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
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ITRONICS INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check Appropriate Box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies.
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(2) Aggregate number of securities to which transaction applies.
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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( ) 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 number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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Telephone (702) 689-7696
Fax (702) 689-7691
http://www.itronics.com
ITRONICS INC. Email: itronics@intercomm.com
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6490 S. McCarran Blvd.
Bldg. C, Suite 23
P.O. Box 10725
Reno, Nevada 89510
Dear Shareholder:
Enclosed is Itronics' 1997 Annual Report on Form 10-KSB. Also
enclosed is the Proxy Statement and Form inviting you to the Annual Meeting
to be held on November 19, 1998 at 10:00 A.M. Pacific Time at the Atlantis
Hotel in Reno, Nevada. It is our hope that you will attend the meeting and
vote your proxy on the re-election of the Company's Directors.
I believe that our Company continues to make significant progress in
its development and has a bright future ahead. Some of the milestones
achieved over the last year include the following:
- During the first quarter of 1998 the Company's wholly-owned
subsidiary, Itronics Metallurgical, Inc. (IMI) completed development
of 11 new fertilizer products, bringing the total to 15 commercial
fertilizer products.
- IMI established a photobyproduct sales and service department
in November 1997 and a fertilizer sales department in April 1998 with
the hiring of two experienced salesmen.
- In February 1998 IMI entered into a lease, with option to
purchase, a 35,000 square foot manufacturing facility on 3 acres of
land in Reno-Stead, Nevada. The purchase option price is $1 million
payable with a $300,000 down payment. The owner has the alternative
to carry the $700,000 balance over 25 years at commercial rates with
a 5 year balloon or to accept payment in full by taking 2.6 million
shares of Itronics restricted common stock.
- In March 1998 the Reno Planning Commission approved the
Special Use Permit for the Stead Manufacturing Facility.
- In March 1998 IMI signed a definitive manufacturing and
distribution agreement with Western Farm Services, Inc., (WFS).
The agreement grants WFS the exclusive license and right to
manufacture and market the Gold'n Gro line of fertilizer products
in the states of Arizona, California, Hawaii, Idaho, Oregon and
Washington.
- In April 1998 IMI entered into an exclusive sales agreement
with Calfran International of Springfield, Massachusetts. The
contract grants IMI the exclusive right to sell Calfran's "Cold
Vaporization" Vacuum Distillation equipment to IMI's photowaste
customers in the United States, Canada and Mexico. This machine
removes 90% of the water from the used photochemicals leaving a 10%
residual that can be economically shipped over long distances and
that is suitable for use in fertilizer after processing in the IMI
plant.
- At September 30, 1998 a total of five Gold'n Gro fertilizer
products were being sold under the WFS agreement and there were more
than 60 customers either trying out or using the product on an
ongoing basis. Sales emphasis has been on introducing the Gold'n
Gro products into the golf course market. In September efforts were
inititated to expand the product introduction to certain specialty
grower markets.
- In April 1998 Itronics began working on a private placement
to raise $2 million in four tranches of $500,000 each.
Shareholder
Page 2
October 29, 1998
- In mid September Itronics announced that it had received a
funding commitment from the Sierra Angels, a venture capital group
based in Incline Village, Nevada. This commitment was sufficient to
ensure that IMI would be able to make the move into the Stead
manufacturing facility. The Sierra Angels are the first professional
investing group to make an investment in Itronics.
- At October 27, 1998 more than $725,000 had been raised in the
first two tranches of the private placement. Management believes it
will obtain a minimum of $900,000 under these two tranches before
closing them.
- An updated memorandum will be issued in December for purposes
of obtaining a minimum of an additional $1 million in new equity in
tranches three and four of the 1998 Private Placement.
- In mid-May Region VI of the Federal EPA officially recognized
Itronics and its "Beneficial Use Recycling Program" at a conference
in San Diego, California. This was the first public recognition for
Itronics from an agency of the federal government.
- In mid-June, I presented Itronics to the leadership of the
International Precious Metals Institute's annual meeting in Toronto.
Afterwards they asked for permission to publish the talk in their
annual proceedings. Since then we have been receiving requests for
information on our process and business plans from all over the world.
- In mid-October IMI was given recognition by Nevada's Governo
Miller at the 15th Annual Governor's Appreciation Luncheon in Sparks,
Nevada. This is the first recognition Itronics has received
officially from the State of Nevada.
- In late October a contractor was chosen to place the new
floor in the Stead facility and work on obtaining the building permit
was nearly complete on October 24. Now that financing has been
obtained, it looks like IMI will be moving into the new facility in
mid-December and that installing the equipment and initiating
operations will be completed in January 1999. Minimal disruption of
on-going operations is expected from the move.
- At September 30 a total of 3.9 million shares had traded,
down considerably from 7 million at the same time in 1997, and
average daily trading volume was 22,000 shares.
- Share prices had stayed nearly flat until mid-June at which
time they started to trend down. A bottom was reached in early
September and prices have since been stable in the $0.20 - $0.24 per
share range.
- On October 26, 1998 Donner Corp. International issued a
speculative buy recommendation on Itronics Inc. This is the first
buy recommendation issued by a NASD broker/dealer for Itronics.
As we look to the future, our focus is on completing the move into
the new facility, completing the $2 million private placement financing that
was started in April, and expanding sales.
Shareholder
Page 3
October 29, 1998
In my 1997 letter to shareholders I pointed out that we had
completely outgrown our existing facility and that further meaningful
increases in sales would not be possible until we obtained and moved into a
new manufacturing facility. Because of the capacity limitations in the
existing plant, it was necessary to reduce the scope of the Gold'n Gro
product introduction effort with WFS in 1998 and it has not been possible to
significantly improve 1998 sales over 1997.
Once the move is complete we will be able to rapidly expand sales of
both photobyproduct services and Gold'n Gro fertilizer products. A backlog
of new customers has been lined up for the photowaste services and the market
development effort underway with WFS will be expanded to include Oregon,
Washington and Idaho during the first quarter of 1999.
During the past year the regulatory climate continued to tighten for
the photographic industry. Clean water is now becoming a major national and
international issue. It is clear that pressure will continue to build to
prevent pollution of natural waters by disposal of chemicals into them. In
the photographic sector, digital technologies continue to develop but it is
apparent that conventional film based photography is continuing to grow. One
of the driving forces for this continued growth is the cost of conventional
photography versus the cost of digital. Conventional photography is much
less expensive while providing high quality. For that reason it is expected
to be the choice of consumers well into the next century.
The silver market was stronger in 1998 and this strengthening is
expected to continue due to the growing imbalance between mine supply and
demand that is being filled by drawdown of existing surface inventories.
Itronics' silver output and silver sales increased significantly in 1998.
This rapid growth in silver output is expected to continue. Once in the new
facility it will be possible to expand the scope of the silver refining
operations and to start larger scale test work on processing of mine
generated materials.
The market for mining consulting services continued to be soft during
the year with several projects bid, but only one new project funded.
Management believes that in 1999 it will be possible to increase the focus
on mining technical services and improve the sales picture for that segment.
Overall, we believe that during the past 12 months the scope of
applications for Itronics' Gold'n Gro fertilizer products has been expanded
and better defined. The market potential now seems to be larger than ever.
Because of this, we anticipate significant growth over an extended period of
time.
Achievement of the milestones outlined in this letter is due to the
dedication and loyalty of our stockholders and employees. I want to thank
each and every one of you for your past and continuing support. Together, I
believe we can continue to achieve great success!!
Sincerely,
DR. JOHN W. WHITNEY
___________________
Dr. John W. Whitney
President
October 29, 1998.
IMPORTANT NOTE:
ITRONICS INC. IS NOT CURRENTLY SUBJECT TO THE PROXY
SOLICITATION RULES OF THE SECURITIES AND EXCHANGE
COMMISSION. ACCORDINGLY, WHILE THIS PROXY STATEMENT
GENERALLY FOLLOWS THE RULES AND REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION, THIS PROXY STATE-
MENT DOES NOT NECESSARILY PROVIDE THE SAME INFORMATION
REQUIRED TO BE DISCLOSED UNDER THE PROXY SOLICITATION
RULES AND REGULATIONS. IN ADDITION THIS PROXY STATEMENT
HAS NOT BEEN REVIEWED BY THE SECURITIES AND EXCHANGE
COMMISSION WHICH MAY HAVE BEEN REQUIRED IF ITRONICS INC.
WAS SUBJECT TO THE PROXY SOLICITATION RULES.
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ITRONICS INC.
6490 So. McCarran Blvd., Bldg. C-23
Reno, Nevada 89509
(702) 689-7696
___________________________________________________________________
PROXY STATEMENT
Annual Meeting of Shareholders
November 19, 1997
___________________________________1998
_______________________________
INFORMATION RELATING TO VOTING AT THE ANNUAL MEETING
----------------------------------------------------
This proxy statement is being furnished to shareholders of Itronics
Inc. (the Company), in connection with the solicitation of proxies by the
Company's Board of Directors for use at the Annual Meeting to be held at the
Airport PlazaAtlantis Hotel, Reno, Nevada on November 19, 19971998 at 10:00 A.M. Pacific time,
and at any adjournment or adjournments thereof. The approximate date of
mailing of this proxy statement and the accompanying form of proxy is November
4, 1997.October
30, 1998.
The Board of Directors of the Company has selected October 20, 19971998
as the record date for the determination of shareholders entitled to notice
of and to vote at the Annual Meeting. A total of 40,266,38752,282,216 shares of the
Company's common stock were of record at the close of business on that date.
Shareholders will be entitled to cast one vote for each share of the Company's
common stock held by them of record at the close of business on the record
date on any matter that may be presented at the Annual Meeting for
consideration and action by the shareholders. Shareholders do not have
cumulative voting rights with respect to the election of directors.
All valid proxies received in response to the solicitation will be
voted in accordance with the instructions indicated thereon by the
shareholders giving such proxies. If no contrary instructions are given,
each such proxy will be voted in favor of: (i)of the election of the director
nominees named in this proxy statement; and (ii) the proposal to amend the
articles of incorporation of the Company to increase the authorized shares of
common stock to 250,000,000.statement.
The Board of Directors does not know of any business to be presented
for action at the Annual Meeting other than that described herein. If any
other business is properly presented at the Annual Meeting and may be properly
voted upon, the proxies solicited hereby will be voted on such matters in
accordance with the best judgement of the proxy holders named therein.
1
Any shareholder has the power to revoke his proxy at any time before
it is voted at the Annual Meeting by giving written notice of such revocation
to the Secretary of the Company (which notice shall be given by the filing of
a duly executed proxy bearing a later date) or by attending the Annual Meeting
and voting in person. Proxies solicited by the Company's Board of Directors
hereby are for use solely at the Annual Meeting and any adjournment or
adjournments thereof.
The expenses of this proxy solicitation will be borne by the Company.
To the extent necessary, proxies may be solicited by personnel of the Company
in person, by telephone, or through other forms of communication. Personnel
of the Company who participate in the solicitation will not receive any
additional compensation for such solicitation. The Company will request
record holders of shares beneficially owned by others to forward this proxy
statement and related materials to the beneficial owners of such shares and
will reimburse such record holders for their reasonable expenses incurred in
doing so.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL
OF THE PROPOSALSPROPOSAL SET FORTH IN THIS PROXY STATEMENT.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Security Ownership of Certain Beneficial Owners
- -----------------------------------------------
The following table sets forth certain data with respect to those
persons known to the Company, as of October 20, 1997,1998, to be the beneficial
owners of more than 5% of the outstanding shares of common stock of the
Company.
Amount and Nature of Beneficial Ownership
------------------------------------------------------------------------------------------------
Common Shares
Name and Which May Be Percent
Address of Common Shares Acquired Within of
Beneficial Owner Presently Held 60 days(4) Total Class
- -------------------- ------------------------------- -------------- ---------------- ---------- -------------------
John W. Whitney
P.O. Box 10725
Reno, NV 89510 12,420,192(3) 1,475,000 13,895,192 33.2914,355,481(3) 200,000 14,555,481 27.73
(1)(2)
Richard J. Cavell
1013 No. Marshall Dr.
Camano Island, WA 4,577,876 540,473 5,118,349 12.544,894,377 250,000 5,144,377 9.79
(1) Director
(2) Officer
(3) Includes 75,13685,136 shares owned by or to be issued to John B.
Whitney, Dr. John W. Whitney's minor son, 71,632 shares owned
by Maureen E. Whitney, Dr. Whitney's wife, and 2,101,4241,630,140 shares
paid for but unissued as of October 20, 1997.1998.
(4) All options and warrants of Drs. Whitney andDr. Cavell are priced at $.10$0.10 per
share. 2
Dr. Whitney's warrants, issued in connection with the 1998
Private Placement under the same terms offered other investors,
are priced at $0.25 and $0.40 per share for the one and two year
periods, respectively, after September 30, 1998.
Security Ownership of Management
- --------------------------------
The following table sets forth as of October 20, 1997,1998, certain
information, with respect to director and executive officer ownership of
common stock in the Company:
2
Amount and Nature of Beneficial Ownership
------------------------------------------------------------------------------------------------
Common Shares Percent
Name and Which May Be of
Address of Common Shares Acquired Within Class
Beneficial Owner Presently Held 60 days(1) Total (2)
- ------------------------------------ -------------- --------------- ------------------------ ---------- ---------
Dr. John W. Whitney
P.O. Box 10725
Reno, NV 89510 12,420,192(5) 1,475,000 13,895,192 33.2914,355,481(5) 200,000 14,555,481 27.73
(3)(4)
Paul H. Durckel
1511 Main St.
Gardnerville, NV.
89410 138,500 50,000 188,500 .47198,500 - 198,500 .38
(3)
Richard W. Stumbo, Jr.
P.O. Box 10725
Reno, NV 89510 107,127 0 107,127 .27
(3) (4)
Alan C. Lewin
P.O. Box 10725
Reno, Nv 89510 107,500167,500 50,000 157,500 .39217,500 .42
(3)
All directors and
executive officers as a
group (7(6 persons) 14,782,102 1,825,000 16,607,102 39.4517,322,644 350,000 17,672,644 33.58
(1) All options, warrants and debt conversion rights listedIncluded in the above table are warrants for 50,000 shares at $.10$0.10
per share, with the exception ofan option for 100,000 shares
which are at the higher of $.10$0.10
per share or current high bid.bid, and a warrant for 200,000 shares
at $0.25 and $0.40 for the one and two year periods, respectively,
after September 30, 1998.
(2) The percent of class is based on the sum of 40,266,38752,282,216 shares
outstanding or to be issued as of October 20, 19971998 plus, for each
individual, the number of common shares as to which the named
individual has the right to acquire beneficial ownership within 60
days of October 20, 1997.1998.
(3) Director
(4) Officer
(5) Includes 75,13685,136 shares owned by or to be issued to John B. Whitney,
Dr. John W. Whitney's minor son, and 71,632 shares owned by Maureen
B. Whitney, Dr. Whitney's wife, and 2,101,4241,630,140 shares paid for but
unissued as of October 20, 1997.
3
1998.
Compliance With Section 16(a) of the 1934 Act
- ---------------------------------------------
The Company is not presently subject to the requirements of Section
16(a) of the Securities Act.
3
ELECTION OF DIRECTORS
Proposal 1
The Company's bylaws provide that the Board of Directors shall
consist of one to nine members. There are presently fourthree directors.
Each of the nominees listed below is currently a director of the
Company. Each nominee has consented to being named in this Proxy Statement
and has indicated his willingness to serve, if reelected. If any nominee
becomes unable to serve, however, the proxy solicited hereby will be voted
for the election of such other person or persons as the Board of Directors
shall elect.
The following table sets forth the names of and certain information
concerning the nominees to the Board of Directors.
Age
Name (As of 10/20/97)98) Position Position Held Since
- --------------- -------------------- ----------------- ------------ -------------------
Dr. John W. Whitney 5152 President/Treasurer May 1988
Director
Paul H. Durckel 80 Director September 1995
Richard W. Stumbo, Jr. 64 Vice President, Finance July 199781 Director September 1995
Alan C. Lewin 5152 Director September 1997
1) For directors, the term of office is until the next annual meeting of
shareholders.
Narrative Information Concerning the Director Nominees of the Company.Company
- -------------------------------------------------------------------------------------------------------------------------------------------
John W. Whitney:
---------------
In addition to being the President and a Director of the Company,
1988 to present, Dr. Whitney is the President and a Director of each of the
operating subsidiaries, Whitney & Whitney, Inc. and Itronics Metallurgical,
Inc. Dr. Whitney also serves as the General Manager of American Hydromet, a
joint venture.
Heventure controlled by the Company.
Dr. Whitney received his Ph.D. in Mineral Economics from Pennsylvania
State University in 1976, his M.S. in Mineralogy from the University of
Nebraska in 1971, and his B.S. in Geology from the University of Nebraska in
1970. Dr. Whitney has served as President of Whitney & Whitney, Inc. since
its formation in 1977.
Prior to his serving as W&W full-time president, Dr. Whitney worked
as a consultant for the Office of Technology Assessment, U.S. Congress, doing
analysis of various Alaskan mineral issues (1977-1978), a consultant for
various government agencies, including the office of Mineral Policy Analysis
in the U.S. Department of Interior, and the Washington, D.C. office of the
U.S. Bureau of Mines, consulting firms, law firms and mining companies on a
variety of mineral planning issues (1976-1977), as a consultant for BKW
Associates, Inc. evaluating mining investment opportunities in Mexico and
the Philippines (1973-1975), and as a geologist-mineralogist for Humble Oil &
Refining Company and GeoTerrex Ltd. (1971-1972).
Dr. Whitney is an internationally recognized consultant in the field
of Metal and Material Resource Economics. Dr. Whitney has presented seminars
for various clients on Mining Economics, and has taught a three-credit
graduate course on International Metal Economics for the University of
Arizona's College of Mines. Dr. Whitney is an Honorary Faculty Member of the
Academy for Metals and Materials under the seal of the American Society for
Metals. Dr. Whitney has made numerous presentations and written a number of
publications on various technical subjects within his broad area of
expertise. Dr. Whitney is coinventor of the American Hydromet process
technology and holds four patents.
4
Paul H. Durckel:
---------------
Mr. Durckel has served as a director of the Company since September
1995. He has served various companies involved in fertilizer manufacturing
and sales for approximately 30 years. He is presently an Independent Real
Estate Salesman for Myers Realty, Inc. and has served them in varying
capacities, including Broker-Salesman, Consultant, Manager, Vice President
of Operations, and Director, since 1987. His experience in the fertilizer
industry includes Vice President and General Manager and Vice President-
Operations for American Plant Food Corp., Executive Assistant to the Chairman
for Best Fertilizers Co., Vice President and General Manager for Best
Fertilizer of Texas, and Vice President and General Manager for Farm Services
Co.
Richard W. Stumbo. Jr.:
----------------------
Mr. Stumbo has served as a director of the Company since September
1995. He joined the Company as Vice President, Finance and Chief Financial
Officer in July 1997. He received his Bachelor of Science in Civil
Engineering degree from the University of Wisconsin in 1958, his M.B.A. from
the Wharton Graduate Business School in 1968 and completed the Advanced
Management Program at Harvard Business School in 1983. He has held varying
financial management positions at several large companies, including the
position of Vice President, Finance and Chief Financial Officer for Western
Pacific Railroad from 1974 to 1983, for Homestake Mining Company from 1983
to 1990 and for FirstMiss Gold Inc. from 1990 to 1993. Prior to joining the
Company as CFO, he owned and operated a business services company in Reno,
Nevada.
Alan C. Lewin:
-------------
Mr. Lewin has served as a director since September 1997. He had
previously served as a director from September 1995 through June 1996. He
received his Bachelor of Arts Degree in Psychology from the San Diego State
University in 1967. He has extensive operations management experience,
primarily in the x-ray film processing chemical industry. His positions
include Founder, President and Chief Executive Officer of Guardian X-Ray
Equipment Service, Inc. from 1976 to 1992, General Manager of Douglas Roesch
Communications, Inc. from 1992 to 1994, Technical Sales Representative of
Commerce Chemical Company from 1994 to 1996, and Vice President of Commodity
Resource & Environmental, Inc. from August 1996 to July 1997, and General
Manager for a Merry X-Ray branch operation in Los Angeles, California since
November 1997.
Information Relating to Executive Officers
- ------------------------------------------
The following table sets forth the names of and certain information
concerning the Executive Officers not included above with the Director
nominees:
Age
Name (As of 10/20/97)98) Position Position Held Since
- ---------------------- ---------------- --------------------------- -------------------
Gregory S. Skinner 4344 Secretary December 1990
Duane H. Rasmussen 6667 Vice President,
Itronics November 1997
Vice President and May 1994
General Manager-IMI
Robert E. Gordon 6566 Vice President and May 1994
General Manager-W&W
5
Narrative Information Concerning the Executive Officers of the Company
- ----------------------------------------------------------------------
Gregory S. Skinner, Esq.:
------------------------
Mr. Skinner has served as secretarySecretary and general counselGeneral Counsel of the
Company and its subsidiaries since December 1990. He obtained his BA degree
in Economics from the University of California at Berkeley in 1976. He
obtained his JD degree from Hastings College of the Law, University of
California at San Francisco in 1979. He is licensed to practice law in the
states of California and Nevada, He is a shareholder in the Law Offices of
Skinner, Sutton & Watson, a Professional Corporation, which has offices
located in Reno and Incline Village, Nevada. Prior to becoming Secretary of
Itronics Inc., Mr. Skinner has provided legal services and advice to Whitney &
Whitney, Inc. since 1980.
Duane H. Rasmussen:
------------------
Mr. Rasmussen has served as Vice President of the Company since
November 1997 and as Vice President and General Manager of IMI since May
1994. He initially joined the Company in 1991 as Assistant Manager and
Business Consultant for W&W. He received his Bachelor of Science degree in
Chemical Engineering from the University of Wisconsin in 1953 and his MBA in
5
Industrial Management in 1955 from the same University. He served as President
of Screen Printing Systems, Inc. from 1987 to 1990 and from 1995 to the
present. Other business experience includes approximately 20 years with
Jacobs Engineering Group, Inc. in varying capacities, including Project
Manager, Regional Sales Manager, Regional Vice President, and Group Vice
President.
Robert E. Gordon:
----------------
Mr. Gordon has served as Vice President and General Manager of W&W
since May 1994. He initially joined the Company in December 1993 as Assistant
Site Manager of the Townsend Mine project. He received his Bachelor of
Science in Geological Engineering from the University of Arizona in 1961.
Prior to joining the Company, he was an independent mining consultant in
1993, served as Director of Latin American Exploration for Fischer-Watt Gold
Company, Inc. from 1991 to 1993, and served as Vice President, Exploration
for Gexa Gold Corp. from 1989 to 1991.
EXECUTIVE COMPENSATION.
- -----------------------COMPENSATION
Summary of Cash and Certain Other Compensation
- ----------------------------------------------
The following table sets forth information as to the compensation of
the Chief Executive Officer and the four most highly compensated officers
whose compensation for the year ended December 31, 19961997 exceeded $100,000:
Annual Compensation
Name and ---------------------------------------------------------------
Principal Calendar
Position Year Salary Bonus
------------------------ ---------- -------- ---------- ----------------
Dr. John W. Whitney: 1997 $97,000 $-0-
President, Treasurer 1996 $96,547 $-0-
President, Treasurerand Director 1995 $87,927 $-0-
and Director 1994 $65,339 $-0-
1)1. Due to the cash needs of the Company, Dr. Whitney has accumulated unpaid
salary over a number of years. As of December 31, 1996,1997, Dr. Whitney had
accumulated deferredunpaid salary totaling $254,750. Of this amount, $49,750$141,750, of which $32,000 was accrued in
1997, $49,750 in 1996, $58,333 was accruedand $60,000 in 1995 and $25,167 was accrued in 1994. Dr. Whitney was
granted an option in Novemberprior years. During the period
from 1992 to convert $147,500 of the deferred salary
into the Company's common stock at $.10 per share. In December 1995 Dr. Whitney was granted an optionoptions to convert an additional $102,500up to $250,000
in unpaid salary at $0.10 per share, for a total of 2,500,000 shares. Dr.
Whitney was also granted options for 1,200,000 shares at $0.10 for his
personal guarantee of certain obligations of the deferred salary into the Company's common stock at $.l0 per share.Company and its subsidiaries.
The combined total convertible deferred salary was $250,000 at $.10$0.10 per share or
6
2,500,000 shares.price was the amount offered in various private placements
throughout this time period. The option, originally dueoptions were to expire onin February 5, 1997, wasbut
were extended to six months after all Itronics Inc. and subsidiaries debts
owed to, or guaranteed by, Dr. Whitney by Itronics Inc., its subsidiaries and partnerships are paid in full. In May 1996 Dr.
Whitney received a warrantwarrants for 100,000 shares. The warrant is
exercisable for five yearsshares at $.10 per share and was issued$0.10 in conjunctionconnection with Dr. Whitney's acquisitionhis
purchase of 100,000 shares for cash. On December 31,
1996,These terms were the same as those
offered to other private placement investors at that time. The combined total
of options and warrants for Dr. Whitney was 3,800,000 shares. Of these
options and warrants, Dr. Whitney exercised options on 500,000 shares by convertingin December 1996,
2,092,380 in 1997, and the remaining 1,207,620 in January 1998. In September
1998 Dr. Whitney converted an additional $50,000 of his deferred salary. In January and June 1997unpaid salary by acquiring
five units of the Company's 1998 Private Placement under the same terms
offered to other investors. At present, Dr. Whitney exercised
options onhas approximately $11,000
in unpaid salary and a 1998 issue warrant for 200,000 shares.
2. During the three years ended in 1997, all Directors received 2,500 shares
per quarter of service. The stock is valued quarterly at the current private
placement price or at market if there is not an additional 75,000 and 300,000 shares by cash payment of $7,500
and $30,000, respectively. In September and October 1997ongoing private placement.
Dr. Whitney exercised
options totaling 1,450,000 shares by converting $145,000served as a Director during each of his deferred
salary. After these option exercises in 1997,quarters and received
the remaining options and
warrants total 1,475,000appropriate number of shares.
2) The salary amounts listed above include
$1,000 for 1997, $547 $1,094, and $1,172 for 1996, and $1,094 for 1995, and 1994, respectively, that represent compensation paid in
commonrepresenting the value
assigned to the stock for service as a director of the Company. The compensation plan
for all directors was 2,500 shares per quarter for 1996. The shares are valued
at the closing high bid price as of the last business day of each quarter.issued.
Option Grants in Last Fiscal Year
- ---------------------------------
% of Total
Options Options Granted Exercise Expiration
Name Granted to Employees Price Date
- ------------------- ---------- --------------- -------- ----------
Dr. John W. Whitney 100,000 100% $.10 5/30/01None.
6
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
- --------------------------------------------------------------------------
Values
------
Options Exercised:
Shares Acquired on
Name Exercise (#) Value Realized($)(1)
- ------------------------ ------------------ -------------------------------------
Dr. John W. Whitney 500,0002,092,380 $-0-
(1) The options were at $0.10 per share and the offering price of restricted
stock to non-employees in 1997 was $0.10. Consequently, no value was
realized. If value realized was based on the high bid on the exercise
dates, the value realized would have been $345,802. The securities
received, common stock of the Company, are restricted under Rule 144 and
thus are not tradable within one year of exercise. In addition, as a
greater than 10% shareholder of the Company, Dr. Whitney is further
restricted by SEC regulations as to the sale of the Company's securities.
The actual value realized, if and when the securities are sold, may be
more or less than the value listed above.
Options Unexercised:
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at 12/31/9697 At 12/31/96
---------------------- --------------------97
-------------------------- -------------------------
Name Exercisable UnexercisableUnexercisable. Exercisable UnexercisableUnexercisable.
- ----- ----------- --------------------------- ----------- ---------------------------
Dr. John W. Whitney 3,300,0001,207,620 - $ -0-(1) $ -0-
1) Fair market(1) The options are at $0.10 per share and the offering price of restricted
stock to non-employees in 1997 was $0.10. Consequently, no value of the securities underlying the options iswould
be realized. If value realized was based on the closing high bid price as of December
31, 1997, the last business dayvalue realized would have been $229,448. The securities
under option, common stock of the fiscalCompany, are restricted under Rule
144 and thus are not tradable within one year ($.0625). Valueof exercise. In addition,
as a greater than 10% shareholder of the unexercised optionsCompany, Dr. Whitney is
further restricted by SEC regulations as to the fair marketsale of the Company's
securities. The actual value realized, if and when the securities are
sold, may be more or less than the exercise price ($.10).value listed above.
Board Committees
- ----------------
The Board of Directors has no specific committees.
Attendance at Meetings
- ----------------------
During the twelve month period ended December 31, 1997, the Board of
Directors held five meetings. No director attended fewer than 75% of the
meetings.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
- -----------------------------------------------TRANSACTIONS
During the Company's two most recent fiscal years, including those of
its subsidiaries and affiliates, the Company engaged in no transactions or
series of transactions with any director, officer, security holder or family
thereof in which the amount involved exceeded $60,000 except as follows:
1. As of December 31, 1996.1997, Dr. Whitney hashad accumulated deferred salary
totaling $254,750,$141,750, with $108,083$81,750 of that amount accruing during 19961997 and 1995.
7
1996.
On January 31, 1998 Dr. Whitney converted $120,762 of this amount into
restricted common stock and on September 30, 1998 the remaining balance was
converted into restricted common stock.
2. In 1993, a note payable to an unrelated party in the amount of $151,602,
including accrued interest, was settled for $92,000. The settlement was
primarily funded by a bank loan in the amount of $80,000. The makers and
guarantors of the bank note are Drs. Whitney and Cavell. The liability is
recorded in the Company's balance sheet and the Company pays the monthly
payment on the note. The balance due as of December 31, 1996 is $29,002.1997 was $8,201.
The note was paid off in May 1998.
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3. In 1994, options totaling 2,675,000 shares for Dr. Whitney and 200,000
shares for Dr. Cavell, which were to expire in 1995, were extended to dates
ranging from February 5, 1996 to May 15, 1997. The option price of $.10$0.10 per
share remained unchanged. In 1995, an additional option for 1,025,000 shares
was granted to Dr. Whitney and his existing options were extended to dates
ranging from February 5, 1997 to May 15, 1997. In 1996, Dr. Whitney's and Dr.
Cavell's options were extended to six months after all debts ofowed to, or
guaranteed by, Dr. Whitney or Dr. Cavell by Itronics Inc. and its subsidiaries
and partnerships owed to or guaranteed by Drs.
Whitney and Cavell are paid in full. Dr. Whitney's options were granted to
allow conversion of accumulated unpaid salaries into stock and for his
personal guarantee of Company and subsidiary debts and Dr. Cavell's options
were granted for his personal guarantee of Company and subsidiary debts.
4. During 1997 and 1996, a Nevada mine property, a majority of which is
owned by Drs. Whitney and Cavell, retained the services of W&W to negotiate
a lease for the property and to perform other technical services as needed.
Total 1996 billings on the project including pass through
expenses of approximately $26,400, amounted to approximately $97,000.$15,000 in 1997 and
$97,000 in 1996. Terms for providing service are similar to that of unrelated
clients and all billings due at December 31, 19961997 have subsequently been
received.
PROPOSAL TO AMEND
THE ARTICLES OF INCORPORATION
TO INCREASE THE AUTHORIZED SHARES
PROPOSAL 2
At the Annual Meeting, an amendment to the Company's Articles of
Incorporation will be presented which will increase the number of authorized
common shares from 50,000,000 of $.001 par value to 250,000,000 of $.001
par value. The Board of Directors is proposing this amendment to create
additional flexibility for future financing and acquisitions. At present,
in excess of 40,000,000 shares are of record. In addition, there are presently
in excess of 5,000,000 shares in options and warrants that may be exercised
in the future. Therefore, the Board of Directors believes it is appropriate
to increase the Company's authorized shares.
An increase in the number of authorized shares could lead to issuance
of additional shares, which would dilute a shareholder's existing ownership
interest in the Company. Furthermore, the issuance of any such shares to
persons other than the public would further reduce the amount of control in
the hands of the public.
19961997 ANNUAL REPORT
The Company's Form 10-KSB for 19961997 as filed with the Securities and
Exchange Commission will serve as the Company's 19961997 annual report. The 19961997
Form 10-KSB is being mailed to each shareholder along with this proxy
statement. ADDITIONAL COPIES OF THE 19961997 FORM 10-KSB MAY BE OBTAINED BY
WRITING TO THE CORPORATION.
19981999 ANNUAL MEETING
Proposals of shareholders intended to be presented at the 19981999 annual
meeting must be received by the Company for inclusion in Management's Proxy
Statement by March 31, 1998.
8
1999.
OTHER BUSINESS TO BE TRANSACTED
As of the date of this Proxy Statement, the Board of Directors knows
of no other business to be presented for action at the Annual Meeting. If any
other business is properly brought before the Annual Meeting, the proxies
returned by the Company's shareholders confer discretionary authority on the
persons named therein. Those persons will vote or act in accordance with
their best judgement with respect to those matters.
You are urged to vote, sign, date and return the accompanying proxy
prior to the Annual Meeting, whether or not you currently plan to attend the
Annual Meeting in person, to the following address:
Itronics Inc.
P.O. Box 10725
Reno, Nevada 89510
By Order of the Board of Directors
JOHN W. WHITNEY
___________________________________________________________________________
October 27, 199729, 1998 John W. Whitney, President and Treasurer
98
ITRONICS INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 19, 19971998
The undersigned hereby constitutes and appoints John W. Whitney, with
power of substitution, to represent and vote on behalf of the undersigned all
of the shares of Itronics Inc. which the undersigned is entitled to vote at
the Annual Meeting of Stockholders to be held at the Airport PlazaAtlantis Hotel, Reno,
Nevada, on November 19, 19971998 at 10:00 A.M. Pacific time, including any
adjournment or adjournments thereof.
Total votes available to cast for the two proposalsone proposal is:
Number of Shares ________________________
PLEASE MARK THE FOLLOWING WITH AN "X"
Proposal 1: Election of Directors
Names of Nominees:
John W. Whitney
Paul H. Durckel
Richard W. Stumbo, Jr.
Alan C. Lewin
Vote for the election of the above directors as a group:
( ) FOR ( ) AGAINST ( ) ABSTAIN
Proposal 2: Increase in authorized shares from 50,000,000 to 250,000,000.
( ) FOR ( ) AGAINST ( ) ABSTAIN
PLEASE VOTE, DATE AND SIGN YOUR NAME(S) EXACTLY AS PRINTED ON THIS
PROXY, indicating where applicable, official position or representative
capacity.
_______________________________________ ______________________________
Signature Signature
___________________ ___________________
Date Date