CorpHQ Inc. has enhanced its existing relationship with National Beverage Bottling Inc. of Corona, CA by agreeing to provide up to US$500,000 in convertible debt financing to fund expansion.

The companies have previously participated in a joint venture to distribute the "Shake-It" lines of self-heating/cooling beverages owned by another CorpHQ partner, Pressto Food & Beverage Inc. of New York City. Initial distribution of this product is targeted for the third quarter of 2004, according to Pressto.

National Beverage was formed to acquire the assets of Palomar Water Company, which includes a state-of-the-art 150,000 square foot water bottling facility in Southern California with a capacity of approximately 1 m bottles per day. According to a National Beverage spokesman, the company now has approximately US$25 m in supply contracts, and believes it has the ability to grow contracts to over US$100 m this year, with increased capitalisation.

Management of both companies confirmed that a formal arrangement concerning a long-term relationship will be finalised within the next 30 days. CorpHQ's corporate finance team will begin initial operations at National Beverage next week.

In a statement, Steve Crane, CEO of CorpHQ, said: "This is an exciting time for our company and its shareholders. National has the potential to be among the fastest growing and most profitable businesses in its segment in the US. This capital will be allocated directly into revenue generating assets, including new factory equipment and expansion of credit lines.

"Because Steve Rice and his team at National have a long history of exceptional performance in this business, we see our role in this portfolio company as one of accelerator, rather than incubator. Our goal over the next six months is to assist management in dramatically ramping up revenue and accelerating market penetration. We will also begin to position National for the public capital markets in the coming months," added Crane.

Steve Rice, president of National Beverage said: "Our relationship with CorpHQ and Steve Crane goes back to the mid 90's. Their exemplary performance and integrity is the reason why we have welcomed them into our company. We are extremely proud to have such a high quality financial partner and we know this relationship will bring substantial value to our shareholders."