BRAVO! BRANDS INC. - 10KSB - 20010402 - SUBSEQUENT_EVENTS
Note 11. Subsequent Events
On March 6, 2001, a sophisticated and accredited investor deposited $250,000
with the Company as consideration for 25,000 shares of Series H convertible
preferred stock to be issued. The Series H convertible preferred stock is
priced at $10.00 per unit. The Series H convertible preferred stock has a
stated value of $10.00 per share and a conversion feature of $0.50 per share
The Series H convertible preferred stock will be issued pursuant to an
exemption to registration provided by Regulation D, Rule 506 and Section
4(2) of the 1933 Act. The gross proceeds of $250,000 are the first tranche
of a total offering of Series H convertible preferred stock having aggregate
gross proceeds of $1,100,000.
On January 2, 2001, the Company hired a new President and Chief Operating
Officer and entered into an employment agreement with him pursuant to which
the Company granted the individual 100,000 shares of its common stock and
options to purchase an additional 400,000 shares of common stock at a per
share price of $0.75.
ITEM 8. CHANGES IN AND DISSAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
FINANCIAL DISCLOSURE
None
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The directors, executive officers and significant employees/advisors
are as follows. Directors serve for staggered terms of two years or until
their successors are elected.
Name of Officer Position with the Company Year Appointed
--------------- ------------------------- --------------
China Premium Food Corporation
Stanley A. Hirschman Chairman and Director 2000
Roy G. Warren Director and Chief Executive Officer 19971999
John McCormack Director, President & Chief Operating Officer 1997/2000
Michael L. Davis Chief Financial Officer 1997
Susan E. Lurvey Treasurer and Secretary 1997
Arthur W. Blanding Director 1999
Robert Cummings Director 1997
Paul Downes Director 1997
George Holdsworth Director 1997
Robert L. Holz Director 2000
Michael Lucci Director 1998
Phillip Pearce Director 1997
Bravo! Foods, Inc. - US subsidiary
Arthur W. Blanding Chairman and Director 2000
Roy G. Warren Director and Treasurer 1999
Anthony P. Guiliano Director, President & Chief Operating Officer 2000
Stanley A. Hirschman Director 2000
John McCormack Director and Chief Executive Officer 2000/2001
Phillip Pearce Director 2000
China Premium Food Corp (Shanghai) Co., Ltd. - Chinese subsidiary
Stephen Langley Chairman, Director and General Manager 1999
Roy G. Warren Director since December 1999
Anthony P. Guiliano Director since December 1999
The experience and background of our executive officers and directors
follows:
Mr. Stanley A. Hirschman - Chairman and Director since September 2000
Mr. Hirschman is president of CPointe Associates, Inc., an executive
management and consulting firm specializing in solutions for emerging
companies with technology-based products.
CPointe was formed in 1996. In addition, he is a director of ObjectSoft
Corp., RetailHighway.com and former chairman of the board of Mustang.com.
Prior to establishing CPointe Associates, Mr. Hirschman was vice president
of operations of Software, Etc., Inc., a retail software chain, from 1989
until 1996. Mr. Hirschman has also held senior management positions with
retailers T.J. Maxx, Gap Stores and Banana Republic.
Mr. Hirschman currently serves on the Executive Committee of our
board of directors and is a director of our US subsidiary Bravo! Foods.
Inc.
Mr. Roy G. Warren - Chief Executive Officer since May 1999; Director since
1997
Mr. Warren serves as our Chief Executive Officer and as a director.
Mr. Warren was in charge of our day to day operations as from 1997 until
the appointment of John McCormack as President and Chief Operating Officer
in December 2000. As Chief Executive Officer, Mr. Warren continues to
develop strategy for our growth and external financial matters.
For 15 years from 1981 through 1996, Mr. Warren was in the securities
brokerage industry. During those years, Mr. Warren acted as executive
officer, principal, securities broker, and partner with brokerage firms in
Florida, most notably Kemper Financial Companies, Alex Brown & Sons and
Laffer Warren & Company. Mr. Warren currently serves on the Executive
Committee of our board of directors.
Mr. Warren also serves as a director of our U.S. subsidiary, Bravo!
Foods, Inc. and our wholly owned Chinese subsidiary, China Premium Food
Corp (Shanghai) Co., Ltd.
Mr. John McCormack - President, Chief Operating Officer since December
2000; Director since 1997
Prior to his appointment as our President and Chief Operating
Officer, Mr. McCormack served as an executive with Dean Foods Co. for over
15 years. Dean Foods is a US national processor and distributor of a full
line of branded and private label products, including fluid milk, cottage
cheese and ice cream. Prior to a 1999 move to the Chicago area for Dean Foods,
Mr. McCormack managed McArthur Dairy in Miami, Florida, a wholly- owned
subsidiary of Dean Foods Co. As a Vice President of Dean Foods, he was in
charge of Dean Food's mid-western division out of Chicago, Illinois.
Mr. McCormack currently serves on the compensation committee of our
board of directors and is a director of our U.S. subsidiary, Bravo! Foods,
Inc.
Mr. Michael L. Davis - Chief Financial Officer since October, 1997
Mr. Davis has been associated with the securities industry over 35
years, as a securities and special situations analyst with ValueLine, and
as a tactical planner, general portfolio manager and short sale portfolio
manager with a number of hedge funds. In 1972, he was a member of the
Investment Committee at Anchor Corp. which supervised its $2.5 billion
family of funds, as well as serving as Anchor's chief market analyst. From
1978 through 1989, Mr. Davis was the portfolio manager of Merrill Lynch's
Special Value Fund. In addition to his position with us, for the past
eight years, Mr. Davis has operated a private consulting firm, M.L. Davis
Financial Services. Mr. Davis advises clients on stock selection and general
market timing considerations. He researches and writes investment reports on
selected small and mid-cap growth companies. In addition. Mr. Davis supervises
an investment portfolio for a group of United Arab Emirates investors.
Mr. Arthur W. Blanding - Director Since November, 1999
Mr. Blanding is president of The Omega Company, an international
dairy industry consulting company. Mr. Blanding has over 50 years
experience in management of dairy processing, sales and strategic planning
consulting. He graduated from Michigan State University in 1956, with a
degree in food science, and in 1964 from Oregon State University with a
degree in Food Microbiology, and attended Harvard Business School.
As President of The Omega Company for the past 20 years, Mr. Blanding
has completed over 200 projects successfully, both in the U.S. and abroad.
Clients of The Omega Company include Abbott International, Cumberland
Farms, Dairy Gold, Farm Fresh, Inc., Haagen Dazs, Labatt, Ross
Laboratories, and Stop & Shop Company, among others. Mr. Blanding was a
consultant for the design and construction of the dairy processing facility
built in Shanghai by Green Food Peregrine. The Omega Company is a party to
a consulting contract with us concerning technical and production issues.
Mr. Blanding also serves as a director and Chairman of our U.S. subsidiary,
Bravo! Foods, Inc.
Mr. Robert J. Cummings - Director Since 1997
Mr. Cummings' work experience includes ten years in purchasing at
Ford Motor Company. In 1975, he founded and currently operates J & J
Production Service, Inc., a manufacturing representative business, which is
currently responsible for over $300 million in annual sales. Mr. Cummings
currently serves on the executive committee of the our board of directors.
Mr. Paul Downes - Director Since 1997
Mr. Downes is a director and, from August of 1997 to April of 1998,
served as our Chairman. For the past 12 years, Mr. Downes has managed his
personal diverse portfolio of international investments with concentration
in the United Kingdom, Eastern Europe, North Africa and Asia. In 1985, he
founded a group of nursing homes for the elderly in Great Britain which he
sold in 1990. Prior to that time, Mr. Downes, spent several years
organizing golf tournaments and international golf matches in Malaysia,
Singapore, Thailand, Philippines, Indonesia and Hong Kong, spending two
years living in Southeast Asia. Mr. Downes is one of our "founders" and
played a leading role in our initial raising efforts. From March of 1999,
Mr. Downes has served as the Chairman of a start up marble quarry company
located in Alabama.
Mr. George Holdsworth - Director Since 1997
From March of 1997 until May, 1998, Mr. Holdsworth was responsible
for the operational aspects of our China operations. Since 1998, Mr.
Holdsworth has managed his personal investment portfolio and has served as
a director and consultant to U.S. Stone Corporation, a start up marble
quarry company located in Alabama.
Mr. Holdsworth is a graduate of the University of London with a B.S.
in Mathematics and an Associate of the London College of Music. He started
in business as a manufacturing manager in Earlsdon Components, Ltd., where
he became Director of Operations, then owner and Managing Director. In
1993, Mr. Holdsworth became owner of Earlsdon Technology, Ltd., a JV
Partner of Shanghai Earlsdon Valve Company, Ltd., and lived in Shanghai for
four years, until May, 1998. Mr. Holdsworth sold his interest in Shanghai
Earlsdon and commenced his duties for us in March, 1997.
Mr. Robert L. Holz - Director since 2000
For the past six years, Mr. Holz has managed a portfolio of private
investments in start up companies under the aegis of Explorer Fund
Management, L.L.C., an entity which he founded in 1994. Prior to 1994, Mr.
Holz held senior management positions in securities related firms such as
Nomura Securities International, Inc., National Investment Services of
America and was a partner in Kidder, Peabody & Co., Inc. Mr. Holz
specializes in identifying and analyzing new business opportunities and
managing resources for goal realization. Mr. Holz currently serves on our
audit committee.
Michael G. Lucci - Director Since 1998
Mr. Lucci is a former All Pro linebacker who played for the Detroit
Lions of the National Football League from 1964 through his retirement from
professional football in 1973. Mr. Lucci became associated with Bally's
Total Fitness Corporation in 1971 and rose through the ranks to become that
corporation's Vice President of club operations in the mid-west, Senior
Vice-President, and President and Chief Operating Officer in 1993. Mr.
Lucci retired in 1996 and, since that time, has managed a diverse
investment portfolio for himself and directed the business of his
construction company in the Detroit MI area. Mr. Lucci serves on the
executive committee of our board of directors.
Mr. Phillip Pearce - Director Since 1997
Mr. Pearce is a "retired" member of the securities industry. Mr.
Pearce served as Chairman of the NASD during which time he was instrumental
in the founding of NASDAQ. Additionally, Mr. Pearce was a former Director
of E.F. Hutton and has served as Governor of the New York Stock Exchange.
Since his retirement in 1988, Mr. Pearce has remained active in the
securities industry as a corporate financial consultant. Mr. Pearce serves
on the compensation committee of our board of directors.
Mr. Pearce also serves on our audit committee and is a director of
our U.S. subsidiary, Bravo! Foods, Inc.
Mr. Stephen Langley - Chairman, Director and General Manager of our wholly
owned Chinese subsidiary, China Premium Food Corp (Shanghai) Co., Ltd. since
October 1999
Mr. Langley's has been in the sales, marketing, and management of the
agribusiness for approximately 22 years. Seventeen of those years have been
with multinational companies, including IBP Inc., a processor of fresh beef
and pork. Mr. Langley was responsible for establishing a market presence
for IBP in China in 1997 for the sales of products imported from IBP-US
which amounted to US$ 250,000 in 1997 and grew to over US $7 million in
1998. Mr. Langley was responsible for the development of business strategy
and directed all sales activities in China for IBP.
Mr. Langley and his family have lived in China continuously for the
last 6 years. He studied Chinese full time for two years from 1993-1995 and
achieved Chinese language Level 3 fluency (Foreign Service scale of 1-5,
with Level 5 equal to native speaker.)
Mr. Anthony P. Guiliano - President and Director of our US subsidiary,
Bravo! Foods, Inc.
Mr. Guiliano has 20 years of experience in senior level marketing and
management positions with consumer products companies, including Dial Co.,
Welch Foods, Kayser-Roth, Cleo, a division of Gibson Greetings, and
Schering-Plough. While with these companies, Mr. Guiliano's
responsibilities included marketing and sales management of branded
consumer products, launching new branded consumer products and negotiating
licensing for product brands, including Looney Tunes(TM), Lion King and
Disney. Prior to his appointment as President and his election Bravo!'s
board in 2000, Mr. Guiliano served as a consultant to us since 1998 for our
China sales and marketing efforts. Mr. Guiliano has been an independent
consumer products sales and marketing consultant since1996 and an employee
of our Bravo! subsidiary since 2000.
As of the date of this prospectus, there have been no family
relationships among the directors and executive officers. Further, no
director, executive officer, promoter or control person has been involved
in any legal proceedings during the past five years that are material to an
evaluation of the ability or integrity of such director, person nominated
to become a director, executive officer, promoter or control person of the
Company. None of the individuals listed in this Item 5 has had a
bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of such
bankruptcy, if any, or within two years prior to that time. No director,
executive officer, promoter or control person was or has been convicted in
a criminal proceeding or is subject to a pending criminal proceeding or
subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, borrowing, or otherwise limiting his or her
involvement in any type of business, securities or banking activities. No
director, executive officer, promoter or control person has been found by a
court of competent jurisdiction in a civil action to violate federal or
state securities or commodities law.
ITEM 10. EXECUTIVE COMPENSATION
Summary compensation table
The following table sets forth the compensation paid during the last
three fiscal years to the Company's Chief Executive Officer, and the four
other most highly compensated executive officers whose total 2000 salary
and bonus exceeded $100,000:
------------Annual Compensation------------ -Long-Term Compensation-
Restricted Stock
Name & Position Year Salary Bonus Other Awards and options
Stanley Hirschman 2000 30,000 (partial yr.) 400,000 (1)
Chairman 2001 15,000 (partial yr)
Roy G. Warren 1998 $120,000 410,914 (2)
President & 1999 $120,000
Chief Executive Officer 2000 $180,000 (retroactive
to 1/1/00)
2001 $180,000
John McCormack 2001 $180,000 100,000 shares (3) 900,000 (4)
President &
Chief Operating Officer
Steven Langley 1999 $ 75,000 $30,000 $70,000 (5) 200,000 (6)
General Manager 2000 $ 75,000 $30,000 $70,000 (5) (6)
Chairman (China)
Michael Edwards 2000 $ 55,000 (partial yr.) $65,000 (7) 200,000 (7)
Sales VP 2001 $110,000
Anthony Guiliano 2000 $ 60,000 (partial yr.) $30,000 (8)
President & 2001 $120,000
Chief Operating Officer
Bravo! Foods, Inc.
Charles Beech 1997 510,914
Chairman 1998
Chief Executive Officer 1997-99 $120,000(9)
Paul Downes (9) 1997 1,383,705(10)
Chairman 1998
--------------------
<F1> Incentive bonus options for 400,000 shares of common stock issued in
100,000 share tranches when our stock trades at $2.00, $3.00, $4.00
and $5.00, respectively. Exercise price is the market price at
issue, with a term of three years.
<F2> These options were authorized by a directors' resolution on April 20,
1997. At that time, a market did not exist for our unrestricted
shares, which had a par value of $0.001.
<F3> One time signing bonus in common stock issued pursuant to an S-8
registration statement.
<F4> Signing bonus of 400,000 options at $0.75 per share with 50% vested
at December 31, 2001 and 2002, respectively, with expiration dates
five years from vesting. Incentive bonus options for 500,000 shares
of common stock issued in 100,000 share tranches when stock trades at
$1.00, $2.00, $3.00, $4.00 and $5.00, respectively. Exercise price
is the market price at issue, with a term of five years.
<F5> Includes $48,000 annual allowance for housing in Shanghai, PRC for
Mr. Langley and his family and $22,000 educational expense for family
members.
<F6> Pursuant to October 1, 1999 agreement for five year options (from
vesting) at market as of September 1, 1999, subject to the following
vesting schedule: 50,000 at 9-1-99; 50,000 at 9-1-00; 50,000 at 9-1-
01; 50,000 at 9-1-02.
<F7> $65,000 bonus paid in quarterly installments for one year with review
thereafter. All options have an exercise price at market, when
issued. Options for 50,000 issued as signing bonus on November 27,
2000; 50,000 to be issued on 5-31-01; 50,000 on 5-31-02;and 50,000 on
5-31-03. Options have a five year term from issuance.
<F8> Incentive options for 127,500 shares of common stock of Bravo!. If
exercised now, the common stock underlying these options represents
15% of the issued and outstanding common stock of Bravo!. Mr.
Guiliano receives from $5,000 to $30,000 for each dairy signed to
participate in Bravo!'s Looney Tunes(TM) branded milk production
program, depending upon the size of the dairy. Mr. Guiliano's
compensation is an expense of Bravo!.
<F9> Salary deemed paid to Mr. Beech for expense accounting purposes only.
<F10> These options were granted to Tamarind Management, Ltd., an affiliate
of Mr. Downes.
Option grant table 1999 and 2000
Underlying Percentage Per Share Expiration
Name & Position Common of Total Exercise $ Date
1999
----
Stephen Langley 200,000 88.88% market at 5 years from
Chief Operating 12-1-99($1.10) vesting
Officer (China)
Nancy Yuan 25,000 11.12% market at 9-12-04
Chief Financial 12-1-99 ($1.10)
Officer (China)
2000
----
Michael Edwards 50,000 100% market at 5 years from
Sales VP 11-27-00($0.50) vesting
Aggregated option exercises in fiscal 1998, 1999 and 2000
None of the named executive officers exercised any stock options
during fiscal 1998,1999 or 2000. The following table provides information
on the value of such officers' unexercised options at December 31, 2000.
Aggregated 1999 and 2000 Fiscal Year End Option Value Table
Securities Underlying Value of "In The Money"
Name & Position Unexercised Options Unexercised Options (1)
--------------- --------------------- -----------------------
Roy G. Warren 410,914 $-0-
Stephen Langley 100,000 (100,000 unexercisable) $-0-
Michael Edwards 50,000 (150,000 unexercisable) $-0-
Nancy Yuan 25,000 $-0-
Charles Beech 510,914 $-0-
Paul Downes (2) 1,383,705 $-0-
--------------------
<F1> On December 31, 1999 and 2000, our unrestricted common stock was
quoted on the NASD Over The Counter Electronic Bulletin Board at a
closing price of $0.81 and $0.2656, respectively; the reported dollar
values represent the "in-the money" value of the options listed as of
each year end.
<F2> These options were granted to Tamarind Management, Ltd., an affiliate
of Mr. Downes.
Compensation of Directors
Directors were compensated for their travel expenses to and from
board of directors' meetings in 1998, 1999 and 2000. There were four in
person meetings and eleven telephonic meetings of the board in 1998, two in
person meetings and eleven telephonic meetings of the board in 1999 and
three in person meetings and five telephonic meetings of the board in 2000.
Employment contracts
* Stanley Hirschman, Chairman of the Board
The Company has a month-to-month contract with Mr. Hirschman with
monthly compensation set at $7,500 for the six-month period commencing
September 1, 2000. During his employment, Mr. Hirschman also will receive
three year incentive options for an additional 400,000 shares in tranches
of 100,000 as the public trading price for the Company's stock attains
certain pre-determined levels. The exercise price for these options will
track the market price for common stock when granted.
* John McCormack, President and Chief Operating Officer
The Company has a two-year contract with Mr. McCormack commencing
December 1, 2000, at an annual base salary of $180,000. Mr. McCormack will
receive100,000 shares of common stock and options for 400,000 shares at
$0.75 per share as a signing bonus. The options for 400,000 shares vest
50% on December 31, 2001 and 2002, respectively and expire five years from
vesting. During his employment, he also will receive five-year incentive
options for an additional 500,000 shares in tranches of 100,000 as the
public trading price for our stock attains certain pre-determined levels.
The exercise price for these options will track the market price for The
Company's common stock when granted.
* Michael Edwards, our Vice President for Sales
The Company has a three-year contract with Mr. Edwards commencing
June 1, 2000, at an annual base salary of $110,000 plus a $65,000 one-year
bonus, payable quarterly. Mr. Edwards received five-year options for
50,000 shares of common stock at an exercise price of $0.69 per share as a
signing bonus. He also will receive five-year option for an additional
150,000 shares in three annual tranches of 50,000, commencing May 1, 2001.
These additional options will have an exercise prices that track the market
price for the Company's common stock when granted.
* Nancy Yuan, Chief Financial Officer for Chinese operations through
mid 2000 and presently Comptroller for overall US operations
Ms. Yuan has a five-year contract dated December 1, 1999 and
effective September 13, 1999, at a base annual salary of $40,000, with an
annual bonus of $5,000 in the first year. Ms. Yuan's employment agreement
calls for her receipt of one time five-year stock options for 25,000 shares
at an exercise price of $1.12 per share.
* Stephen Langley, Chief Operating Officer (General Manager) of China
Premium (Shanghai), wholly owned Chinese subsidiary
Mr. Langley has a five-year contract dated December 1, 1999 and
effective September 1, 1999, at a base annual salary of $75,000, with a
quarterly bonus of $7,500 in the first year. In subsequent years, Mr.
Langley's bonus is performance based. In addition, Mr. Langley receives a
$48,000 annual housing allowance and a $22,000 education allowance for his
family. Mr. Langley's employment agreement calls for his receipt of five-
year stock options for 200,000 shares at an exercise price of $1.12 per
share. These options are in four equal tranches of 50,000 with vesting over
a three-year period.
* Anthony Guiliano, President and Chief Operating Officer of Bravo!
Foods, Inc.
Mr. Guiliano has a five-year contract with the Company's Bravo!
subsidiary, dated November 2000 and effective July 1, 2000. Mr. Guiliano
receives a base salary of $120,000 plus an annual bonus of $30,000, payable
quarterly, and incentive options for 127,500 shares of the common stock of
Bravo!. If exercised now, the common stock underlying these options
represents 15% of the issued and outstanding common stock of Bravo!. Mr.
Guiliano receives from $5,000 to $30,000 for each dairy signed to
participate in Bravo!'s Looney Tunes(TM) branded milk production program,
depending upon the size of the dairy. Mr. Guiliano's compensation is an
expense of Bravo!. Mr. Guiliano has received three-year options for
250,000 shares of the Company's common stock at $1.00 per share.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our common
stock on of January 31, 2001, as to
* each person known to beneficially own more than 5% of our common
stock
* each of the Company's directors
* each executive officer
* all directors and officers as a group
The following conditions apply to all of the following tables:
* except as otherwise noted, the named beneficial owners have direct
ownership of the stock and have sole voting and investment power
with respect to the shares shown
* the class listed as "common" includes the shares of common stock
underlying our issued convertible preferred stock, options and
warrants
Holders of 5% or more of the Company's common stock follows:
Name & Address of Amount & Nature of Percent
Title of Class Beneficial owner Beneficial Ownership of Class
-------------- ----------------- -------------------- --------
Common Amro International, S.A. 2,903,284 11.5%
P.O. Box 4401
Zurich, Switzerland CH 8022
Common Austinvest Anstalt Balzers 2,802,841 11%
Landstrasse 938
9494 Furstentums
Balzers, Liechtenstein
Common Esquire Trade & Finance Inc. 2,802,841 11%
Trident Chambers
P.O. Box 146
Road Town, Tortola, B.V.I.
Common Mr. Dale Reese 3,157,985 11.7%
125 Kingston Road
Media, PA
Common Paul Downes 24,182 (direct) 0.095%
Tamarind Management Ltd. 2,098,145 (indirect/control) 8.29%
5646 Windrift Lane
Boca Raton, FL 33433
Common Libra Finance, S.A. 1,662,500 6.57%
P.O. Box 4603
Zurich, Switzerland
Common American Flavors China, Inc. 1,531,685 6.05%
Florence & Noam Sender
(principal beneficial owners)
1007 Chestnut Street
Newton, MA 02164
Common stock owned by our directors follows:
Name & Address of Amount & Nature of Percent
Title of Class Beneficial owner Beneficial Ownership of Class
-------------- ----------------- -------------------- --------
Common Paul Downes 24,182 (direct) 0.095%
Tamarind Management Ltd. 2,098,145 (indirect/control) 8.29%
5646 Windrift Lane
Boca Raton, FL 33433
Common Roy G. Warren 717,414 2.83%
1128 Country Club Road
N. Palm Beach, FL 33408
Common Robert Cummings 310,000 1.22%
2829 N.E. 44th Street
Lighthouse Point, FL 33064
Common Michael G. Lucci 210,000 0.83%
49 Spanish River Drive
Ocean Ridge, FL 33435
Common John McCormack 200,000 0.79%
8750 South Grant
Burridge, IL 60521
Common Mr. Arthur W. Blanding 75,811 0.29%
Janesville, WI 53545
Common Phillip Pearce 25,000 0.098%
6624 Glenleaf Court
Charlotte, NC 28270
Common Stanley Hirschman 9,670 0.38%
2600 Rutgers Court
Plano, Texas 75093
Common stock owned by our executive officers follows:
Name & Address of Amount & Nature of Percent
Title of Class Beneficial owner Beneficial Ownership of Class
-------------- ----------------- -------------------- --------
Common Roy G. Warren 717,414 2.83%
CEO/Director
Common John McCormack 200,000 0.79%
President/COO/Director
Common Stephen Langley 70,000 0.27%
Chairman/GM- China
Common Michael L. Davis 25,000 0.098%
Chief Financial Officer
Common Susan Lurvey 12,000 0.049%
Treasurer/Secretary
Common stock owned by our directors
and executive officers as a group 3,777,222 14.9%
The following is a breakdown of the amount of underlying common stock
the listed holders have the right to acquire within sixty (60) days from
convertible preferred stock, options and warrants. This underlying common
stock has been included as part of the "common stock" listed in the above
tables. For Amro International, S.A., Austinvest Anstalt Balzers, Esquire
Trade & Finance Inc., Libra Finance, S.A., please refer to page 11 of this
prospectus.
Total Equity and Underlying
Holder Rights to Equity Type of Security Common Stock
------ ---------------- ---------------- ------------
Amro International, S.A. 2,903,284 Series D Convertible 456,890
Series F Convertible 778,812
Warrants 1,505,759
Austinvest Anstalt Balzers 2,802,841 Series D Convertible 437,841
Series F Convertible 771,298
Warrants 1,406,759
Esquire Trade & Finance Inc. 2,802,841 Series D Convertible 437,841
Series F Convertible 771,298
Warrants 1,406,759
Mr. Dale Reese 3,157,985 Options 700,000
Tamarind 2,122,327 Series B Convertible 107,440
Management, Ltd. Options 1,383,705
(Mr. Paul Downes)
Libra Finance, S.A. 1,662,500 Warrants 1,662,500
Roy G. Warren 670,414 Options 410,914
Michael L. Davis 25,000 Options 25,000
Steve Langley 70,000 Options 50,000
There currently are no arrangements that may result in a change of
ownership or control of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Loans/Fees
In February, 1997 the Company issued 25,000 shares of common stock in
exchange for 100% of equity interest of Manor Products Corp. Manor was a
Delaware company established on January 10, 1996. In early 1996, 80% of
equity interest of Manor was bought by the principal of the initial
founding entity of the Company. Accordingly, this acquisition was regarded
as a related party transaction.
In January, 1997, the major limited partner of China Peregrine
Enterprises loaned US $200,000 to that limited partnership in order for
China Peregrine Enterprises to meet interim registered capital requirements
of the Green Food Peregrine Articles of Association and Joint Venture
Contract. In March, 1997, three shareholders together provided a loan of
US $1,315,000 to pay China Peregrine Enterprises' final registered capital
requirement to Green Food Peregrine. This last capital contribution was
set by the Board of Directors of Green Food Peregrine as a condition
precedent to the approval of the Company's acquisition of the interest of
China Peregrine Enterprises in and to the
Green Food Peregrine joint venture. These two loans were paid off during
May and June, 1997, utilizing the proceeds from a Rule 504 regulation D
offering.
In March, 1997, a holder of the majority of the partnership interests
in China Peregrine Enterprises, together with two other investors of ours,
assumed a US $1,260,000 outstanding line of credit owed by the limited
partnership to a Tennessee-based financial institution. On March 15, 1997,
the Company issued 1,260,000 shares of its Series B preferred stock to
these shareholders in consideration for this assumption. The line of credit
was paid in full in October, 1997.
In the course of setting up the Hangzhou Meilijian joint venture,
Meilijian contributed fixed assets with a value in excess of its required
capital contribution amount. Based on an agreement signed by the Chinese
and American investors, the excess portion was treated as a fixed asset
loan from Meilijian at an interest rate of 8% per annum. The balance of
this loan at December 31, 1998 was $560,080.
On January 1, 1994, Meilijian provided the use of its trademark,
which was valued at RMB500,000 -approximately US $60,245. This was
recorded this trademark value as a part of deferred assets and a
shareholder loan. We recorded amortization of RMB50,000 -approximately US
$6,025- per year for trademark and paid cash of RMB50,000 to Meilijian per
year against the shareholder loan. The balance of this loan at December
31, 1998 was $36,238. Accumulated interest on these loans amounted to
$81,265.
Relationships
Mr. Paul Downes has investment power with respect to the affairs of
Tamarind Management, Ltd. Accordingly, the Company's securities held by
Mr. Downes and Tamarind have been combined in this document for reporting
purposes. The Downes/Tamarind ownership of issued and underlying shares of
common stock, Series B Preferred Stock and Options represents 8.93% of all
issued and outstanding common stock and shares of common stock underlying
the preferred stock plus unexercised options and warrants.
The Company purchased the assets of China Peregrine Enterprises,
Limited in March of 1997, in exchange for 1,040,000 shares of common stock.
At the time of this asset purchase, Mr. Dale Reese was the major equity
holder in the China Peregrine Enterprises limited partnership and Mr.
Charles Beech controlled the activities of China Peregrine Enterprises by
virtue of his control of China Peregrine International, Inc., the General
Partner of China Peregrine Enterprises. At the time of the asset purchase,
Messrs. Reese and Beech were two of the Company's three directors. As
noted above, through the assumption of a loan in excess of one million
dollars owed by China Peregrine Enterprises to a Tennessee bank, and by
virtue of his position as one of our founders, and through stock purchases,
Mr. Reese presently holds 9.7% of our equity. Mr. Beech, directly and
through Peregrine Enterprises, Inc., presently holds less than 1% of the
Company's equity.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8K
(a) Exhibits
SEC
Exhibit Reference
No. No. Title of Document
------- --------- -----------------
1a 2 Asset Purchase Agreement China Peregrine Enterprises, Limited (1)
1b 2 Interim Agreement to Operate China Peregrine Project (1)
2a 3(i) Articles of Incorporation (1)
2b 3(i) Amended Articles (name change) (1)
3 3(ii) Restated Bylaws China Peregrine Food Corporation (1)
4a 4 Rights of Equity Holders Common see Articles of Incorporation (1)
4b 4 Preferred, Series A and B Designation (1)
4c 4 Preferred, Series C Designation (1)
4d 4 Preferred, Series D Designation (2)
4e 4 Preferred, Series D Amended (4)
4f 4 Preferred, Series E Designation (3)
4g 4 Preferred, Series F Designation (4)
4h 4 Preferred, Series G Designation (5)
5 10 Material Contracts Green Food Joint Venture Contract (1)
6 10 Material Contracts Hangzhou Meilijian Joint Venture Contract (1)
7a 10 Material Contracts Asset Purchase Agreement (1)
American Flavors China, Inc
7b 10 First Amendment (1-28-98) (1)
7b 10 Second Amendment (6-19-98) (1)
7f 10 Agreement to Form Yangling Mandarin (6)
7g 10 Milk Supply Agreement Hangzhou Meilijian (6)
7h 10 Milk Supply Agreement Huai Nan Dairy (6)
7i 10 Bravo! - Quality Chekd Promotion Agreement (6)
7j 10 Bravo! - Dairy Production Agreement (6)
7k 10 Warner Bros./China Premium License Agreement (7)
7l 10 Warner Bros./China Premium License Agreement (modified) (7)
7m 10 Warner Bros./Bravo! Foods License Agreement (7)
7o 10 Employment Contracts (7)
7p 10 Omega Consulting Contract (7)
7q 10 Lane Cracker Contract (7)
7r 10 Lease: US corporate offices, N.Palm Beach, FL (7)
7s 10 Lease: Langley residence Pudong, Shanghai, PRC (7)
8 21 Subsidiaries Articles of Association Green Food Peregrine (1)
9 21 Subsidiaries Articles of Association Hangzhou Meilijian (1)
9a 21 Subsidiaries Certificate of Incorporation Bravo! Foods, Inc. (6)
9b 21 Subsidiaries Articles of Association (6)
China Premium Food Corporation (Shanghai) Co., Inc.
11 99 Hangzhou Meilijian Audited Financial (4)
Statements, Years Ending December 31,1998 and 1999
--------------------
<F1> Filed with Form 10SB/A First Amendment
<F2> Filed with Form 10QSB for 3-31-99
<F3> Filed with Form 10QSB for 6-30-99
<F4> Filed with Form 10K-SB for 12-31-99
<F5> Filed with Form 10QSB for 6-30-00
<F6> Filed with Form SB-2/A Second Amendment
<F7> Filed with Form SB-2/A Third Amendment
(b) Reports on Form 8-k During the Last Quarter of 2000:
December 9, 2000 Item 3. Sale of Hangzhoou Meilijian
Item 5. Election of Mr. John McCormack as President and COO
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, China Premium Food Corporation has caused this eport to be signed on
its behalf by the undersigned, thereunder duly authorized, this March 29,
2001.
CHINA PREMIUM FOOD CORPORATION
(Formerly China Peregrine Food Corporation)
By: /S/ Roy G. Warren,
Chief Executive Officer
In accordance with the Securities Exchange Act of 1934, China Peregrine
Food Corporation has caused this amended report to be signed on its behalf
by the undersigned in the capacities and on the dates stated.
Signature Title Date
--------- ----- ----
/S/ Roy G. Warren Chief Executive Officer March 29, 2001
and Director
/S/ Michael L. Davis Chief Financial Officer March 29, 2001
/S/ Susan Lurvey Secretary, Treasurer March 29, 2001
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