WASATCH PHARMACEUTICAL, INC.
714 East 7200 South, Midvale, Utah 84047 Phone 801-566-9688--Fax 801-566-9680
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held __________________
Dear Shareholders;
It is with great pleasure and excitement that we announce our forthcoming
annual shareholders meeting to be held on the_____day of______, 1998
at_____________________________, Salt Lake City, Utah. The meeting will be
brought to order at 6:00pm, for the following purposes:
(1) To obtain approval for long term funding for the opening of new
clinics.
(2) To elect five (5) Directors to serve for one year and until their
successors shall be elected and duly qualified.
(3) To ratify the reappointment of Leger & Co as the Company's independent
auditors for the 1997 fiscal year.
(4) To introduce new management personnel.
(5) To discuss the long term business plan.
(6) To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on _________day of
_______, 1998, as the record date for the determination of stockholders entitled
to receive notice of and to vote, in person or by proxy, at the meeting.
Accordingly, only stockholders of record of the Company at the close of business
on that date will be entitled to vote at the meeting. The transfer books of the
Company will not be closed. A list of those entitled to vote at the Annual
Meeting will be available for inspection for ten (10) days prior to the meeting
at the offices of the Company.
All stockholders are urged to attend the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Gary V. Heesch
Chief Executive Officer
Mailing Date: _______________
IMPORTANT
All stockholders are urged to attend or send in their proxy. Whether or not you
expect to attend the meeting in person, to assure that your shares will be
represented, please complete, date, sign, and return the enclosed proxy without
delay to Wasatch Pharmaceutical, Inc., 714 East 7200 South, Midvale, Utah 84047.
Your proxy will not be used if you are present at the annual meeting and desire
to vote your shares personally.
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WASATCH PHARMACEUTICAL, INC.
714 East 7200 South, Midvale, Utah 84047 Phone 801-566-9688--Fax 801-566-9680
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PROXY STATEMENT
Annual Meeting of Stockholders
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SOLICITATION OF PROXIES
The Proxy Statement is furnished to stockholders of Wasatch Pharmaceutical, Inc.
("Company") in connection with the solicitation by the Board of Directors of the
Company of proxies for use at the Annual Meeting of Stockholders of the Company
scheduled to be held at __________________________on_______________________ at
6:00pm local time and at any adjournment or postponement of such meeting.
The Proxy Statement and the accompanying Proxy Card are being mailed on or about
_____________________to the stockholders of the Company.
Stockholders of the Company are cordially invited to attend the Annual Meeting.
Whether or not you expect to attend, it is important that you complete the
enclosed proxy card and sign, date and return it as promptly as possible in the
envelope provided for that purpose. You have the right to revoke your proxy at
any time prior to its use by filing a written notice of revocation with the
Secretary of the Company prior to convening of the Annual Meeting or by
presenting another proxy card with a later date. If you attend the Annual
Meeting and desire to vote in person, you may request that your previously
submitted proxy card not be used.
The cost of soliciting proxies and the cost of the Annual Meeting will be borne
by the Company. In addition to the solicitation of Proxies by mail, proxies may
be solicited by personal interview, telephone and similar means by directors,
officers or employees of the Company, none of whom will be specially compensated
for such activities.
VOTING SECURITIES
As of the close of business on the record date, the Company had outstanding
______________shares of common stock, par value $.001 per share (the "Common
Stock"), all of which are entitled to be voted at the Annual Meeting. Each share
is entitled to one (1) vote, and only those stockholders of record of the Common
Stock as of the close of business on the record date shall be entitled to vote
their shares.
A majority of the outstanding shares of the Common Stock, represented in person
or by proxy, is required for a quorum at the Annual Meeting. In the proposed
election of Directors, stockholders will not be allowed to cumulate their votes
and Directors will be elected by a plurality of the votes cast in the meeting.
The five (5) nominees receiving the highest number of votes will be elected. As
a result, abstentions and broker non-votes will not affect the outcome of the
election. All other matters presented for approval to the stockholders will be
decided by the affirmative vote of a majority of the votes cast at the Meeting
on such matters. Accordingly, abstentions and broker non-votes will not affect
the outcome of such matters.
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APPROVAL FOR LONG TERM FUNDING
After all of this time struggling with funding to complete the research and
development, and clinical work, the time has come to secure long term funding
and put into full time development our 6 year business plan which will open more
than 350 Dermatology clinics across the United States, as well as develop
marketing agreements for other countries. After 15 years of extremely hard work,
the clinical setting has proven that our products are very successful in the
treatments they are intended for. The long term funding is now top priority and
listed below are the main objectives and options that we will present to the
shareholders for their approval.
Management is recommending that the shareholders approve both OPTION ONE and
OPTION TWO. OPTION ONE is the option preferred by management and is the one that
is actively being pursued. OPTION TWO would only be used if OPTION ONE does not
materialize due to contingencies and would provide the general guidelines for
management to use in further negotiations on long-term funding.
LONG TERM FUNDING OPTION ONE
A loan in the amount of $60 million U.S. funds borrowed at the rate of 6.375
percent annually, amortized over 22 years. The funds will be advanced in
increments of $8 million per quarter over a two year period to be used strictly
to advance our business plan to its fruition. Independent auditors and
consultants will be contracted by Wasatch to verify that the funds are being
used in strict accordance with the business plan. Any variation to the approved
business plan and the Project Funding Agreement in any material effect without
the written approval of the Lender will be deemed a condition of default. This
funding agreement is secured by all of the assets of Wasatch. There is no
participation of ownership given to the Lenders through shares of Wasatch stock,
however, there are some shares that are committed to brokers and interim funders
that are part of this transaction which represent less than 20% of the company.
The Lender requires that at least 51% of the total outstanding shares of Wasatch
common stock will be held in escrow as additional collateral, and will be
returned to Wasatch upon the successful payment of all principal and interest of
the outstanding loan amount. The voting rights for this block of stock will be
held by the board of directors except when needed to protect the interest of the
lender with respect to the ability of the Company to repay the loan. This $60
million loan is contingent upon the Company putting up a $15 million
"good-faith" deposit which will not be used as collateral nor encumbered in any
way. The Company has a letter of commitment on the "good-faith" deposit and is
negotiating on interim funding to provide the financing points required in
escrow for the deposit.
LONG TERM FUNDING OPTION TWO
This funding will be a combination of both equity funding and debt funding.
There are many financial companies that are interested in providing these funds
for Wasatch. However, negotiating with these companies is very costly and time
consuming. We propose that the Board of Directors of Wasatch be given the
authority from the shareholders to choose the best financial proposal based on
the following parameters. (1). That no more than forty percent (40%) of Wasatch
would be used to secure the equity funds, and that the debt funds be gathered at
the most economical rate. (2). This debt will be secured by all of the assets of
Wasatch. If the business plan is proceeding as outlined, we would be able to pay
off the debt with proceeds from operations. If the business plan is slowed
because of any factors, it would be necessary to do private or public offerings
for additional funds.
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DIRECTORS AND EXECUTIVE OFFICERS
At the shareholders meeting, five (5) Directors are to be elected to hold office
until the Company's 1999 Annual Meeting of Stockholders and/or until their
successors shall be elected and duly qualified.
Set forth below is a table which identifies the current Directors (all of whom
are nominees) and the Company's executive officers, and the positions and
offices within the Company held by each. The table is followed by a brief
description concerning the employment and business experience of each such
person.
Name Position
- ---- --------
Gary V. Heesch Chief Executive Officer, Director
Lee Hale President
David K. Giles Vice President / Chief Financial Officer
Jack D. Brotherson Director
Robert A. Arbon Director
Craig Heesch Director
Ronald J. Hollberg, Jr. Director
Gary V. Heesch has been a Director of the Company since its inception. He has
been developing medical technology in the field of Dermatology since 1983. Prior
to this he was Chief Epidemiologist for U.S. Public Health, Santa Clara, Cal.
Lee Hale has been with the Company since late 1997. He has extensive management
experience with a large public company. He was Vice President of U.S. Operations
for Tecsyn International Inc. a Canadian public company, for nine years. His
responsibilities were for all operating entities in the United States. He was
also a Director for other subsidiaries of the parent. From 1985 to 1987 he was
VP - General Manager of Fibres South Inc. a multinational company where he was
responsible for U.S. Operations. Mr. Hale finished his schooling at Utah State
University where he majored in Psychology.
David K. Giles has been with the Company since 1993. His current position of VP/
CFO also includes Corporate Secretary/Treasurer. From 1981 to 1993 he held
several positions with EFI Electronics, Salt Lake City, Utah, which including
Controller, Director of Manufacturing and VP of Finance and Administration. Mr.
Giles received an BS (Accounting) from the University of Utah, and one year
later received his MBA.
Jack D. Brotherson has been a Director of the Company since its inception. He is
a full professor of Natural Resource Management in the Department of Botany and
Range Science for Brigham Young University. He holds a BS and MS degree from BYU
and a Ph.D. degree from Iowa State University.
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Robert A. Arbon has been a Director of the Company since its inception. He is a
Medical Doctor with certification from the American Board of Otolaryngology. Dr.
Arbon has held positions and memberships in many medical related organizations.
He holds a BS and M.D. degree from the University of Utah.
Craig Heesch has been a Director of the Company since its inception. He
currently is Senior Partner, CV Associates, a technical consulting firm
assisting in the development of technologies for disposition into the
marketplace.
Ronald J. Hollberg, Jr. has been a Director of the Company since 1997. He is
presently the owner of ARJAY Oil Company which deals in the Oil industry.
RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS
Ratify the appointment of Leger & Co. of Houston, Texas as the Company's
independent auditors for the 1997.
OTHER DISCUSSION ITEMS
Management will introduce new officers and share information on individuals who
will play key roles in the implementation of our business plan. These
individuals have been identified and will be brought on board as soon as the
long term funding is secured.
Management will also discuss the highlights of the five (5) year business plan
for opening medical skin care clinics across the country.
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WASATCH PHARMACEUTICAL, INC.
714 East 7200 South, Midvale, Utah 84047 Phone 801-566-9688--Fax 801-566-9680
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PROXY
This proxy is solicited on behalf of the Board of Directors. You have the option
to vote below for the proposals that will be presented in the Annual
Stockholders Meeting, OR you can appoint Gary V. Heesch, CEO, or some other
person to vote your shares. Management is recommending that you vote in favor of
each of the four options.
[ ] The undersigned hereby appoints Gary V. Heesch, CEO or
______________________________________ as proxy with the power to appoint his or
her substitute, and hereby authorizes him to represent and to vote, at his
discretion, all the shares of Common Stock of Wasatch Pharmaceutical, Inc. held
on record by the undersigned on _____________________________, at the Annual
Meeting of Stockholders to be held on ____________________ or any adjournments
thereof.
OR
[ ] In Favor [ ] Not In Favor To approve Funding Option One as described in
the enclosed Proxy Statement.
[ ] In Favor [ ] Not In Favor To approve Funding Option Two as described in
the enclosed Proxy Statement.
[ ] In Favor [ ] Not In Favor To elect the five (5) directors recommended
by Management
[ ] In Favor [ ] Not In Favor To ratify the appointment of Leger & Co. as
the Company's independent auditor.
This proxy when properly executed will be voted in the manner directed by the
appointed proxy or according to the indication above.
Please sign exactly as name appears on your stock certificate. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Dated___________, 1998 _____________________________________________________
PRINT NAME AS IT APPEARS ON CERTIFICATE
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SIGNATURE (two individuals must sign if held jointly)
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SIGNATURE IF HELD JOINTLY
Please mark, sign, date and return promptly
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