awards to employees, directors, independent contractors or agents of
the Company. Awards may include, but are not limited to, stock options,
stock appreciation rights, warrants, dividend equivalents, stock
awards, restricted stock, phantom stock, performance shares or other
securities or rights that the Board of Directors determines to be
consistent with the objectives and limitations of the plans. The 2003
Plan and the 2003 Plan #2 provide the Board of Directors the right to
grant awards up to a total of 1,000,000 shares and 1,500,000 shares,
respectively, of the Company's common stock. In addition, both plans
provide the Board of Directors the ability to determine the type, size,
terms and vesting periods of the awards under the plans. As of June 30,
2003, 1,000,000 shares of the Company's common stock were issued under
the 2003 Plan and 1,180,000 shares of the Company's common stock were
issued under the 2003 Plan #2.

F-15

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 11 - STOCK OPTIONS - (cont'd)

In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure-an amendment of FASB
Statement No. 123." SFAS No. 148 amends FASB Statement No. 123,
"Accounting for Stock-Based Compensation," to provide alternative
methods of transition for an entity that chooses to change to the
fair-value-based method of accounting for stock-based employee
compensation. It also amends the disclosure provisions of that
statement to require prominent disclosure about the effects that
accounting for stock-based employee compensation using the
fair-value-based method would have on reported net income and earnings
per share and to require prominent disclosure about the entity's
accounting policy decisions with respect to stock-based employees
compensation. Certain of the disclosure requirements are required for
all companies, regardless of whether the fair value method or intrinsic
value method is used to account for stock-based compensation
arrangements. The amendments to SFAS No. 123 are effective for
financial statements for fiscal years ended after December 15, 2002 and
for interim periods beginning after December 15, 2002.

The Company accounted for its employee incentive stock option plans
using the intrinsic value method in accordance with the recognition and
measurement principles of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," as permitted by SFAS No.
123. In the quarter ended June 30, 2003, the Company adopted the fair
value method in accordance with SFAS No. 148, which did not have a
material effect on the Company's financial position or results of
operations.

F-16

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 12 - RELATED PARTY TRANSACTIONS

Grant of Stock Options
----------------------

In June 2003, the President of the Company was granted options pursuant
to the June employment agreement to purchase 100,000 shares of the
Company's common stock at $0.25 per share. If the employee continues
employment with the Company for a period of 90 days following the
execution of the agreement, the employee will be granted additional
options to purchase an additional 100,000 shares of the Company's
common stock in 90 days from the effective date and each 90 day period
through the term of the employment agreement. All options will have a
term of two years. The options are exercisable at a price equal to 100%
of the closing price of the stock as of the grant date. The options
become fully exercisable on the date of grant.

F-17

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 12 - RELATED PARTY TRANSACTIONS (cont'd)

Grant of Stock Options (cont'd)
-------------------------------

In March 2003, the President of ChampionLyte Beverages, Inc., as
consideration for entering into an employment agreement, was granted
50,000 options to purchase shares of the Company's common stock at
$0.10 per share. If the employee continues employment with the Company
for a period of 90 days following the execution of the agreement, the
employee will be granted additional options to purchase an additional
100,000 shares of the Company's common stock in 90 days from the
effective date. The options carry a term of two years and are
exercisable at a price equal to 100% of the closing price of the stock
as of the grant date. The options become fully exercisable on the date
of grant.

Employment Agreements
---------------------

In April 2003, the Company's Board of Directors passed a resolution to
compensate its directors and certain officers 150,000 shares of common
stock on a quarterly basis.

In June 2003, the Company entered into a formal employment agreement
with a key officer/shareholder, the president of the Company. The
agreement is for a term of two years. The base salary for the executive
is $3,500 per month paid in the Company's common stock in the first
year, and $4,000 per month payable in the Company's common stock in the
second year. Should the agreement be renewed, the base salary will
increase at a rate of 10% per annum. The employee is also entitled to
commissions based on sales made as a direct result of the employee's
efforts in amounts equal to 1% of gross sales payable on a quarterly
basis.

In March 2003, the Company entered into a formal employment agreement
with a shareholder of the Company and a key officer of the Company's
subsidiary ChampionLyte Beverages, Inc. The term of the agreement is
for a period of two years with a base salary of $96,000 for the period
beginning on the date of the agreement through June 14, 2003, $108,000
for the period beginning on June 15, 2003 through September 14, 2004,
and $120,000 for the period beginning September 15, 2004 through March
14, 2005. The employee is entitled to bonuses as follows: an annual
bonus equal to 3% of the Company's annual net pre-tax profits, a
personal performance commission based on sales made as a direct result
of the employees efforts equal to 1% of gross sales, payable on a
quarterly basis.

Settlement Agreement for Repayment of Notes Payable
---------------------------------------------------

On March 27, 2003, the Company entered into an agreement to repay a
relative of a former employee in the amount of $140,000 in four equal
installments with $35,000 of the Company's common stock based on a 20%
reduction to the then average closing price of the common stock for the
three trading days prior to the issuance date of such common stock for
the six months ending June 30, 2003. The Company at its option may
repay such indebtedness with cash for a 20% premium to the face value
of such quarterly payments due. The average stock price, net of the 20%
discount, at the close of the first quarter was $0.06 per share,
resulting in the issuance of 570,683 shares of the Company's common
stock.

F-18

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 13 - SETTLEMENT OF TRADEMARK

During 2001, a suit was filed against the Company alleging that its
trademark corporate name, ChampionLyte, violated the plaintiff's
trademark. A settlement agreement was entered into April 1, 2003
between the Company and the plaintiff. The terms included granting the
Company an exclusive license to use the ChampionLyte mark in connection
with the sugar-free drinks in the United States, Mexico and Canada. A
licensing agreement providing this mark was established for an initial
five-year term, with two additional five-year terms at the Company's
option. It does require a royalty of three percent until sales reach
$10,000,000 annually. The royalty then increases to five percent on all
sales after sales reach $10,000,000 annually and six percent on all
sales after sales reach $15,000,000 annually. The minimum required
sales per year is as follows:

2003 - $500,000 (measured from 4/1/03 to 3/31/04)
2004 - $750,000
2005 - $1,000,000
2006 - $1,250,000
2007 - $1,500,000
(renewal for second five years if sales in years 2005-07 average at least $1,500,000)
2008 - $2,000,000
2009 - $2,500,000
2010 - $3,000,000
2011 - $3,500,000
2012 - $4,000,000
(renewal for third five years if sales in years 2010-12 average at least $5,000,000)
2013 - $5,000,000
2014 - $6,000,000
2015 - $7,000,000
2016 - $8,000,000
2017 - $9,000,000

F-19

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 14 - SUBSEQUENT EVENTS

Termination of Consultant Agreement
-----------------------------------

In June 2003, one of the consulting agreements that was entered into by
the Company in April 2003 was terminated for non-performance. The
related 1,000,000 shares of the Company's common stock were issued and
held by the Company and the consultant did not receive these shares.
The Company canceled these shares and, therefore, no expense was
recorded in the June 30, 2003 statement of operations.

Settlements
-----------

On May 28, 2003, the Company filed a complaint against certain parties
alleging the fraudulent conveyance of the Company's interest in Old
Fashioned. The complaint filed was for monetary damages, injunctive
declaratory and equitable relief. The lawsuit further claimed that the
Company has suffered irreparable damage and the Company was seeking to
rescind the sale of the securities in the Old Fashioned to InGlobalVest
and restore the Company, the Old Fashioned and InGlobalVest to their
respective positions prior to the time the transaction was entered.

On July 21, 2003, the Company reached a settlement with all but one of
the Defendants in this matter. In addition negotiations with the
remaining Defendant are ongoing and if a settlement is not reached
within a reasonable period of time the Company will proceed with the
litigation. Pursuant to a Settlement Agreement with the other
Defendants, the parties have agreed to stay the case pending the
completion of certain obligations prior to August 20, 2003. In the
event all obligations are performed by such date, the Company shall
dismiss all claims against these Defendants. If such obligations are
not met by August 20, 2003, or such date is not extended by the mutual
consent of the parties, then the case will be reactivated for the
purpose of enforcing the obligation of the parties under the Settlement
Agreement.

Pursuant to the terms of the Settlement Agreement, InGlobalvest has
agreed to deliver any and all stock certificates in Old Fashioned as
well as all books and records to the Company's counsel by August 20,
2003. In addition, InGlobalvest agreed to appoint a representative to
assist in the change in control and management and has agreed to enter
into a non-interference agreement with the Company with respect to the
Old Fashioned. InGlobalvest has warranted and represented to the
Company that the financial conditions depicted in the books and records
tendered to the Company 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, the Company
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. In the event that the full terms of the
settlement are not completed by the Company, the $20,000 shall be
forfeited to InGlobalvest.

F-20

CHAMPIONLYTE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)

NOTE 14 - SUBSEQUENT EVENTS (cont'd)

Factoring Agreement
-------------------

The Company entered into an agreement with a financial services company
for the factoring of accounts receivable and purchase order financing
services. The agreement states no limitation on the volume with a total
facility available of $500,000. The discount schedule related to the
factored receivables is as follows: 0-45 days, 4 points; 46-60 days, an
additional 2 points; 61-75 days, an additional 2 points, and an
additional 2 points for each succeeding 15 days. The agreement bears an
indefinite term.

Amendment to Convertible Note Payable
-------------------------------------

In July 2003, the Company amended their convertible promissory note
agreement with the investment fund by increasing the maximum borrowing
amount to $350,000 and extending the maturity date of the note to
December 31, 2004. All other terms of the note remain unchanged.

Stock Incentve P1ans
--------------------

In August 2003, the Company's shareholders approved the adoption of the
2003 Stock Incentive Plan #3 ("2003 Plan #3"). In September 2003, the
Company's shareholders approved the adoption of the 2003 Stock
Incentive Plan #4 ("2003 Plan #4"). The plans allow the Board of
Directors to grant awards to employees, directors, independent
contractors or agents of the Company. Awards may include, but are not
limited to, stock options, stock appreciation rights, warrants,
dividend equivalents, stock awards, restricted stock, phantom stock,
performance shares or other securities or rights that the Board of
Directors determine to be consistent with the objectives and
limitations of the plans. The 2003 Plan #3 and the 2003 Plan #4 provide
the Board of Directors the right to grant awards up to a total of
2,750,000 shares and 2,000,000 shares, respectively, of the Company's
common stock, In addition, both plans provide the Board of Directors
the ability to determine the type, size, terms and vesting periods of
the awards under the plans. As of September 25, 2003, 2,302,122 shares
of the Company's common stock were issued under the 2003 Plan #3 and no
shares of the Company's common stock were issued under the 2003 Plan
#4.

F-21

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CHAMPIONLYTE PRODUCTS, INC. AND SUBSIDIARIES

Independent Auditors' Report......................................F-2

Consolidated Balance Sheet........................................F-3

Consolidated Statement of Operations..............................F-4

Consolidated Statement of Stockholders' Deficiency................F-5

Consolidated Statement of Cash Flows..............................F-6

Notes to Consolidated Financial Statements.................F-7 - F-21

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
ChampionLyte Products, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of ChampionLyte
Products, Inc. (formerly known as Meridian USA Holdings, Inc.) and subsidiaries
as of December 31, 2002, and the related statements of operations, stockholders'
deficiency and cash flows for the years ended December 31, 2002 and 2001. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ChampionLyte Products, Inc. and
subsidiaries, for the years ended December 31, 2002 and 2001 and the results of
their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that
ChampionLyte Products, Inc. will continue as a going concern. As more fully
described in Note 1, the Company has incurred recurring operating losses and
will have to obtain additional capital to sustain operations. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 1. The financial statements do not include any adjustments to reflect the
possible effects on the recoverability and classification of assets or the
amounts and classification of liabilities that may result from the outcome of
this uncertainty.

/S/ Radin Glass & Co., LLP
Radin Glass & Co., LLP
Certified Public Accountants
New York, New York
March 20, 2003

F-2

CHAMPIONLYTE PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 2002

ASSETS

Current assets:
Cash and cash equivalents $ 71
Prepaid expenses 10,825
------------
Total current assets 10,896
Property and equipment, net 27,284
------------
$ 38,180
============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
Accounts payable $ 610,969
Net liabilities of discontinued operations 116,730
Notes payable - related party 140,000
Accrued expenses and other current liabilities 160,000
------------
Total current liabilities 1,027,699
------------
Series II redeemable convertible preferred stock, par value $.01 - authorized
8,500 shares, 8,230 shares issued and outstanding (liquidation value
$8,230,000) 8,229,727

Commitments and contingency --
Stockholders' deficiency:
Series I convertible preferred stock, par value $1.00 - authorized
100,000 shares, 0 shares issued and outstanding --
Common stock, par value $.001 - authorized 40,000,000 shares,
issued and outstanding 7,559,399 7,560
Additional paid-in capital 4,979,550
Accumulated deficit (14,206,355)
------------
Total stockholders' deficiency (9,219,245)
------------
$ 38,180
============

See notes to consolidated financial statements

F-3

CHAMPIONLYTE PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31,
--------------------------------------
2002 2001
------------------ -------------------

Net sales $ 266,336 $ 368,631

Cost of goods sold 165,909 360,754
----------- -----------

Gross profit 100,427 7,877

Selling, general and administrative 1,956,991 4,153,599
----------- -----------

Loss from operations (1,856,564) (4,145,722)

Other income (expense):
Investment income 11,732 234,405
Interest expense (16,728) (14,291)
Gain on sales of investment 10,860
Expenses relating to conversion of notes to
Series
II preferred stock -- (898,605)
----------- -----------

Other expenses, net 5,863 (678,491)
----------- -----------

Net loss from continuing operations before income
tax expense (1,850,700) (4,824,213)

Income tax expense -- --
----------- -----------
Net loss from continuing operations (1,850,700) (4,824,213)
Loss on from discontinued operations (476,910) (744,949)
----------- -----------
Net Loss (2,327,610) (5,569,162)
Series II deemed preferred dividends 411,500 399,965
Net loss available to common shareholders $(2,739,110) $(5,969,127)
=========== ===========

Basic and Diluted Earnings (Loss) Per share

Loss from continuing operations available to shareholders $ (0.30) $ (0.81)

Loss from discontinued operations (0.06) (0.12)
----------- -----------
$ (0.36) $ (0.93)
=========== ===========

Weighted average number of common shares
outstanding - basic and diluted 7,528,861 6,427,168
=========== ===========

Other comprehensive loss:
Net loss $(2,327,610) $(5,569,162)

Unrealized gain from marketable securities -- 12,681
----------- -----------

Comprehensive loss $(2,327,610) $(5,556,481)
=========== ===========

See notes to consolidated financial statements

F-4

CHAMPIONLYTE PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY

Series I
Common Stock Convertible Preferred Stock
-------------------------------- ------------------------------
Shares Amount Shares Amount
---------------- -------------- ------------- ----------

Balance, December 31, 2000 6,376,399 $ 6,377 3,500 $ 3,500

Issuance of common stock
for services 15,000 15 -- --

Issuance of options for services -- -- -- --

Effect of change in fair value
of available-for-sale securities -- -- -- --

Repurchase of shares in
settlement with consultant (95,000) (95) -- --

Exercise of stock options 50,000 50 -- --

Conversion of Series I
Preferred Stock 1,155,000 1,155 (3,500) (3,500)

Net loss -- -- -- --
---------- ---------- ---------- ----------

December 31, 2001 7,501,399 7,502 -- --

Issuance of options for
services

Amortization of deferred
compensation --

Effect of change in fair value
of available-for-sale securities --

Exercise of options 58,000 58

Net loss
---------- ---------- ---------- ----------
December 31, 2002 7,559,399 $ 7,560 $ -- $ --

========== ========== ========== ==========

Additional Unrealized
Paid-in Deferred Gain on Certain
Capital Compensation Investments
----------------- -------------- ------------

Balance, December 31, 2000 $ 4,590,150 $ (82,891) $ 60,992

Issuance of common stock
for services 23,260 -- --

Issuance of options for services 330,258 (8,711) --

Effect of change in fair value of
available-for-sale securities -- -- (48,311)

Repurchase of shares in settlement
with consultant (24,905) -- --

Exercise of stock options 4,950 -- --

Conversion of Series I
Preferred Stock 2,345 -- --

Net loss -- -- --
----------- ----------- -----------

December 31, 2001 4,926,058 (91,602) 12,681

Issuance of options for services 50,000 (33,333)

Amortization of deferred compensation -- 124,935

Effect of change in fair value of
available-for-sale securities (12,681)

Exercise of options 3,492

Net loss
----------- ----------- -----------
December 31, 2002 $ 4,979,550 $ -- $ --
=========== =========== ===========

Total
Accumulated Stockholders'
Deficit Deficiency
--------------------- ----------------

Balance, December 31, 2000 $ (6,309,583) $ (1,731,455)

Issuance of common stock for services -- 23,275

Issuance of options for services -- 321,547

Effect of change in fair value of available
- -for-sale securities -- (48,311)

Repurchase of shares in settlement with consultant -- (25,000)

Exercise of stock options -- 5,000

Conversion of Series I Preferred Stock -- --

Net loss (5,569,162) (5,569,162)
------------ ------------

December 31, 2001 (11,878,745) (7,024,106)

Issuance of options for services 16,667

Amortization of deferred compensation 124,935

Effect of change in fair value of available-for-sale securities (12,681)

Exercise of options 3,550

Net loss (2,327,610) (2,327,610)
------------ ------------
December 31, 2002 $(14,206,355) $ (9,219,245)
============ ============

See notes to consolidated financial statements.

F-5

CHAMPIONLYTE PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31,
----------------------------
2002 2001
------------ ------------

Cash flows from operating activities:
Net loss $(2,327,610) $(5,569,162)
Adjustments to reconcile net loss to net cash
used in operating activities:
Net loss from discontinued operations 476,910 744,949
Depreciation and amortization 23,712 343,424
Write down or loss on disposal
of equipment 128,814 --
Common stock and options
issued for services 53,550 344,822
Amortization of debt discount -- 635,442
Changes in current assets and liabilities:
Accounts receivable 33,766 (20,750)
Other receivable 100,000 --
Inventory -- 74,391
Advances 2,115 (2,115)
Prepaid expenses 41,567 5,942
Deposits 11,246 --
Accounts payable 445,769 151,712
Accrued expenses and other current
liabilities 60,030 (119,195)
----------- -----------
Net cash used in operating
activities of continuing operations (950,132) (3,410,540)
----------- -----------

Cash flows from investing activities:
Proceeds from sale of marketable securities 990,279 2,809,415

Capital expenditures -- (85,042)
----------- -----------
Net cash used in investing
activities of continuing operations 990,279 2,724,373
----------- -----------

Cash flows from financing activities:
Exercise of stock options -- 5,000
Repurchase of shares for settlement of
consulting agreement -- (25,000)
Proceeds from loans and notes payable 140,000 --
Principal payments on notes payable -- (3,066)
----------- -----------
Net cash used in financing
activities of continuing operations 140,000 (23,066)
----------- -----------
Net cash used in discontinued
operations (209,534) (717,993)
----------- -----------
Net decrease in cash (29,387) (1,427,226)

Cash, beginning of year 29,458 1,456,684
----------- -----------

Cash, end of period $ 71 $ 29,458
=========== ===========

Supplemental Disclosure of Cash Flow Information:

Cash paid during the year:
Interest expense $ -- $ --
=========== ===========
Income taxes $ -- $ --
=========== ===========

Noncash investing and financing activities:
Conversion of note payable to
Series II preferred stock $ $ 8,229,727
=========== ===========
Issuance of warrants in
conjunction with convertible
notes payable $ -- $ 1,357,922
=========== ===========

See notes to consolidated financial statements

F-6

CHAMPIONLYTE PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2002 AND 2001

1. BUSINESS AND BASIS OF PRESENTATION:

Business:

The Company, ChampionLyte, Inc. ("ChampionLyte"), markets sugar-free,
calorie-free, sports refresher beverage under the ChampionLyte brand
name and up to mid December 2002 the Company sold and marketed
sugar-free, fat-free, cholesterol-free, flavored syrups through its
subsidiary The Old Fashioned Syrup Company, Inc. "Old Fashioned". Both
of these products are sold to retailers and food service customers
throughout the United States. On October 3, 2001, with the majority
consent of its shareholders, Meridian changed its name to ChampionLyte
Products, Inc. (the "Company"). In December 2002, a 67% ownership of
Old Fashioned was relinquished as part of a foreclosure action on a
$15,000 advance made to the Company in mid 2002. As a consequence of
loosing control of such business the Company has decided to record the
Old Fashioned syrup business as a discontinued business. The Company is
currently reviewing the terms of the agreements relating to the
aforementioned foreclosure of Old Fashioned and an appropriate form of
recourse action if any.

In mid-December 2002, the Series II Convertible Preferred Stock was
sold to another investment firm. The new bond holders began to exercise
their influence over the Company in December 2002 and ultimately
replaced the management of the Company in early 2003.

Basis of Presentation:

Since its inception, the Company has incurred significant operating
losses. The Company has limited assets on hand and will be unable to
sustain operations for a prolonged period of time. The Company will
have to obtain additional capital or generate additional revenue in
order to continue operations. The Company is actively engaged in
pursuing additional sources of capital. However, the Company's
management has indicated that if it is unable to successfully raise
additional capital or it is unable to generate additional revenue in
the near future, the Company may cease operations. These conditions
raise substantial doubt about the Company's ability to continue as a
going concern.

The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result
from the outcome of this uncertainty.

F-7

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. PRINCIPLES OF CONSOLIDATION - The consolidated financial
statements include the accounts of the Company and its
subsidiaries. All material intercompany transactions have been
eliminated.

b. ESTIMATES - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.

c. CASH AND CASH EQUIVALENTS - The Company considers all highly
liquid temporary cash investments with an original maturity of
three months or less when purchased, to be cash equivalents.

d. MARKETABLE SECURITIES - Investments in marketable securities are
classified as available-for-sale and are recorded at fair value
with any unrealized holding gains or losses included in
accumulated other comprehensive income (loss), which is a
component of stockholders' deficiency. During 2002 all marketable
securities were sold at the gain.

e. ALLOWANCE FOR ACCOUNTS RECEIVABLE- The Company records a bad debt
expense/allowance based on specific receivable basis. All
outstanding accounts receivable accounts are reviewed for
collectibility on an individual basis. There is no accounts
receivable at December 31, 2002.

f. REVENUE RECOGNITION - Revenues are recognized as products are
received by customers.

g. INVENTORY - Inventory is stated at lower of cost or market on the
first-in, first-out method of inventory valuation. At December 31,
2002 the Company has no inventory.

h. PROPERTY AND EQUIPMENT - Property and equipment is stated at cost.
Depreciation of property and equipment is computed using the
straight-line method over the estimated useful lives of the
assets. Leasehold improvements are depreciated over the life of
the appropriate lease.

i. CONCENTRATION OF RISK - Credit losses, if any, have been provided
for in the financial statements and are based on management's
expectations. The Company's accounts receivable are subject to
potential concentrations of credit risk. The Company does not
believe that it is subject to any unusual or significant risks, in
the normal course of business.

j. INCOME TAXES - Income taxes are accounted for under Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes," which is an asset and liability approach that requires the
recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been
recognized in the Company's financial statements or tax returns.

k. NET LOSS PER SHARE - Basic earnings per share has been calculated
based upon the weighted average number of common shares
outstanding. Stock options have been excluded as common stock
equivalents in the diluted earnings per share because they are
either antidilutive, or their effect is not material.

l. FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying amounts
reported in the balance sheet for cash, receivables, accounts
payable and accrued expenses approximate fair value based on the
short-term maturity of these instruments.

m. LICENSING AGREEMENT - The licensing agreement is amortized on a
straight-line basis over ten years. Since Old Fashioned foreclosed
upon in 2002, the licensing agreement was relinquished as part of
the foreclosure action.

n. ADVERTISING COSTS - Advertising costs are expensed as incurred.
Total advertising costs charged to operations for the years ended
December 31, 2002 and 2001 amounted to $290,647 and $2,292,688,
respectively.

o. IMPAIRMENT OF LONG-LIVED ASSETS - The Company reviews long-lived
assets for impairment whenever circumstances and situations change
such that there is an indication that the carrying amounts may not
be recovered. At December 31, 2002, the Company believes that
there has been no impairment of its long-lived assets.

p. STOCK OPTIONS - The Company accounts for all transactions under
which employees, officers and directors receive shares of stock in
accordance with the provisions of Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees." In
accordance with Statement of Financial Accounting Standards No.
123 ("SFAS 123"), "Accounting for Stock-Based Compensation," the
Company adopted the pro forma disclosure requirements of SFAS 123.
Accordingly, no compensation has been recognized in the results of
operations for the employees, officers and directors stock option
plan other than for those options issued to non-employees for
consulting services.

F-8

q. COMPREHENSIVE INCOME - The Company has adopted Statement of
Financial Accounting Standard No. 130 ("SFAS 130"), "Reporting
Comprehensive Income", which establishes standards for reporting
and display of comprehensive income, its components and
accumulated balances. Comprehensive income is defined to include
all changes in equity except those resulting from investments by
owners and distributions to owners. Among other disclosures, SFAS
No. 130 requires that all items that are required to be
recognized under current accounting standards as a component of
comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements.
Comprehensive income is displayed in the statement of
stockholders' deficiency and in the balance sheet as of component
of stockholders' deficiency.

r. RECLASSIFICATIONS

Certain amounts in the prior year financial statements have been
reclassified to conform to the current year presentation.

s. RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the FASB issued SFAS No. 141, "Business
Combination", SFAS No. 142, "Goodwill and Other Intangible Assets"
and SFAS No. 143, "Accounting for Asset Retirement Obligations."
SFAS No. 141 requires the use of the purchase method of accounting
and prohibits the use of the pooling-of-interest method of
accounting for business combinations initiated after June 30,
2001. It also requires that the Company recognize acquired
intangible assets apart from goodwill. SFAS No. 142 requires,
among other things, that companies no longer amortize goodwill,
but instead test goodwill for impairment at least annually. In
addition, SFAS No. 142 requires that the Company identify
reporting units for the purposes of assessing potential future
impairments of goodwill, reassess the useful lives of other
existing recognized intangible assets, and cease amortization of
intangible assets with an indefinite useful life. SFAS No. 143
establishes accounting standards for recognition and measurement
of a liability for an asset retirement obligation and the
associated asset retirement cost, which will be effective for
financial statements issued for fiscal years beginning after June
15, 2002.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" which basically
further clarifies SFAS No. 121 and methods of quantifying
potential impairments or disposal of assets as well as the related
reporting of such impairments or disposals.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". This SFAS applies to
costs associated with an "exit activity" that does not involve an
entity newly acquired in a business combination or with a disposal
activity covered by SFAS No. 144. These costs include, but are not
limited to the following: termination benefits associated with
involuntary terminations, terminating contracts that are not
capital leases and costs to consolidate facilities or relocate
employees. SFAS No. 146 will be effective for exit or disposal
activities initiated after December 31, 2002 with early
application encouraged.

During 2002, the FASB issued SFAS No. 145, 147 and 148, which were
merely amendments to existing SFAS's or other accounting
pronouncements.

The adoption of SFAS No. 141, SFAS No. 142, SFAS No. 143, SFAS
No. 144 and SFAS No. 146 is not expected to have a material
effect on the Company's financial position, results of operations
and cash flows.

3. RESTATEMENT OF 2002 AND 2001 FINANCIAL STATEMENTS

We made certain adjustments and reclassifications to financial statements as
follows:

a. "Loss on impairment of inventory" for the year ended December 31, 2001
of $139,575, previously reported as a separate component of "Other
income and expenses" has been reclassed to be a component of "Costs of
Goods Sold"

b. "Loss on sale of assets" for the year ended December 31, 2002 of
$2,229, previously reported as a separate component of "Other income
and expenses" has been reclassed to be included as a component of
"Selling, General and Administrative expenses".

c. "Repurchase of shares for settlement of consulting agreement" for the
year ended December 31, 2001 of $25,000, previously reported as a
component of investing activity in the statement of cash flows was
reclassed to be a component of financing activity.

d. Additional footnote disclosure was added to Note 4. "Discontinued
Operations".

4. DISCONTINUED OPERATIONS

F-9

interest in Old Fashioned, since there was no net equity in such
business segment. In addition due to the lack of control over the
minority share of Old Fashioned, lack of cooperation with the
successor management the Company and the Old Fashioned business
segment has not had profitable operations in the last four years,
management does not expect any future cash flows from such minority
ownership interest in the immediate future. The Company is currently
reviewing the terms of the agreements relating to the aforementioned
foreclosure of Old Fashioned and an appropriate form of recourse
action if any.

The consolidated financial statements and related footnotes for the
year ended 2001, have been restated, where applicable, to reflect the
Old Fashioned business segment as a discontinued operation.

Additional financial data on the discontinued operations is as follows;

--------------------------------------------------------- --------------------------------
Year ended December 31,
--------------------------------------------------------- --------------------------------
2002 2001
---- ----
--------------------------------------------------------- -------------- ----------------

Net Sales from discontinued operations $ 685,554 $ 876,476
--------------------------------------------------------- -------------- ----------------

--------------------------------------------------------- -------------- ----------------
Loss from operations of discontinued operations before
income taxes (355,167) (744,949)
--------------------------------------------------------- -------------- ----------------

--------------------------------------------------------- -------------- ----------------
Loss on disposal of discontinued operations before
income taxes $ (121,733) $ -
--------------------------------------------------------- -------------- ----------------

--------------------------------------------------------- -------------- ----------------

The loss on disposal of discontinued operations is predominately
comprised of the remaining recorded value of the licensing agreement
for the right to use the "Sweet `N Low" Trademark utilized for
marketing the sugar-free, fat-free, cholesterol-free, chocolate,
vanilla and strawberry flavored syrup products.

5. RELATED PARTY TRANSACTIONS

As of December 31, 2002 the Company had $140,000 of payables to a
relative of a former-officer of the Company. During 2002, the Company
entered into three short-term loans with this individual. Such notes
were due thirty days from the date of issuance of July and September
2002, respectively, and bear interest at 10% for the first month and at
the highest legal rate thereafter. As of December 31, 2002 no principal
amounts on these notes have been repaid.

6. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

December 31,
-----------------------------
Useful Life 2002 2001
----------------- --------------- ------------

Office Furniture and Equipment 5 Years - 80,280
Coolers 5 Years 34,199 34,199
Leasehold Improvements 5 Years - 25,873
Website 3 Years 11,017 -
Vehicles 5 Years - 116,676
-------------- --------------
45,216 319,528
Accumulated Depreciation (17,932) (139,718)
-------------- --------------
$ 27,284 $ 179,810
============== ==============

Depreciation expense was $10,512 and $49,602 for the years ended
December 31, 2002 and 2001, respectively.

7. NOTE PAYABLE

In May 2000, the Company entered into a note payable of $17,184, the
proceeds for which were used to acquire a vehicle. Such borrowings are
secured by the vehicle and bears interest at 9% per annum, payable in
sixty monthly installments. The vehicle was returned in the fourth
quarter of 2002 for satisfaction of the note payable.

F-10

8. CONVERTIBLE NOTE PAYABLE

On June 16, 2000, the Company entered into a convertible debt agreement
with a bank. Such agreement includes a convertible note payable for
$8,000,000. This note bears interest at 5.00% per annum and is
automatically converted on June 15, 2001. The note may be converted
prior to its mandatory conversion date by either the Company or the
note holder upon satisfaction of certain conditions. The note is
convertible into Series II Convertible Preferred Stock at one share for
each $1,000 in debt, including accrued interest. The Company received
net proceeds of $7,366,334 and recorded deferred financing costs of
$602,666, to be amortized over one year. In the event the Company is
sold or liquidated while any principal amount of the note is
outstanding, the note will be due upon demand, including accrued
interest. On May 11, 2000, the Company received bridge financing from
the same note holders for $500,000, which debt was satisfied upon
issuance of the convertible note. The Company has recorded $31,000 in
interest expense related to the bridge financing.

Along with the convertible note, the Company issued 698,948 warrants to
acquire shares of the Company's common stock. The warrants are
exercisable at $1.75 per share and expire seven years from the date of
issuance. The Company has recorded these warrants as a discount to the
convertible note for $1,357,922. The discount was derived from the
Black-Scholes option-pricing model based on the following assumptions:
expected stock price volatility of 128%; risk-free interest rate of
5.70%; and an expected 7-year life. The discount will be amortized as
interest expense over one year. With respect to such discount, the
Company recorded amortization expense of $735,540 for the period ended
December 31, 2000.

On January 8, 2001, the debt holder converted its $8,000,000
convertible note along with accrued interest of $229,727 into 8,230
shares of the Company's Series II Convertible Preferred Stock. The
Company amortized $622,382, the remaining balance of the discount on
such note. Additionally, the Company expensed the balance of the
deferred finance charges of $276,223, which were attributable to the
issuance of the convertible note.

As of December 31, 2002 and 2001, had the Company's board of directors
declared dividends, the Company would have accrued $411,500 and
$399,965, respectively, in dividends on its Series II Convertible
Preferred Stock. Such dividends accrue at the rate of 5% per annum.

9. STOCKHOLDERS' DEFICIENCY

On January 11, 2001, the Company issued 3,810 options to acquire shares
of the Company's common stock pursuant to a one-year consulting
agreement. These options were valued at $6,740 or approximately $1.77
per option, which was imputed using the Black-Scholes option-pricing
model with the following assumptions: expected stock price volatility
of 104%; risk-free interest rate of 5.70%; and an expected life of one
year. The value of the options was recorded as deferred compensation
and will be amortized of the duration of the consulting agreement.

On April 16, 2001, the Company issued 50,000 options to acquire shares
of the Company's common stock pursuant to a member of its board of
directors. Such options are exercisable at $0.10 per share. These
options were valued at $23,585 or approximately $0.47 per option which
was imputed using the Black-Scholes option pricing model with the
following assumptions: expected stock price volatility of 123%;
risk-free interest rate of 5.00%; and an expected life of four years.
The value of the options was recorded as compensation as of December
31, 2001. On October 3, 2001, such shares were exercised the Company
received proceeds of $5,000 in regard to this exercise.

In May 2001, the Company purchased back from a consultant 95,000 shares
of its own common stock for $25,000. Such shares were placed into
treasury and retired.

F-11

Additionally, the remaining term of the consultant's agreement was
terminated at the time of the repurchase of the shares.

In 2001, the Company issued 15,000 shares to members of its board of
directors and of its advisory board. Such shares were valued at an
aggregate of $23,275 or averaging $1.55 per share. Such amount was
recorded as compensation.

During the year ended December 31, 2001, the Company issued 285,000
options to acquire shares of its common stock to consultants pursuant
to agreements with terms ranging from six-months to one-year. The
exercise price of these options range from $0.50 to $1.75.

The Company valued the grant of these options at $217,042. Compensation
is to be expensed over the term of the agreements. As of December 31,
2001, the Company has recorded $206,650 in compensation expense in
relation to these consulting agreements.

Additionally, the Company has recorded $82,891 in compensation expense
for options issued in 2000 for which the services performed in 2001;
these expenses were recorded as deferred compensation at December 31,
2000.

In April 2002, 25,000 options to purchase the Company's common stock
were exercised at $0.01 per share. The Company received proceeds from
this exercise of $250.

For the year ended December 31, 2002, the Company recognized $141,602
in compensation expense for options issued under terms of contracts for
endorsements contracts and professional services. Such contracts were
entered into during the year ended December 31, 2001 and through the
first quarter of this year.

On January 31, 2002, the Company entered into a three-month employment
agreement, expiring April 30, 2002, with its acting chief operating
officer. The executive received 100,000 options to purchase shares of
common stock, at an exercise price of $0.10 per share. The Company
valued these options using the intrinsic value method under APB No. 25,
or $0.50 per share and expensed. In August 2002, 33,000 options were
exercised by this former executive at $0.10 per share, the Company
received no proceeds from this exercise; the proceeds were offset
against monies due from the Company against the exercise price to be
paid.

The Company amortized the remaining portion of the unearned
compensation, since the applicable personnel no longer perform services
for the Company as of December 31, 2002.

10. CONVERTIBLE PREFERRED STOCK

SERIES I:
The Company is authorized to issue 1,000,000 shares of preferred stock
at .001 par value, the terms of which may be determined at the time of
issuance by the Board of Directors without further action by the
shareholders. The Company has designated 100,000 shares of convertible
preferred stock as Series I. Each outstanding share of Series I
Preferred Stock is convertible into 330 shares of common stock. In
December 2001 Series I Preferred Stock was converted into 1,155,000
shares of the Company's common stock.

SERIES II:
In September 1999, in connection with the Cumberland agreement, the
Company has granted warrants to purchase 385,000 shares of the
Company's common stock at an exercise price equal to the greater of
$2.50 per share or 50% of the average trading price for the Company's
shares during the twenty days prior to the exercise of the warrants.
The warrants expire on December 31, 2008 and management has

F-12

estimated the value of the warrants, based on the Black-Scholes
option-pricing model, in order to record $176,000 of deferred
licensing cost. The deferred licensing cost were being amortized on a
straight-line basis over ten years from the date the warrants were
granted. Amortization expense charged to operations for the years
ended December 31, 2002 and 2001 was approximately $17,600 and
$17,600. In December 2002, the Company fully reserved against this
asset, since the license agreement was relinquished as part of the
foreclosure of the Old Fashioned subsidiary.

On June 16, 2000, the Company amended its articles of incorporation to
designate Series II Convertible Preferred Stock ("Series II"). The
Company authorized 8,500 shares of Series II stock, $.01 par value.
Series II stock accrues preferred dividends at 5% per annum and each
share is convertible in to approximately 588 shares of the Company's
common stock based upon a $1.70 conversion price where each Series II
share converts into a $1,000 unit of common stock. The conversion price
may be adjusted one year from the date of issuance.

The adjusted conversion price would be the lower of $1.70 or the
average of the closing prices of the common stock for the ten-day
period ending one year from the date of issuance. Additionally, these
shares have the right of mandatory redemption ten years from the date
of issuance.

11. STOCK OPTION PLAN

In August 1999 the Company's stockholders approved the adoption of an
Incentive Stock Option Plan ("1999 Option Plan"), which allows the
Board of Directors to grant options to employees and members of the
Board of Directors. The 1999 Option Plan provides the Board of
Directors the right to grant options to purchase up to a total of
100,000 share of the Company's common stock. On August 17, 2000, with
the approval of the shareholders of the Company the number of shares
available under the 1999 Option Plan was increased to 1,000,000. As of
December 31, 2002, 250,000 options have been granted under the 1999
Option Plan. As of December 31, 2002 and 2001, 511,810 non-plan options
were issued and outstanding.

For disclosure purposes in accordance with SFAS No. 123, the fair value
of each stock option granted is estimated on the date of the grant
using the Black-Scholes option-pricing model with the following
weighted-average assumptions used for stock options granted during the
year ended December 31, 2002 and 2001: annual dividends of $0.00,
expected volatility of 150% and 128%, risk-free interest rate of 2.82%
and 5.0% and expected lives varying on the option agreement.

If the Company recognized compensation cost for the vested portion of
the employee stock option plan in accordance with SFAS No. 123, the
Company's net loss available to common shareholders would have been
approximately, ($6,086,000) and ($0.95) per share for the year ended
December 31, 2001. There were no additional costs to pro-forma for the
year ended December 31, 2002, since compensation expense was recorded
for the options issued and granted in 2002.

F-13

The following tables summarize the Company's fixed stock options
activity at December 31, 2001:

Employee and Director's Stock Options:
Weighted Average
SHARES Exercise Price
---------------- ---------------------

Outstanding at December 31, 2000 200,000 1.00
Granted 100,000 .86
Exercised -- --
Expired or Cancelled (50,000) .50
-------- -----

Outstanding at December 31, 2001 250,000 $1.04
Granted
Exercised -- --
Expired or Cancelled
-------- -----

Outstanding at December 31, 2002 250,000 $1.04
======== =====

Non-employee stock options:
Weighted Average
Shares Exercise Price
---------------- ---------------------

Outstanding at December 31, 2000 196,000 .71
Granted 338,810 1.06
Exercised (50,000) .10
Expired or Cancelled (10,000) 2.27
-------- -----
Outstanding at December 31, 2001 474,810 $ .99
Granted 100,000 .10
Exercised (58,000) .06
Expired or Cancelled (5,000) 1.00
-------- -----
Outstanding at December 31, 2002 511,810 $ .98
======== =====

Information, at date of issuance, regarding stock option grants during the two
years ended December 31, 2002 and 2001:

Weighted-Average Weighted-Average
Shares Exercise Price Fair Value
-------------- ---------------- --------------

Year ended December 31, 2001:
Exercise price exceeds market price 200,000 $ .98 $ .93
Exercise price equals market price 50,000 $1.22 $1.22
Exercise price is less than market price 138,810 $ .45 $1.03

Year ended December 31, 2002:
Exercise price exceeds market price -- -- --
Exercise price equals market price -- -- --
Exercise price is less than market price 100,000 $ .10 $ .50

F-14

The following table summarizes information about stock options outstanding and
exercisable at December 31, 2002:

OUTSTANDING AND EXERCISABLE
------------------------------------------------------------------------
Weighted-Average Weighted Average
Number Remaining Exercise Number
Outstanding Life in Years Price Exercisable
---------------- -------------- ------------- ---------------

Range of exercise prices:
$.001 to $.50 223,000 2.28 .40 223,000
$.51 to $1.00 298,810 6.25 .95 298,100
$1.01 to $1.50 240,000 5.75 1.40 240,000

12. INCOME TAXES

The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"). SFAS 109 requires the recognition of deferred tax assets and
liabilities for both the expected impact of differences between the
financial statements and tax basis of assets and liabilities, and for
the expected future tax benefit to be derived from tax loss and tax
credit carryforwards. SFAS 109 additionally requires the establishment
of a valuation allowance to reflect the likelihood of realization of
deferred tax assets. At December 31, 2002 and 2001, a valuation
allowance for the full amount of the deferred tax asset was recorded
because of operating losses incurred and the uncertainties as to the
amount of taxable income that would be generated in the future years.

The provision (benefit) for income taxes differs from the amounts
computed by applying the statutory federal income tax rate to income
(loss) before provision for income taxes is as follows:

December 31,
---------------------------
2001
------------ ------------

Taxes benefit computed at statutory rate $ (792,000) $(1,488,000)
Losses for which no tax benefit realized 792,000 1,488,000
----------- -----------
Net income tax benefit $ $
=========== ===========

The Company has a net operating loss carryforward for tax purposes
totaling approximately $10,300,000 at December 31, 2002 expiring
through the year 2021.

Listed below are the tax effects of the items related to the Company's
net tax asset:

December 31,
2002
-----------
Tax benefit of net operating loss carryforward $ 3,515,000
Valuation Allowance (3,515,000)
-----------
Net deferred tax asset recorded $ --
===========

F-15

13. COMMITMENTS AND CONTINGENCY

Commitments:

The Company cancelled all of its operating leases by the end of
December 31, 2002. The Company currently rents and shares office space
with a related party on a month to month basis at $1,750 a month.

Rent expense for the years ended December 31, 2002 and 2001 totaled
$67,240 and $81,475, respectively.

SUPPLIER AGREEMENTS:

The Company entered into a five year exclusive Supplier Agreement for
the production of its isotonic beverage. This Supplier Agreement
automatically renews for two successive two year renewal periods,
unless either party terminates with at least 90 days written notice.
The supplier has a quoted price to produce such isotonic beverages
within the Supplier Agreement. The Supplier Agreement does allow for
price increases based on the cost change in the supplier's cost to
produce such product.

CONTINGENCY:

During 2001 a suit was filed against the Company alleging that its
trademarked corporate name, ChampionLyte, violated the plaintiff's
trademark. The Company believes that there is no merit to this case and
intends to defend its trademark vigorously.

The Company is currently reviewing the terms of the agreements relating
to the aforementioned foreclosure of Old Fashioned and an appropriate
form of recourse action if any.

14. SUBSEQUENT EVENTS - (UNAUDITED)

In January 2003, the Company retained a financial advisory firm, as a
business consultant to assist in a variety of areas relating to
financial, strategic and related development growth of the Company.
This financial advisory firm has common management with the current
Series II Preferred stockholders in that some of the members of the
financial advisory firm are also some of the holders of the Series II
Preferred shares. The term of the engagement is six months and shall
automatically renew on a month-to-month basis, subject to termination
by either party with a twenty-four month follow on period, whereby
transactions consummated within the subsequent twenty-four months
following the termination of this agreement the transaction may have
fees due and payable to the financial advisory firm. The terms of the
agreement are as follows; a monthly of $2,500 per month is due, the
financial advisory firm may at its discretion accept shares of
discounted registered stock in lieu of cash, the Company shall issue a
warrant to purchase 2.99% of the fully stock of the Company at 90% of
the closing bid price on January 6, 2003, exercisable for 5 years,
various sliding scale compensation amounts for equity and debt
financings consummated from an introduction by the financial advisory
firm, sliding scale compensation amounts due for a merger or
acquisition candidate introduced to the Company and the reimbursement
of out-of-pocket expenses not to exceed $500 a month unless agreed upon
by the Company.

In January 2003, the Company entered into a funding arrangement for
$250,000. The funding arrangement is from an entity similar to
the financial advisory firm and the holders of the Series II
Convertible Preferred stock. This $250,000 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

F-16

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 the Company to obtain such an effective registration within
ninety days from the date of its initial filing, the Company 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.

In January 2003, the Company engaged another business consulting firm
to assist in a variety of areas relating to strategic and related
development growth of the Company. The term of the engagement is twelve
months with a twelve month follow on period, whereby transactions
consummated within the subsequent twelve months following the
termination of this agreement the transaction may have fees due and
payable to the business consulting firm. The Company has agreed to pay
$25,000 upon signing of the engagement letter or 400,000 shares of
common stock in lieu of cash.

The Company entered into a Strategic Marketing Agreement "SMA" in
January 2003 with BevSystems International, Inc. "BEVI", another small
publicly traded company in the business of beverage products, whereby
BEVI shall issue shares equal to $125,000 per month of its common stock
to the Company. These shares shall be fully paid and non-assessable and
shall bear no restrictive legend. BEVI shall register these shares
prior to each issuance on form S-8 or some other applicable
registration form. The Company shall issue 50,000 shares of its
restricted stock per month to BEVI under this agreement. These shares
shall carry a piggyback registration right. The Company shall pay BEVI
up to $100,000 per month for services rendered by BEVI relating to the
use of their beverage knowledge and distribution resources. Each entity
shall be entitled to 50% of the profits derived from distributing the
other firms beverage product. The net economic effect of the revenues
and expenses from this cross selling arrangement shall be recorded as a
cost or other revenue each month and each reporting period.

The liability insurance for the Company was terminated in February
2003. The Company has yet to obtain comparable liability insurance
coverage.

In February 2003, the Company registered 1,000,000 shares of common
stock for a 2003 Stock Incentive Plan with a Form S-8. Upon issuance
these shares will be recorded as compensation and expensed,
accordingly. Approximately 700,000 of shares have been issued under
this Form S-8 in February 2003. An additional 100,000 shares were
issued pursuant to the Company's 1999 Stock Incentive Plan in February
2003.

In February 2003, the holders of the Series II, converted 850 shares of
preferred stock for 500,000 shares of restricted common stock.

F-17

CHAMPIONLYTE HOLDINGS, INC.

6,666,667 Shares of Common Stock

41,473,869 Selling Security Holder Shares of Common Stock
1,076,400 Shares of Common Stock Issuable in Connection
with Conversion of Options and Warrants

PROSPECTUS

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE
HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON
STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.

, 2003

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.

Section 607.0850 of the Florida Statutes provides for the indemnification of
officers, directors, employees, and agents. A corporation shall have power to
indemnify any person who was or is a party to any proceeding (other than an
action by, or in the right of, the corporation), by reason of the fact that he
or she is or was a director, officer, employee, or agent of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise against liability incurred in connection with such proceeding,
including any appeal thereof, if he or she acted in good faith and in a manner
he or she reasonably believed to be in, or not opposed to, the best interests of
the corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any proceeding by judgment, order, settlement, or conviction or upon a plea of
nolo contendere or its equivalent shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.

We have agreed to indemnify each of our directors and certain officers against
certain liabilities, including liabilities under the Securities Act of 1933.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons
pursuant to the provisions described above, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than our payment of expenses
incurred or paid by our director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

Item 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the expenses in connection with the issuance and
distribution of the securities being registered hereby. All such expenses will
be borne by the registrant; none shall be borne by any selling stockholders.

Securities and Exchange

Commission registration fee $ 1,110
Legal fees and expenses (1) $30,890

Accounting fees and expenses (1) $13,000

Miscellaneous and Printing fees(1) $ 5,000

-------

Total (1) $50,000

(1) Estimated.

Item 26. RECENT SALES OF UNREGISTERED SECURITIES.

On September 27, 2000, we issued 120,000 shares of our common stock to a
consultant, Market Voice, Inc., for services rendered. We recorded $264,000 in
compensation expenses based on the fair value of our common stock on the date of
issuance, less a discount for the restrictive legend on the shares issued. Our
shares were issued in reliance on the exemption from registration provided by
Section 4(2) of the Securities Act of 1933. No commissions were paid for the
issuance of such shares.

On October 12, 2000, we issued 5,000 shares of our common stock to Ami Sharaby
for being a Member of our advisory board. The issuance was valued at $2.21 per
share or $11,050. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On November 1, 2000, we issued 5,000 shares of our common stock to Joel Flig for
his services as a director. The issuance was valued at $2.35 per share or
$11,750. Our shares were issued in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act of 1933. No commissions were paid
for the issuance of such shares.

On November 1, 2000, we issued 5,000 shares of our common stock to Ronald Shapss
for his services as a director. The issuance was valued at $2.35 per share or
$11,750. Our shares were issued in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act of 1933. No commissions were paid
for the issuance of such shares.

On November 1, 2000, we issued 5,000 shares of our common stock to Dave Ravich
for his services on our advisory board. The issuance was valued at $2.35 per
share or $11,750. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On November 1, 2000, we issued 5,000 shares of our common stock to Steven
Sharoff for his services on our advisory Board. The issuance was valued at $2.35
per share or $11,750. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On November 1, 2000, we issued 5,000 shares of our common stock to Steven
Kreuscher for his services as our officer. The issuance was valued at $2.35 per
share or $11,750. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On November 1, 2000, we issued 5,000 shares of our common stock to Victor Badner
for his services on our advisory board. The issuance was valued at $2.35 per
share or $11,750. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On November 1, 2000, we issued 5,000 shares of our common stock to Stanley Green
for his services on our advisory board. The issuance was valued at $2.35 per
share or $11,750. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On February 5, 2001, we issued 5,000 shares of our common stock to Paul M.
Galant for his services as a director. The issuance was valued at $1.55 per
share or $7,750. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On June 27, 2001, we issued 5,000 shares of our common stock to Gilbert D. Kaye
for his services as a director. The issuance was valued at $1.55 per share or
$7,750. Our shares were issued in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act of 1933. No commissions were paid
for the issuance of such shares.

On July 16, 2001, we issued 5,000 shares of our common stock to Henry Karpf for
his services as a director. The issuance was valued at $1.55 per share or
$7,750. Our shares were issued in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act of 1933. No commissions were paid
for the issuance of such shares.

In October 2001, we issued 50,000 shares of our common stock to Ron Shapss based
upon the exercise of stock options. The issuance was valued at $.10 per share or
$5,000. Our shares were issued in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act of 1933. No commissions were paid
for the issuance of such shares.

On December 4, 2001, we issued 577,500 shares of our common stock to Alan Posner
based on his conversion of 50,000 shares of Series I Convertible Preferred
Stock. No consideration was required. Our shares were issued in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act of
1933. No commissions were paid for the issuance of such shares.

On December 4, 2001, we issued 577,500 shares of our common stock to Mark
Streisfeld based on his conversion of 50,000 shares of Series I Convertible
Preferred Stock. No consideration was required. Our shares were issued in
reliance on the exemption from registration provided by Section 4(2) of the
Securities Act of 1933. No commissions were paid for the issuance of such
shares.

On April 10, 2002, we issued 12,500 shares of our common stock to Michael Cohen
based upon the exercise of stock options. The issuance was valued at $.01 per
share or $125. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On April 10, 2002, we issued 12,500 shares of our common stock to Marty Cohen
based upon the exercise of stock options. The issuance was valued at $.01 per
share or $125. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On August 6, 2002, we issued 33,000 shares of our common stock to Don Blaustein
based upon the exercise of stock options. The issuance was valued at $.10 per
share or $3,300. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares. On February 5, 2003, we
issued 50,000 shares of our common stock to BevSystems International, Inc.
pursuant to a strategic marketing agreement entered into in January 2003. The
issuance was valued at $0.11 per share or $5,500. Our shares were issued in
reliance on the exemption from registration provided by Section 4(2) of the
Securities Act of 1933. No commissions were paid for the issuance of such
shares.

On April 1, 2003, we issued 570,683 shares to Elaine Streisfeld pursuant to a
settlement agreement. Ms. Streisfeld had loaned us $140,000 and this amount
represented repayment of $35,000 of such amount. Therefore, the issuance was
valued at $35,000. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On June 19, 2003, we issued a total of 1,500,000 shares to Championlyte Asset
Acquisition Corp. pursuant to an Issuance and Exchange Agreement. We issued
shares because Championlyte Asset Acquisition Corp. converted preferred shares
into common shares and paid some of our expenses with the purchase of such
shares. The issuance was valued at $0.07 per share or $105,000. Our shares were
issued in reliance on the exemption from registration provided by Section 4(2)
of the Securities Act 1933. No commissions were paid for the issuance of such
shares.

On June 19, 2003, we issued 15,000 shares to R&T Sports Marketing Inc. pursuant
to a consulting agreement with us to provide professional athletes to act as
spokespersons and sponsors for our products. The issuance was valued at $0.07
per share or $3,450. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On June 19, 2003, we issued 50,000 shares to Andre Dawson pursuant to a
consulting agreement with us to act as a spokesperson and sponsor for our
products. The issuance was valued at $0.23 per share or $11,500. Our shares were
issued in reliance on the exemption from registration provided by Section 4(2)
of the Securities Act of 1933. No commissions were paid for the issuance of such
shares.

On June 19, 2003, we issued 50,000 shares to Larry Little pursuant to a
consulting agreement with us to act as a spokesperson and sponsor for our
products. The issuance was valued at $0.23 per share or $11,500. Our shares were
issued in reliance on the exemption from registration provided by Section 4(2)
of the Securities Act of 1933. No commissions were paid for the issuance of such
shares.

On June 19, 2003, we issued 50,000 shares to Alonzo Highsmith pursuant to a
consulting agreement with us to act as a spokesperson and sponsor for our
products. The issuance was valued at $0.23 per share or $11,500. Our shares were
issued in reliance on the exemption from registration provided by Section 4(2)
of the Securities Act

On June 24, 2003, we issued a total of 526,400 shares of our common stock to
Knightsbridge Holdings, LLC doing business as Knightsbridge Capital pursuant to
an agreement for consulting services dated January 6, 2003 and an amendment to
such agreement dated April 7, 2003. The issuance
was valued at $0.07 per share or $36,848. Our shares were issued in reliance on
the exemption 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.

On June 24, 2003, we issued a total of 2,000,000 shares of our common stock to
Little Cobbler Corp. doing business as Stedman Walker Ltd. pursuant to an
agreement for marketing services dated April 2003. The consulting services were
for development of a business plan, budgets, capitalization structure and
strategic plans. The issuance was valued at $0.08 per share or $160,000. Our
shares were issued in reliance on the exemption from registration provided by
Section 4(2) of the Securities Act of 1933. No commissions were paid for the
issuance of such shares.

On June 24, 2003, we issued 500,000 shares to Christopher Knapp pursuant to an
agreement for consulting and marketing services rendered to us. The issuance was
valued at $.16 per share or $80,000. Our shares were issued in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act of
1933. No commissions were paid for the issuance of such shares.

On June 24, 2003, we issued 114,118 shares to Geraldine Cohen in partial
settlement of a debt in the amount of $42,224. This issuance was valued at $.37
per share or $42,224. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On June 24, 2003, we issued a total of 500,000 shares of our common stock to
Momentum Traders Network pursuant to an agreement for consulting services to
develop a program for dissemination of our information. The issuance was valued
at $0.08 per share or $40,000. Our shares were issued in reliance on the
exemption from registration provided by Section 4(2)

of the Securities Act of 1933. No commissions were paid for the issuance of
such shares.

On June 24, 2003, we issued a total of 820,000 shares of our common stock to
Marshall Kanner pursuant to an agreement for compensation for past and future
services rendered. Mr. Kanner assisted us with certain aspects of restructuring
including, but not limited to, negotiating our past due accounts payable. The
issuance was valued at $0.07 per share or $57,400. Our shares were issued in
reliance on the exemption from registration provided by Section 4(2) of the
Securities Act of 1933. No commissions were paid for the issuance of such
shares.

On June 24, 2003, we issued 200,000 shares of our common stock to Peter Nasca
pursuant to an agreement for settlement of obligations owed. The issuance was
valued at $0.08 per share or $16,000. Our shares were issued in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act of
1933. No commissions were paid for the issuance of such shares.

On June 24, 2003, we issued 1,000,000 shares to SOS Resources pursuant to an
agreement for consulting services rendered for corporate planning and business
strategies. The issuance was valued at $0.07 per share or $70,000. Our shares
were issued in reliance on the exemptions from registration provided by Section
4(2) of the Securities Act of 1933. No commissions were paid for the issuance of
such shares.

On June 24, 2003, we issued 10,000 shares to Ed Donato in lieu of a cash payment
for consulting services provided to us. This issuance was valued at $.28 per
share or $2,800. Our shares were issued in reliance on the exemptions from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On June 24, 2003, we issued 500,000 shares of our common stock to DML Marketing
pursuant to an agreement for dissemination of information for the 1934 Exchange
Act. The issuance was valued at $.09 per share or $45,000. Our shares were
issued in reliance on the exemption from registration provided by Section 4(2)
of the Securities Act of 1933. No commissions were paid for the issuance of such
shares.

On July 9, 2003, we issued 1,650,000 shares to Mark Streisfeld, our former
officer and director pursuant to a settlement agreement we signed with Mr.
Streisfeld. The issuance was valued at $44,333, the amounted we were indebted to
Mr. Streisfeld. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On July 18, 2003, we issued 572,093 shares to Elaine Streisfeld pursuant to a
settlement agreement. Ms. Streisfeld had loaned us $140,000 and this amount
represented repayment of $35,000 of such amount. Therefore, the issuance was
valued at $35,000. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On July 18, 2003, we issued 114,118 shares to Geraldine Cohen in partial
settlement of a debt in the amount of $42,224. This issuance was valued at $.37
per share or $42,224. Our shares were issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

On September 15, 2003, we issued 185,185 shares of our common stock to Foster
Sports, Inc. for advertising services provided to us. The issuance was valued at
$.16 per share or $29,630. Our shares were issued in reliance on the exemption
from registration provided by Section 4(2) of the Securities Act of 1933. No
commissions were paid for the issuance of such shares.

Unless otherwise specifically stated, we issued shares in the above
transactions: (a) to consultants because our cash flow was not sufficient to
satisfy our obligations to various consultants based on agreements with such
consultants; (b) to various parties that subscribed for the purchase of our
shares in stock purchase agreements and financing agreements; or (c) in
repayment of loans or other obligations.

All of the above issuances of shares of our common stock qualified for exemption
under Section 4(2) of the Securities Act of 1933 since the issuance of such
shares by us did not involve a public offering. Each of these shareholders was a
sophisticated investor and had access to information regarding us. The offering
was not a "public offering" as defined in Section 4(2) due to the insubstantial
number of persons involved in the deal, size of the offering, manner of the
offering and number of shares offered. We did not undertake an offering in which
we sold a high number of shares to a high number of investors. In addition,
these shareholders had the necessary investment intent as required by Section
4(2) since they agreed to and received a share certificate bearing a legend
stating that such shares are restricted pursuant to Rule 144 of the 1933
Securities Act. These restrictions ensure that these shares would not be
immediately redistributed into the market and therefore not be part of a "public
offering." Based on an analysis of the above factors, we have met the
requirements to qualify for exemption under Section 4(2) of the Securities Act
of 1933 for the above transactions.

Item 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits:

The following exhibits are filed as part of this registration statement:

EXHIBIT DESCRIPTION

3.1(a) Certificate of Incorporation(1)
3.1(b) Amended Certificate of Incorporation
3.1(c) Articles of Incorporation of Championlyte Beverages, Inc.
3.2 By-Laws(1)
4.1 2003 Stock Incentive Plan #4
5.1 Opinion and Consent of Anslow & Jaclin, LLP
10.1 Agreement between Knightsbridge Holdings, LLC doing business as
Knightsbridge Capital and us dated January 6, 2003 and amendment dated
April 7, 2003
10.2 Agreement between Little Cobbler Corp. doing business as Stedman Walker, Ltd. and us dated April 2003
10.3 Advantage Fund I, LLC $1,000,000 Stock Purchase Agreement dated April 2003
10.4 Advantage Fund I, LLC $250,000 Promissory Note (increased to $350,000) dated January 2003
10.5 Triple Crown Consulting Promissory Notes each in the amount of $50,000 dated April 15, 2003 and
June 30, 2003
10.6 Agreement between S.O.S. Resource Services, Inc. and us dated April 2003
10.7 Agreement between Cahpionlyte Asset Acquisition Corp. and us dated April 4, 2003
10.8 Settlement Agreement between Peter Nasca and us dated April 7, 2003
10.9 Consulting Agreement between Christopher Knapp and us dated April 20, 2003
10.10 Agreement between Momentum Traders Network, Inc. and us dated April 2, 2003
10.11 Agreement between DML Marketing Corp. and us dated April 15, 2003
10.12 Settlement Agreement between Mark Streisfeld and us dated December 19, 2002 and amendments to such
Agreements dated April 10, 2003 and April 28, 2003
10.13 Settlement Agreement between Elaine Streisfeld and us dated March 27, 2003 and amendment dated July 2, 2003
10.14 Agreement between Andre Dawson and us dated May 20, 2003
10.15 Agreement between Larry Little and us dated May 20, 2003
10.16 Agreement between Alonzo Highsmith and us dated May 20, 2003
10.17 Agreement between R&T Sports Management, Inc. and us dated April 16, 2003
10.18 David Goldberg Employment Agreement effective June 1, 2003
10.19 Donna Bimbo Employment Agreement with Championlyte Beverages, Inc (our wholly owned subsidiary)
effective March 15, 2003
10.20 Common Stock Purchase Warrant issued to Knightsbridge Holdings, LLC doing business as Knightsbridge Capital
10.21 Settlement Agreement with Sara Lee Corporation effective April 1, 2003
10.22 License Agreement with Sara Lee Global Finance, L.L.C. effective April 1, 2003
10.23 Strategic Marketing Agreement between BevSystems International, Inc. and us dated January 20, 2003
10.24 Inglobalvest, Inc. Lawsuit Settlement Agreement
10.25 Joan Ann Forniero $250,000 Promissory Note dated January 7, 2003
21.1 Subsidiaries of ChampionLyte Holdings, Inc.
23.1 Consent of Radin, Glass & Co., LLP, independent auditors.
24.1 Power of Attorney (included on signature page of Registration
Statement)

(1) Incorporated herein by reference to the Company`s Form 10-KSB originally
filed with the SEC on November 19, 1999.

Item 28. UNDERTAKINGS.

(A) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) any deviation from the low or high end of the
estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement; and

(iii)Include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.

(B) Undertaking Required by Regulation S-B, Item 512(e).

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or controlling persons pursuant to
the foregoing provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses

incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel that the

matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934
that is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at the time shall be deemed to be the
initial bona fide offering thereof.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Miami, State of Florida,
on the day of September 29, 2003.

Championlyte Holdings, Inc.

By: /s/ David Goldberg
----------------------------------
David Goldberg

Chairman of the Board of Directors,
President, Principal Financial Officer
And Principal Accounting Officer

POWER OF ATTORNEY

The undersigned directors and officers of Championlyte Holdings, Inc. herbey
constitute and appoint David Goldberg, with full power to act without the other
and with full power of substitution and resubstitution, our true and lawful
attorneys-in-fact with full power to execute in our name and behalf in the
capacities indicated below any and all amendments (including post-effective
amendments and amendments thereto) to this registration statement under the
Securities Act of 1933 and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission
and hereby ratify and confirm each and every act and thing that such attorneys-
in-fact, or any them, or their substitutes, shall lawfully do or cause to be
done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.

SIGNATURE TITLE DATE

/s/ David Goldberg Chairman of the Board of Directors September 29, 2003
- ---------------------- and President, Principal Financial Officer
DAVID GOLDBERG and Principal Accounting Officer

/s/ Thad Kaplan Director September 29, 2003
- ----------------------
THAD KAPLAN

/s/ Steven Field
- ---------------------- Director September 29, 2003
STEVEN FIELD

/s/ Marshall Kanner
- ---------------------- Director September 29, 2003
MARSHALL KANNER