SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[_] Confidential, For Use of the Commission Only (as Permitted by Rule
14a-6(e)(2))
[X ] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BRAVO! FOODS INTERNATIONAL CORP.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
BRAVO! FOODS INTERNATIONAL CORP.
11300 US Highway 1
North Palm Beach, Florida 33408
(561) 625-1411
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 12, 2004
North Palm Beach, Florida January 30, 2004
A Special Meeting of Stockholders (the "Special Meeting") of Bravo! Foods
International Corp., a Delaware corporation (the "Company"), will be held at The
Waterford Hotel & Conference Center, 11360 US Highway No.1, North Palm Beach,
Florida 33408 on Friday, February 12, 2004 at 10:00 AM (local time) for the
following purposes:
1. To amend the Company's certificate of incorporation to increase the
authorized number of common stock from 50,000,000 shares to 300,000,000 shares
(Proposal No. 1); and
2. To ratify financing transactions requiring potential stock issuances in
excess of currently authorized capital stock (Proposal No. 2).
3. To transact such other business as may properly come before the Special
Meeting and any adjournment or postponement thereof.
BECAUSE OF THE SIGNIFICANCE OF THESE PROPOSALS TO THE COMPANY AND ITS
SHAREHOLDERS, IT IS VITAL THAT EVERY SHAREHOLDER VOTES AT THE Special MEETING IN
PERSON OR BY PROXY.
The foregoing items of business are more fully described in the Proxy Statement
that is attached and made a part of this Notice.
The Board of Directors has fixed the close of business on January 22, 2004 as
the record date for determining the stockholders entitled to notice of and to
vote at the Special Meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Special Meeting in person.
Your vote is important regardless of the number of shares you own. Whether or
not you plan to attend the meeting, please take the time to vote by mail. Fill
in, sign and date the enclosed proxy card and return it promptly in the
postage-paid envelope.
You may attend the meeting and vote in person even if you have previously voted
by proxy by mailing in your proxy. Your proxy is revocable in accordance with
the procedures set forth in the Proxy Statement.
By Order of the Board of Directors,
Stanley A. Hirschman, Chairman
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE THE ADDED EXPENSE OF
RE-ISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE MEETING AND SO DESIRE, YOU
MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON. THANK YOU FOR ACTING PROMPTLY.
1
BRAVO! FOODS INTERNATIONAL CORP.
11300 US Highway 1
North Palm Beach, Florida 33408
(561) 625-1411
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of Bravo! Foods International Corp., a Delaware
corporation (the "Company"), of proxies in the enclosed form for use in voting
at the Special Meeting of Stockholders (the "Special Meeting") to be held at The
Waterford Hotel & Conference Center, 11360 US Highway No.1, North Palm Beach,
Florida 33408, on Friday, February 12, 2004 at 10:00 a.m. (local time), and any
adjournment or postponement thereof. Only holders of record of the Company's
common stock, $.001 par value per share (the "Common Stock"), on January 22,
2004 (the "Record Date") will be entitled to vote at the Meeting. At the close
of business on the Record Date, the Company had issued and outstanding o shares
of Common Stock.
In accordance with the Company's bylaws, the presence of a majority of the
shares entitled to vote, whether present in person or represented by proxy, will
constitute a quorum at the meeting. Abstentions will be treated as shares that
are present and entitled to vote but against any proposal submitted to
stockholders. Executed proxies returned by a broker holding shares of the
Company's Common Stock in street name which indicate that the broker does not
have discretionary authority as to certain shares to vote on one or more matters
("broker non-votes") will be considered present but not entitled to vote on any
proposal submitted to stockholders
Any person giving a proxy in the form accompanying this Proxy Statement has the
power to revoke it prior to its exercise. Any proxy given is revocable prior to
the Meeting by an instrument revoking it or by a duly executed proxy bearing a
later date delivered to the Secretary of the Company. Such proxy is also revoked
if the stockholder is present at the Meeting and elects to vote in person.
The Company will bear the entire cost of preparing, assembling, printing and
mailing the proxy materials furnished by the Board of Directors to stockholders.
Copies of the proxy materials will be furnished to brokerage houses, fiduciaries
and custodians to be forwarded to the beneficial owners of the Common Stock. In
addition to the solicitation of proxies by use of the mail, some of the
officers, directors and regular employees of the Company may (without additional
compensation) solicit proxies by telephone or personal interview, the costs of
which the Company will bear.
This Proxy Statement and the accompanying form of proxy is being sent or given
to stockholders on or about January 30, 2004.
Stockholders of the Company's Common Stock are entitled to one vote for each
share held. Such shares may not be voted cumulatively.
Each validly returned proxy (including proxies for which no specific instruction
is given) which is not revoked will be voted "FOR" each of the proposals as
described in this Proxy Statement and, at the proxy holders' discretion, on such
other matters, if any, which may come before the Meeting (including any proposal
to adjourn the Meeting).
Determination of whether a matter specified in the Notice of Special Meeting of
Stockholders has been approved will be determined as follows. The affirmative
vote of the holders of a majority of the outstanding shares of the Company
present or represented by proxy and entitled to vote on the matter is required
to amend the Company's certificate of incorporation to increase the number of
authorized shares of common stock from 50,000,000 to 300,000,000 (Proposal No.
1) and to ratify the financing transaction requiring potential stock issuances
in excess of the Company's currently authorized capital stock (Proposal No. 2).
2
GENERAL INFORMATION REGARDING PROPOSALS 1 AND 2
Overview
The Company currently has authorized capital stock consisting of
50,000,000 common shares, $.001 par value, of which 27,647,542 shares are issued
and outstanding and 5,000,000 preferred shares, $.001 par value, of which the
following are issued and outstanding:
o 107,440 Series B Convertible, 9% Cumulative and Redeemable Preferred
Stock;
o 130,315 Series F Convertible and Redeemable Preferred Stock;
o 58,810 Series G Convertible, 8% Cumulative and Redeemable Preferred
Stock;
o 165,000 Series H Convertible, 7% Cumulative and Redeemable Preferred
Stock;
o 30,000 Series I Convertible, 8% Cumulative and Redeemable Preferred
Stock; and
o 200,000 Series J Convertible, 8% Cumulative and Redeemable Preferred
Stock.
Shares "outstanding" include only shares held by shareholders of the
Company, while shares "issued" also include treasury shares held by the Company
itself.
Since October 2, 2000, the Company issued preferred stock, convertible
notes, warrants and options that may potentially require an issuance of shares
greater than the number of shares that the Company currently is authorized to
issue. By issuing these securities, the Company has exhausted its 20,000,000
then authorized shares of common stock, which was subsequently increased to
50,000,000 shares of common stock, and cannot meet any equity-based obligations
entered into after October 2000 without shareholder approval for an increase in
the number of authorized shares. Management of the Company, which is responsible
for these issuances of securities, discovered that it could potentially exceed
its authorized shares of common stock in November 2003. This discovery was made
upon the recalculation by the Company of its equity and equity equivalents using
a non "treasury method" calculation, which considered all equity equivalents,
irrespective of whether the exercise or conversion prices of such equivalents
were above the then current public trading prices of the Company's common
stock..
Upon discovery of this situation, the Company has taken affirmative steps
to ensure that this does not occur again. Such steps include (i) ceasing to
issue any new common shares, (ii) conducting a complete review of all securities
of the Company currently outstanding, (iii) proceeding to seek shareholder
approval to increase the number of authorized shares so as to satisfy the shares
that may potentially be required to be issued should the holders of the
Company's options, warrants, convertible notes, preferred stock and other
convertible securities elect to exercise and/or convert such securities into
common stock, (iv) proceeding to seek shareholder ratification of the issuances
of securities that may cause the Company to exceed its authorized share limit,
(v) instituting controls and procedures to prevent the issuance of securities in
excess of its authorized capitalization and (vi) appointing an individual
responsible for ensuring that the Company does not issue securities in excess of
its capitalization in the future. For a complete description of the terms of the
transaction, see "Ratification of Financing Transactions Requiring Potential
Stock Issuances In Excess Of Currently Authorized Capital Stock" below.
Transactional Effects on Capitalization of the Company
As previously stated, performance of the Company's obligations pursuant to
the transactions entered into since October 10, 2000, contemplates the issuance
of shares of its common stock beyond its authorized capital. The following table
describes its capitalization (i) prior to the transaction entered since October
2, 2000, (ii) after giving effect to the transactions entered into since October
2, 2000, and (iii) as adjusted to give effect to the changes to the Company's
capitalization as described in this Information Statement.
-------------------------------------------- ------------------- --------------------- -------------------------------
As Adjusted to Give As Adjusted to Reflect Actions
Effect to the Taken as Described in this
Securities Authorized and Outstanding Prior to Transactions Since Information Statement
October 2, 2000 October 2, 2000
-------------------------------------------- ------------------- --------------------- -------------------------------
Common Shares Authorized 20,000,000 50,000,000 300,000,000
-------------------------------------------- ------------------- --------------------- -------------------------------
-------------------------------------------- ------------------- --------------------- -------------------------------
Common Shares Outstanding 12,929,935 27,647,542 27,647,542
-------------------------------------------- ------------------- --------------------- -------------------------------
-------------------------------------------- ------------------- --------------------- -------------------------------
Common Shares Reserved - Outstanding 5,902,777 30,089,777 30,089,777
Warrants
-------------------------------------------- ------------------- --------------------- -------------------------------
3
-------------------------------------------- ------------------- --------------------- -------------------------------
Common Shares Reserved - Outstanding 2,183,705 4,711,086 4,711,086
Options
-------------------------------------------- ------------------- --------------------- -------------------------------
-------------------------------------------- ------------------- --------------------- -------------------------------
Common Shares Reserved - Outstanding 3,197,143 50,356,327 50,356,327
Shares of Preferred Stock
-------------------------------------------- ------------------- --------------------- -------------------------------
-------------------------------------------- ------------------- --------------------- -------------------------------
Common Shares Reserved - Convertible -- 8,000,000 8,000,000
Debentures
-------------------------------------------- ------------------- --------------------- -------------------------------
-------------------------------------------- ------------------- --------------------- -------------------------------
Total Excess (Deficit) of Common Shares (4,213,560) (100,894,509) 149,105,491
Authorized
-------------------------------------------- ------------------- --------------------- -------------------------------
As the table above illustrates, performance of the Company's obligation s
pursuant to the transactions entered into since October 2, 2000, contemplates
the issuance of 100,894,509 shares of the Company's common stock beyond its
authorized capital. The stockholders holding a majority of the common stock of
the Company have ratified the above transactions in light of the fact that the
Company did not have sufficient share capital to enter in the agreements so that
it will have authorized sufficient capital to fully perform the Company's
obligations under the agreements.
4
PROPOSAL NO. 1
AMENDMENT OF THE CERTIFICATE OF INCORPORATION
TO INCREASE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK
FROM 50,000,000 TO 300,000,000 SHARES
The Board of Directors has approved an amendment to the Certificate of
Incorporation to increase the number of authorized shares of common stock from
50,000,000 to 300,000,000. The Company has authorized capital stock consisting
of 50,000,000 common shares, $.001 par value, of which 27,647,542 shares are
issued and outstanding, and 5,000,000 preferred shares, $.001 par value, of
which the following are issued and outstanding:
o 107,440 Series B Convertible, 9% Cumulative and Redeemable Preferred
Stock;
o 130,315 Series F Convertible and Redeemable Preferred Stock;
o 58,810 Series G Convertible, 8% Cumulative and Redeemable Preferred
Stock;
o 165,000 Series H Convertible, 7% Cumulative and Redeemable Preferred
Stock;
o 30,000 Series I Convertible, 8% Cumulative and Redeemable Preferred
Stock; and
o 200,000 Series J Convertible, 8% Cumulative and Redeemable Preferred
Stock.
As described above in the preceding section (General Information Regarding
Proposals 1 and 2), the Company currently has additional outstanding securities
and agreements that would require the issuance of up to 100,894,509 additional
shares of its common stock. The Company currently authorized shares can only
satisfy the exercise of securities that the Company issued prior to October
2000. The Company's commitments to issue shares in the future as required by the
securities issued after October 2000 can only be met if the Company's
shareholders approve this proposed increase in authorized shares (Proposal No.
1).
When issued, the additional shares of common stock authorized by the
amendment will have the same rights and privileges as the shares of common stock
currently authorized and outstanding. Holders of common stock have no preemptive
rights and, accordingly, shareholders would not have any preferential rights to
purchase any of the additional shares of common stock when such shares are
issued. If the shareholders vote to approve the increase in the number of
authorized shares of common stock, 100,894,509 of the 300,000,000 newly
authorized shares of common stock will be immediately reserved for issuance to
cover the agreements that could cause the Company to exceed its authorized share
limit that are described in Proposal No. 2. The Company does not presently have
any plans, arrangements or understandings with respect to the issuance of any of
the remaining newly authorized shares of common stock.
Having a substantial number of authorized but unissued shares of common
stock that are not reserved for specific purposes will allow us to take prompt
action with respect to corporate opportunities that develop, without the delay
and expense of convening an annual meeting of shareholders for the purpose of
approving an increase in the Company's capitalization. The issuance of
additional shares of common stock may, depending upon the circumstances under
which such shares are issued, reduce shareholders' equity per share and may
reduce the percentage ownership of common stock by existing shareholders. It is
not the present intention of the Board of Directors to seek shareholder approval
prior to any issuance of shares of common stock that would become authorized by
the amendment unless otherwise required by law or regulation. Frequently,
opportunities arise that require prompt action, and it is the belief of the
Board of Directors that the delay necessitated for shareholder approval of a
specific issuance could be to the detriment of the Company and its shareholders.
The increase in the authorized number of shares of the Company's common
stock under the proposed amendment could be used by its Board of Directors to
make more difficult, and thereby discourage, delay or prevent, an attempt to
acquire control of the Company. For example, the shares could be privately
placed with purchasers who might support the Company's Board of Directors in
opposing a hostile takeover bid. The issuance of the new shares also could be
5
used to dilute the stock ownership and voting power of a third party seeking to
remove directors, replace incumbent directors, accomplish certain business
combinations or alter, amend or repeal provisions of the Company's articles of
incorporation or bylaws. To the extent that it impedes any such attempts, the
issuance of shares following the adoption of the proposed amendment may serve to
perpetuate existing management. While the proposed amendment may have potential
antitakeover effects, this proposal is not prompted by any specific effort or
takeover threat currently perceived by the Company's Board of Directors or
management. Although under Delaware law our Board of Directors is required to
make any determination to issue such stock based on its judgment as to the best
interests of its shareholders, its Board of Directors could act in a manner that
would discourage an acquisition attempt or other transaction that some, or a
majority, of its shareholders might believe to be in their best interests or in
which shareholders might receive a premium for their stock over the then market
price of such stock.
Unless the Company's shareholders approve an amendment to its certificate
of incorporation to increase the number of authorized shares of common stock
from 50,000,000 to 300,000,000 through this Proposal 1, the Company will be
unable to perform its obligations under the agreements described in Proposal 2
and will be in default pursuant to the terms of those agreements. Management of
the Company believes that it is highly likely that such default will require the
Company to substantially curtail or cease its operations, and may result in a
total loss of your investment in the Company.
Approval of this proposal requires the affirmative vote of a majority
of the shares of the Company's outstanding stock.
RECOMMENDATION OF THE BOARD
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT OF THE CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK.
6
PROPOSAL NO. 2
RATIFICATION OF FINANCING TRANSACTIONS
REQUIRING POTENTIAL STOCK ISSUANCES
IN EXCESS OF CURRENTLY AUTHORIZED CAPITAL STOCK
As described above in the preceding section General Information
Regarding Proposals 1 and 2, the Company has entered into financing agreements
since October 2000, that potentially require an issuance of shares greater than
the number of shares that the Company is currently authorized to issue. The
Company's commitment to issue shares as may be required by these agreements can
only be met if the Company's shareholders approve its proposed increase in
authorized shares (Proposal 1). This Proposal seeks ratification of the
financing transactions in light of their requirement of potential issuances of
common stock beyond the Company's authorized capital. The following narrative
describes the material terms of each of this transaction.
Shares to be Issued Pursuant to Agreement Entered Into with Inadequate
Authorized Share Capital
Series G Convertible, 8% Cumulative and Redeemable Preferred Stock
On October 2, 2000, the Company issued 25,000 shares of its amended
Series G convertible preferred stock to two sophisticated and accredited
investors and warrants to a finder for 114,777 shares of common stock. This
issuance was pursuant to an agreed upon partial exercise of the put granted to
the Company by the Series G investors. The amended Series G convertible
preferred stock was priced at $10.00 per unit and resulted in proceeds of
$226,500 in cash, less aggregate fees of $23,500. Each share of the amended
Series G convertible preferred stock has the same features as the original
Series G issue, except a conversion feature for the partial put exercise equal
to the lesser of $0.60 per share or 75% of the average of the three lowest
closing bid prices of the 22 days immediately preceding the conversion of the
preferred. The remaining 50,000 shares of the amended Series G convertible
preferred subject to put rights have a conversion feature equal to 75% of the
average of the three lowest closing bid prices in a lookback period of the 10
days immediately preceding the conversion of the preferred or 75% of the average
of the three lowest closing bid prices in a lookback period of the 22 days
immediately preceding the conversion of the preferred, at the option of the
investors. The warrants for 114,777 shares of common stock have an exercise
price of $0.9625 per share and an expiration date of October 1, 2003.
Series F Convertible and Redeemable Preferred Stock
On October 13, 2000, the Company issued 24,999 shares of its amended
Series F convertible preferred stock and warrants for 114,777 shares of common
stock to three sophisticated and accredited investors. The amended Series F
convertible preferred stock and warrants were priced at $10.00 per unit and
resulted in proceeds of $224,990 in cash, net of aggregate fees of $25,000. Each
share of the amended Series F convertible preferred stock has the same features
as the original Series F issue, except a conversion feature equal to the lesser
of $0.60 per share or 75% of the average of the three lowest closing bid prices
of the 22 days immediately preceding the conversion of the preferred. The
7
warrants for 114,777 shares of common stock have an exercise price of $0.9625
per share and an expiration date of October 12, 2003.
Series H Convertible, 7% Cumulative and Redeemable Preferred Stock
On December 5, 2001, the Company commenced the issuance of Series H
Convertible Preferred Stock. Each share of Series H convertible preferred stock
o has a stated value of $10.00 per share;
o accrues dividends at 7% simple interest per annum, payable in cash or,
at the option of the holder, added to the stated value of the
preferred for conversion computation purposes;
o has no voting rights;
o has a conversion price of $0.40 per share of common stock, subject to
a contractually limited maximum conversion into no greater than 9.99%
of the Company's issued and outstanding common stock at conversion;
o is redeemable at the option of the Company after two years from
issuance at 135% of the stated value, plus accrued dividends; and
o has a mandatory conversion feature exercisable by the Company five
years from issue at the stated conversion price, subject to a minimum
daily trading volume of 100,000 shares during a lookback period and
closing bid prices not less that 300% of the conversion price.
Each share of Series H preferred stock has detachable warrants for 25
shares of common stock with an exercise price of $0.50 per share and an exercise
period of five years. As of March 2002, the Company issued 175,500 shares of
Series H Convertible Preferred Stock.
Series I Convertible, 8% Cumulative and Redeemable Preferred Stock
On June 17, 2002, the Company issued 30,000 shares of its Series I
convertible preferred stock and warrants for 2,000,000 shares at $0.50 per
share, exercisable three years from issue, to two sophisticated and accredited
investors, pursuant to Rule 506, Regulation D and Section 4(2) of the Securities
Act of 1933. The conversion of the preferred into common stock shall be at a per
common share conversion price of either $0.40 or 75% of the average of the three
lowest closing bid prices for the thirty day period immediately preceding
conversion, at the option of the holder. The conversion price is subject to a
maximum of $0.50 per share and a minimum of $0.30 per share, which minimum
conversion price shall govern for the 270 days immediately following the issue
date of the Series I preferred shares. The minimum conversion price shall be
extended indefinitely upon the occurrence of certain defined events, including
the effectiveness of a registration statement for the resale of the common stock
underlying the preferred and a trading price of the Company's common stock at
$0.50 or higher for fifteen consecutive days. The Series I convertible preferred
stock and warrants were priced at $10.00 per unit, and resulted in gross cash
proceeds of $300,000, less expenses of $12,012.
Series J Convertible, 8% Cumulative and Redeemable Preferred Stock
On September 30, 2002, the Company issued 100,000 shares of non-voting
Series J Convertible Preferred stock, having a stated value of $10.00 per
Preferred J share, and common stock warrants to one accredited investor for the
aggregate purchase price of $1,000,000. Each preferred share is convertible to
40 shares of the Company's common stock of at a per common share conversion
price of $0.25, representing 4,000,000 shares of common stock underlying the
preferred. The issued warrants entitle the holder to purchase 25 shares of
common stock for each share of Series J Convertible Preferred stock issued at an
exercise price of $0.40 per common stock share, representing 2,500,000 shares of
common stock underlying the warrants. The warrants are exercisable for a
five-year period. The blended per share price for the common stock underlying
the preferred and the warrants is $0.307; the September 30, 2002 closing market
trading price was $0.29 per share. This private offering was made to one
accredited investor, pursuant to Rule 506 of Regulation D and Section 4(2) of
the Securities Act of 1933.
On February 21, 2002, the Company issued 50,000 shares of non-voting
Series J 8% Convertible Preferred stock, having a stated value of $10.00 per
Preferred J share, and common stock warrants to the accredited investor for the
aggregate purchase price of $500,000. Each preferred share is convertible to 40
shares of the Company's common stock of at a per common share conversion price
of $0.25, representing 2,000,000 shares of common stock underlying the
preferred. The issued warrants entitle the holder to purchase 33.33 shares of
common stock for each share of Series J Convertible Preferred stock issued at an
exercise price of $0.30 per common stock share, representing 1,666,667 shares of
common stock underlying the warrants. The warrants are exercisable for a
five-year period. The February 21, 2003 closing market trading price was $0.23
per share. This private offering was made to one accredited investor, pursuant
to Rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933.
On May 29, 2003, the Company issued 50,000 shares of non-voting Series
J 8% Convertible Preferred stock, having a stated value of $10.00 per Preferred
J share, and common stock warrants to Mid-Am Capital, L.L.C. for the aggregate
purchase price of $500,000. Each preferred share is convertible to 50 shares of
the Company's common stock at a per common share conversion price of $0.20,
representing 2,500,000 shares of common stock underlying the preferred. The
8
issued warrants entitle the holder to purchase 40 shares of common stock for
each share of Series J Convertible Preferred stock issued at an exercise price
of $0.25 per common stock share, representing 2,000,000 shares of common stock
underlying the warrants. The warrants are exercisable for a five-year period.
The May 22, 2003 closing market trading price was $0.12 per share. In addition,
the following adjustments were made to prior issued warrants for the purpose of
facilitating future fund raising by the Company arising out of the exercise of
the warrants by Holder. The purchase price, as defined in the Warrants No. 1 and
2, has been reduced to $0.25, subject to further adjustment as described in the
warrants. The warrant stock provided for in Warrant No. 1 has been increased by
1,500,000 shares. The warrant stock provided for in Warrant No. 2 has been
increased by 333,333 shares. The expiration date, as defined in the respective
warrants, remains as stated (see page 23 for explanation). The trading price
call option trigger set forth in Section 9 (b) of the warrants has been reduced
from $1.75 to $0.75 per share. This private offering was made to Mid-Am, an
accredited investor, pursuant to Rule 506 of Regulation D and Section 4(2) of
the Securities Act of 1933.
Convertible Note
On November 21, 2003, the Company entered into a Subscription Agreement
with Gamma Opportunity Capital Partners, LP for the sale of a convertible note
in the amount of $200,000 and warrants to purchase 5,000,000 shares of common
stock. The convertible note is convertible into shares of common stock of the
Company at the lesser of $.05 or 75% of the average of the three lowest closing
bid prices for the thirty trading days prior to but not including the conversion
date. During the 180 days following the issuance of the convertible note, the
conversion price shall not be less that $.03 per share if no event of default
exists. This 180 period shall be extended indefinitely if no event of default
exists, the closing trading price for any 15 consecutive trading period is $.20
or higher, the daily trading volume for the 15 days is at least 300,000 and the
registration statement registering the convertible note is effective. In
connection with this transaction, the Company issued a warrant to purchase
2,000,000 shares of common stock at $.05 per share.
Summary
Unless the Company's shareholders approve these transactions by
approval of this Proposal 2, the Company will be in default pursuant to the
terms of these agreements. Management of the Company believes that it is highly
likely that such default will require the Company to substantially curtail or
cease its operations, and may result in a total loss of your investment in the
Company. In addition, the Company may be liable for extensive damages in the
event that it is unable to issue shares to security holders seeking conversion
or exercise of their outstanding securities.
Approval of this proposal requires the affirmative vote of the majority of the
shares present in person or represented by proxy and entitled to vote at the
Special Meeting.
RECOMMENDATION OF THE BOARD
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE FINANCING TRANSACTIONS
REQUIRING POTENTIAL STOCK ISSUANCES IN EXCESS OF CURRENTLY AUTHORIZED CAPITAL
STOCK.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of our common stock as of January 16, 2004
o by each person who is known by us to beneficially own more than
5% of our common stock;
o by each of our officers and directors; and
o by all of our officers and directors as a group.
9
------------------------------- ---------------------------- ---------------------------- ----------------------------
Title of Class Name and Address of Amount and Nature of Percent of Class (5)
Beneficial Owner Beneficial Ownership (4)
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Amro International, SA 2,761,989(1) 9.99%
Grossmuenster Platz 26
P.O. Box 4401 Zurich,
Switzerland CH 8022
Austinvest Anstalt
Balzers Landstrasse 938 9494
Furstentums Balzers,
Liechtenstein Esquire Trade
& Finance Inc.
Trident Chambers
P.O. Box 146
Road Town, Tortola, B.V.I.
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common The Keshet Fund LP 2,761,989 (2) 9.99%
Keshet L.P.
Nesher Ltd
Talbiya B. Investments Ltd.
Ragnall House, 18 Peel Road
Douglas, Isle of Man
1M1 4L2, United Kingdom
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Mid-Am Capital, L.L.C. 2,761,989 (3) 9.99%
Northpointe Tower
10220 North Ambassador
Drive
Kansas City, MO 64190
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Dale Reese 3,305,985 11.95%
125 Kingston Road
Media, PA
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Explorer Fund Management, 2,761,989 (3) 9.99%
LLC
444 N. Michigan Ave.
Chicago, IL 60611
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Mr. Larry Frisman 2,702,500 9.77%
7533 Isle Verde Way
Delray Beach, FL 33446
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Paul Downes Tamarind 108,000 0.39%
Management Ltd.
20579 S. Charlestown
Boca Raton, FL 33434
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Roy G. Warren 575,482 2.00%
1128 Country Club Road
N. Palm Beach, FL 33408
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Robert Cummings 480,000 1.73%
2829 N.E. 44th Street
Lighthouse Point, FL 33064
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common John McCormack 737,500 2.60%
8750 South Grant
Burridge, IL 60521
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Mr. Arthur W. Blanding 127,889 046%
Janesville, WI 53545
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Phillip Pearce 181,000 0.65%
6624 Glenleaf Court
Charlotte, NC 28270
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Stanley Hirschman 294,670 1.06%
2600 Rutgers Court
Plano, Texas 75093
10
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Michael Edwards 805,143 2.90%
4140 S.E. Old St. Lucie
Blvd.
Stuart. FL
Vice President
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Tommy Kee 5,000 0.02%
Chief Financial Officer
129 Eagleton Court
Palm Beach Gardens, FL
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Roy D. Toulan, Jr. 212,000 0.76%
VP, General Counsel
6 Wheelers Pt. Rd
Gloucester, MA
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Common Executive officers and 3,526,684 12.75%
directors as a group
------------------------------- ---------------------------- ---------------------------- ----------------------------
(1) Amro International, S.A., Austinvest Anstalt Balzers and Esquire Trade &
Finance Inc. share a common investment representative, attorney and subscription
agreements for the Series D and Series F convertible preferred stock and are
treated as a group for beneficial ownership purposes. This group is
contractually limited to a beneficial ownership of the Company's equity not to
exceed 9.99%.
(2) The Keshet Fund L.P., Keshet L.P., Nesher Ltd. and Talbiya B. Investments
Ltd share a common investment representative, attorney and subscription
agreements for the Series G convertible preferred stock and are treated as a
group for beneficial ownership purposes. This group is contractually limited to
a beneficial ownership of the Company's equity not to exceed 9.99%.
(3) This owner is contractually limited to a beneficial ownership of the
Company's equity not to exceed 9.99%.
(4) Beneficial Ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of common stock subject to options or
warrants currently exercisable or convertible, or exercisable or convertible
within 60 days of January 5, 2004 are deemed outstanding for computing the
percentage of the person holding such option or warrant but are not deemed
outstanding for computing the percentage of any other person.
11
(5) Percentage based on 27,647,542 shares of common stock outstanding with
respect to the common stock
OTHER BUSINESS
The Board of Directors is not aware of any other business that will
come before the Meeting, but if any such matters are properly presented, the
proxies solicited hereby will be voted in accordance with the best judgment of
the persons holding the proxies. All shares represented by duly executed proxies
will be voted at the Meeting.
AVAILABILITY OF CERTAIN DOCUMENTS REFERRED TO HEREIN
This proxy statement refers to certain documents of the company that
are not presented herein or delivered herewith. Such documents are available to
any person, including any beneficial owner, to whom this proxy statement is
delivered, upon oral or written request, without charge, directed to Roy C.
Warren, CEO, Bravo! Foods International Corp., 11300 US Highway 1, North Palm
Beach, Florida 33408, (561) 625-1411. In order to ensure timely delivery of the
documents, such requests should be made by February 3, 2004.
It is important that the proxies be returned promptly and that your shares be
represented. Stockholders are urged to mark, date, execute and promptly return
the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
Stanley A. Hirschman, Chairman
North Palm Beach, Florida
January 30, 2004
12
PROXY
BRAVO! FOODS INTERNATIONAL CORP.
PROXY FOR SPECIAL MEETING TO BE HELD ON February 12, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Roy G. Warren, the CEO, as proxy, with the power
to appoint his substitute, to represent and to vote all the shares of common
stock of Bravo Foods International Corp. (the "Company"), which the undersigned
would be entitled to vote, at the Company's Special Meeting of Stockholders to
be held on February 12, 2004 and at any adjournments thereof, subject to the
directions indicated on the reverse side hereof.
In their discretion, the proxy is authorized to vote upon any other matter that
may properly come before the meeting or any adjournments thereof.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE, BUT IF NO
CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR THE PROPOSALS LISTED ON THE
REVERSE SIDE.
IMPORTANT--This Proxy must be signed and dated on the reverse side.
13
THIS IS YOUR PROXY
YOUR VOTE IS IMPORTANT!
Dear Stockholder:
We cordially invite you to attend the Special Meeting of Stockholders of Bravo!
Foods International Corp. to be held at The Waterford Hotel & Conference Center,
11360 US Highway No.1, North Palm Beach, Florida 33408, on Friday, February 12,
2004 at 10:00 a.m. (local time).
Please read the proxy statement, which describes the proposals and presents
other important information, and complete, sign and return your proxy promptly
in the enclosed envelope.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2
FOR AGAINST ABSTAIN
1. Proposal to approve an amendment to [_] [_] [_]
the Articles of Incorporation to increase
the number of authorized shares of
common stock
2. Proposal to ratifying financing transactions [_] [_] [_]
requiring potential stock issuances in excess of currently
authorized capital stock
If you plan to attend the Special Meeting please mark this box [_]
Dated:________________, 2004
Signature ____________________________________________________________________
Name (printed) _______________________________________________________________
Title ________________________________________________________________________
Important: Please sign exactly as name appears on this proxy. When signing as
attorney, executor, trustee, guardian, corporate officer, etc., please indicate
full title.
FOLD AND DETACH HERE
14
EXHIBIT A
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
BRAVO! FOODS INTERNATIONAL CORP.
The undersigned, being the Chief Executive Officer of BRAVO! FOODS
INTERNATIONAL CORP., a corporation existing under the laws of the State of
Delaware, does hereby certify under the seal of the said corporation as follows:
1. The name of the Corporation (hereinafter referred to as the
"Corporation") is BRAVO! FOODS INTERNATIONAL CORP.
2. The certificate of incorporation of the Corporation is hereby
amended by replacing Article Fourth, in its entirety, with the following:
"FOURTH: (a) The Corporation is authorized to issue two
classes of stock. One class of stock shall be Common Stock, par value
$0.001. The second class of stock shall be Preferred Stock, par value
$0.001. The Preferred Stock, or any series thereof, shall have such
designations, preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions
thereof as shall be expressed in the resolution or resolutions
providing for the issue of such stock adopted by the board of directors
and may be made dependent upon facts ascertainable outside such
resolution or resolutions of the board of directors, provided that the
matter in which such facts shall operate upon such designations,
preferences, rights and qualifications; limitations or restrictions of
such class or series of stock is clearly and expressly set forth in the
resolution or resolutions providing for the issuance of such stock by
the board of directors.
The total number of shares of stock of each class which the Corporation
shall have authority to issue and the par value of each share of each
class of stock are as follows:
Class Par Value Authorized Shares
Common $0.001 300,000,000
Preferred $0.001 5,000,000
-----------------
Totals: 305,000,000"
4. The amendment of the certificate of incorporation herein certified
has been duly adopted by the unanimous written consent of the Corporation's
Board of Directors and stockholders holding a majority of the outstanding shares
of common stock of the Corporation in accordance with the provisions of Sections
141(f), 228 and 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
hereunto affixed and this Certificate of Amendment of the Corporation's
Certificate of Incorporation, as amended, to be signed by Roy G. Warren, its
CEO, this ___ day of ________, 2004.
BRAVO! FOODS INTERNATIONAL CORP.
By:_______________________________
Roy G. Warren, CEO