<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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 Section 240.14a-11(c) or Section
240.14a-12
VitriSeal, Inc.
- --------------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 18, 2000
VITRISEAL, INC.
You are cordially invited to attend the Annual Meeting of Stockholders of
VITRISEAL, INC. (the "Company"), which will be held Saturday, March 18, 2000,
at the Flamingo Hilton Hotel, 3555 Las Vegas Boulevard, South Las Vegas,
Nevada 89109-8919,telephone number (702) 733-3111, at 6:00 p.m. local time,
or any adjournment thereof for the following purposes:
1. To elect Company directors for the upcoming year.
2. To approve the change of name of the Company to "Liquitek
Enterprises, Inc." upon the closing of the reorganization agreements
with Thermoflow Corporation, a Nevada corporation, and Liquitek, Inc.,
a Nevada corporation, and to approve the change of name of Dancor, Inc.,
the Company's wholly-owned subsidiary to "VitriSeal, Inc."
3. To consider and ratify the appointment of Squar, Milner, Reehl &
Williamson, LLP as independent auditors of the Company for the fiscal
year ending December 31, 2000.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on February 16,
2000 will be entitled to vote at the Annual Meeting or adjournment thereof.
By Order of the Board of Directors
/s/ Culley W. Davis
Culley W. Davis
Chairman of the Board
February 25, 2000
IMPORTANT
PLEASE COMPLETE, DATE, SIGN, AND MAIL PROMPTLY THE ENCLOSED PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT
THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH
TO DO SO EVEN THOUGH YOU HAVE RETURNED YOUR PROXY.
<PAGE>
VITRISEAL, INC.
12226 South 1000 East, Suite 10
Draper, Utah 84020
PROXY STATEMENT
February 25, 2000
SOLICITATION OF PROXIES
DATE, TIME, AND PLACE
This Proxy Statement and the accompanying proxy/voting instruction
card ("Proxy Card") are being mailed beginning on or about the date shown
above, to holders of common shares (the "Stockholders") in connection with
the solicitation of proxies by the Board of Directors (the "Board of
Directors" or "Board") of VITRISEAL, INC., a Nevada corporation (the
"Company"), to be used at the Annual Meeting of Stockholders (the "Meeting"),
to be held on March 18, 2000 at the Flamingo Hilton Hotel, 3555 Las Vegas
Boulevard, South Las Vegas, Nevada 89109-8919, telephone number (702)
733-3111, at 6:00 p.m. local time, or any adjournment thereof.
QUORUM AND VOTING
Proxies are solicited to give all Stockholders of record at the
close of business on February 16, 2000 (the "Record Date"), an opportunity to
vote on matters that come before the Meeting. This procedure is necessary
because Stockholders live in various states and many may not be able to
attend the Meeting. Shares of Common Stock (the "Shares") can be voted only
if the Stockholder is present in person or is represented by proxy. The
presence, in person or by proxy, of the holders of a majority of the total
outstanding voting Shares is necessary to constitute a quorum at the Meeting.
When your Proxy Card is returned properly signed, the Shares
represented will be voted in accordance with your directions. You can specify
your choices by marking the appropriate boxes on the enclosed Proxy Card. If
your Proxy Card is signed and returned without specifying choices, the Shares
will be voted as recommended by the Board of Directors. Abstentions marked on
the Proxy Card and broker non-votes are voted neither "for" nor "against"
items being voted upon, but are counted in the determination of a quorum.
As of the Record Date, there were 20,839,191 Shares outstanding.
Each outstanding Share is entitled to one vote on each matter properly
brought before the Meeting unless any shareholder notifies the Company prior
to the voting on the election of Directors that he or she desires to cumulate
votes, in which case the election of Directors will be by cumulative voting.
SOLICITATION AND COST
The Company will bear all costs and expenses related to this
solicitation of proxies by the Board of Directors, including the costs of
preparing, printing, and mailing to the Stockholders this Proxy Statement and
accompanying materials. In addition to the solicitation of proxies by use of
the mails, the Directors, Officers, and employees of the Company, without
receiving additional compensation, may solicit proxies personally, by
telephone, or by any other means of communication.
1
<PAGE>
REVOCABILITY OF PROXY
If you wish to give your proxy to someone other than the persons
designated by the Board of Directors, all names appearing on the enclosed
Proxy Card must be crossed out and the name of another person or persons must
be inserted. The signed Proxy Card must be presented at the Meeting by the
person or persons representing you. You may revoke your proxy at any time
before it is voted at the Meeting by executing a later-dated proxy, by voting
by ballot at the Meeting, or by filing a written revocation of your proxy
with the Company before the Meeting.
YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE URGED TO SIGN AND
RETURN THE ACCOMPANYING PROXY CARD WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING. If you do attend, you may vote by ballot at the Meeting, thereby
canceling any proxy previously given.
As a matter of policy, proxies, ballots, and voting tabulations that
identify individual Stockholders are kept private by the Company. Such
documents are available for examination only by the inspectors of election
and certain personnel associated with processing Proxy Cards and tabulating
the vote. The vote of any Stockholder is not disclosed except as may be
necessary to meet legal requirements.
DOCUMENTS INCORPORATED BY REFERENCE
The Company specifically incorporates the Financial Statements for
the year ended December 31, 1999, filed as part of the 1999 Annual Report on
Form 10-KSB in response to Item 13 of the Form 10-KSB. The Annual Report and
attached Financial Statements should have been enclosed in the mailing
containing this Proxy Statement. If you did not receive a copy of the Annual
Report and attached Financial Statements, please contact the Company and
request that the information be sent to you. A copy of the 1999 Annual Report
may be obtained from the Company without cost to the requesting Stockholder
by contacting the Company.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
VOTING SECURITIES
As of the Record Date for the Annual Meeting of Stockholders, the
number of issued and outstanding shares of Common Stock totaled 20,839,191.
PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning the beneficial
ownership of the Company's Shares as of February 16, 2000 for (i) each
current Director and each nominee for Director (ii) each named executive
officer of the Company as defined in 402(a)(2) of Regulation S-B of the
Securities Act of 1933, (iii) all persons known by the Company to
beneficially own more than 5% of the Company's voting Shares, and (iv) all
officers and Directors of the Company as a group.
<TABLE>
<CAPTION>
PERCENTAGE
AMOUNT AND NATURE OF
NAME TITLE OF OWNERSHIP(1)(2) CLASS(3)
- --------------------------------------- -------------------------------- ------------------ ----------
<S> <C> <C> <C>
Culley W. Davis Chief Executive Officer, 300,000 (4) 1.4%
12226 South 1000 East, Suite 10 Chairman of the Board,
Draper, UT 84020 Directors, and Director Nominee
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
AMOUNT AND NATURE OF
NAME TITLE OF OWNERSHIP(1)(2) CLASS(3)
- --------------------------------------- -------------------------------- ------------------ ----------
<S> <C> <C> <C>
Family Legacy, Ltd. Beneficial Owner 2,409,442 (5) 11.6%
1878 Foxboro Lane
Draper, UT 84020
Daniel L. Corbin President and Director 1,623,825 (6) 7.7%
1101 Dove Street, Suite 235
Newport Beach, CA 92660
John W. Nagel Chief Financial Officer and 50,000 (7) *
12226 South 1000 East, Suite 10 Director
Draper, UT 84020
Dennis A. Repp Director 321,000 1.5%
1101 Dove Street, Suite 235
Newport Beach, CA 92660
Bruce H. Haglund Secretary, Director, and 248,336 (8) 1.2%
2 Park Plaza, Suite 450 Director Nominee
Irvine, CA 92614
Alois F. Sferrazza Director Nominee -0- --
830 Corridor Boulevard, #400
Knoxville, TN 37932
David Datillo Director Nominee -0- --
2449 Tall Oaks Drive
Elgin, IL 60123
Robert C. Gay Director Nominee -0- --
Two Copley Place
Boston, MA 02116
T-6G Limited Partnership Beneficial Owner 3,173,376 15.2%
767 South Dixie Drive
St. George, UT 84770
All Directors and Executive Officers as a Group 2,543,161 (9) 11.8%
</TABLE>
- ------------------------
* Less than one percent.
(1) Unless otherwise noted, the Company believes that all Shares are
beneficially owned and that all persons named in the table or family
members have sole voting and investment power with respect to all Shares
owned by them.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon the
exercise of warrants or options.
(3) Assumes 20,839,191 Shares outstanding plus, for each individual, any
securities that such individual has the right to acquire upon exercise of
presently exercisable stock options. Each beneficial owner's percentage
ownership is determined by assuming that options or warrants that are held
by such person (but not those held by any other person) and which are
exercisable within 60 days from the date hereof have been exercised.
(4) Includes options to purchase 300,000 shares at an exercise price of $1.75.
See "Certain Relationships and Related Transactions."
(5) Family Legacy, Ltd. is a Utah limited partnership, the General Manager of
which is Eagle Gate, LC for which Culley W. Davis serves as the Operating
Manager.
3
<PAGE>
(6) Includes options to purchase 300,000 shares at an exercise price of $1.75.
See "Certain Relationships and Related Transactions."
(7) Includes shares held in trust by the John W. Nagel Trust and options to
purchase 25,000 shares at an exercise price of $1.75. See "Certain
Relationships and Related Transactions."
(8) Includes options to purchase 50,000 shares at an exercise price of $1.75.
See "Certain Relationships and Related Transactions."
(9) Includes options to purchase 675,000 shares at an exercise price of $1.75.
See "Certain Relationships and Related Transactions."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS DURING 1999
Prior to March 18, 1999, Culley W. Davis made working capital
advances to the Company equal to $2,919,710. This liability was settled with
the issuance of 1,764,583 shares of the Company's Common Stock to Mr. Davis
at the average price of $1.65 per share.
REORGANIZATION
On March 18, 1999, the Company entered into an Agreement and Plan of
Reorganization (the "Reorganization") which resulted in the acquisition by
the Company of no less than 80% of the issued and outstanding shares of
restricted Common Stock of Dancor, Inc. ("Dancor"), a Delaware corporation.
The Reorganization qualified as a tax-free reorganization under Section 368
(a) (1) (B) of the 1986 Internal Revenue Code. Under the terms of the
Reorganization, the former stockholders of Dancor received three shares of
Company Common Stock for each one share of Dancor and in the aggregate
ultimately acquired approximately 94% of the issued and outstanding Common
Stock of the Company. Dancor was previously a privately held company with no
public market for its stock. As of February 16, 2000, the former stockholders
of Dancor owned about 95% of the 20,839,191 post-Reorganization shares of the
Company's issued and outstanding Common Stock. Such shares are currently
restricted under Federal law; however, those shares may be sold under the
provisions of Rule 144 under the Securities Act of 1933 after March 18, 2000.
OTHER TRANSACTIONS IN 1999
In December 1999, the Company entered into a letter of intent (the
"LOI") with Thermoflow Corporation, a Nevada corporation ("Thermoflow"), and
Liquitek, Inc., a Nevada corporation ("Liquitek"), relating to a plan of
reorganization with such companies. The LOI provides that upon approval of
80% of the shareholders of Thermoflow Company Common Stock will issue to them
a total of 10,060,000 shares of the Company in exchange for all of their
Thermoflow shares. The LOI also provides that upon approval of 90% of the
shareholders of Liquitek the Company will issue to them a total of 6,000,000
shares of the Company in exchange for all of their Liquitek shares. Alois F.
Sferrazza and David Datillo, Director nominees, will receive 3,000,000 and
20,000 of the Company's shares, respectively, in exchange for their Liquitek
shares upon the closing of the reorganization agreement with Liquitek.
4
<PAGE>
In connection with the reorganization agreements with Thermoflow and
Liquitek, the Company agreed to grant 275,000 options to Culley W. Davis and
250,000 options to PCI Ventures, LLC an affiliate of Bruce H. Haglund. The
options vest upon the closing of the reorganization agreements with
Thermoflow and Liquitek and are exercisable at $2.00 per share.
OTHER TRANSACTIONS
In February 1997, the Board of Directors of the Company approved the
assignment of a continuing royalty equal to 2% of revenues derived by the
Company from the VitriSeal process to Dennis A. Repp for all customers
entering into contracts with the Company during the time Mr. Repp remains
involved with the Company.
In February 1997, the Board of Directors of the Company approved the
assignment of a continuing royalty equal to 2% of revenues derived by the
Company from the VitriSeal process to Daniel Corbin for all customers
entering into contracts with the Company during the time Mr. Corbin remains
involved with the Company.
CERTAIN RELATIONSHIPS
Culley W. Davis, the Company's Chief Executive Officer, Chairman and
beneficial stockholder, is the brother-in-law of the Company's President,
Daniel L. Corbin. Mr. Corbin is also a director and stockholder.
John W. Nagel, the Company's Chief Financial Officer and a Director,
is the brother-in-law of the Company's legal counsel, Bruce H. Haglund. Mr.
Haglund is also the Company's Secretary, a Director and Director nominee, and
is a stockholder.
Gibson, Haglund & Paulsen, the Company's attorneys, were paid or
incurred approximately $119,000 in legal fees during 1999. Bruce H. Haglund,
the Company's Secretary, a Director and Director nominee, and a stockholder,
is a member of the law firm.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act requires the Company's
officers, Directors, and persons who own more than 10% of a registered class
of the Company's equity securities to file reports of ownership and changes
in ownership with the SEC. Officers, Directors, and greater than 10%
beneficial owners are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. During 1999, each of the
directors failed to file Form 4's concerning the grant of stock options to
them, Culley W. Davis did not file four Form 4s for related party transfers
at the end of 1999, Daniel Corbin did not file a Form 4 related to a stock
sale in 1999, and John Nagel did not timely file a Form 3 upon his
appointment as a director. Form 5's were filed during 2000 reflecting all
1999 transactions and the Company believes that all filing requirements
applicable to its Officers, Directors, and greater than 10% beneficial owners
are current.
BOARD OF DIRECTORS
The Board of Directors has the responsibility for establishing broad
corporate policies and for overseeing the overall performance of the Company.
However, in accordance with corporate governance principles, the Board is not
involved in day-to-day operating details. Members of the Board of Directors
are kept informed of the Company's business through discussions with the
Chairman and other officers, by reviewing analyses and reports sent to them,
and by participating in Board and committee meetings.
The Board held five meetings during 1999. All Directors attended more
than 75% of the Meetings held.
COMMITTEES OF THE BOARD
Following the Meeting, the Board of Directors will convene the
Annual Board of Directors meeting and will establish a Finance Committee, an
Audit Committee, and a Compensation Committee, each of which is briefly
described below.
5
<PAGE>
The Finance Committee will be established to oversee Company
expenditures and approve contracts entered into by the Company. The Committee
must, by majority vote, approve all contracts and negotiated debt obligations
on behalf of the Company whereby the obligation of the Company will exceed
$100,000. The nominees for the Finance Committee include Culley W. Davis,
Robert C. Gay, and Bruce H. Haglund.
The Audit Committee will be established to meet with management to
consider the adequacy of the internal controls and the objectivity of
financial reporting; the committee will meet with the independent auditors and
with appropriate Company financial personnel about these matters. The Audit
Committee will recommend to the Board of Directors the appointment of the
independent auditors, subject to ratification by the Stockholders at each
Annual Meeting. The independent auditors will meet periodically alone with
the committee and always have unrestricted access to the committee. The
nominees for the Audit Committee are Robert C. Gay, David Datillo, and Bruce
H. Haglund, with John W. Nagel, serving as an ex officio member of the Audit
Committee.
The Compensation Committee will be established to negotiate
employment contracts, make recommendations to the Board of Directors for
compensation for officers, directors, and employees, and administers
management incentive compensation plans, including stock option plans. The
Compensation Committee nominees are Culley W. Davis, Robert C. Gay, and Bruce
H. Haglund.
Following the election of directors at the Meeting, the Committees
will be formally constituted.
COMPENSATION OF DIRECTORS
The Company's policy is not to pay cash compensation to directors
who are employees or consultants of the Company for their services as
directors, but reimburses reasonable out-of-pocket expenses of directors for
attendance at meetings. Currently the Company pays approximately $64,800
annually to Dennis A. Repp as a combination of consulting and director's fee
for serving on the board. In the future, based on recommendations from the
Compensation Committee, the Company will likely pay a fee to outside Board
members and grant stock options to all Directors as an incentive for their
continued service on the Board.
LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS
The Company's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Nevada law. Such limitation of
liability does not apply to liabilities arising under the federal securities
laws and does not affect the availability of equitable remedies such as
injunctive relief or rescission.
The Company's Bylaws provide that the Company shall indemnify its
directors and executive officers and may indemnify its other officers and
employees and other agents to the fullest extent permitted by law. The
Company believes that indemnification under its Bylaws covers at least
negligence and gross negligence on the part of indemnified parties. The
Company's Bylaws also permit it to secure insurance on behalf of any officer,
director, employee, or other agent for any liability arising out of his or
her actions in such capacity, regardless of whether the Bylaws permit such
indemnification.
At present, there is no pending litigation or proceeding involving
any director, officer, employee, or agent of the Company where
indemnification will be required or permitted. The Company is not aware of
any threatened litigation or proceeding that might result in a claim for such
indemnification.
6
<PAGE>
PRICE RANGE OF COMMON STOCK
The following table sets forth, for the period from February 1999
through February 16, 2000, the high and low bid quotations each quarter for
the Company's Common Stock during the most recent fiscal year as reported by
the OTC Bulletin Board. The Company's stock was not actively traded during
the two years before March 1999. The prices represent quotations between
dealers, without adjustment for retail markup, mark down or commission, and
do not necessarily represent actual transactions.
COMMON STOCK PRICE
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
2000
1st Quarter 6.0000 1.8750
1999
1st Quarter 3.7500 1.8750
2nd Quarter 2.8750 1.7500
3rd Quarter 1.9375 0.8750
4th Quarter 2.3750 0.7500
</TABLE>
The Company has not paid any cash dividends on its Common Stock
since its incorporation and anticipates that, for the foreseeable future,
earnings, if any, will continue to be retained for use in its business. As of
February 16, 2000, the approximate number of record holders of the Company's
Common Stock was 502.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
The Bylaws of the Company provide for the Directors to number at least
three and no more than seven. Five members of the Board of Directors are to be
elected at the Meeting. The nominees selected by the Board of Directors are
listed on the following pages.
Shareholder shall not be entitled to cumulate votes (I.E., cast for
any one or more candidates a number of votes greater than the number of the
shareholder's shares) at the Meeting unless the candidate's names have been
placed in nomination prior to commencement of the voting and a shareholder
has given notice at the Meeting, prior to the voting, of the shareholder's
intention to cumulate votes. If any shareholder has given such a notice, then
every shareholder entitled to vote may cumulate votes for candidates in
nomination and give one candidate a number of votes equal to the number of
directors to be elected, multiplied by the number of votes to which that
shareholder's shares are entitled, or distribute the shareholder's votes on
the same principle among any or all of the candidates, as the shareholder
thinks fit. The five candidates receiving the highest number of votes shall
be elected.
Any Shares not voted, whether by abstention, broker non-vote, or
otherwise, have no impact on the vote.
The Board of Directors intends to vote proxies equally for the
nominees unless otherwise instructed on the Proxy Card. If you do not wish
your Shares to be voted for particular nominees, please identify the
exceptions in the designated space provided on the Proxy Card.
If at the time of the Meeting one or more of the nominees have
become unavailable to serve, Shares represented by proxies will be voted for
the remaining nominees and for any substitute nominee or nominees designated
by the Board of Directors.
7
<PAGE>
Directors elected at the Meeting will hold office until the next
Annual Meeting or until their successors have been elected and qualified. For
each nominee there follows a brief listing of principal occupation for at
least the past five years, other major affiliations, and age as of February
25, 2000.
NOMINEES FOR ELECTION AS DIRECTORS
The names, ages, and positions of the nominees for election as
Directors are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY FIRST ELECTED
---- --- ------------------------- -------------
<S> <C> <C> <C>
Culley W. Davis 44 CEO, Chairman, Director 1999
Bruce H. Haglund 48 Secretary, Director 1999
Robert C. Gay 48 Director Nominee --
Alois F. Sferrazza 43 Director Nominee --
David Datillo 59 Director Nominee --
</TABLE>
CULLEY W. DAVIS, CHIEF EXECUTIVE OFFICER, CHAIRMAN OF THE BOARD, DIRECTOR
Mr. Davis was a founder of Dancor and since its inception in 1992
has held various positions including Chief Executive Officer, Chairman of the
Board, and Director. Mr. Davis currently holds the positions of Chief
Executive Officer and Chairman of the Board of the Company. Since 1992, Mr.
Davis has also served as Chief Executive Officer and Chairman of the Board of
HydroMaid International, Inc., the developer of a patented water-powered
garbage disposal whose stock is traded on the OTC bulletin board. From 1989
until 1992, Mr. Davis was President and Chief Executive Officer of
Lubrication Research, Inc., a company engaged in the development and
marketing of technology used in the automobile industry. During the period of
1984 until 1990, Mr. Davis founded and served as President of Vencor
International, Inc., a developer of form-fitted, reusable, cloth diapers for
medical and non-medical applications. From 1979 until 1984 Mr. Davis founded
and operated Capital Diamond Corporation, a diamond and jewelry wholesaling
company.
In May 1996, Mr. Davis entered into a stipulation for judgment and
permanent injunction (the "Injunction") with the Department of Finance of the
State of Idaho (the "State") in connection with a complaint (the "Complaint")
filed by the State alleging that Mr. Davis violated provisions of the Idaho
Securities Act. In accordance with the Injunction, Mr. Davis paid a $50,000
fine to the state and was permanently enjoined from violating the Idaho
Securities Act, from offering or selling unregistered securities in Idaho,
and from transacting securities business in Idaho without applicable
securities licenses.
BRUCE H. HAGLUND, SECRETARY, DIRECTOR
Bruce H. Haglund served as a Director and Secretary of Dancor from
September 1998 until the Reorganization and currently serves in the same
positions with the Company. Mr. Haglund is a principal in the law firm of
Gibson, Haglund & Paulsen in Orange County, California where he has been
engaged in the private practice of law since 1980. He is member of the Board
of Directors and the Secretary of Metalclad Corporation, a public company
whose stock is traded on the Nasdaq SmallCap Market. Mr. Haglund is also the
Secretary and a member of the Board of Directors of Aviation Distributors,
Inc., HydroMaid International, Inc., and Renaissance Golf Products, Inc.,
public companies whose stocks are traded on the OTC Bulletin Board. He is a
graduate of the University of Utah College of Law.
8
<PAGE>
ROBERT C. GAY, DIRECTOR NOMINEE
Robert C. Gay has been a Managing Director of Bain Capital since
1993 and has been a General Partner of Bain Venture Capital since 1989. From
1988 to 1989, Mr. Gay was a Principal of Bain Venture Capital. Prior to
joining Bain Capital, Mr. Gay was an Executive Vice President of General
Electric Capital Markets Group. He was also a Vice President and Principal of
Kidder Peabody's Merchant Banking Group. Previously, Mr. Gay was a manager at
McKinsey & Company. In addition, he taught economics at Harvard University.
Mr. Gay is Vice Chairman of the Board of Directors of IHF Capital, Inc.,
parent of ICON Health & Fitness Inc. Mr. Gay also serves as a director of
Cambridge Industries, Inc., Nutraceutical Corporation, American Pad & Paper
Company, GS Technologies Corporation, and Alliance Laundry Holdings LLC. Mr.
Gay received a Ph.D. in Business Economics form Harvard University and
graduated Phi Beta Kappa with an A.B. from the University of Utah.
ALOIS F. SFERRAZZA, DIRECTOR NOMINEE
Alois F. Sferrazza has been the Chief Executive Officer and a
Director of Liquitek since its organization in May 1999. From 1992 to May
1999, Mr. Sferrazza was employed by EET Corporation where he served as
President, Chief Executive Officer, and Chairman of EET Corporation. During
his watch at EET, the company was ranked as one of the country's fastest
growing companies on the Inc. 500 listing and the fastest growing
environmental, health and safety company on the Technology Fast 500 listing.
Mr. Sferrazza has over 20 years of management and technical experience in the
environmental and design and manufacturing areas. He holds B.S. in Mechanical
Engineering/Materials Science from the University of California, Berkeley and
an M.B.A. in Finance from University of Colorado, Boulder.
DAVID DATILLO, DIRECTOR NOMINEE
David Datillo has been an independent consultant since June 1998,
following his retirement as Senior Vice President, Sales and Services, of
Safety-Kleen Corporation, which he co-founded in 1968. Safety Kleen grew from
startup to over $1 billion in sales. Prior to his involvement with
Safety-Kleen, he was employed by Standard Oil Company. Mr. Datillo received a
B.S. degree from Miami University (Oxford, Ohio) and did graduate studies in
engineering while serving in the U.S. Navy.
Management intends to vote for the directors as nominated.
EXECUTIVE OFFICERS
The names, ages, and positions of the Company's executive officers
who are not also nominees for Directors are as follows:
DANIEL CORBIN, PRESIDENT AND CURRENT DIRECTOR
Mr. Corbin became President and a director of the Company at the
time of the acquisition, and has been the President and a Director of Dancor
since its formation in April 1992. He was the founder, and from 1980 until
1984, the President of Snuggles Corporation, a California-based private
company. He patented and developed the world's first form fitted reusable
cloth infant/adult diaper with Velcro . In 1984, he merged Snuggles with
Vencor International, Inc. and was one of the key individuals responsible for
taking the company public on the OTC market in 1987. More recently, Mr.
Corbin acquired a controlling interest in "Fins and Flippers," a
privately-held California retail sales corporation. Mr. Corbin has also had
extensive experience in organization and management development as the
Marketing Director for Press Steel Corporation, and from 1979 to 1980, as
Vice President of Sales for American Data Industries. For the last four
years, Mr. Corbin has analyzed and evaluated the sales and business
opportunities in the worldwide coatings industry and initiated the
acquisition of the VitriSeal technology for the Company.
9
<PAGE>
Mr. Corbin will continue to serve as the President and a member of
the Board of Directors of Dancor, Inc., a subsidiary of the Company.
DENNIS A. REPP , CURRENT DIRECTOR
Mr. Repp became a director of the Company at the time of the
acquisition and has been a Director of Dancor since May 1996. He has been a
business consultant and private investor since 1980. Through the years, he
has also founded several companies, primarily in the computer and electronics
field, and provided continuing service to these companies through board
membership. Prior to 1980, Mr. Repp served as the President of Union Bank's
venture capital subsidiary. He has also previously managed the venture
capital investments for Allstate Insurance Company. Mr. Repp holds an M.S.
degree in economics and an M.B.A. degree in finance.
Mr. Repp will continue to serve as a member of the Board of
Directors of Dancor, Inc., a subsidiary of the Company.
JOHN W. NAGEL, CHIEF FINANCIAL OFFICER, CURRENT DIRECTOR
Mr. Nagel joined Dancor, Inc. as Chief Financial Officer and a
member of the Board of Directors in September 1998 and served until the
Reorganization and currently serves in the same positions with the Company.
From 1988 to August 1998, Mr. Nagel served as Director of Finance for WVUE
Television of New Orleans, Louisiana. During the period of 1983 to 1988, he
was operator and part owner of several franchised ice cream parlors. From
1980 to 1983, Mr. Nagel held positions in administration and management for
The Nautilus Group, Inc., a privately held venture capital firm. From 1968 to
1980, Mr. Nagel worked for Arthur Anderson & Co. in numerous capacities
relating to consulting for the design and implementation of computer-based
management information systems. He served as an officer in the U.S. Navy
Supply Corps from 1962 to 1966. Mr. Nagel has an M.B.A. degree from Harvard
University and a B.S. degree in accounting from Ohio State University.
Mr. Nagel will continue to serve as the Company's Chief Financial
Officer and as a member of the Board of Directors of Dancor, Inc., a
subsidiary of the Company.
APPROVAL OF NAME CHANGE
(ITEM 2 ON THE PROXY CARD)
In January 2000, the Board of Directors of the Company approved the
amendment of the Articles of Incorporation to change the name of the Company
to "Liquitek Enterprises, Inc." upon the closing of the reorganization
agreements with Thermoflow and Liquitek. The Board also approved changing the
name of Dancor, Inc., the Company's wholly-owned subsidiary conducting the
coating business, to "VitriSeal, Inc."
VOTE REQUIRED
The affirmative vote of a majority of the outstanding Shares is
required to approve this proposal. Management intends to vote "FOR" the
proposal to approve the name change to "Liquitek Enterprises, Inc.,"
contingent upon the closing of the reorganization agreements with Thermoflow
and Liquitek.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND THAT THE COMPANY'S
STOCKHOLDERS VOTE "FOR" THE PROPOSAL TO APPROVE THE NAME CHANGE TO "LIQUITEK
ENTERPRISES, INC.," CONTINGENT UPON THE CLOSING OF THE REORGANIZATION
AGREEMENTS WITH THERMOFLOW AND LIQUITEK.
10
<PAGE>
RATIFICATION OF APPOINTMENT OF AUDITORS
(ITEM 3 ON PROXY CARD)
The Board of Directors has selected Squar, Milner, Reehl &
Williamson LLP as independent public accountants for the Company for the
fiscal year ending December 31, 2000, subject to the approval of the
Stockholders. To the knowledge of the Company, at no time has Squar, Milner,
Reehl & Williamson, LLP had any direct or indirect financial interest in or
any connection with the Company other than as independent public accountants.
A representative of Squar, Milner, Reehl & Williamson, LLP will be available
at the Meeting to make a statement if the representative so desires and to
respond to appropriate questions.
In conjunction with a merger and reorganization of Dancor, Inc. and
the Company, the Company changed auditors in April 1999. The Company's former
accountants Jones, Jensen & Co. were dismissed effective May 3, 1999, and
Squar, Milner, Reehl & Williamson, LLP, was appointed as the Company's
principal accountants. There were no disagreements with the former accountant
and are no disagreements with the current Accountant on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure.
Ratification of the appointment of auditors requires a majority of
the votes cast thereon. Any Shares not voted, whether by abstention, broker
non-vote, or otherwise, have no impact on the vote. If the Stockholders do
not ratify this appointment, other independent auditors will be considered by
the Board or Directors upon recommendation of the Audit Committee.
VOTE REQUIRED
The affirmative vote of a majority of the outstanding Shares is
required to approve this proposal. Management intends to vote "FOR" the
proposal to ratify the auditors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND THAT THE COMPANY'S
STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF THE AUDITORS, AND YOUR PROXY WILL
BE SO VOTED UNLESS YOU SPECIFY OTHERWISE.
REPORT ON EXECUTIVE COMPENSATION
The Company's compensation programs are designed to link executives'
compensation to the performance of the Company. The annual salary paid to
executives over the past three years reflect fixed amounts that are deemed
competitive for executives with comparable ability and experience in the
industry.
COMPENSATION OF OFFICERS
The following table sets forth the aggregate compensation paid by
the Company for services rendered during the periods indicated. Management of
the Company was completely replaced in conjunction with the Reorganization
between the Company and Dancor, Inc.
11
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------------------------------------------------------------------------
OTHER ANNUAL
SALARY BONUS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)
--------------------------------------- --------- -------------- -------- -----------------
<S> <C> <C> <C> <C>
Culley W. Davis 1999 60,000 -- -0-
Chairman and 1998 95,000 -- -0-
Chief Executive Officer 1997 -0- -- -0-
Daniel L. Corbin 1999 120,000 -- -0-
President 1998 88,000 -- -0-
1997 18,750 -- -0-
</TABLE>
- ------------------------
(1) The remuneration described in the table does not include the cost to the
Company of benefits furnished to the named executive officers, including
premiums for health insurance and other personal benefits provided to such
individual that are extended to all employees of the Company in connection
with their employment. The value of such benefits cannot be precisely
determined; however, the executive Officers named above did not receive
other compensation in excess of the lesser of $50,000 or 10% of such
Officers' cash compensation.
SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholders proposals intended for inclusion in next years proxy
statement should be sent via certified mail-return receipt requested to Bruce H.
Haglund, Secretary, 12226 South 1000 East, Suite 11, Draper, Utah 84020, and
must be received by January 15, 2001.
MISCELLANEOUS AND OTHER MATTERS
Management knows of no matters to come before the Meeting other than
those specified herein. If any other matter should come before the Meeting,
then the persons named in the enclosed form of proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their
judgment.
A COPY OF THE COMPANY'S CURRENT ANNUAL REPORT ON FORM 10-KSB AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS AND NOTES THERETO, IS BEING MAILED TO EACH STOCKHOLDER
TOGETHER WITH THIS PROXY STATEMENT. ADDITIONAL COPIES MAY BE OBTAINED BY
STOCKHOLDERS WITHOUT CHARGE BY WRITING TO: VITRISEAL, INC., 12226 SOUTH 1000
EAST, SUITE 10, DRAPER, UTAH 84020. COPIES OF ANY EXHIBITS TO THE ANNUAL
REPORT, SPECIFICALLY LISTED IN THE ANNUAL REPORT, MAY BE OBTAINED BY
STOCKHOLDERS WITH A CHARGE EQUAL TO THE COMPANY'S COST TO COPY AND SEND ANY
REQUESTED EXHIBIT.
12
<PAGE>
[SIDE ONE OF CARD]
VITRISEAL, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MARCH 18, 2000
The undersigned hereby constitutes and appoints Culley W. Davis and
Bruce H. Haglund, and each of them, the true and lawful attorneys, agents,
and proxies of the undersigned, with full power of substitution, to vote with
respect to all the shares of Common Stock, par value $.001, of VITRISEAL,
INC. (the "Company"), standing in the name of the undersigned at the close of
business on February 16, 2000, at the Annual Meeting of Stockholders to be
held March 18, 2000, and at any and all adjournments and postponements
thereof, to vote:
1. Election of Directors:
_____ FOR all nominees listed below
(Except as marked to the contrary below)
_____ WITHHOLD AUTHORITY
CULLY W. DAVIS ROBERT C. GAY ALOIS F. SFERRASSA
DAVID DATILLO BRUCE H. HAGLUND
2. To approve the change of name of the Company to "Liquitek Enterprises,
Inc." upon the closing of the reorganization agreements with Thermoflow
Corporation, a Nevada corporation, and Liquitek, Inc., a Nevada
corporation, and to approve the change of name of Dancor, Inc., the
Company's wholly-owned subsidiary to "VitriSeal, Inc."
_____ FOR _____ AGAINST _____ ABSTAIN
3. To consider and ratify the appointment of SQUAR, MILNER, REEHL &
WILLIAMSON, LLP as independent auditors of the Company for the fiscal
year ending December 31, 2000:
_____ FOR _____ AGAINST _____ ABSTAIN
4. In their discretion, the Board of Directors is authorized to vote this
Proxy upon such other matters as may properly come before the meeting
or any adjournment or postponement thereof.
<PAGE>
[SIDE TWO OF CARD]
The shares represented by this Proxy will be voted in the manner
directed herein by the undersigned stockholder. If no directions to the
contrary are made, this Proxy will be voted FOR the election of all of the
director nominees named above and FOR approval of Proposals 2, 3, and 4 if
necessary.
DATED: , 2000
-------------------------
-------------------------------
(Signature)
-------------------------------
(Signature, if held jointly)
IMPORTANT: Please sign exactly as your name appears at the left. Each joint
owner should sign. Executors, administrators, trustees, should give full
title. If a corporation, please sign in full corporate name by an authorized
officer. If a partnership, please sign in partnership name by an authorized
person.
Please mark, sign, date and return promptly.
THIS PROXY IS BEING SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF VITRISEAL, INC.
