CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
Notice of Annual Meeting of Stockholders
January 28, 1997
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Cyclodextrin Technologies Development, Inc., a Florida Corporation (the
"Company") , will be held on Tuesday, January 28, 1997, at 10:00 AM EDT, at
the Company's principal offices at 3713 S.W. 42nd Avenue, Suite 3,
Gainesville, Florida 32608-6581, for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are duly elected and qualified.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying the Notice.
Only stockholders of record at the close of business on December 20,
1996, are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting and the presence of a
quorum at the meeting you are urged to sign and return the enclosed proxy as
promptly as possible in the postage-prepaid envelope enclosed for that
purpose. Any stockholder attending the meeting may vote in person even if the
stockholder has returned a proxy.
/s/ C.E. Rick Strattan
C. E. Rick Strattan, President
Gainesville, Florida
December 31, 1996
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
3713 S.W. 42nd Avenue, Suite 3
Gainesville, Florida 32608-6581
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
The enclosed proxy is solicited by the management of Cyclodextrin
Technologies Development, Inc., (the "Company") for use at the Annual Meeting
of the Stockholders (the "Annual Meeting") to be held at 10:00 A.M. EDT on
Tuesday, January 28, 1997, at the Company's offices located at 3713 S.W. 42nd
Avenue, Suite 3, Gainesville, Florida 32608-6581, and adjournment or
postponement thereof. The Company's telephone number is (352) 375-6822.
This proxy statement and form of proxy are being mailed to stockholders
on or about January 8, 1997. The Annual Report including certified financial
statements for the two most recent fiscal years ending on December 31, 1996,
is enclosed herewith.
INFORMATION CONCERNING SOLICITATION AND VOTING
Revocability of Proxies
Any proxy may be revoked at any time before it is voted by written notice
mailed or delivered to the Secretary of the Company, by receipt of a proxy
properly signed and dated subsequent to an earlier proxy, and by revocation of
a written proxy request in person at the Annual Meeting, but if not so
revoked, the shares represented by such proxy will be voted.
Cost and Method of Solicitation
This solicitation of proxies is being made on behalf of the Company and
its cost will be borne by the Company, including expenses in connection with
preparing, assembling and mailing the proxy solicitation materials and the
charges and expense of brokerage fees and others for forwarding solicitation
materials to beneficial owners. In addition to solicitation by mail, proxies
may be solicited personally or by telephone or telegraph by directors,
officers or employees of the Company, who will receive no additional
compensation for such services.
Shares Outstanding and Voting Rights
The outstanding voting securities of the Company entitled to one (1) vote
per share on December 20, 1996 was 1,225,110 shares of the Company's common
stock, $.0001 par value (the "Common Stock"). Holders of record of the Common
Stock at the close of business on December 20, 1996, will be entitled to one
vote per share on each matter submitted to or acted upon by the Stockholders
at the Annual Meeting: The following table shows the ownership of the Common
Stock of the Company on December 20, 1996, by each person who, to the
knowledge of the Company, owned beneficially more than five (5%) of such
stock, the ownership of each director, and the ownership of all directors and
officers as a group. Unless otherwise noted, shares are subject to the sole
voting and investment power of the indicated person.
Names and Address of Amount and Nature Approximate % of Class
Individual or of Beneficial Ownership
Identity of Group
C.E. Rick Strattan<F1> 515,800<F2> 42.10%
4123 N.W. 46th Avenue
Gainesville, FL 32606
Diversified Corporate 75,000 6.12%
Consulting Group
11355 S.E. 54th Avenue
Belleview, FL 34420
David L. Southworth 14,000 1.14%
3142 N. E. 13th Street
Gainesville, FL 32609
All Officers and 529,800 43.25%
Directors as a group
(2 Persons)
[FN]
<F1> Held by Strattan Associates, Ltd., of which Mr. Strattan is the general
partner. Strattan Associates, Ltd. is a limited partnership established by
Mr. Strattan for estate tax purposes and is not otherwise engaged in business.
Strattan Associates, Ltd. is the owner of the 500,000 shares of CTD stock.
<F2> Includes 15,800 issuable to Mr. Strattan pursuant to employee stock
purchase plan.
Deadline for Receipt of Stockholder Proposals
Any proposal by a stockholder of the Company to be presented at the next
annual meeting must be received by the Company no later than August 27, 1997,
in order to be considered for inclusion in the Corporation's Proxy Statement
and form of proxy relating to such meeting.
ELECTION OF DIRECTORS
One (1) Director is to be elected for a term of one (1) year and until
the election and qualification of his successor. Unless otherwise instructed,
the persons named in the proxy will vote the proxies received by them for the
election as Director of C.E. Rick Strattan. The nominee is currently acting as
the sole director of the Company. The Board of Directors held six meetings
during the last fiscal year. The Board of Directors does not
have standing nominating, audit or compensation committees. There is no
family relationship between any director or officer
of the Company. Persons serving on the Board of Directors receive no
compensation for their services as Directors.
The Board of Directors recommends that the stockholders vote "FOR" the
nominee listed below:
Name Age Position Since
C.E. Rick Strattan 51 President/C.E.O., Director August, 1990
C.E. Rick Strattan, has been President and a Director of the Company
since its formation. He served as treasurer of the Company from August, 1990
to May, 1995. From November 1987 through July 1992, Mr. Strattan was with
Pharmatec, Inc. where he became its Director of Marketing and Business
Development. He was responsible for CD sales and related business development
efforts. From November, 1985 through May, 1987 he served as Director of Sales
and Marketing for Boots-Celltech Diagnostics, Inc. He also served as Product
Sales Manager for American Bio-Science Laboratories, a Division of American
Hospital Supply Corporation. He is a graduate of the University of Florida
with a BS degree in chemistry and mathematics and has also received an MS
degree in Pharmacology and an MBA degree in Marketing/Computer Information
Sciences from the same institution. Mr. Strattan has written and published
numerous articles and a book chapter on the subject of Cyclodextrins. Mr.
Strattan's professional and technical experience are deemed highly important
to the Company. See "Business - General."
EXECUTIVE COMPENSATION
Executive compensation is determined by the Board of Directors. All
compensation paid by the Company for services rendered during the three fiscal
years ended December 31, 1993, 1994 and 1995 for each executive officer is set
forth in the following table:
SUMMARY COMPENSATION TABLE
(two fiscal years ended December 31, 1994 and 1995)
Annual Long Term
Compensation Compensation
_________________________ _____________
Other All
Name and Annual Other
Principal Position Year Salary Bonus Compensation Compensation
[S] [C] [C] [C] [C] [C]
C.E. Rick Strattan 1996<F1> $24,000 -0- -0- -0-
Chief Executive 1995 $36,000 -0- -0- -0-
Officer, President 1994 $60,000 -0- -0- $500
Steve Herschleb 1996<F1> -0- -0- -0- -0-
Vice President 1995<F2> $12,500 -0- -0- $25,000<F2>
1994 $18,750 -0- -0- -0-
David L. Southworth 1996<F1> $21,550 -0- -0- -0-
Treasurer/Chief 1995 $27,550 -0- -0- $2,501<F3>
Financial Officer
[FN]
<F1> Nine months ended September 30, 1996.
<F2> On May 1, 1995, Mr. Herschleb left CTD due to ill health and the Company
repurchased his shares for $2.50 per share.
<F3> On November 11, 1995 Mr. Southworth received 4,000 shares of CTD common
stock having a value of $2,501 based on the market price of the shares at that
time.
On November 15, 1995, the Company adopted a non-qualified employee stock
purchase plan pursuant to which employees may purchase restricted shares of
the Company's common stock at a price of 50% of the current bid price of the
shares in amounts not to exceed the employee's gross pay. Pursuant to the
plan, employees have elected to purchase 33,400 shares, of which 15,800 shares
have been purchased by Mr. Strattan.
Performance-Based Stock Compensation
The Company has adopted a resolution whereby up to 100,000 shares may be
transferred to Mr. Strattan based on his performance in the discretion of the
Board of Directors which is solely comprised of Mr. Strattan.
Certain Transactions
In November 1993, the Company entered into a Business Consulting
Agreement with Garrison Enterprises, Inc. ("Garrison") to provide consulting
services to the Company in the areas of the evaluation of managerial,
marketing and sales requirements; reviewing and analyzing proposed business
opportunities; consulting with the Company on strategic corporate planning and
long-term investment policies; and rendering advice with respect to future
fund raising and other financial arrangements. As compensation for its
services Garrison was issued 300,000 shares of the Company's Common Stock and
after completion of the Company's private placement offering in May, 1994,
Garrison began receiving $7,000 per month for a period of 3 years and $10,000
per month for the two-year period thereafter.
In November 1993, C.E. Rick Strattan, the President of the Company, and
Garrison entered into a Shareholder's Agreement. Pursuant to which Mr.
Strattan and Garrison (the "Shareholders") agreed to vote their shares so as
to provide that the Directors of the Company shall be C.E. Rick Strattan and
Michael A. Schub ("Schub"). In addition, the Shareholders agreed to an annual
salary to the President of the Company of $7,000 per month for the three years
after the closing of the stock offering, increasing to $10,000 per month in
years four and five.
Subsequently, on June 16, 1994, Mr. Schub resigned as Vice President,
Secretary and Director of the Company. On June 23, 1994, Barry R. Klein
became Secretary and a Director of the Company. In addition, Mr. Schub was
president and a director of Garrison from inception to June 23, 1994, when Mr.
Schub resigned.
Upon Mr. Schub's resignation as an officer and director of the Company
and Garrison, the Company entered into a retainer agreement with Schub thereby
retaining Schub as special counsel, at a monthly retainer of $1,750 commencing
July 1, 1994 and continuing until March 31, 1997. From April 1, 1997 to March
31, 1999, said retainer was to be increased to $2,500 per month. Garrison
thereafter agreed to reduce its compensation from the Company in an amount
equal to the monthly retainer paid to Schub.
On August 1, 1994, the Company entered into a five-year consulting
agreement (renewable annually by mutual agreement) with Yellen Associates
("Yellen"). Yellen agreed to provide ideas for new products in the
nutritional, geriatric, and related health fields; to find companies and/or
products suitable for acquisition; to find products suitable for manufacture
and/or distribution; and to secure customers for Company products. All
products offered by Yellen and accepted by the Company will belong exclusively
to the Company with all related rights. In return, the Company agreed to pay
Yellen $2,000 per month for nine months. If sales of Yellen products had been
at least $200,000 per year, this monthly payment would have automatically
continued for one year. Any other continuance of the payment would be
negotiated. Additionally, the Company would pay Yellen royalties of up to 5%
of sales for three to five years for products acquired through Yellen or
cyclodextrin sales made by Yellen. The Company also agreed to sell to Yellen
over a period of three years from August 1, 1994, up to 30,000 shares of
Company stock at a discount of 50% of the market price quoted at the time of
purchase. Having satisfied the guaranteed minimum payments part of the
agreement in April, 1995, the Company chose to discontinue the monthly
payments.
In September 1994, the Company prepaid its consulting agreements with
Garrison and Schub for an amount equal to $180,000. Garrison and Schub are no
longer providing services to the Company. The Company terminated these
agreements because it believed that the marketing and financial services of
Schub and Garrison would not be needed for the remaining term of five years.
Thus, the Company bought out of these agreements at a discount of $270,000.
Under the terms of the contracts, the Company was obligated to expend
approximately $450,000 over the next year term of the agreement.
On December 12, 1994, the Company adopted a stock issuance plan pursuant
to which employees named by the board of directors receive shares in amounts
determined by the board. Shares received pursuant to the 1994 plan are vested
after five years. During the third, fourth and fifth years the stock is held
by an employee, the employee may cause the Company to repurchase the stock at
50% of the then current market value. Since its inception 35,000 shares have
been issued pursuant to the plan, of which 10,000 have been repurchased.
On May l, 1995, the Company agreed to purchase all of Mr. Herschleb's
common shares of the Company (10,000 shares) at a price of $2.50 per share
payable in 12 monthly installments without interest.
On May 1, 1995, the Company entered into a Joint Venture Agreement with
Ocumed, Inc. Under the terms of the Agreement, the parties have created a
separate entity called Ocudex, Inc. for the purpose of developing and selling
ophthalmic products manufactured by Ocumed and developed by the Company for
which the Company will provide funding of up to $120,000 over a 12-month
period. The Company and Ocumed each own 50% of Ocudex, Inc.
The Company has adopted a resolution whereby up to 100,000 shares may be
transferred to Mr. Strattan based on his performance in the discretion of the
Board of Directors which is solely comprised of Mr. Strattan.
Independent Public Accountants
James Moore & Co. acted as the principal accountant for the Company for
the fiscal year most recently completed. Davis, Monk & Co. will serve as the
Company's principal accountant for the current year. The Company does not
expect representatives of James Moore & Co. or Davis, Monk & Co. to be present
at the Annual Meeting.
Form 10-K
The Company will provide to any record holder or beneficial owner of its
Common Stock, without charge, a copy of its Annual Report to the Securities
and Exchange Commission on Form 10-K filed with the Securities and Exchange
Commission (not including exhibits to the Form 10-K), upon request. Written
requests should be directed to David Southworth, 3713 S.W. 42nd Avenue, Suite
3, Gainesville, Florida 32608-6581.
Other Matters
As of the date of this Proxy Statement, there are no other matters to be
brought before the Annual Meeting. Should any other matters come before the
Annual Meeting, action may be taken thereon pursuant to the proxies in the
form enclosed, which confer discretionary authority on the persons named
therein or their substitutes with respect to such matters.
In the event of any questions, please call David Southworth at (352) 375-
6822.
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
PROXY
The undersigned hereby constitutes and appoints C.E. Rick Strattan 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
Cyclodextrin Technologies Development, Inc. (the "Company"), held on record by
the undersigned on December 20, 1996, at the Annual Meeting of Stockholders to
be held on January 28, 1997, or any adjournment thereof;
The undersigned hereby instructs said Proxy to vote:
1. Election of Directors.
For the nominee listed below: (____)
Withhold authority to vote for the nominee listed below: (____)
C.E. Rick Strattan
2. Other Matters.
In his discretion, the Proxy is authorized to vote upon such other
business as may properly come before the meeting with respect to: (a) matters
not known a reasonable time before the solicitation of this proxy; (b) the
approval of the minutes of the prior shareholders' meeting provided that such
approval does not amount to ratification of the action taken at that meeting;
and (c) the election of any person to any office for which a bona fide nominee
has been named in the proxy statement and such nominee is unable to serve or
for good cause will not serve.
This Proxy is solicited on behalf of the Management of Cyclodextrin
Technologies Development, Inc. This Proxy when properly executed will be
voted in the manner directed herein by the undersigned Stockholder. If no
direction is made, this Proxy will be voted for the nominee for Director named
above.
Please sign exactly as name appears below. 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 the corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
________________________________
Signature
________________________________
Signature If Held Jointly
________________________________
(Please Print Name)
________________________________
Number of Shares Subject to Proxy
Dated:___________________________
