SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. N/A)
Filed by the registrant XX
Filed by a party other than the registrant [ ]
Check the appropriate box:
XX Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
(Name of Registrant as Specified in Its Charter)
ROBERT L. BITTERLI ON BEHALF OF THE BOARD OF DIRECTORS
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
X $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14-a6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:____________________________
(2) Aggregate number of securities to which transactions
applies:__________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:____________________________________________
(4) Proposed maximum aggregate value of transaction:________________
___________________
[ ] 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: N/A
(2) Form, schedule or registration statement no: 14A
(3) Filing party: AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
(4) Date filed: N/A
<PAGE>
AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------
The annual meeting of the shareholders of American Absorbents Natural Products,
Inc., a Utah Corporation, will be held, in accordance with the bylaws of the
Company, at The University of Texas Club Austin, 2108 E. Campus Drive, Austin,
Texas, on Friday, August 11, 2000, at 1:00PM Central Standard Time for the
following purposes:
1. To elect six directors;
2. To receive the reports of officers (without taking any action
thereon);
3. To authorize the board to hire a qualified independent certified
public accountant to act as independent auditor and accountant for the
Company for the fiscal year ending January 31, 2001;
4. To ratify and approve transactions with Robert L. and Judith A.
Bitterli. including the borrowing of working capital funds, and use of
assets as collateral; and,
5. To transact such other business as may properly come before the
meeting.
Only holders of common stock of record on the books of the company at the close
of business on June 5, 2000, will be entitled to notice of and to vote at the
annual meeting of shareholders and any adjournment or adjournments or
postponement or postponements thereof. A list of shareholders entitled to vote
at the annual meeting of shareholders will be kept on file at the offices of the
Company at least ten days prior to the annual meeting of shareholders and may be
reviewed by any shareholder during regular business hours.
The enclosed proxy, which is being solicited on behalf of the Board of Directors
of the Company, should be completed, dated, signed and returned promptly to
assure that your vote will be included.
YOU MAY, OF COURSE, CHOOSE TO REVOKE YOUR PROXY IN THE MANNER DESCRIBED IN THIS
PROXY AT ANY TIME BEFORE IT HAS BEEN VOTED AT THE ANNUAL MEETING OF
SHAREHOLDERS, AND PERSONALLY CAST YOUR VOTES.
Deborah Smetzer, Corporate Secretary
Austin, Texas
June 27, 2000
<PAGE>
AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
6015 LOHMAN FORD ROAD, SUITE 100
LAGO VISTA, TEXAS 78645
------------
PROXY STATEMENT
------------
SOLICITATION AND REVOCATION OF PROXY
The accompanying proxy is being furnished to holders of Common Stock ($0.001 par
value), of American Absorbents Natural Products, Inc., a Utah corporation, and
is solicited by the Board of Directors of the Company for use at the annual
meeting of the shareholders to be held at The University of Texas Club, 2108 E.
Campus Drive, Austin, Texas on August 11, at 1:00 P.M. (local time), and any
postponements or adjournments thereof.
The expenses of preparing, assembling, printing and mailing the proxy statement
and material used in the solicitation of proxies will be borne by the Company.
It is contemplated that proxies will be solicited principally through the use of
the mails, but officers, directors and regular employees of the Company may
solicit proxies personally or by telephone or mail.
Any shareholder executing a proxy retains the right to revoke it by giving
written notice dated after the date of the proxy and before the proxy is counted
at the annual meeting of shareholders, to the Secretary of the Company, by duly
executing a subsequent proxy relating to the same shares and delivering it to
the Secretary of the Company, or by attending the annual meeting of shareholders
and voting in person. Any written notice revoking a proxy should be sent to the
offices of the Company at the address listed above.
All shares represented at the annual meeting of shareholders by properly
executed proxies received prior to or at the annual meeting of shareholders,
unless such proxies previously have been revoked, will be voted at the annual
meeting of shareholders in accordance with the instructions on the proxies. If
no instructions are indicated, proxies will be voted FOR each nominee and FOR
each item set forth in the Proxy. If any other matters are properly presented to
the annual meeting of shareholders for action, the persons named on the enclosed
form or forms of proxy and acting thereunder will have discretion to vote on
such matters in accordance with their best judgment.
The Board of Directors has fixed the close of business on June 5, 2000, as the
record date for the determination of shareholders entitled to notice of and to
vote at the annual meeting of shareholders. As of the record date, there were
5,241,136 shares of common stock ($0.001 par value) of the Company outstanding.
Holders of record of common stock on the record date are entitled to cast one
vote per share, to be exercised in person or by properly executed proxy, with
respect to each matter to be considered by them at the annual meeting of
shareholders.
The presence, in person or by properly executed proxy, of the holders of a
majority of the outstanding shares of common stock entitled to vote is necessary
to constitute a quorum at the annual meeting of shareholders.
The approval of at least a majority of those shares of common stock voted at the
annual meeting of shareholders for each nominee and for each item set forth in
the notice of annual meeting of shareholders will be required to elect the
nominees and to approve such matters.
Copies of this proxy statement and enclosed proxy card were filed with the
Washington, D.C. office of the Securities & Exchange Commission a minimum of ten
days prior to them being sent to shareholders on approximately June 30, 2000.
THE BOARD OF DIRECTORS RECOMMENDS THAT HOLDERS OF COMMON STOCK VOTE FOR THE
NOMINEES AND MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING OF SHAREHOLDERS.
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors has nominated Six persons to be elected at the annual
meeting of shareholders, each to serve until the next annual meeting of
shareholders and until their successor is elected and qualified. To be elected,
a director must receive the votes of a majority of the shares present at the
meeting by proxy or in person, provided that a majority of all shares are
present at the meeting by proxy or in person. Shares represented by the proxies
solicited by the Board of Directors will be voted (unless otherwise directed) in
favor of the election as directors of the persons named below. The bylaws of the
Company provide for a maximum of nine directors to be elected by the holders of
the common stock. During the past several fiscal years, Board operations have
operated smoothly with fewer directors. The enclosed proxy cannot be voted for a
greater number of persons than the number of nominees named.
Each nominee has agreed to serve as a director of the Company if elected.
However, in the unexpected event of the refusal or inability of any nominee for
director to serve, proxies may be voted for a substitute nominee designated by
the Board of Directors, or the Board may be reduced accordingly.
The following information concerning the principal occupation of each nominee
during the past five years and certain other information have been furnished to
the Company by each nominee for director:
<TABLE>
<CAPTION>
SERVED AS DIRECTOR OR
NAME POSITIONS WITH THE COMPANY AGE OFFICER SINCE
<S> <C> <C> <C>
Robert L. Bitterli Chairman of the Board, Chief 43 1999
Executive Officer, Director (May
99)
Richard A. Waterfield Director (March 1, 1999) 60 1999
John Krings Director (July 1999) 70 1999
Dr. Jan Krason Director (February 2000) 68 2000
Patrick Cassidy Director (September 1999) 62 1999
Gerald Clay Nominee
</TABLE>
ROBERT L. BITTERLI served as a director of the Company from June 1996 until June
1997 and became a director of the Company again in May 1999. He also became
Chief Executive Officer and President of the Company in May 1999. Mr. Bitterli
founded and served as President of Windfall Corporation, a management consulting
firm, specializing in corporations seeking and working with government
contracts. He also served as President of Security First Group Benefits
Corporation, one of the Trilon Financial group of companies (the 12th largest
financial organization in the world), providing marketing, sales, communication
and administrative services to employers for both qualified and non-qualified
pension and retirement plans. He served as Vice President of Security First
Group, a company providing investments and investment advisory services and as
General Partner of the Diversified Securities Network, a company specializing in
the sales of securities and limited partnerships. Mr. Bitterli was with Security
First Group for twelve years. He also owns J&B Properties, a residential
property investment and management company, and a majority interest in Devin
Lane Publishing, a publisher of thriller fiction. He served with honor in the
United States Army in an enlisted and commissioned capacity. He holds a B.S.
degree in Psychology from Campbell University in Bueise Creek, North Carolina
and an M.A. in Business Administration and Personnel Management, both from
Webster University in St. Louis, Missouri. Age 43.
RICHARD A. WATERFIELD has served as a director of the Company since March 1999.
He has been the owner of Database Marketing, a high tech marketing company,
since February 1997 and the owner of Waterworks Productions since October 1992.
Mr. Waterfield has been a loan consultant and lobbyist with Waterfield and
Associates since October 1991. He was elected as a representative to the Texas
State Legislature for
<PAGE>
District 88 and served two terms from 1986 to 1991. During that time he was
voted Outstanding Freshman Legislator. He served on the Human Services
Agriculture Committee and as a member of the Congressional Oil and Gas Advisory
Committee. From 1984 to 1991, Mr. Waterfield was the owner of Washita
Investments, a commodities trading firm. He was a part owner in Canadian
Feed-yard working in commercial cattle feeding operations, commodity trading and
risk management from 1975 to 1984. Mr. Waterfield has served on the Canadian
City Council, the Canadian School Board and on the board of directors of First
State Bank of Canadian, Texas. He attended Oklahoma State University majoring in
business and animal science. Age 60.
THE HONORABLE JOHN E. KRINGS is currently president of Krings Corporation.
Krings Corporation provides consulting services for the defense industry,
National Aeronautics and Space Agency, and the Federal Aviation Agency. Prior to
serving as President of Krings Corporation, Mr. Krings served as Assistant
Secretary of Defense. The President appointed Mr. Krings as the first Director,
Operational Test and Evaluation (DOT&E), Department of Defense (DOD), at the
level of Assistant Secretary of Defense. As such, he worked directly for the
Secretary of Defense and Congress. Mr. Krings also served on the Defense
Resources Board and the Defense Acquisitions Board. He evaluated and reported
independently to the Congress and the Secretary of Defense in regard to the
effectiveness and suitability of all major weapons systems as a prerequisite to
military systems entering full production. Mr. Krings has thirty years
experience in aerospace design, engineering, testing, marketing and management
with McDonnell Douglas Corporation. He was responsible for all of McDonnell
Douglas Corporation Navy and Marine Corps programs. Mr. Krings served in the Air
Force and Air National Guard as a fighter pilot, test pilot, and nuclear weapons
expert. Mr. Krings holds a B.S. degree in Chemistry and Physics. Age 70.
DR. JAN KRASON has served as director since February 2000. For the past 26
years, Dr. Krason has served as President and CEO of Geoexplorers International,
Inc. an internationally renowned consulting corporation. As a professional
consultant, Dr. Krason has served over forty clients, mostly mining and
petroleum companies, government agencies, and various international and domestic
financial institutions. Dr. Krason's forty years of experience include all
aspects of exploration for economically viable mineral and petroleum deposits to
include project management, geologic and special mapping, practically oriented
research and assessment of mineral and petroleum resources. His broad fields of
professional specialization and expertise include research on sediment-hosted
and volcanogenic gold, other precious and base metals specifically regarding
their relationships to hydrocarbons. He has extensive knowledge in basin
analysis, determination of formation, stability, and resources assessment of gas
hydrates, and conventional-type hydrocarbon deposits (particularly in the
offshore environment). Dr. Krason's consulting, projects, and lecturing have
taken him to over 60 countries including Canada, Mexico, Central and South
America, Africa, Australia, and Eastern and Central Europe to include the Newly
Independent States of the former Soviet Union. Dr. Krason has authored and
co-authored over 100 scientific publications. Age 68
DR. PATRICK CASSIDY has served as director of the Company since September 1999.
Following his education at the University of Illinois, Iowa and Arizona and two
years in industry, Dr. Patrick Cassidy began as a group leader for Chemistry and
Materials at Tracor in Austin in 1966. In this contract research and development
endeavor he developed programs with NASA and the US Navy which became the
foundation for a new company, Texas Research Institutes (TRI) of which he was a
co-founder and which developed into a $12 million research and development
enterprise. In 1971 Dr. Cassidy joined the Chemistry Department at Southwest
Texas State University (SWT) where he began the Polymer Research Group (PRG)
which grew into the largest polymer synthesis group in the southwest United
States. That effort has resulted in over $7,000,000 in grants and contracts
coming to SWT.Dr. Cassidy also initiated in 1993 the Institute for Environmental
and Industrial Science (IEIS) at SWT, an entity which serves regional industries
using university resources, all the while creating educational opportunities for
students and research fellows. His technical publications number over 140
including one book and ten chapters in other books and encyclopedias. Oral
papers total over 160 and eight patents have been issued under his direction.
Invited lectures have been international in scope including India, France,
Holland, Mexico, Germany and Japan and have been given at about 50 locations.
Dr. Cassidy has been active professionally as well serving in local and national
capacities for the American Chemical Society as a referee for several journals
as a proposal referee and as an advisory board member for another university and
an international journal. Age 62.
<PAGE>
GERALD C. CLAY has had a lifelong career as a corporate business executive,
entrepreneur and consultant. He worked in sales management for Beatrice Foods
and Uncle Ben's, a subsidiary of Mars, Inc., before joining Star-Kist Foods, a
subsidiary of H. J. Heinz Company, as General Manager of International Business
Development. In this capacity he managed existing profit centers, identified,
negotiated and recommended acquisitions and joint ventures, directed research
and implemented marketing programs, and managed export sales in Europe, South
America, and Asia. He later served as the President/CEO of Star-Kist Canada,
Inc., an autonomous profit center with $50MM in annual sales. Mr. Clay has also
owned three specialty and organic food companies. Most recently, he has utilized
his corporate and entrepreneurial background as a business consultant
specializing in turn-arounds, acquisitions, joint ventures, and development. Mr.
Clay attended the University of Cincinnati and received an honorable discharge
from the United States Army. Age 57.
There are no known arrangements or understandings between any of the foregoing
individuals and any other person pursuant to which they were elected as a
director or as a nominee.
The Company has audit and compensation committees. The Company does not have a
nominating committee. The present Board of Directors met sixteen times during
the fiscal year ended January 31, 2000. All incumbent directors attended at
least 75% or more of the total number of meetings of the Board of Directors
during the last fiscal year or for such shorter period that they served as a
director.
EXECUTIVE COMPENSATION
The following table sets forth the aggregate remuneration paid or accrued for
the fiscal years ended January 31, 1998, 1999 and 2000, as to each officer of
the Company whose aggregate remuneration exceeds $100,000, and as to the
aggregate remuneration of all officers as a group:
<TABLE>
<CAPTION>
ANNUAL COMPENSATION (1) LONG-TERM COMPENSATION
--------------------------------- ---------------------------------
AWARDS PAYOUTS
RESTRICTED
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS SAR'S PAYOUTS COMPENSATION
POSITIONS YEAR ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert L. Bitterli,
CEO 2000 9,500 -0- -0- 8,200 -0- -0- -0-
All Officers as a 1998 143,400 -0- -0- 46,325 -0- -0- -0-
Group (3 persons)
(6 persons) 1999 251,438 -0- -0- 84,998 -0- -0- -0-
(8 persons) 2000 180,571 -0- -0- 27,980 -0- -0- -0-
</TABLE>
1) Excludes the value of personal use of Company office facilities and certain
other personal benefits. The value of such personal benefits cannot be
specifically or precisely ascertained without unreasonable effort. After
reasonable inquiry, however, the Company believes that the aggregate annual
amount of such personal benefits does not exceed $50,000 per person or 10% of
the total annual salary and bonus for the named executive officer.
The Company does not have any pension, retirement, deferred compensation or
similar plan for its officers, directors or employees.
Currently, directors do not receive any cash compensation for serving in their
roles as directors of the Company. The six outside directors, Richard
Waterfield, Don Chapman, John Krings, David Stein, Patrick Cassidy, and Jan
Krason each receive 500 shares of restricted common stock for each board meeting
attended. Former Directors Nicholas Wentworth and Donald Gillespie also received
shares for their service as a director. The fair market value of the common
stock is determined by the average of the closing price of the stock for the
preceding month.
<PAGE>
The following table sets forth the aggregated option/SAR exercises in the last
fiscal year and the fiscal year-end option/SAR values:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS/SARS OPTIONS/SARS
ON VALUE AT FY-END (#) AT FY-END ($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
David W. Redding -0- -0- 100,000 E 0/0
</TABLE>
The exercisable options listed in the above table were granted to David Redding
on June 17, 1997. In an agreement reached May 19, 2000 Mr. Redding has agreed to
surrender the 100,000 options he was previously issued. Currently, there are no
other options issued.
The following table sets forth the aggregated option/SAR exercises in the last
fiscal year and the fiscal year-end option/SAR values: None
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of January 31, 2000, Mr. Robert L. Bitterli had loans outstanding to the
company totaling $60,000. Mr. Bitterli is the CEO, President and Chairman of the
Board of Directors. As of June 5, 2000, Mr. Bitterli had loans outstanding to
the Company totaling $189,624. This was the amount outstanding on the $215,000
line of credit Mr. and Mrs. Bitterli made available to the Company February 29,
2000. This line of credit is secured by a first mortgage on the real estate and
manufacturing facility located in Hines, Oregon. The terms of this line of
credit include a $2,500 monthly payment to be applied to the accrued interest
and the outstanding principal balance. The interest rate on the line of credit
is 10%.
CHANGE IN CONTROL
During the fiscal year ended January 31, 2000, there was a change of control of
the Company. On July 6, 1999, the Company purchased 2,800,000 of its common
stock from Austin-Young, Inc for $924,000. The terms of the purchase included an
initial payment of $92,400 for 280,000 shares of common stock. The balance of
the purchase price is evidenced by a non-interest bearing note of $831,600
payable over a seven-year period. The Company was also granted the proxy to vote
the 2,800,000 shares of common stock at the annual shareholders' meeting.
Complete details of the transaction were reported on the Form 8-K/A filed July
6, 1999 with the Securities and Exchange Commission. During the first part of
fiscal year 2000 several changes in management occurred as follows which
resulted in a virtual change in managing control of the Company.
Terry L. Young resigned as Chief Executive Officer effective March 1, 1999 and
his term as Chairman of the Board of Directors on April 30, 1999.
David W. Redding was resigned as President, Chief Operating Officer, Assistant
Secretary, and Treasurer effective May 12, 1999.
William C. Branch resigned as a member of the Board of Directors effective
February 26, 1999.
Donald L. Gillespie and Richard A. Waterfield were elected to the Board of
Directors of the Company in March 1999.
<PAGE>
Robert L. Bitterli was elected as Acting Interim President on April 5, 1999 and
Chief Executive Officer, President and Director effective May 12, 1999.
The following list details the remaining changes in the composition of the Board
of Directors and management team during the remainder of the year ended January
31,2000 and during the first quarter of this fiscal year:
Nicholas N. Wentworth was elected as Chairman of the Board of directors May 10,
1999.
Donald R. Chapman was elected a Director in May 1999.
James W. Haake was appointed Chief Operating Officer in June 1999.
Aaron Thomas was appointed as VP Sales in July 1999.
Robert L. Bitterli was elected as Chairman of the Board effective July 28, 1999.
Nicholas N. Wentworth resigned as Chairman of the Board effective July 28, 1999.
John Krings was elected a director in July 1999.
Donald L. Gillespie resigned as Chief Financial Officer effective August 31,
1999.
David Stein was elected as a director in September 1999.
Patrick Cassidy was elected a director in September 1999.
David Scott was appointed Chief Financial Officer September 1, 1999.
Deborah Smetzer was appointed Secretary effective October 1999.
Aaron Thomas resigned as VP of Sales in November 1999.
Dr. Jan Krason was elected a director in February 2000.
James Toney resigned as VP of Plant Operations effective March 31, 2000.
RATIFICATION AND APPROVAL OF THE APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors ask that the selection of Sprouse & Winn, L.L.P. to serve
as independent auditors of the Company for the year ending January 31, 2000, be
ratified by the shareholders at the shareholders' meeting in 2000. Orton &
Company, the previous auditor of record declined to stand for reelection.
Representatives of Sprouse & Winn are invited to make a presentation at the
shareholder meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information furnished by the following
persons concerning the common stock ownership as of June 5, 2000, of (i) each
person who is known to the Company to be the beneficial owner of more than 5
percent of the common stock; (ii) all directors and executive officers; (iii)
directors and executive officers of the Company as a group:
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES COMMON STOCK SUBJECT PERCENT OF
OF BENEFICIAL OWNER OF COMMON STOCK TO OPTIONS OR WARRANTS CLASS
<S> <C> <C> <C>
Robert L. Bitterli 500,906 -0- 9.56
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
Patrick Cassidy 2,176 -0- 0.00
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
Donald Chapman 20,587 -0- 0.28
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
Dr. Jan Krason 100,000 -0- 1.35
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
John Krings 168,069 -0- 3.21
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
David Stein 926 -0- 0.00
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
Richard Waterfield 23,468 -0- 0.45
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
James W. Haake 78,500 -0- 1.50
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
David C. Scott 60,000 -0- 0.51
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
Officers and Directors 954,632 -0- 18.21
as a Group (9 Persons)
</TABLE>
1) Unless otherwise indicated, the second column reflects amounts as to which
the beneficial listed in the first column has sole voting power and sole
investment power.
2) The total number of shares of common stock outstanding as of June 5, 2000
was 5,241,136. Option shares to each named director or officer, which are
not currently outstanding but which are subject to option exercise, are
deemed to be outstanding for the purpose of computing that director's,
officer's or group's percentage of ownership of outstanding shares of
common stock, but are not deemed to be outstanding for computing the
percentage of common stock owned by any other person.
<PAGE>
3) Of the shares set forth above for Robert L. Bitterli ,494,406shares are
held in the name of Mr. Bitterli and 6,500 are in his wife's brokerage
account.
4) Of the shares set forth above for Patrick Cassidy, all 2,176 are held in
the name of Mr. Cassidy.
5) Of the shares set forth above for Donald Chapman, 16,468 are held in his
brokerage account, 3,819 are held in the name of Donald Chapman, and 300
are held in brokerage accounts with Mr. Chapman as custodian.
6) Of the shares set forth above for Dr. Jan Krason, all 100,000 shares are
held in the name of Dr. Krason.
7) Of the shares set forth above for John Krings, 168,069 are held in the name
of Mr. Krings.
8) Of the shares set forth above for David Stein, 926 are held in the name of
Mr. Stein.
9) Of the shares set forth above for Richard Waterfield, 21,468 are held in
the name of Mr. Waterfield and 2,000 are held in Mr. Waterfield's brokerage
account.
10) Of the shares set forth above for James Haake, all shares are held in the
name of Mr. Haake.
11) Of the shares set forth above for David C. Scott, 50,000 shares are held in
the name of Mr. Scott, and 10,000 are held in Mr. Scott's brokerage
account.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OF PREFERRED STOCK SUBJECT PERCENT OF
OF BENEFICIAL OWNER CONVERTIBLE PREFERRED STOCK TO OPTIONS OR WARRANTS CLASS
<S> <C> <C> <C>
Robert L. Bitterli -0- -0- -0-
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
Patrick Cassidy -0- -0- -0-
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
Donald Chapman 10,047 -0- 3.41
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
Dr. Jan Krason -0- -0- -0-
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
John Krings 30,000 -0- 10.18
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
David Stein 20,000 -0- 0.00
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
Richard Waterfield 15,047 -0- 5.11
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
James W. Haake 30,000 -0- 10.18
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
David C. Scott -0- -0- -0-
6015 Lohman Ford Road, Suite 100
Lago Vista, TX 78645
Officers and Directors 105,094 -0- 35.68
as a Group (9 Persons)
</TABLE>
<PAGE>
1) Unless otherwise indicated, the second column reflects amounts as to which
the beneficial listed in the first column has sole voting power and sole
investment power.
2) The total number of shares of preferred stock outstanding as of June 5,
2000, was 294,584.
3) Of the shares set forth above for Donald Chapman , 10,047 shares are held
in the name of Mr. Chapman.
4) Of the shares set forth above for John Krings, all 30,000 are held in the
name of Krings, Inc. Defined Benefit Pension Plan.
5) Of the shares set forth above for David Stein, all 20,000 are held jointly
in Mr. Stein's and Ms. Kerwick's names.
6) Of the shares set forth above for Richard Waterfield, all 15,047 shares are
held in the name of Mr. Waterfield.
7) Of the shares set forth above for James W. Haake, 30,000 are held in the
name of Mr.Haake
SECURITY OWNERSHIP OF NEWLY ELECTED OFFICERS AND DIRECTORS:
The following table sets forth the security ownership on the day proceeding the
date of election for each of the newly elected officers and directors elected to
their positions subsequent to June 5, 2000: NONE
RATIFICATION AND APPROVAL OF THE BORROWING OF WORKING CAPITAL FUNDS
AND USE OF COLLATERAL FROM ROBERT L. BITTERLI:
As of January 31, 2000, Mr. Robert L. Bitterli had loans outstanding to the
company totaling $60,000. Mr. Bitterli is the CEO, President and Chairman of the
Board of Directors. As of June 5 2000 Mr. Bitterli had loans outstanding to the
Company totaling $189,624. This was the amount outstanding on the $215,000 line
of credit Mr. and Mrs. Bitterli made available to the Company February 29, 2000.
This line of credit is secured by a first mortgage on the real estate and
manufacturing facility located in Hines, Oregon. The terms of this line of
credit include a $2,500 monthly payment to be applied to the accrued interest
and the outstanding principal balance. The interest rate on the line of credit
is 10%.
During the year ended January 31, 2000, the Company had to secure operating
funds from Mr. Bitterli with the outstanding balance on January 31, 2000 of
$60,000. Such amount is evidenced by demand promissory
<PAGE>
notes bearing interest from 7.00% to 8.50% per annum. Management of the Company
believes that the terms of the note are fair to the Company. In addition, the
Company has used collateral of Mr. Bitterli to secure bank financing on the
warehouse facility in Austin, Texas and has in turn given Mr. Bitterli a
security interest in the warehouse facility for the use of Mr. Bitterli's assets
as collateral. That note balance was $150,000 on January 31, 2000 and June 5,
2000. However, because none of the directors at such time that these
transactions were made was a disinterested party, the transactions may be
subject to challenge by the shareholders.
Section 16-10a-851 of the Utah Revised Business Corporation Act provides that no
such conflicting interest transactions may be enjoined, be set aside, or give
rise to an award of damages or other sanctions, in a proceeding by a shareholder
or by or in the right of the corporation, if the shareholders holding qualified
shares approve the transactions at any time, provided that the shareholders
holding a majority of such qualified shares are present at a duly held meeting
and a majority of such qualified shares present at the meeting vote in favor of
the transactions. For purposes of this section, the term "qualified shares"
means those shares otherwise entitled to vote on the transactions, except shares
owned or controlled by a director who has a conflicting interest respecting the
transactions, or by a related person of that director (see "Security Ownership
of Certain Beneficial Owners and Management"). There are approximately 4,740,230
common shares qualified to vote on this proposal. In addition, the transactions
may not be enjoined, be set aside, or give rise to an award of damages or other
sanctions, in a proceeding by a shareholder or by or in the right of the
corporation, if the transactions, judged according to the circumstances at the
time of commitment, is established to have been fair to the corporation.
Therefore, the Board of Directors is seeking ratification and approval of the
transactions described above at the annual meeting of shareholders by persons
holding qualified shares. If less than a majority of the persons holding
qualified shares are present at the annual meeting of shareholders, or if less
than a majority of such qualified shares are voted for ratification and approval
of such transactions, the transactions may be challenged under the section set
forth above. Notwithstanding a failure by the shareholders to ratify and approve
the transactions, the Board of Directors believes that under the circumstances
at the time of such transactions with Mr. Robert L. Bitterli such transactions
were fair to the Company and does not intend to seek rescission of the granting
of loans, or use of collateral by the previously mentioned directors to the
Company.
LEGAL PROCEEDINGS
Neither the Company, any of its properties, nor its subsidiary is a party to any
material pending legal proceeding or government action, including any material
bankruptcy, receivership, or similar proceedings. Management of the Company does
not believe that there are any material proceedings to which any director,
officer or affiliate of the Company or its subsidiary, any owner of record,
beneficially, of more than 5 percent of the common stock of the Company, or any
associate of any such director, officer or affiliate of the Company, or security
holder is a party adverse to the Company or its subsidiary or has a material
interest adverse to the Company or its subsidiary. The Company does, from time
to time, get involved in litigation in the carrying out of its operations.
On or about July 6, 1998, the Company filed a Complaint For Declaratory Relief
(Case No. 98-07-145-CV) in the Circuit Court of the State of Oregon for the
County of Harney against David Calkins seeking removal of a Claim of Lien Upon
Chattels. Mr. Calkins was contracted by the Company to install milling equipment
for the Company in its Oregon Milling Facility. Mr. Calkins alleged that he was
not completely paid for the installation and filed a Claim of Lien Upon Chattels
(No. 980681) in the amount of $10,806.37. The Company alleges that, after
deducting items that were completed without the Company's approval and for the
personal benefit of Mr. Calkins and after paying directly to Service Providers
items that were billed to the Company by Mr. Calkins, the contract fees were all
paid to Mr. Calkins. This matter has been resolved
<PAGE>
by a trial held on May 21-22, 2000. The Company was found to be responsible for
approximately $8,200 in unpaid bills and a yet to be determined amount of the
plaintiff's legal fees. The Company's management does not expect this litigation
to have any material impact on the Company, its management or its operations.
FINANCIAL STATEMENT
The audited financial statements of the Company for the years ended January 31,
2000 and 1999 are included with this proxy statement.
SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING OF SHAREHOLDERS
The next annual meeting of shareholders of the Company is presently and
tentatively scheduled for June 6, 2001. The Secretary of the Company must
receive proposals of shareholders intended to be presented at such meeting at
the offices of the Company at the address listed above no later than January 31,
2001.
OTHER BUSINESS
As of the date of this Proxy Statement, The Board of Directors knows of no other
matters to be presented for action at the annual meeting of shareholders. If
other matters are properly presented, the person named in the proxy intends to
vote in accordance with their best judgment on such matters.
By Order of the Board of Directors
/s/ Robert L. Bitterli
-----------------------------------------
Robert L. Bitterli, Chairman of the Board
Austin, Texas
June 27, 1999
<PAGE>
AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
6015 Lohman Ford Road, #100 Lago Vista, TX. 78645
PROXY
This proxy is solicited on behalf of the board of directors The undersigned
hereby appoints Robert L. Bitterli as Proxy, with the power to appoint his
substitute, and hereby authorizes him to represent and to vote, as designated
below, all the shares of common stock of American Absorbents Natural Products.
Inc. held on record by the undersigned on June 5, 2000, at the annual meeting of
shareholders to be held on August 11, 2000, or any postponements or adjournments
thereof.
--------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS
[ ] FOR ALL nominees listed below (except as marked to the contrary
below)
[ ] WITHHOLD AUTHORITY to vote for ALL nominees listed below.
(Instruction: To withhold authority to vote for any INDIVIDUAL
NOMINEE, strike a line through the nominee's name in the list below.)
Robert Bitterli oo John E. Krings oo Dr. Jan Krason oo Richard Waterfield oo
Dr. Patrick Cassidy oo Gerald Clay
2. To authorize the board to hire a qualified independent certified public
accountant to act as independent auditor and accountant for the Company for
the fiscal year ending January 31, 2001; (Circle One)
FOR AGAINST ABSTAIN
3. Proposal to ratify and approve the transactions with Robert L. Bitterli
(Circle One)
FOR AGAINST ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3.
Shares held by joint tenants requires both signatures. 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 authorized officer. If a
partnership, please sign in partnership name by authorized person.
____________________________________ ___________________________________
Signature if individually held Corporation or Partnership Name
____________________________________ By:___________________________________
Signature if jointly held Authorized officer or person
Date:__________________________,1999 NUMBER OF SHARES___________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY.
