UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C
(RULE 14c-101)
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ] Preliminary information statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
[X] Definitive information statement
GLOBAL BEVERAGE SOLUTIONS, INC.
-------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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GLOBAL BEVERAGE SOLUTIONS, INC.
2 SOUTH UNIVERSITY DRIVE, SUITE 220
PLANTATION, FLORIDA 33324
INFORMATION STATEMENT
OCTOBER 2, 2007
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
This information statement is being provided on behalf of the board of directors
(the "Board") of Global Beverage Solutions, Inc. (the "Company") to record
holders of shares of our common stock ("Shareholders") as of the close of
business on the record date of July 13, 2007. This information statement
provides notice that the Board has recommended, and holders of a majority of the
voting power of our outstanding common stock have voted, to approve the
following items:
PROPOSAL 1: Authorization to the Board to withdraw the Company's
election to be treated as a business development company ("BDC") under
the Investment Company Act of 1940, as amended (the "1940 Act").
This information statement describes, in more detail, the action being taken and
the circumstances surrounding the Board's recommendation of the actions. The
action will become effective as of the filing of the Form N-54C by the Company
with the Securities and Exchange Commission (the "SEC").
The Company will bear the expenses relating to this information statement,
including expenses in connection with preparing and mailing this information
statement and all documents that now accompany or may in the future supplement
it.
Only one information statement is being delivered to multiple shareholders
sharing an address, unless the Company has received contrary instructions from
one or more of the shareholders. The Company will undertake to deliver promptly
upon written or oral request a separate copy of the information statement to a
shareholder at a shared address to which a single copy of the information
statement was delivered. You may make a written or oral request by sending a
written notification to the Company's principal executive offices stating your
name, your shared address and the address to which the Company should direct the
additional copy of the information statement or by calling the Company's
principal executive offices. If multiple shareholders sharing an address have
received one copy of this information statement and would prefer the Company
mail each shareholder a separate copy of future mailings, you may send
notification to or call the Company's principal executive offices. Additionally,
if current shareholders with a shared address received multiple copies of this
information statement and would prefer us to mail one copy of future mailings to
shareholders at the shared address, notification of that request may also be
made by mail or telephone call to the Company's principal executive offices.
The information statement is being provided to you for informational purposes
only. Your vote is not required to approve the action described above. This
information statement does not relate to an annual meeting or special meeting in
lieu of an annual meeting. You are not being asked to send a proxy and you are
requested not to send one. The approximate mailing date of this information
statement is October 9, 2007.
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We appreciate your continued interest in Global Beverage Solutions, Inc.
Very truly yours,
/s/ Jerry Pearring
- ----------------------------------------------------
Jerry Pearring President and Chief Executive Officer
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INFORMATION STATEMENT
GLOBAL BEVERAGE SOLUTIONS, INC.
2 SOUTH UNIVERSITY DRIVE, SUITE 220
PLANTATION, FLORIDA 33324
BOARD DETERMINATION
The Board of the Company determined that it was in the best interest of the
Company and its shareholders to withdraw its election to be regulated as a
business development company ("BDC") under the Investment Company Act of 1940,
as amended (the "1940 Act"). The holders of a majority of the voting power of
the Company's outstanding common stock have voted to approve the recommendation
of the Board. This information statement is being provided to shareholders to
inform them of the circumstances surrounding and the reasons for the actions
being taken.
PROPOSAL
On June 19, 2003, the Company filed a notification of election to be regulated
as a BDC under the 1940 Act on Form N-54A. The Company elected BDC status
intending to provide equity and debt investment capital to fund growth,
acquisitions and recapitalizations of small market companies primarily located
in the United States.
At the time it became a BDC, the Company determined that it was necessary to
raise additional capital to carry out the Company's business plan. Accordingly,
from the time the Company became a BDC to the present, the Company has conducted
several offerings of shares of its common stock pursuant to Regulation E under
the Securities Act of 1933, as amended (the "Securities Act"), and filed several
offering circulars and related notifications on Form 1-E with the Securities and
Exchange Commission (the "SEC"). Recently, the staff of the SEC (the "SEC
Staff") reviewed the Company's offering circular and related notification on
Form 1-E and issued a comment letter. As a result, the Company understands that
it may have been out of compliance with certain of the rules and regulations
under the 1940 Act relating to BDCs. The SEC Staff also informed the Company
that several of its Form 1-E filings failed to include all of the information
required to be communicated to potential investors, including all of the
financial statements required by Form 1-E, and that the Company failed to file
reports on Form 2-E following each Regulation E offering it conducted setting
forth therein information regarding the number of shares of common stock it sold
in each such offering and other related information. Subsequently, the Company
filed a report on Form 2-E pertaining to its most recent Regulation E offering.
However, given the Company's limited resources, the time and expense involved in
the preparation and filing of reports on Form 2-E and the Company's intention to
withdraw its election to be treated as a BDC under the 1940 Act, the Company
does not currently intend to file any other Form 2-Es with the SEC.
Furthermore, the Company is not in compliance with the following additional
provisions of the 1940 Act:
o RULE 38a-1 UNDER THE 1940 ACT - which requires the Company to adopt and
implement written policies and procedures reasonably designed to
violation of the federal securities laws by the Company and the of a
chief compliance officer to be responsible for administration of
policies and procedures.
o SECTION 23(a) OF THE 1940 ACT - which prohibits the Company from
issuing any of its securities for services or for property other than
cash. In regard, the Company issued shares of its common stock in
connection the settlement of legal claims against the Company.
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o SECTION 61 OF THE 1940 ACT - which requires the Company to shareholder
approval prior to the issuance of securities convertible shares of its
common stock. In this regard, the Company issued convertible promissory
notes without obtaining the shareholder required by Section 61 of the
1940 Act.
Moreover, given that the Company has not undertaken a detailed examination of
its compliance with the 1940 Act, it is possible that the Company may not be in
compliance with other provisions of the 1940 Act.
The Board of Directors, including the Directors who are not interested persons
of the Company, reviewed the facts surrounding these compliance failures and
their implications for the Company. Accordingly, after careful consideration of
the 1940 Act requirements applicable to BDCs, an evaluation of the Company's
ability to operate as a going concern in an investment company regulatory
environment, the costs associated with complying with the 1940 Act, the
Company's past difficulty in complying with the 1940 Act and a thorough
assessment of potential alternative business models, the Board has determined
that continuation as a BDC is not in the best interest of the Company and its
shareholders at the present time. A majority of the voting power of the
Company's outstanding common stock has voted to approve the recommendation of
the Board, that the Company file a Form N-54C and withdraw its election to be
registered as a BDC. The Board will file a Form N-54C to effect the withdrawal
at such time as the Board determines that it is in the best interest of the
Company and its shareholders to do so. As of the date hereof, the Board believes
that the Company meets the requirements for filing the notification to withdraw
its election to be regulated as a BDC.
Subsequent to the filing of the Form N-54C with the SEC, the Company intends to
pursue a business model whereby it would acquire majority ownership stakes in
beverage-related companies (the "New Business Model"). In this regard, the
Company would remain active in the imported bottled water category and
alternative or "New Age" beverage category (such as mildly flavored water, fruit
drinks, sports and energy drinks, soy-based beverages and other non-conventional
beverages) through its two wholly owned entities: Aqua Maestro, Inc. and
Beverage Network of Maryland, Inc.
Under the New Business Model, the Company will at all times conduct its
activities in such a way that it will not be deemed an "investment company"
subject to regulation under the 1940 Act. Thus, it will not hold itself out as
being engaged primarily in the business of investing, reinvesting or trading in
securities. In addition, the Company will conduct its business in such a manner
as to ensure that it will at no time own or propose to acquire investment
securities having a value exceeding 40 percent of the Company's total assets at
any one time.
Aqua Maestro, Inc. is based in Boca Raton, Florida and imports and sells bottled
water through company-owned distribution to retailers and consumers in South
Florida, direct sales to retailers outside of South Florida, direct sales to
consumers generated through its website at aquamaestro.com and sales to third
party distributors.
Beverage Network of Maryland, Inc. is a New Age distributor based in Jessup,
Maryland and distributes brands such as Welch's and Fiji water to retailers in
Washington DC, Northern Virginia, and the entire state of Maryland.
The Company's strategy would be to grow the third party branded revenue base in
each of these entities while developing and/or acquiring bottled water or New
Age beverage brands. Thus, through these entities, the Company will sell its own
proprietary brands as well as third party brands.
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The Company intends to initially fund the New Business Model through debt and
equity financing and, to a lesser extent, cash flow from Aqua Maestro, Inc. and
Beverage Network of Maryland, Inc.'s operations. However, there can be no
assurance that the Company will have sufficient funds to successfully execute
its proposed business operations under the New Business Model.
It is anticipated that the Company's current executive officer and directors
will continue in such capacities following the Company's filing of the Form
N-54C with the SEC.
To the extent that the Company violated certain rules and regulations under the
1940 Act or the Securities Act, such violations may cause the Company to incur
certain liabilities. Importantly, the filing of a Form N-54C in order to
withdraw the Company's election to be regulated as a BDC does not absolve the
Company from liability with respect to any such violations. Such liabilities
cannot be estimated by management as of this time. However, such liabilities, if
incurred, could have a significant impact on the Company's ability to continue
as a going concern.
RISKS ASSOCIATED WITH THE WITHDRAWAL OF ELECTION
TO BE REGULATED AS A BDC
When the Company ceases to be a BDC, the shareholders will lose certain
protections, including the following:
[X] The Company will no longer be subject to the requirement that it
maintain a ratio of assets to senior securities of at least 200%;
[X] The Company will no longer be prohibited from protecting director or
officer against any liability to the Company or Company's shareholders
arising from willful malfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved the conduct of that person's
office;
[X] The Company will no longer be required to provide and maintain bond
issued by a reputable fidelity insurance company to protect against
larceny and embezzlement;
[X] The Company will no longer be required to ensure that a majority the
directors are persons who are not "interested persons," as term is
defined in Section 2(a)(19) of the 1940 Act, and persons that would be
prevented from acting in the capacity employee, officer or director of
the Company if it were a BDC (as persons convicted of certain
malfeasance) will be able to on the Company's board;
[X] The Company will no longer be subject to provisions of the 1940
regulating transactions between BDCs and certain affiliates restricting
the Company's ability to issue warrants and options;
[X] The Company will no longer be prohibited from issuing its for services;
[X] The Company will be able to change the nature of its without having to
obtain the approval of its shareholders;
[X] The Company will no longer be subject to provisions of the 1940
prohibiting the issuance of securities at below net asset value book
value; and
[X] The Company will no longer be required to disclose its net value per
share on the face of its financial statements.
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[X] The Company will no longer be subject to the other provisions
protections set forth in Sections 55 through 64 of the 1940 Act and the
rules and regulations promulgated thereunder.
However, the Board will still be subject to customary principles of fiduciary
duty under the Nevada General Corporation Law with respect to the Company and
its shareholders.
In addition, withdrawal of the Company's election to be treated as a BDC will
not affect the Company's registration under Section 12(g) of the Securities
Exchange Act of 1934 (the "Exchange Act"). Under the Exchange Act, the Company
is required to file periodic reports on Form 10-K, Form 10-Q, Form 8-K, proxy
statements and other reports required under the Exchange Act.
EFFECT ON THE FINANCIAL STATEMENTS AND TAX STATUS
The withdrawal of the Company's election to be regulated as a BDC will result in
a change in its method of accounting. BDC financial statement presentation and
accounting uses the value method of accounting used by investment companies,
which allows BDCs to value their investments at value as opposed to historical
cost. In addition, entities in which the Company owns majority ownership stakes
in are not consolidated; rather, investments in those entities are reflected on
the balance sheet as an investment in a majority-owned portfolio company at
value. In this regard, the Company's only significant investments at June 30,
2007 were in two majority-owned entities: Aqua Maestro, Inc. and Beverage
Network of Maryland, Inc. At June 30, 2007, the value of such investments
recorded in the Company's financials statements were approximately $14.9
million.
Operating companies use either the fair-value or historical-cost methods of
accounting for financial statement presentation and accounting for securities
held, depending on how the investment is classified and how long the company
intends to hold the investment. In addition, operating companies consolidate the
accounts of majority-owned entities. Since the Company's only significant
investments at June 30, 2007 were in majority-owned entities, any previously
recorded unrealized gain on investments will no longer be reflected in the
Company's financial statements. At June 30, 2007 the Company did not have any
unrealized appreciation recorded in any such investments.
Subsequent to the withdrawal of the Company's election to be regulated as a BDC,
the value of the Company's investments in its two majority-owned entities would
be eliminated and such entities' financial accounts would be consolidated with
those of the Company.
The Company does not believe that withdrawing its election to be regulated as a
BDC will have any impact on its federal income tax status, because the Company
never elected to be treated as a regulated investment company under Subchapter M
of the Internal Revenue Code. Instead, the Company has always been subject to
corporate level federal income tax on its income (without regard to any
distributions it makes to its shareholders) as a "regular" corporation under
Subchapter C of the Internal Revenue Code.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Except in their capacity as shareholders (which interest does not differ to that
of other shareholders), none of the Company's officers, directors, or any of
their respective affiliates has any interest in the withdrawal of the Company's
election to be regulated as a BDC.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Although shareholders are not being asked to approve or disapprove or otherwise
vote on any matter discussed in this information statement, the following
generally describes voting rights of shareholders.
As of the record date, July 13, 2007, there are 150,267,501 shares of common
stock outstanding. Each share represents one vote. There are currently no
arrangements known to the Company, the operation of which may result in a change
in control of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table indicates all persons who, as of July 13, 2007, the record
date, are known by us to own beneficially more than 5% of any class of our
outstanding voting securities. As of July 13, 2007, there were 150,267,501
shares of our common stock outstanding. Except as otherwise indicated below, to
the best of our knowledge, each person named in the table has sole voting and
investment power with respect to the securities beneficially owned by them as
set forth opposite their name.
TITLE OF BENEFICIAL NAME AND ADDRESS AMOUNT AND NATURE OF
OWNERSHIP OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP % OF CLASS
- ----------------------- ------------------------------------------------ -------------------------- ------------------
Common Gene Donney 9,225,000 6.14%
4040 Sanctuary Lane
Boca Raton, FL 33431
Common XStream Beverage Network, Inc. 60,500,000 40.26%
2 South University Drive, Suite 220
Plantation, FL 33324
SECURITY OWNERSHIP OF MANAGEMENT
The following table indicates the beneficial ownership of our voting securities
of all Directors of the Company and all Executive Officers who are not Directors
of the Company, and all officers and directors as a group, as of July 13, 2007,
the record date. As of July 13, 2007, there were 150,267,501 shares of our
common stock outstanding.
NAME AND ADDRESS AMOUNT AND NATURE OF
TITLE OF CLASS OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP % OF CLASS
- ----------------------- --------------------------------------------- ----------------------------- ------------------
Common Jerry Pearring (a)(b) -- --
Chief Executive Officer, President and
Director
Boca Raton, FL 33431
Common Ross Silvey, Director (c) -- --
Common Terry Turner, Director (c) -- --
Common All officers and directors as a group (3 -- --
persons)
- --------------------------------------------------
(a) Mr. Pearring owns 2,100,000 shares of XStream (approximately 3%).
Accordingly, in the event of a distribution of the Global stock owned
by XStream to its shareholders, Mr. Pearring would own approximately
1,815,000 shares of Global or approximately 1.4%.
(b) An "interested person" of the Company, as such term is defined in
Section 2(a)(19) of the 1940 Act.
(c) Not an "interested person" of the Company, as such term is defined in
Section 2(a)(19) of the 1940 Act.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- -------------------------------------------------------
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, the Company's
directors and executive officers, and any persons holding 10% or more of its
common stock, are required to report their beneficial ownership and any changes
therein to the SEC and the Company. Specific due dates for those reports have
been established, and the Company has been requested by the SEC to report herein
any failure to file such reports by those due dates. Based on the Company's
review of such reports, the Company believes Jerry Pearring, its Chief Executive
Officer and President and a member of its Board of Directors, Ross Silvey, a
member of its Board of Directors, Terry Turner, a member of its Board of
Directors, and XStream Beverage Network, Inc., a holder of more than 10% of the
Company's outstanding shares of common stock, all failed to timely file Form 3
and/or Form 4, as appropriate, with the SEC. In September 2007, Messrs.
Pearring, Silvey and Turner filed their required Section 16(a) forms with the
SEC and have now filed all reports required to be filed with the SEC pursuant to
Section 16(a) of the Securities Exchange Act of 1934.
SHAREHOLDER PROPOSALS
As a general matter, the Company does not hold annual meetings of shareholders,
and, therefore, the anticipated date of a meeting of shareholders cannot be
provided. Any shareholder proposal that properly may be included in proxy
solicitation materials for a meeting of shareholders must be received by the
Company a reasonable time prior to the date voting instructions or proxy
materials are mailed to shareholders.
MORE INFORMATION
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM
10-K AND ITS MOST RECENT QUARTERLY REPORT ON FORM 10-Q TO A SHAREHOLDER, UPON
REQUEST TO JERRY PEARRING, 2 SOUTH UNIVERSITY DRIVE, SUITE 220, PLANTATION, FL
33324 OR BY CALLING 954-473-0850, BY FIRST CLASS MAIL, WITHIN THREE BUSINESS
DAYS OF RECEIPT OF THE REQUEST.
INQUIRIES
Shareholders may make inquiries by contacting Jerry Pearring at 954-473-0850.
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