WASHINGTON, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
ITRONICS INC.
[ ] $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 14a-6(i)(4) and
0-11.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any 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.
ITRONICS INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To the Stockholders of Itronics Inc.:
NOTICE IS HEREBY GIVEN that the Special Meeting (the "
Meeting
")
of Stockholders of Itronics Inc., a Texas corporation (the "
Company
" or
"
Itronics
") will be held at 10:00 a.m. on March 27, 2008, at the
Reno-Sparks Convention Center, Section A-13 North, 4590 South Virginia Street, Reno,
Nevada, 89502, for the following purposes:
1. To consider and vote upon a proposal to increase the Companys
authorized shares of common stock, $0.001 par value, from one billion (1,000,000,000)
shares to twenty billion (20,000,000,000) shares of common stock; and
2. To consider and transact such other business as may properly come
before the Meeting and any adjournments thereof.
In accordance with the provisions of the Company's By-laws, the Board
of Directors has fixed the close of business on February 6, 2008 as the date for
determining the stockholders of record entitled to receive notice of, and to vote at, the
Meeting and any adjournments thereof.
Dated: February 5, 2008
By Order of the Board of Directors,
/S/ Dr. John W. Whitney
Dr. John W. Whitney, President and Director
STOCKHOLDERS ARE URGED TO FILL IN, DATE, SIGN AND PROMPTLY RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING PREPAID ENVELOPE.
It is desirable that as many stockholders as possible be represented,
in person or by proxy, at the Meeting. Consequently, whether or not you now expect to be
present, please execute and return the enclosed proxy. You have the power to revoke your
proxy at any time before it is voted, and the giving of a proxy will not affect your right
to vote in person if you attend the Meeting.
2
ITRONICS INC.
6490 South McCarran Boulevard, Building C, Suite 23
Reno, Nevada 89509
PRELIMINARY PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
March 27, 2008
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Itronics Inc. (the "
Company"
)
for use at the Company's Special Meeting of Stockholders to be held on March 27, 2008, and
at any adjournment thereof (the "
Meeting"
). Further, solicitation of
proxies may be made personally, or by telephone or telegraph, by regularly employed
officers and other employees of the Company, who will receive no additional compensation
for such solicitations. The cost of soliciting proxies will be borne by the Company which
may enlist the assistance, and reimburse the reasonable expenses, of banks and brokerage
houses for additional solicitation of proxies and proxy authorizations, particularly from
their customers whose stock is not registered in the owner's name, but in the name of such
banks or brokerage houses.
Only stockholders of record at the close of business on February 6,
2008 (the "
Record Date
") are entitled to vote at the Meeting. As of the
Record Date, there were issued and outstanding 999,996,999 shares of the Companys
common stock, $0.001 par value per share (the "
Common Stock
"). Each
outstanding share of Common Stock is entitled to one vote on all matters properly coming
before the Meeting. All properly executed, unrevoked proxies on the enclosed form of proxy
that are received in time will be voted in accordance with the stockholders
directions and, unless contrary directions are given, will be voted for the proposals (the
"
Proposals
") described below. Anyone giving a proxy may revoke it at any
time before it is exercised by giving the Board of Directors of the Company written notice
of the revocation, by submitting a proxy bearing a later date or by attending the Meeting
and voting in person.
The presence in person or by properly executed proxy of holders
representing a majority of the issued and outstanding shares of the Common Stock entitled
to vote is necessary to constitute a quorum for the transaction of business at the
Meeting. Votes cast by proxy or in person at the Meeting will be tabulated by the
inspector of elections appointed for the Meeting, who will determine whether or not a
quorum is present. Shares of Common Stock represented by proxies that are marked
"abstain" will be included in the determination of the number of shares present
and voting for purposes of determining the presence or absence of a quorum for the
transaction of business. Abstentions are counted as voted against a proposal. Brokers
holding shares of Common Stock for beneficial owners in "street name" must vote
those shares according to specific instructions they receive from the owners. However,
brokers have discretionary authority to vote on "routine" matters. Absent
specific instructions from the beneficial owners in the case of "non-routine"
matters, the brokers may not vote the shares. "Broker non-votes" result when
brokers are precluded from exercising their discretion on certain types of proposals.
Shares that are voted by brokers on some but not all of the matters will be treated as
shares present for purposes of determining the presence of a quorum on all matters, but
will not be treated as shares entitled to vote at the Meeting on those matters as to which
instructions to vote are not provided by the owner.
The Board of Directors of the Company has adopted and approved the
proposals set forth herein and recommends that the Companys Stockholders vote
"FOR" the proposals.
Copies of each of the Annual Reports on Form 10-KSB of the Company for
the fiscal year ended December 31, 2006 and the Quarterly Report on Form 10-QSB for the
fiscal quarter ended September 30, 2007, including financial statements, which are
incorporated by reference into this Proxy Statement and made a part hereof, are attached
hereto as Appendix B and C, respectively.
This Proxy Statement, the accompanying Notice of Meeting and the Form
of Proxy have been first sent to the stockholders on or about February 14, 2008. The date
of this Proxy Statement is February 5, 2008.
3
TABLE OF CONTENTS
Page
QUESTIONS AND ANSWERS
5
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
8
STOCKHOLDER PROPOSALS
14
SOLICITATION OF PROXIES
14
INFORMATION INCORPORATED BY REFERENCE
14
APPENDIX A -
Certificate of Amendment to the Articles of Incorporation
15
APPENDIX B
Annual Report on Form 10-KSB for the fiscal year ended December
31, 2006
17
APPENDIX C
Quarterly Report on Form 10-QSB for the fiscal quarter ended
September 30, 2007
18
4
QUESTIONS AND ANSWERS
Q: Who may vote at the meeting?
A: You may vote your Itronics stock if our records show that you owned
your shares of common stock, $0.001 par value (the "
Common Stock
") on
February 6, 2008, which is referred to as the Record Date. On February 6, 2008, there were
999,996,999 shares of Common Stock outstanding. You may cast one vote for each share of
Common Stock held by you on all matters presented.
Q: What proposals will be voted on at the meeting?
A: There is one proposal scheduled to be voted on at the special
meeting to be held at 10:00 a.m. on March 27, 2008, at the Reno-Sparks Convention Center,
Section A-13 North, 4590 South Virginia Street, Reno, Nevada (the "
Meeting
"):
The increase of our authorized Common Stock, $0.001 par value, from
1,000,000,000 shares to 20,000,000,000 shares.
Q: How does the Board of Directors recommend that I vote?
A: Our Board of Directors recommends that you vote:
"FOR" the increase in our authorized Common Stock.
Q: How can I vote my shares in person at the Meeting?
A: If your shares are registered directly in your name with our
transfer agent, Securities Transfer Corporation, you are considered the stockholder of
record with respect to those shares and the proxy materials and proxy card are being sent
directly to you by us. As the stockholder of record, you have the right to vote in person
at the Meeting. If you choose to do so, you can bring the enclosed proxy card or vote
using the ballot provided at the Meeting. Even if you plan to attend the Meeting, we
recommend that you vote your shares in advance as described below so that your vote will
be counted if you later decide not to attend the Meeting.
Some of our stockholders hold their shares in street name through a
stockbroker, bank or other nominee rather than directly in their own name. In that case,
you are considered the beneficial owner of shares held in street name, and the proxy
materials are being forwarded to you together with a voting instruction card. As the
beneficial owner, you are also invited to attend the Meeting. Because a beneficial owner
is not the stockholder of record, you may not vote these shares in person at the Meeting
unless you obtain a "legal proxy" from the broker, trustee or nominee that holds
your shares, giving you the right to vote the shares at the Meeting. You will need to
contact your broker, trustee or nominee to obtain a legal proxy, and you will need to
bring it to the Meeting in order to vote in person.
Q: How can I vote my shares without attending the Meeting?
A: Whether you hold shares directly as the stockholder of record or
beneficially in street name, you may direct your vote without attending the Meeting by
mailing your proxy card or voting instruction card in the enclosed pre-paid envelope.
Please refer to the enclosed materials for details.
Q: What happens if I do not give specific voting instructions?
A: If you hold shares in your name, and you sign and return a proxy
card without giving specific voting instructions, your shares will be voted as recommended
by our Board of Directors on all matters and as the proxy holders may determine in their
discretion with respect to any other matters properly presented for a vote before the
Meeting. If you hold your shares through a broker, bank or other nominee and you do not
5
provide instructions on how to vote, your broker or other nominee will
have authority to vote your shares on all matters to be considered at the Meeting.
Q: What is the quorum requirement for Meeting?
A: A majority of our outstanding shares of Common Stock as of the
record date must be present at the Meeting (in person or represented by proxy) in order to
hold the Meeting and conduct business. This is called a quorum. Your shares will be
counted for purposes of determining if there is a quorum, even if you wish to abstain from
voting on some or all matters introduced at the Meeting, if you:
are present and vote in person at the Meeting; or
have properly submitted a proxy card.
Q: How can I change my vote after I return my proxy card?
A: You may revoke your proxy and change your vote at any time before
the final vote at the Meeting. You may do this by signing a new proxy card with a later
date or by attending the Meeting and voting in person. However, your attendance at the
Meeting will not automatically revoke your proxy unless you vote at the Meeting or
specifically request in writing that your prior proxy be revoked.
Q: Is my vote confidential?
A. Proxy instructions, ballots and voting tabulations that identify
individual stockholders are handled in a manner that protects your voting privacy. Your
vote will not be disclosed either within Itronics or to third parties, except: (1) as
necessary to meet applicable legal requirements, (2) to allow for the tabulation of votes
and certification of the vote, and (3) to facilitate a successful proxy solicitation.
Occasionally, stockholders provide written comments on their proxy card, which may be
forwarded to our management.
Q: Where can I find the voting results of the Meeting?
A: The preliminary voting results will be announced at the Meeting. The
final voting results will be tallied by our Inspector of Elections and published in a
Current Report on Form 8-K.
Q: How can I obtain a copy of Itronics 10-KSB and 10-QSB?
A: Copies of Itronics Annual Report on Form 10-KSB for the fiscal
year ended December 31, 2006 and Itronics Quarterly Report on Form 10-QSB for the
fiscal quarter ended September 30, 2007, are attached hereto as Appendix B and C,
respectively. Our Forms 10-KSB and 10-QSB are also available in PDF format on the
Securities and Exchange Commissions website at http://www.sec.gov.
Q: What is the voting requirement to approve the proposal?
A: The proposal requires the affirmative "FOR" vote of a
two-thirds majority of the outstanding common shares of the Company. If you hold shares
beneficially in street name and do not provide your broker with voting instructions, your
shares may constitute "broker non-votes." Generally, broker non-votes occur when
a beneficial owner fails to give voting instructions with respect to
"non-routine" matters. In tabulating the voting result for any particular
proposal, shares that constitute broker non-votes are not considered entitled to vote on
that proposal. Thus, although broker non-votes are counted for purposes of determining a
quorum, broker non-votes will not otherwise affect the outcome of any matter being voted
on at the Meeting. There are no votes scheduled that are considered
"non-routine."
6
Q: How can I communicate with the Board of Directors?
A: Our Board of Directors has not adopted a formal procedure that
stockholders must follow to send communications to it. The Board of Directors may receive
communications from stockholders, from time to time, and shall addresses those
communications as appropriate. Stockholders can send communications to the Board in
writing to:
ITRONICS INC.
6490 South McCarran Boulevard, Building C, Suite 23
Reno, Nevada 89509
Attention: Dr.
John W. Whitney
Q: Who can help answer my questions?
A: You may seek answers to your questions by writing or calling us at
our principal executive offices:
ITRONICS INC.
6490 South McCarran Boulevard, Building C, Suite 23
Reno, Nevada 89509
Telephone:
(775) 689-7696
Attention:
Dr. John W. Whitney
7
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Only stockholders of record at the close of business on February 6,
2008 are entitled to vote at the meeting to be held at 10:00 a.m. on March 27, 2008, at
the Reno-Sparks Convention Center, Section A-13 North, 4590 South Virginia Street, Reno,
Nevada (the "
Meeting
"). The total number of shares of our common stock,
par value $.001 per share (the "
Common Stock
") issued, outstanding and
entitled to be voted on the record date was 999,996,999 shares. Each such share of Common
Stock is entitled to one vote upon all matters to be acted upon at the Meeting. There are
no cumulative voting rights. The holders of a majority of the outstanding shares of Common
Stock (i.e., 499,998,500 shares) shall constitute a quorum. A quorum is necessary to hold
a valid meeting. In accordance with our Articles of Incorporation and By-laws, and
applicable law, approval of the proposal will require a favorable vote by a two thirds
majority of the shares of our Common Stock issued and outstanding.
Abstentions will be counted as votes not cast, which will have the same
effect as a negative vote on the matter. A broker non-vote occurs when a broker votes on
some matter on the proxy card but not on others because the broker does not have the
authority to do so.
The following table sets forth certain data with respect to those
persons known to us, as of February 6, 2008, to be the beneficial owners of more than 5%
of the outstanding shares of our Common Stock as well as certain information, with respect
to director and executive officer ownership of our Common Stock:
|
Amount and Nature of Beneficial Ownership
|
|
|
|
Common Shares
|
|
|
Name and
|
|
Which May Be
|
|
Percent
|
Address of
|
Common Shares
|
Acquired Within
|
|
of
|
Beneficial Owner
|
Presently Held
|
60 days (1)
|
Total
|
Class
|
Dr. John W. Whitney
|
|
|
|
|
P.O. Box 10725
|
|
|
|
|
Reno, NV 89510 (2)(3)(4)
|
33,081,313
|
20,050,000
|
53,131,313
|
5.2
|
Howland S. Green
|
|
|
|
|
P.O. Box 10725
|
|
|
|
|
Reno, NV 89510 (2)
|
1,899,483
|
500,000
|
2,399,483
|
*
|
Duane H. Rasmussen
|
|
|
|
|
P.O. Box 10725
|
|
|
|
|
Reno, NV 89510 (3)
|
2,202,973
|
2,850,703
|
5,053,676
|
*
|
All directors and
|
|
|
|
|
Executive officers as
|
|
|
|
|
a group (4 persons)
|
37,836,088
|
23,400,703
|
61,236,791
|
6.0
|
*Less than 1%
(1) Dr. Whitneys options include compensatory options of
1,000,000 shares at $0.25 per share, 3,000,000 shares at $0.30 per share, 250,000 shares
at $0.20 per share, and 550,000 shares at $0.15 per share.
The Common
Shares Which May Be Acquired Within 60 Days also includes 15,250,000 shares that are to be
issued to Dr. Whitney when sufficient cash is available to pay payroll tax withholdings.
In April 2005 Mr. Green was granted a compensatory option to acquire
1,000,000 of the Companys restricted common shares at $0.10 per share. The first
500,000 shares of the option became exercisable when the Federal EPA accepted the
registration application for the GOLDn GRO Guardian in December 2007 and the second
500,000 shares of the option will become exercisable when the Federal EPA issues the
registration for the GOLDn GRO Guardian. The entire option is exercisable for two
years after the EPA registration is received. The second 500,000 shares of the option is
not included in the above table as it is not exercisable within 60 days.
Mr. Rasmussen was granted a compensatory option to acquire 425,000
shares of our Common Stock at $0.15 per share. This option is exercisable at any time
until
8
one year after Mr. Rasmussen leaves our employment. The Common Shares
Which May Be Acquired Within 60 Days also includes 2,425,703 shares that are to be issued
to Mr. Rasmussen when sufficient cash is available to pay payroll tax withholdings.
(2) Director
(3) Officer
(4) Includes 72,768 shares owned by Maureen E. Whitney, Dr. Whitney's
wife.
9
PROPOSAL 1
RATIFICATION OF THE AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION INCREASING THE AUTHORIZED SHARES OF COMMON STOCK FROM ONE
BILLION TO TWENTY BILLION SHARES OF COMMON STOCK
In order to cover future contingencies, including future financings,
business acquisitions, and technology acquisitions, and to provide for our obligations
under the Securities Purchase Agreement as described below, we will be required to
authorize and issue a greater number of shares of our Common Stock, than are presently
available therefore. Consequently, our Board of Directors has determined to increase our
authorized share capital to twenty billion (20,000,000,000) shares of Common Stock. We
have no current intention or commitment to issue an amount of shares in excess of the one
billion (1,000,000,000) shares currently authorized other than under the terms of the
Securities Purchase Agreement and other outstanding warrants and options.
The Board of Directors has unanimously approved and unanimously
recommends that the Stockholders ratify the authorization of an increase in our authorized
share capital to twenty billion (20,000,000,000) shares of Common Stock.
The Authorization
We intend to seek stockholder approval for the authorization of an
additional nineteen billion (19,000,000,000) shares of Common Stock, for a total
authorized share capital of twenty billion (20,000,000,000) and the amendment to our
Articles of Incorporation required thereby. The amendment, attached hereto as
Appendix
A
, will be filed with the Secretary of State of the State of Texas as soon as
practicable following the date of the Meeting, assuming the requisite approval therefor is
obtained.
Reason for the Authorization; the Securities Purchase Agreement
To obtain funding for our ongoing operations, we entered into a series
of Securities Purchase Agreements with five accredited investors from July 15, 2005 to
December 19, 2007 for the sale of (i) $6,310,000 in secured convertible notes and (ii)
five to seven year warrants to buy 143,500,001 shares of our Common Stock. In addition, we
have issued secured convertible notes totaling $342,170 to convert accrued interest into
secured convertible notes. The total principal balance of the Notes as of February 6, 2008
is $4,364,420 (the convertible notes are collectively referred to as the "
Notes
").
The Notes bear interest at rates ranging from 2% to 8%, mature three
years from the date of issuance, and are convertible into the Common Stock, at the selling
stockholders option, at the lower of (i) $0.10 or (ii) 35% of the average of the
three lowest intraday trading prices for our Common Stock on a principal market for the 20
trading days before but not including the conversion date. Accordingly, there is in fact
no limit on the number of shares into which the Notes may be converted. As of January 28,
2008, the average of the three lowest intraday trading prices for our Common Stock during
the preceding 20 trading days as reported on the Over-The-Counter Bulletin Board was
$0.0021 and, therefore, the conversion price for the Notes was $0.000735. Based on this
conversion price, the $4,364,420 Notes, excluding interest, were convertible into
5,937,985,878 shares of Common Stock. Our agreements with our investors require minimum
authorized and unissued shares of twice the number required to convert the debt plus the
number of warrants issued, which would amount to 12,162,971,757 shares as of January 28,
2008.
The five accredited investors, AJW Partners, LLC, AJW Qualified
Partners, LLC, AJW Offshore, Ltd, AJW Master Fund, Ltd. and New Millennium Partners II,
LLC (collectively the "
Investors
"), have contractually agreed to restrict
their ability to convert or exercise their warrants and receive shares of Common Stock
such that the number of shares of Common Stock held by them and their affiliates after
such conversion or exercise does not exceed 4.99% of the then issued and outstanding
shares of Common Stock.
We are obligated by the terms of the Securities Purchase Agreement to
exercise our best efforts to effectuate a reverse split or increase the number of
authorized shares of Common Stock. However, irrespective of any commitment on our part
whether under the Securities Purchase
10
Agreement or otherwise, we do believe that we presently do not have an
adequate amount of shares of Common Stock authorized to meet our obligations to the
Investors as well as to maintain a sufficient number of authorized but unissued shares
issuable with commitments and contingencies, including future financings, business
acquisitions, and technology acquisitions, and that we may incur but are presently unaware
of.
If We Fail to Obtain Stockholder Approval to Increase our Authorized Shares of Common
Stock, We May be Subject to Various Penalties and Will be in Default of the Securities
Purchase Agreement.
In the event that we are unable to obtain an increase in our authorized
Common Stock, we will be required to pay penalties to the Investors of the July 2005
though December 19, 2007 Securities Purchase Agreements and will be in default of the
agreement. If we are in default, we could be required to immediately repay the Notes. If
we are required to repay the Notes, we would be required to use our limited working
capital and raise additional funds. If we were unable to repay the Notes when required,
the Investors could commence legal action against us and foreclose on all of our assets to
recover the amounts due. Any such action would require us to curtail or cease operations.
STOCKHOLDER Vote Required
APPROVAL OF THE INCREASE IN THE AUTHORIZED SHARE CAPITAL, PURSUANT TO
SECTION 4.02 OF THE TEXAS BUSINESS CORPORATION ACT, REQUIRES THE AFFIRMATIVE VOTE OF A TWO
THIRDS MAJORITY OF THE SHARES OUTSTANDING THAT ARE ENTITLED TO BE CAST BECAUSE SUCH
AUTHORIZATION REQUIRES THE RATIFICATION OF AN AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION. SUCH AMENDMENT WILL, PENDING STOCKHOLDER APPROVAL, BE FILED WITH THE TEXAS
SECRETARY OF STATE PURSUANT TO THE TEXAS BUSINESS CORPORATION ACT.
THE BOARD OF
DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THIS PROPOSAL 1 TO
INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK TO TWENTY BILLION.
11
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is not presently subject to the requirements of Section
16(a) of the Securities Act.
DESCRIPTION OF SECURITIES
The following is a description of all material terms and features of our securities,
but does not purport to be complete and is subject in all respects to applicable Texas law
and to the provisions of our Articles of Incorporation and bylaws.
Preferred Stock
We are authorized to issue up to 999,500 shares of preferred stock, par value $.001. As
of the date of this proxy statement, there were no shares of preferred stock issued.
Common Stock
We are authorized to issue up to 1,000,000,000 shares of Common Stock,
par value $0.001. As of the date of this proxy statement, there were 999,996,999 shares of
Common Stock outstanding. The holders of Common Stock are entitled to one vote per share
on all matters submitted to a vote of our stockholders. In addition, such holders are
entitled to receive ratably such dividends, if any, as may be declared from time to time
by our Board of Directors out of funds legally available therefor, subject to the payment
of preferential dividends with respect to any shares of preferred stock that may be
outstanding from time to time. In the event of our dissolution, liquidation or winding up
the holders of our Common Stock are entitled to share ratably in all assets remaining
after payment of all of our liabilities, subject to the prior distribution rights of the
holders of any preferred stock that may be outstanding at that time. All outstanding
shares of Common Stock are duly authorized fully paid and non-assessable.
Holders of Common Stock do not have any subscription, redemption or
conversion rights, nor do they have any preemptive or other rights to acquire or subscribe
for additional, unissued or treasury shares. Accordingly, if we were to issue additional
shares of Common Stock current stockholders would have no right to purchase additional
shares and, as a result, their percentage equity interest in our Common Stock would be
reduced.
Notes and Warrants Issued Under the Securities Purchase Agreement
In connection with the closing of the Securities Purchase Agreement,
the Investors received three year Notes bearing simple interest at rates ranging from 2%
to 8% per annum. The Notes are convertible into Common Stock at a price equal to the
lesser of (i) $0.10 or (ii) 35% of the average of the lowest three trading prices during
the 20 trading day period ending one trading day before the conversion date.
The Investors also received five to seven year warrants to purchase a
total of 143,500,001 shares of our Common Stock at a purchase prices ranging from $0.001
to $0.15 per share.
If we issue shares of Common Stock below the market price, the exercise
price of the warrants will be reduced accordingly. The market price is determined by
averaging the last reported sale prices for our Common Stock for the five trading days
immediately preceding such issuance as set forth on our principal trading market. The
exercise price shall be determined by multiplying the exercise price in effect immediately
prior to the dilutive issuance by a fraction. The numerator of the fraction is equal to
the sum of the number of shares outstanding immediately prior to the offering plus the
quotient of the amount of consideration received by us in connection with the issuance
divided by the market price in effect immediately prior to the issuance. The denominator
of such issuance shall be equal to the number of shares outstanding after the dilutive
issuance.
The conversion price of the Notes and the exercise price of the
warrants may be adjusted in certain circumstances such as if we pay a stock dividend,
subdivide or combine outstanding shares of Common Stock into a greater or lesser number of
shares, or take such other actions as
12
would otherwise result in dilution of the note holders position.
The Investors have agreed to restrict their ability to convert their
Notes or exercise their warrants and receive shares of Common Stock such that the number
of shares of Common Stock held by them in the aggregate and their affiliates after such
conversion or exercise does not exceed 4.9% of the then issued and outstanding shares of
Common stock.
Transfer Agent
Our transfer agent is Securities Transfer Corporation, 2591 Dallas
Parkway, Suite 102, Frisco, Texas 75034.
13
FINANCIAL AND OTHER INFORMATION
Financial Statements
Please see our Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2006 and our Quarterly Report on Form 10-QSB for the fiscal quarter ended
September 30, 2007, including financial statements, which are attached hereto as Appendix
B and C, respectively.
GENERAL AND OTHER MATTERS
We know of no matters other than the matters described above that will
be presented to the Meeting. However, if any other matters properly come before the
Meeting, or any of our postponements or adjournments, the person or persons voting the
proxies will vote them in accordance with their best judgment on such matters.
STOCKHOLDER PROPOSALS
The Board of Directors has not yet determined the date on which the
next annual meeting of our stockholders will be held. Any proposal by a stockholder
intended to be presented at our next annual meeting of stockholders must be received at
our offices a reasonable amount of time prior to the date on which the information or
proxy statement for that meeting are mailed to stockholders in order to be included in our
proxy statement relating to that meeting.
SOLICITATION OF PROXIES
We will solicit proxies and will bear the costs associated therewith.
Solicitations may be made by mail or telephonically. We will reimburse banks, brokerage
firms, other custodians, nominees and fiduciaries for reasonable expenses incurred in
sending proxy material to the beneficial owners of our Common Stock.
INFORMATION INCORPORATED BY REFERENCE
Our Annual Report on Form 10-KSB for the fiscal year ended December 31,
2006, and our Quarterly Report on Form 10-QSB for the fiscal quarter ended September 30,
2007, including financial statements, are incorporated by reference into this Proxy
Statement and made a part hereof, and are attached hereto as Appendix B and C,
respectively.
While you have the matter in mind, please complete, sign and return the enclosed proxy
card.
BY ORDER OF THE BOARD OF DIRECTORS,
/S/ Dr. John W. Whitney
Dr. John W. Whitney, President
14
APPENDIX A
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
OF
ITRONICS INC.
Pursuant to the provisions of the Texas Business Corporation Act, the
undersigned Corporation adopts the following Articles of Amendment to its Articles of
Incorporation:
FIRST: The name of the Corporation is Itronics Inc.
SECOND: Article IV of the Corporation's Articles of Incorporation is
amended by deleting the first paragraph, under the heading "SHARES", in its
entirety and a new first paragraph is substituted therefore which reads as set forth in
Exhibit "A" attached hereto and incorporated herein by this reference.
THIRD: The amendment to the Corporation's Articles of Incorporation was
adopted by its shareholders on ______________.
FORTH: (a) The number of shares of record were 999,996,999 shares of
common stock.
(b) The number of shares entitled to vote on the Amendment were
999,996,999 shares of common stock.
(c) There were no shares entitled to vote as a class other than the
common stock.
FIFTH: (a) The number of common shares voting for the Amendment were
_______________, the number of common shares voting against the Amendment were
___________, and the number of common shares abstaining were ___________.
(b) There was no class of shares entitled to vote on the Amendment
other than the common shares.
SIXTH: The Amendment did not provide for an exchange, reclassification
or cancellation of issued shares.
SEVENTH: The Amendment did not provide or effect a change in the Stated
capital.
ITRONICS INC.
By:
/S/ Dr. John W. Whitney
Dr. John W. Whitney, President
15
Exhibit "A"
AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
ITRONICS INC.
ARTICLE IV
SHARES
The total number of shares of capital stock which the Corporation is
authorized to issue is to consist of twenty billion (20,000,000,000) shares of common
stock, with a par value of one mill ($0.001) per share (the "Common Stock"), and
one million (1,000,000) shares of Preferred Stock, with a par value of one mill ($0.001)
per share (the "Preferred Stock"). The Board of Directors is authorized to issue
the capital stock of the Corporation from time to time in such amounts as the Board of
Directors may determine for any purpose allowed by law.
16
APPENDIX B
17
APPENDIX C
18
Itronics Inc.
The undersigned hereby appoints Dr. John W. Whitney, with full power of
substitution, proxy to vote all of the shares of Common Stock of the undersigned and with
all of the powers the undersigned would possess if personally present, at the Special
Meeting of the Stockholders of Itronics Inc. ("
Itronics
"), to be held at
Reno-Sparks Convention Center, Section A-13 North, 4590 South Virginia Street, Reno,
Nevada, on March 27, 2008 at 10:00 a.m. local time and at all adjournments thereof, upon
the matters specified below, all as more fully described in the Proxy Statement dated
February 5, 2008 and with the discretionary powers upon all other matters which come
before the Special Meeting or any adjournment thereof.
This Proxy is solicited on behalf of Itronics Board of Directors.
Every properly signed proxy will be voted in accordance with the specifications made
thereon. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED
"FOR"
PROPOSALS 1.
The undersigned hereby acknowledges receipt of a copy of the accompanying Notice of
Meeting and Proxy Statement and hereby revokes any proxy or proxies heretofore given.
Please mark, date, sign and mail your proxy promptly in the envelope provided.
PLEASE MARK, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.