SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): May 12, 2005
CHAMPIONLYTE HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 000-28223 65-0510294
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NO.) (IRS EMPLOYEE
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
600 Bayview Avenue
Inwood, New York 11096
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(516) 239-7000
(ISSUER TELEPHONE NUMBER)
3450 Park Central Boulevard
Pompano Beach, Florida 33064
(FORMER NAME AND ADDRESS)
FORWARD LOOKING STATEMENTS
This Form 8-K and other reports filed by Registrant from time to time with the
Securities and Exchange Commission (collectively the "Filings") contain or may
contain forward looking statements and information that are based upon beliefs
of, and information currently available to, Registrant's management as well as
estimates and assumptions made by Registrant's management. When used in the
filings the words "anticipate", "believe", "estimate", "expect", "future",
"intend", "plan" or the negative of these terms and similar expressions as they
relate to Registrant or Registrant's management identify forward looking
statements. Such statements reflect the current view of Registrant with respect
to future events and are subject to risks, uncertainties, assumptions and other
factors relating to Registrant's industry, Registrant's operations and results
of operations and any businesses that may be acquired by Registrant. Should one
or more of these risks or uncertainties materialize, or should the underlying
assumptions prove incorrect, actual results may differ significantly from those
anticipated, believed, estimated, expected, intended or planned.
Although Registrant believes that the expectations reflected in the forward
looking statements are reasonable, Registrant cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, Registrant
does not intend to update any of the forward-looking statements to conform these
statements to actual results.
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On May 12, 2005 (the "Effective Date"), pursuant to a Stock Purchase Agreement
and Share Exchange (the "Agreement") between the Company, Cargo Connection
Logistics Corp. ("Cargo Connection"), a Delaware corporation, and Mid-Coast
Management, Inc. ("Mid-Coast"), an Illinois corporation, the Company purchased
all of the outstanding shares of Cargo Connection and Mid-Coast for a total of
70% of the issued and outstanding shares of the Company's common stock. As
additional consideration, the Company also issued shares of its preferred stock
to Cargo Connection and Mid-Coast which are convertible into shares of the
Company's common stock so that in twelve (12) months from the Closing Date,
Cargo Connection and Mid-Coast will own a total of eighty (80%) percent of the
outstanding shares of the Company at such time. Pursuant to the Agreement, Cargo
Connection and Mid-Coast became wholly owned subsidiaries of the Company. The
acquisition was approved by the unanimous consent of our Board of Directors on
May 12, 2005.
On May 12, 2005, the Company completed a financing agreement for $1,000,000 with
Highgate House Funds, Ltd. (the "Investor"). Under the agreement the Company
issued a $1,000,000 secured convertible debenture with a 10% interest rate to
the Investor. The debenture is convertible into common shares of the Company at
a conversion price of $0.01 per share. The Company simultaneously issued to the
Investor a Warrant to purchase 250,000 shares of the Company's common stock at
an exercise price of $0.001. The Company is committed to filing an SB-2
Registration Statement with the SEC within 90 days of funding. There are penalty
provisions for the Company should the filing not become effective within 120
days of filing.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
Pursuant to the Agreement, the Company purchased all of the outstanding shares
of Cargo Connection and Mid-Coast for a total of 70% of the issued and
outstanding shares of the Company's common stock. Pursuant to the Agreement,
Cargo Connection and Mid-Coast became wholly owned subsidiaries of the Company.
Cargo Connection Logistics Corp. ("Cargo Connection") is a transportation
logistics provider based in Inwood, NY. Cargo Connection is engaged primarily in
hauling truckload and less-than-truckload (LTL) shipments of general commodities
in both interstate and intrastate commerce. Cargo Connection operates a domestic
and an international logistics operation for all classifications of freight.
The movement of this cargo is accomplished through a network of company drivers
and owner-operators that provide needed resources for the book of business and
the operational skill to maintain their customer base. Cargo Connection provides
the back office operation for the companies, allowing them to focus on the
business itself while Cargo Connection deals with the insurance, financial and
regulatory portions of the business.
In addition to its truck operation, Cargo Connection is in the warehouse and
distribution movement of dry goods from its inbound locations at Atlanta, GA;
Bensenville, IL; Columbus, OH; Inwood, NY and Miami, FL to points throughout the
United States. These operations enhance the appeal to entrepreneurial agents
mainly because it provides built-in backhauls from primary markets for their
truck operations.
Cargo Connection provides carriers with, amongst a host of other aspects of air
carrier handling, electronic messaging, customer service, surface
transportation, ULD control, and collection of monies.
In the Chicago area, Cargo Connection operates a US Customs Bonded Container
Freight Station in Bensenville, IL. It is a 92,000 sq. ft. facility that also
operates as the Midwest trucking center.
In New York, the USA headquarters, Cargo Connection operates a 105,000-sq. ft.
US Customs Bonded Container Freight Station. At this location, Cargo Connection
provides the build-up and breakdown of air cargo for airlines and freight
forwarders. At one time Cargo Connection's largest airline partner in New York
was El-Al Israel Airlines. Cargo Connection provided off Airport pallet building
services for them.
In the southeast Cargo Connection operates a 27,520 sq. ft. US Customs Bonded
Container Freight Station just off the Hartsfield-Jackson International Airport
in Atlanta and a 36,000 sq. ft. US Customs Bonded Container Freight Station in
Miami near Miami International Airport. Both operations serve as trucking
operations for the region as well.
In Columbus, Ohio, Cargo Connection currently operates a 52,000 sq. ft. US
Customs Bonded Container Freight Station and trucking operation.
Currently Cargo Connection has a fleet of approximately twenty 5000 pound Yale,
Toyota and Komatsu Forklifts. Most of these trucks is leased with full
maintenance agreements to ensure that the company is never left without the
proper equipment. In addition, in those locations where it handles ULD's for the
airlines, Cargo Connection has 15,000 lb. capacity trucks so the loaded ULD's
can be moved efficiently.
Pursuant to the Agreement, as additional consideration, the Company also issued
shares of its preferred stock to Cargo Connection and Mid-Coast which are
convertible into shares of the Company's common stock so that in twelve (12)
months from the Closing Date, Cargo Connection and Mid-Coast will own a total of
eighty (80%) percent of the outstanding shares of the Company at such time.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
On May 12, 2005, pursuant to the Agreement, we agreed to issue a total of a
total of 70% of the issued and outstanding shares of the Company's common stock
to Cargo Connection and Mid-Coast in exchange for all of the outstanding shares
of Cargo Connection and Mid-Coast. These shares were issued in reliance on an
exemption from registration under Section 4(2) of the Securities Act of 1933.
These shares of our common stock qualified for exemption under Section 4(2) of
the Securities Act of 1933 since the issuance of shares by us did not involve a
public offering. The offering was not a "public offering" as defined in Section
4(2) due to the insubstantial number of persons involved in the deal, the size
of the offering, and the manner of the offering. We did not undertake an
offering in which we sold a high number of shares to a high number of investors.
In addition, Cargo Connection and Mid-Coast had the necessary investment intent
as required by Section 4(2) since Cargo Connection and Mid-Coast agreed to and
received share certificates bearing a legend stating that such shares are
restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction
ensures 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 this transaction.
ITEM 5.01 CHANGES IN CONTROL OF REGISTRANT.
Pursuant to the terms of the Agreement, Cargo Connection and Mid-Coast will be
issued a total of 70% of the issued and outstanding shares of the Company's
common stock shares of the Company's authorized common stock. The shares to be
held by Cargo Connection and Mid-Coast represent a majority of the Company's
outstanding common stock. As part of the Agreement, the following changes to the
Company's directors and officers have occurred.
David Goldberg resigned as the Company's President, Chief Executive Officer,
Chief Financial Officer, and Chairman of the Board of Directors; and Thad Kaplan
and Steven Field resigned as members of the Board of Directors, effective May
12, 2005.
Jesse Dobrinsky was appointed as the Company's President and Chief Executive
Officer; Scott Goodman was appointed as the Company's Secretary, Chief Financial
Officer, and Chief Operating Officer; and John Udell was appointed as the
Company's Vice-President as of May 12, 2005.
Further, Jesse Dobrinsky and Scott Goodman were appointed as members of the
Board of Directors of the Company.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.
David Goldberg resigned as the Company's President, Chief Executive Officer,
Chief Financial Officer, and Chairman of the Board of Directors; and Thad Kaplan
and Steven Field resigned as members of the Board of Directors, effective May
12, 2005.
Jesse Dobrinsky was appointed as the Company's President and Chief Executive
Officer; Scott Goodman was appointed as the Company's Secretary, Chief Financial
Officer, and Chief Operating Officer; and John Udell was appointed as the
Company's Vice-President as of May 12, 2005.
Further, Jesse Dobrinsky and Scott Goodman were appointed as members of the
Board of Directors of the Company.
Jesse Dobrinsky - President and CEO
Jesse was born in 1956. He was raised and educated in New York. Jesse has been
and entrepreneur all of his life. While working his way through college, Jesse
worked as an assistant pharmacist and an assistant manager for Edison Brothers
Shoes. In mid-1978 he and an associate opened a retail stereo shop called Sounds
Incredible. They grew this business until the sales volume was in excess of one
(1) million dollars per year. In 1981, Jesse was enticed into a family
restaurant business where he spent the next year building up the business.
In 1982, Jesse was given the opportunity to open a sales agency for a group of
Midwestern meat haulers. This company was called Coast Dispatch, Inc. It was
started in a small office in Manhattan and its focus was to sell westbound
freight from the Northeastern portion of the United States. As this business
grew, the customers began to inquire about trucks to haul freight throughout the
country. In early 1983 Coast Dispatch, Inc. became an irregular route common
carrier. Over the next twelve years Coast Dispatch, Inc. grew to over 40 company
trucks and ten million dollars in sales.
In 1995 Landstar Inway approached Jesse and asked him to open an Air-Freight
Division for the Landstar group. This division was called Cargo Connection
Logistics. With Jesse at the helm the company grew from less then three million
dollars in sales in 1996 to over five million dollars in sales in 1997. In late
1997, Landstar Inway was directed to refocus on their core business and to
disband any business that was not related to that core business. In 1997, Cargo
Connection Logistics became a non-owned division of ARL and in 1998, did in
excess of eight million dollars in sales. In 1999 the sales volume exceeded
twelve million dollars and Cargo Connection Logistics became the largest
non-owned division of ARL.
Scott Goodman - COO and CFO
Scott was born in 1959. He attended schools in New York and Massachusetts. Scott
holds a Bachelor of Science Degree in Business Administration with a major in
accounting from Northeastern University. He also obtained his MBA from Adelphi
University with majors in International Business and Corporate Finance.
Scott began his career with Norman Goldstein Associates where his primary duties
were as Controller for NGA and as Director of Operations for its subsidiary
company, E & N Plastics. It was at this company that Scott began to travel the
world. In 1983, Scott joined M. Blumenthal Graphics, a New York City printing
house, as Controller and later as Director of Operations.
In 1988, Scott went to work for Lafayette Precision Products. As Controller and
Director of Purchasing, Scott was responsible for overseeing and managing the
installation and implementation of a new computer system. In addition, he was
very involved with developing new procedures for purchasing, inventory control
and financial reporting. When Reichel & Drews bought the company and ultimately
moved the operation to their headquarters in Itasca, IL in 1990, Scott went to
work for Landes Marketing. At Landes Marketing Scott held dual positions as
their Vice President and General Manager. He joined them in order to restructure
their financial debt and reduce costs after heavy losses were sustained by the
Landes family. Landes was a leader in the marketing and distribution of
silver-plated tabletop and giftware. It was in this position that Scott began to
develop a deeper understanding of the import business. One of the vendors Scott
became intimate with was Ben Forman & Sons. In 1992, when Landes Marketing was
being sold, Scott went to work for Ben Forman & Sons where he was responsible
for the financial area of the multi-million dollar manufacturing company. He was
also responsible for the company's related real-estate ventures.
In 1995 Scott Goodman met Jesse Dobrinsky. In late 1995 he went to work for
Coast Dispatch, Inc. as its CFO. In 1996 Scott joined Jesse Dobrinsky at Cargo
Connection Logistics, where they went to work for Landstar Inway.
With Jesse Dobrinsky as President, Scott joined the team as Executive Vice
President. The company grew from less than three million dollars in sales in
1996 to over five million in sales in 1997. In late 1997, Landstar Inway was
directed to refocus on their core business and to disband any business that was
not related to that main business focus. In 1997 Cargo Connection Logistics
became a non-owned division of ARL and in 1998 had sales volumes in excess of
eight million dollars. In 1999 the sales volume exceeded twelve million dollars
and Cargo Connection Logistics became the largest non-owned division of ARL.
John L. Udell - Vice President
John was born in 1955. He was raised and educated in New York. John has had an
entrepreneurial spirit his whole life. While working his way through college,
John had many jobs. In 1976, before completing his education, John was called
home from school to help save the family business. Later that year, John became
the Director of the Finishing Division for AMPCO Printing Company.
It became John's responsibility to make sure that jobs were finished properly
and shipped out in a timely manner. While performing this job it became clear to
John that there was a need for and ultimately an opportunity for a trucking
company that could provide expedited service for the printing industry. He took
this concept to a friend and in 1982, Jesse Dobrinsky and John Udell formed a
company called Coast Dispatch, Inc.
John soon found himself intrigued by the growth and opportunity at Coast
Dispatch, Inc. He soon decided to make it his full time career. Over the next 12
years John was very instrumental in the development and growth of Coast
Dispatch, Inc. In 1996, when Jesse departed from the company, John became its
President and began to lead the company into a rebuilding process. It was his
dream to build a regional trucking company that would focus on the New York
Tri-State Area. In 1996, after bringing the company through a major overhaul,
the investors chose to shut down the company. During that last year John had
managed to reduce the debts of Coast Dispatch, Inc. from just over two million
dollars to less than fifty thousand dollars. John spent the balance of the year
closing Coast Dispatch, Inc. and selling off the assets of the company.
In mid-1997, John joined Cargo Connection Logistics as its Director of Container
Freight Station Operations. In that capacity, John managed the two main CFS
operations in New York and Chicago. John also headed up both the Safety &
Compliance and Driver Recruitment Departments.
No transactions occurred in the last two years to which the Company was a party
in which any director or officer had or is to have a direct or indirect material
interest.
ITEM 9.01 FINANCIAL STATEMENT AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Financial Statements will be filed as an amendment to this Form 8K.
(b) Pro Forma Financial Information.
Pro Forma Financial Information will be as an amendment to this Form 8K.
(c) Exhibits.
Stock Purchase Agreement and Share Exchange dated May 12, 2005, by and among
Championlyte Holdings, Inc.; Cargo Connection Logistics Corp.; and Mid-Coast
Management, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHAMPIONLYTE HOLDINGS, INC.
By: /s/ Jesse Dobrinsky
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JESSE DOBRINSKY
President, CEO
Dated: May 16, 2005