Esio Water & Beverage Development Corp. – ‘PRES14A’ for 3/15/01

On:  Wednesday, 2/21/01, at 5:28pm ET   ·   For:  3/15/01   ·   Accession #:  950147-1-500375   ·   File #:  1-10320

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Preliminary Proxy Solicitation Material — Special Meeting   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRES14A     Notice of Special Meeting                             11     61K 

PRES14A
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
 Securities Exchange Act of 1934

Filed by the Registrant [X]                                                     
Filed by a Party other than the Registrant [ ]                                  

Check the appropriate box:                                                      
[X]  Preliminary Proxy Statement           [ ]  Confidential, For Use of the    
[ ]  Definitive Proxy Statement                 Commission Only (as permitted   
[ ]  Definitive Additional Materials            by Rule 14a-6(e)(2))            
[ ]  Soliciting Material Pursuant to                                            
Rule 14a-11(c) or Rule 14a-12                                         

VITRIX, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):                              
[X]  No fee required.                                                           
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.   

1)   Title of each class of securities to which transaction applies:            

--------------------------------------------------------------------------------
2)   Aggregate number of securities to which transaction applies:               

--------------------------------------------------------------------------------
3)   Per unit price or other underlying value of transaction  computed  pursuant
     to Exchange  Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):                          

--------------------------------------------------------------------------------
4)   Proposed maximum aggregate value of transaction:                           

--------------------------------------------------------------------------------
5)   Total fee paid:                                                            

--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:                             

[ ] Check box if any part of the fee is offset as provided  by  Exchange  Act   
   Rule  0-11(a)(2)  and identify the filing for which the  offsetting fee was
   paid  previously.  Identify the previous filing by  registration  statement
number, or the form or schedule and the date of its filing.             

1)   Amount previously paid:                                            
                          ------------------------------------------
2)   Form, Schedule or Registration Statement No.:                      
                                                --------------------
3)   Filing Party:                                                      
                ----------------------------------------------------
4)   Date Filed:                                                        
              ------------------------------------------------------

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VITRIX, INC.
 51 West Third Street, Suite 310
Tempe, Arizona 85281

----------------------------------------------------------

 NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH __, 2001

----------------------------------------------------------

To the Shareholders of Vitrix, Inc.:                                            

     The Special Meeting of Shareholders of VITRIX,  INC., a Nevada  corporation
(the "Company"), will be held at the at the offices of Squire, Sanders & Dempsey
L.L.P., 40 North Central Avenue,  Suite 2700,  Phoenix,  Arizona 85004, on March
__, 2001, at ___ a.m., Mountain Standard Time, for the following purposes:      

     1. To consider and act upon a proposal to amend the  Company's  Articles of
Incorporation  to effect a reverse  stock split of one share of Common  Stock of
the Company for every 10 shares of Common Stock that are issued and outstanding.

     2. To transact such other  business as may properly come before the Special
Meeting or any adjournment(s) or postponement(s) thereof.                       

     The  foregoing  items of  business  are more fully  described  in the Proxy
Statement  accompanying this Notice.  The Company is presently aware of no other
business to come before the Special Meeting.                                    

     The Board of  Directors  has fixed the close of business  on  February  __,
2001,  as  the  record  date  (the  "Record  Date")  for  the  determination  of
shareholders  entitled  to  notice  of  and  to  vote  at  the  meeting  or  any
postponement(s) or adjournment(s)  thereof.  Shares of Common Stock can be voted
at the  meeting  only if the holder is  present  at the  meeting in person or by
valid proxy. A list of shareholders entitled to vote at the Special Meeting will
be available  for  inspection at the Company's  corporate  headquarters  for any
purpose germane to the Special  Meeting during  ordinary  business hours for ten
(10) days prior to the Special Meeting.                                         

     Management and the Board of Directors of the Company  cordially invites you
to attend the Special Meeting.  Your attention is directed to the attached Proxy
Statement  for a discussion  of the  foregoing  proposal and the reasons why the
Board of Directors encourages you to vote for approval of such proposal.        

                                        By Order of the Board of Directors

                                           Todd P. Belfer, Chairman of the Board

Tempe, Arizona                                                                  
February __, 2001                                                               

 IMPORTANT: IT IS IMPORTANT THAT YOUR SHAREHOLDINGS BE REPRESENTED AT THIS
 MEETING. PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED
 PROXY CARD IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES.

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----------------------------------------------------------

VITRIX, INC.
 51 West Third Street, Suite 310
Tempe, Arizona 85281

----------------------------------------------------------

 PROXY STATEMENT

----------------------------------------------------------

     This Proxy  Statement  is  furnished  by the Board of  Directors of VITRIX,
INC., a Nevada corporation (the "Company"),  in connection with the solicitation
of  proxies  to be used for the  purpose  of  voting  at a  Special  Meeting  of
Shareholders of the Company (the "Special Meeting"). The Special Meeting will be
held on March __, 2001,  at ___ a.m.,  Mountain  Standard Time at the offices of
Squire,  Sanders & Dempsey L.L.P.,  located at Two Renaissance  Square, 40 North
Central Avenue,  Suite 2700,  Phoenix,  Arizona 85004, and any adjournment(s) or
postponement(s)  thereof.  A copy of the Notice of the Meeting  accompanies this
Proxy Statement.                                                                

     The  enclosed  proxy is solicited by the Board of Directors of the Company.
The proxy  materials  relating  to the Special  Meeting  were mailed on or about
February  __,  2001,  to  shareholders  of record at the  close of  business  on
February __, 2001 (the "Record  Date").  Only  holders (the  "Shareholders")  of
record at the close of  business  on the Record Date will be entitled to vote at
the Special Meeting, or any adjournment(s) or postponement(s) thereof, either in
person or by valid  proxy.  As of  February  __,  2001,  there were  outstanding
31,479,140  shares of common  stock,  $.005  par  value per share  (the  "Common
Stock").                                                                        

     Shareholders  are  entitled to one vote for each share of Common Stock held
of record on each matter of business to be  considered  at the Special  Meeting.
Ballots  cast  at the  Special  Meeting  will be  counted  by the  Inspector  of
Elections and determinations of whether a quorum exists and whether the proposal
is approved will be announced at the Special Meeting.                           

     All valid proxies  received before the Special Meeting and not revoked will
be  exercised.  All  shares  represented  by proxy  will be  voted,  and where a
shareholder  specifies by means of his or her proxy a choice with respect to any
matter  to be acted  upon,  the  shares  will be voted  in  accordance  with the
specifications so made. If the signed proxy is returned without instructions and
authority to vote is not specifically  withheld,  the persons named in the proxy
solicited by the Board of Directors intend to vote for the proposal to amend the
Company's  Articles of  Incorporation.  Abstentions and broker non-votes will be
included in the determination of the number of shares  represented for a quorum,
and have the same effect as "no" votes in determining  whether the proposals are
approved.  Proxies  may be  revoked at any time prior to the time they are voted
by: (a)  delivering  to the  Secretary  of the Company a written  instrument  of
revocation  bearing  a date  later  than  the  date of the  proxy;  or (b)  duly
executing and  delivering to the  Secretary a subsequent  proxy  relating to the
same shares;  or (c) attending  the meeting and voting in person,  provided that
the shareholder notifies the Secretary of the meeting of his or her intention to
vote in person at any time prior to the  voting of the  proxy.  In order to vote
their  shares in person at the  meeting,  shareholders  who own their  shares in
"street name" must obtain a special proxy card from their broker.               

     The cost of soliciting proxies, including the cost of preparing and mailing
the Notice and Proxy Statement,  will be paid by the Company.  Solicitation will
be  primarily by mailing this Proxy  Statement to all  shareholders  entitled to
vote at the meeting.  Proxies may be solicited by officers and  directors of the
Company   personally   or  by  telephone  or   facsimile,   without   additional
compensation. The Company may reimburse brokers, banks and others holding shares
in their  names  for  others  for the cost of  forwarding  proxy  materials  and
obtaining proxies from beneficial owners.                                       

     The Board of Directors does not know of any matters other than the proposal
to amend  the  Company's  Articles  of  Incorporation  that are  expected  to be
presented for  consideration at the Special Meeting.  However,  if other matters
properly come before the meeting,  the persons named in the  accompanying  proxy
intend to vote thereon in accordance with their judgment.                       

     The affirmative vote of holders of a majority of the outstanding  shares of
Common Stock  entitled to vote at the Special  Meeting are required for approval
of the proposal to be acted upon at the Special Meeting.                        

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information,  as of February , 2001,
concerning the beneficial  ownership of shares of Common Stock of the Company by
(i) each  person  known by the Company to  beneficially  own more than 5% of the
Company's Common Stock; (ii) each Director;  (iii) each executive officer of the
Company;  and (iv) all  Directors  and  executive  officers  of the Company as a
group.  To the  knowledge of the Company,  all persons  listed in the table have
sole voting and  investment  power with respect to their  shares,  except to the
extent that authority is shared with their  respective  spouse under  applicable
law.                                                                            

                                                    SHARES BENEFICIALLY OWNED(1)
NAME AND ADDRESS                                    ----------------------------
OF BENEFICIAL OWNER (2)                             NUMBER               PERCENT
-----------------------                             ------               -------
Thomas S. Bednarik                                  250,000 (3)              *  
Michael A. Wolf                                   1,026,433 (4)            3.3  
Todd P. Belfer                                    4,418,206 (5)           14.0  
Lise M. Lambert                                     524,824 (6)            1.6  
William K. Swartz                                        --                 --  
Bahan Sadegh                                      1,625,702 (7)            5.2  
Hamid Shojaee                                     5,456,446               17.3  
Craig J. Smith                                       59,942 (8)              *  
Circle F Ventures                                 4,425,000 (9)           13.8  
All directors and Named Officers as a group      13,361,553               41.6  

----------                                                                      
*    Less than 1%.                                                              
(1)  A personal is deemed to be the beneficial  owner of securities  that can be
     acquired  within 60 days from the date set forth above through the exercise
     of any option, warrant or right. Shares of Common Stock subject to options,
     warrants or rights that are currently  exercisable or exercisable within 60
     days are deemed  outstanding  for  computing  the  percentage of the person
     holding such options,  warrants or rights,  but are not deemed  outstanding
     for  computing  the  percentage  of  any  other  person.  The  amounts  and
     percentages are based upon 31,479,140 shares of Common Stock outstanding as
of February , 2001.                                                   
(2)  The address of each of the beneficial  owners is c/o Vitrix,  Inc., 51 West
     Third  Street,  Suite  310,  Tempe,  Arizona  85281,  except  for  Circle F
     Ventures,  whose  address  is  17797  North  Perimeter  Drive,  Suite  105,
Scottsdale, Arizona 85255.                                            
(3)  Includes  62,500 shares of Common Stock  issuable upon exercise of warrants
issued in the Company's October 2000 warrant exercise program.        
(4)  Includes  (i)  159,690   shares  of  Common  Stock  which  are  subject  to
     unexercised  options that were  exercisable on September 1, 2000, or within
     60 days  thereafter,  and (ii) 54,000 shares of Common Stock  issuable upon
     exercise of warrants issued in the Company's October 1999 and February 2000
private placements.                                                   
(5)  Includes  92,200 shares of Common Stock  issuable upon exercise of warrants
issued in the Company's October 2000 warrant exercise program.        
(6)  Includes  (i)  159,690   shares  of  Common  Stock  which  are  subject  to
     unexercised  options that were  exercisable on September 1, 2000, or within
     60 days  thereafter,  and (ii) 23,200 shares of Common Stock  issuable upon
     exercise of warrants issued in the Company's  October 2000 warrant exercise
program.                                                              
(7)  Includes  9,600 shares of Common Stock  issuable  upon exercise of warrants
issued in the Company's October 1999 private placement.               
(8)  Includes (i) 29,942 shares of Common Stock which are subject to unexercised
     options  that were  exercisable  on  September  1, 2000,  or within 60 days
     thereafter,  and (ii) 10,000 shares of Common Stock  issuable upon exercise
of warrants issued in the Company's October 1999 private placement.   
(9)  Includes  1,475,000  shares of  Common  Stock  issuable  upon  exercise  of
     warrants  issued in the  Company's  October 1999 and February  2000 private
placement.                                                            

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 AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO
EFFECT REVERSE STOCK SPLIT
(PROPOSAL ONE)

     The Company's Board of Directors has unanimously approved and determined to
submit  to  the  Company's   shareholders   an  amendment  (the  "Reverse  Split
Amendment") to the Company's  Articles of  Incorporation,  as currently  amended
(the "Articles of Incorporation"), to effect a reverse stock split (the "Reverse
Split") of one share of the Company's Common Stock for every 10 shares of Common
Stock that are  currently  issued and  outstanding.  The Board of Directors  has
unanimously approved and recommends a vote FOR Proposal One.                    

     If the  shareholders  approve  Proposal  One,  the  Company's  Articles  of
Incorporation  will be amended to replace the existing provision relating to the
Company's  authorized  capital with the following  provision  relating  thereto.
Accordingly, Article Fourth of the Articles of Incorporation shall be amended to
read as follows:                                                                

          The authorized  capital stock of the Corporation is 50,000,000  shares
          of common stock, par value $.005 per share (the "Common  Stock"),  and
          10,000,000  shares of preferred stock,  $.01 par value (the "Preferred
          Stock"). Each ten (10) shares of the Corporation's Common Stock issued
          as of [Date  which  Articles  of  Amendment  are  filed]  (the  "Split
          Effective Date"), shall be automatically changed and reclassified,  as
          of the Split Effective Date and without  further action,  into one (1)
          fully paid and nonassessable share of the Corporation's  Common Stock;
          provided,  however,  that any fractional  interest resulting from such
          change and classification shall be rounded upward to the nearest whole
share.                                                      

     If the shareholders approve Proposal One, the Reverse Split Amendment shall
become   effective   upon  the  filing  of  an  amendment  to  the  Articles  of
Incorporation  with the Nevada  Secretary of State.  The Reverse Split Amendment
will  amend  the  Company's  Articles  of  Incorporation  to give  effect to the
amendment made pursuant to Proposal One. THE REVERSE SPLIT AMENDMENT, AS IT WILL
APPEAR IF PROPOSAL ONE IS APPROVED BY THE  SHAREHOLDERS,  IS ATTACHED AS EXHIBIT
A.  If  Proposal  One is not  approved  by the  shareholders,  the  Articles  of
Incorporation will not be amended.                                              

     The proposed  Reverse  Split  Amendment  will not affect any  shareholder's
proportionate  equity  interest  in  the  Company  or the  rights,  preferences,
privileges or priorities of any  shareholder,  other than an adjustment that may
occur due to the rounding up of fractional shares.  Likewise,  the Reverse Split
Amendment will not affect the total  shareholders'  equity of the Company or any
components of shareholders'  equity as reflected on the financial  statements of
the Company except (i) to change the number of the issued and outstanding shares
of capital  stock and (ii) for an  adjustment  which will occur due to the costs
incurred  by the  Company  in  connection  with  this  Proxy  Statement  and the
implementation of Proposal One as approved by the shareholders. However, because
the number of shares of capital  stock that the Company is  authorized  to issue
will not be decreased in  proportion  to the one for every 10 share  decrease in
the number of issued  shares,  the  number of shares  which are  authorized  but
unissued,  and the  percentage of ownership of such shares if they are issued in
the future in the  discretion  of the Board of  Directors,  effectively  will be
increased.                                                                      

     The following  table  illustrates  the  principal  effects on the Company's
capital stock of the Reverse Split, assuming a one-for-ten reverse split:       

 NUMBER OF SHARES OF CAPITAL STOCK

                                            PRIOR TO REVERSE     AFTER REVERSE
                                             SPLIT               SPLIT
                                             -----               -----
COMMON                                                                          
Authorized                                      50,000,000          50,000,000  
Issued and outstanding (1)                      31,479,140           3,147,914  
Available for future issuance                   18,520,860          48,852,086  

PREFERRED                                                                       
Authorized                                      10,000,000          10,000,000  
Issued and outstanding                                   0                   0  
Available for future issuance                            0                   0  

----------                                                                      
(1)  Excludes (i) 3,777,925 shares issuable upon exercise of outstanding options
     (377,793  shares  after  the  Reverse  Split),  and (ii)  3,698,306  shares
     issuable upon exercise of outstanding  warrants  (369,831  shares after the
Reverse Split), each as of January 31, 2001.                          

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NO EXCHANGE OF SHARES; NO FRACTIONAL SHARES                                     

     Pursuant to the proposed Reverse Split Amendment, every 10 shares of issued
and outstanding  Common Stock would be converted and reclassified into one share
of post-split  Common Stock,  and any fractional  interests  resulting from such
reclassification  would be  rounded  upward  to the  nearest  whole  share.  For
example,  a holder of 100 shares prior to the Split  Effective Date would be the
holder of 10 shares at the Split  Effective  Date.  The proposed  Reverse  Split
would become  effective  upon the Split  Effective  Date.  Shareholders  will be
notified  after  the  Split  Effective  Date  that the  Reverse  Split  has been
effected.                                                                       

     Shareholders will not receive  certificates for shares of post-split Common
Stock.  Accordingly,  shareholders  should not forward their certificates to the
Company or its transfer  agent.  Beginning  on the Split  Effective  Date,  each
certificate  representing shares of the Company's pre-split Common Stock will be
deemed for all  corporate  purposes to  evidence  ownership  of the  appropriate
number of shares of post-split Common Stock.                                    

     No service charge will be payable by  shareholders  in connection  with the
exchange  of  certificates,  all  costs of which  will be borne  and paid by the
Company.                                                                        

     Shareholders  have no right  under  Nevada law to dissent  from the Reverse
Split or to dissent from the rounding up of fractional  interests resulting from
the Reverse Split.                                                              

PURPOSES OF THE REVERSE SPLIT                                                   

     The  Company  has  entered  into a letter of intent to  acquire  all of the
outstanding shares of capital stock of Time America, Inc. ("Time America"). This
acquisition transaction, which is subject to the execution of mutually agreeable
definitive  agreements  and board  approval,  will be  effectuated  through  the
exchange of shares of Common Stock for shares of common  stock of Time  America.
The closing of the Time America  acquisition  is subject to, among other things,
the Company effecting the Reverse Split.  Assuming the Reverse Split is approved
by the  shareholders,  the Company will have  approximately  3,147,914 shares of
Common Stock issued and outstanding on the Split Effective Date. Under the terms
of the purchase agreement  governing the Time America  acquisition,  the Company
would issue an aggregate of  approximately  3,147,914  shares of Common Stock to
acquire Time  America,  with the  resulting  outstanding  shares of Common Stock
increasing from 3,147,914 to 6,295,828.  Accordingly,  the  shareholders of Time
America  would  own  approximately   fifty  percent  (50%)  of  the  issued  and
outstanding  shares of capital  stock of the Company  after giving effect to the
acquisition transaction.                                                        

     Additionally,  the Board of Directors  believes  that the current price per
share of the Company's  Common Stock may reduce the effective  marketability  of
the  Common  Stock  because of the  reluctance  of  certain  brokerage  firms to
recommend  the  purchase  of  lower-priced  stocks  to  their  clients.  Certain
institutional  investors  have  internal  policies  preventing  the  purchase of
lower-priced  stocks and many brokerage houses do not permit lower-priced stocks
to be used as collateral  for margin  accounts.  Further,  a number of brokerage
houses have policies and practices  that tend to discourage  individual  brokers
within those firms from dealing in lower-priced  stocks.  Some of those policies
and  practices   pertain  to  the  payment  of  brokers'   commissions   and  to
time-consuming  procedures  that  function to make the handling of  lower-priced
stocks  unattractive to brokers from an economic  standpoint.  In addition,  the
structure of trading commissions tends to have an adverse impact upon holders of
lower-priced  stocks because the brokerage  commission on a sale of lower-priced
stocks  generally  represents  a higher  percentage  of the sale  price than the
commission on a relatively higher-priced stock.                                 

     The Board of Directors  believes that the historically low per share market
price of the Common  Stock  impairs  the  marketability  of the Common  Stock to
institutional  investors  and  members of the  investing  public  and  creates a
negative  impression  with respect to the  Company.  Many  investors  and market
makers look upon lower priced stocks as unduly  speculative  in nature and, as a
matter of policy,  avoid  investment  and trading in such stocks.  The foregoing
factors adversely affect both the pricing and the liquidity of the Common Stock.
Thus,  the  potential  increase in trading price is expected to be attractive to
the financial community and the investing public and in the best interest of the
shareholders.                                                                   

     The Board of Directors is hopeful that the decrease in the number of shares
of Common Stock  outstanding  as a consequence  of the proposed  Reverse  Split,
together  with the  acquisition  of Time America and the  resulting  anticipated
increased  price level,  will  stimulate  additional  interest in the  Company's
Common  Stock  and  possibly   promote  greater   liquidity  for  the  Company's
shareholders. There can be no assurance, however, that there will be any greater
liquidity,  and it is  possible  that  the  liquidity  could  even be  adversely
affected  by the  reduced  number  of  shares  of  Common  Stock  that  would be
outstanding after the proposed Reverse Split is effected.                       

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     Similarly,  the Board of  Directors is hopeful that such an increase in the
per share  price of the  Company's  Common  Stock  will  improve  the  Company's
ultimate  ability to seek the listing of the Common Stock on the Nasdaq SmallCap
Market  ("Nasdaq").  In order to  qualify  for  initial  listing  on Nasdaq  the
Company's Common Stock must have a minimum bid price of $4 per share. Currently,
the Company does not meet the  requirements  for listing on Nasdaq and there can
be no assurance  that, even after effecting the Reverse Split and acquiring Time
America, the Company will ever meet such listing requirements.                  

     If the  Reverse  Split  becomes  effective,  management  expects the quoted
market price of the Company's Common Stock to increase as a result of decreasing
the  number  of shares  outstanding  without  altering  the  aggregate  economic
interest in the Company  represented by such shares. The Board believes that the
increased  market price may serve to mitigate the present  reluctance,  policies
and practices on the part of brokerage  firms referred to above and diminish the
adverse impact of trading  commissions on the potential market for the Company's
shares of Common  Stock.  There can be no assurance,  however,  that the Reverse
Split will achieve these  desired  results,  that any such increase  would be in
proportion  to the  one-for-ten  Reverse Split Ratio or that the per share price
level of the Common Stock  immediately  after the proposed  Reverse Split can be
maintained for any period of time.                                              

     The Reverse Split may result in some shareholders owning "odd lots" of less
than 100 shares. The costs, including brokerage commissions,  of transactions in
odd lots are generally  higher than the costs in transactions in "round lots" of
even multiples of 100.                                                          

     The secondary  result of the effective  increase in the number of shares of
Common  Stock  which are  authorized  but  unissued,  and in the  percentage  of
ownership  of the Company  represented  by such shares if they are issued in the
future in the  discretion  of the Board of Directors of the Company,  is for the
Company to have additional  shares of Common Stock  authorized and available for
issuance as the need arises for possible future  financing  transactions,  stock
acquisitions,  asset purchases,  stock dividends or splits,  issuances under any
stock option plan that may be adopted in the future, and other general corporate
purposes.  If Proposal One is  approved,  shareholders  will have no  preemptive
rights with respect to the additional  authorized  shares of Common Stock.  Such
shares of Common  Stock may be issued on such  terms,  at such times and on such
conditions as the Board may determine in its discretion.                        

     The Board of Directors is not aware of any present efforts by any person to
accumulate  the  Company's  capital  stock or to obtain  control of the  Company
through a tender offer, merger or other business  combination,  proxy contest or
otherwise.  The Board has not  formulated  any  program,  nor  entered  into any
agreement or understanding,  and has no current intention, to issue any unissued
and unreserved  shares of Common Stock for the purpose of impeding or preventing
any proposed takeover.                                                          

EFFECTS OF FAILURE TO OBTAIN SHAREHOLDER APPROVAL OF THE REVERSE SPLIT PROPOSAL 

     In the event  shareholder  approval is not obtained  for the Reverse  Split
Amendment,  the Company  will not be able to complete  its  acquisition  of Time
America. If the Time America  acquisition is not completed,  the Company will be
required to  continue  its  efforts to locate a suitable  acquisition  or merger
candidate  or obtain  alternative  sources of  financing  to fund the  Company's
future  working  capital  needs.  If the  Company is unable to locate a suitable
acquisition or merger candidate or otherwise obtain appropriate  financing,  the
Company's business, financial condition, results of operations and prospects may
be materially adversely affected.                                               

CERTAIN FEDERAL INCOME TAX CONSEQUENCES                                         

     The  Company  has not sought and will not seek a ruling  from the  Internal
Revenue  Service  or an  opinion of counsel  regarding  the  federal  income tax
consequences of the Reverse Split Amendment. A summary of the federal income tax
consequences  of the Reverse Split as  contemplated in Proposal One is set forth
below.  The  discussion  is based on the  present  federal  income tax law.  The
discussion is not intended to be, nor should it be relied on as, a comprehensive
analysis of the tax issues  arising  from or relating  to the  proposed  Reverse
Split  Amendment.  Income tax  consequences  to  shareholders  may vary from the
federal tax consequences described generally below.  SHAREHOLDERS SHOULD CONSULT
THEIR OWN TAX ADVISORS AS TO THE EFFECT OF THE CONTEMPLATED  REVERSE SPLIT UNDER
APPLICABLE FEDERAL, STATE AND LOCAL INCOME TAX LAWS.                            

     The proposed Reverse Split constitutes a "recapitalization"  to the Company
and its  shareholders  to the  extent  that  issued  shares of Common  Stock are
exchanged for a reduced number of shares of Common Stock. Therefore, neither the
Company nor its shareholders  will recognize any gain or loss for federal income
tax purposes as a result thereof.                                               

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     The shares of Common  Stock to be issued to each  shareholder  will have an
aggregate basis, for computing gain or loss, equal to the aggregate basis of the
shares of such stock  held by such  shareholder  immediately  prior to the Split
Effective Date. A shareholder's holding period for the shares of Common Stock to
be issued will  include the holding  period for the shares of Common  Stock held
thereby  immediately prior to the Split Effective Date provided that such shares
of stock were held by the  shareholder as capital assets on the Split  Effective
Date.                                                                           

VOTING REQUIREMENTS                                                             

     Each holder of Common  Stock is  entitled  to one vote per share held.  The
holders of a majority of the shares of the Common Stock  issued and  outstanding
constitutes  a quorum.  The  affirmative  vote of holders  of a majority  of the
outstanding  shares  of  Common  Stock of the  Company  entitled  to vote at the
Special  Meeting is required for  approval of Proposal  One. In the event that a
quorum is not present or represented at the Special  Meeting,  the  shareholders
entitled to vote at the meeting present,  in person or by proxy,  shall have the
power to  adjourn  the  Special  Meeting  until a quorum  shall  be  present  or
represented.  Proxies  solicited  by the  Board of  Directors  will be voted for
approval of Proposal One. A Shareholder voting through a proxy who abstains with
respect to approval of Proposal One shall be  considered to have cast a negative
vote with respect to Proposal One.                                              

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL ONE.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires
the Company's directors and executive officers,  as well as persons beneficially
owning more than 10% of the Company's  outstanding Common Stock, to file reports
of  ownership  and  changes  in  ownership  with  the  Securities  and  Exchange
Commission (the "SEC") within specified time periods.  Such officers,  directors
and  shareholders  are also  required to furnish the Company  with copies of all
Section 16(a) forms they file.                                                  

     Based  solely  on its  review of such  forms  received  by it,  or  written
representations  from certain reporting  persons,  the Company believes that all
Section 16(a) filing requirements applicable to its officers,  directors and 10%
shareholders were complied with during the fiscal year ended June 30, 2000.     

CERTAIN TRANSACTIONS AND RELATIONSHIPS

     During  1996,  the Company  entered  into a debt  financing  agreement  for
$310,000 with T.P.B.  Investment  Limited  Partnership  (TPB), which is owned by
Todd P. Belfer, a member of the Company's Board of Directors.  On June 20, 1998,
TPB  converted  debt of  $110,000,  together  with accrued  interest  thereon of
approximately $27,700, to contributed capital.                                  

     On March 3, 1999, TPB agreed to convert the remaining principal  ($200,000)
and accrued interest ($64,570) outstanding on its notes into 2,720,723 shares of
the Company's Common Stock and Preferred Stock.                                 

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 OTHER MATTERS

VOTING BY PROXY                                                                 

     In order to ensure  that your  shares  will be  represented  at the Special
Meeting,  please sign and return the enclosed Proxy in the envelope provided for
that purpose,  whether or not you expect to attend. Any shareholder may, without
affecting any vote previously taken,  revoke a written proxy by giving notice of
revocation  to the  Company in writing or by  executing  and  delivering  to the
Company a later dated proxy.                                                    

SHAREHOLDER PROPOSALS FOR ACTION AT THE COMPANY'S NEXT ANNUAL MEETING           

     Any shareholder  who wishes to present any proposal for shareholder  action
at the Company's  Annual  Meeting of  Shareholders  to be held in 2001,  must be
received by the Company's  Secretary,  at the Company's offices,  not later than
June 19, 2001, in order to be included in the Company's proxy statement and form
of proxy for that meeting.  Such proposals  should be addressed to the Corporate
Secretary, Vitrix Inc., 51 W. 3rd Street, Suite #310, Tempe, Arizona 85281. If a
shareholder  proposal is introduced at the 2001 Annual  Meeting of  Shareholders
without any discussion of the proposal in the Company's proxy statement, and the
shareholder  does not notify  the  Company on or before  September  3, 2001,  as
required by SEC Rule 14(a)-4(c)(1),  of the intent to raise such proposal at the
Annual  Meeting of  Shareholders,  then proxies  received by the Company for the
2001 Annual  Meeting will be voted by the persons named as such proxies in their
discretion with respect to such proposal.  Notice of such proposal is to be sent
to the above address.                                                           

                                        BY ORDER OF THE BOARD OF DIRECTORS

                                           Todd P. Belfer, Chairman of the Board

Tempe, Arizona                                                                  
February __, 2001                                                               

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 EXHIBIT "A"

 FORM OF AMENDMENT TO ARTICLES OF INCORPORATION OF

VITRIX, INC.

Pursuant to the provisions of N.R.S.  Section  78.390,  et seq., the undersigned
Corporation adopts the following amendment to its Articles of Incorporation:    

1. Pursuant to N.R.S.  Section  78.390,  as of _________ __, 2001,  the Board of
Directors of the Corporation  adopted the following amendment to its Articles of
Incorporation  and resolved that such amendment be submitted to the shareholders
for  their  approval  at  the  2001  Annual  Meeting  of   Shareholders  of  the
Corporation.                                                                    

     a) RESOLVED,  that Article Fourth of the Articles of  Incorporation  of the
Corporation, as amended (the "Articles of Incorporation"),  be amended to effect
a one-for-___ reverse split of the Corporation's outstanding no par value Common
Stock  (the  "Common  Stock"),  and shall  thereafter  read in its  entirety  as
follows:                                                                        

WHAT ARTICLE FOURTH CURRENTLY STATES:                                           

FOURTH: THE TOTAL NUMBER OF SHARES OF ALL CLASSES OF STOCK WHICH THE CORPORATION
SHALL  HAVE THE  AUTHORITY  TO ISSUE IS  60,000,000  SHARES,  CONSISTING  OF (i)
50,000,000  SHARES OF COMMON  STOCK,  $.005  PAR  VALUE PER SHARE  (THE  "COMMON
STOCK"),  AND (ii)  10,000,000  SHARES OF PREFERRED  STOCK,  $0.01 PAR VALUE PER
SHARE (THE "PREFERRED STOCK").                                                  

FOURTH:  The  authorized  capital  stock of the  Corporation  is  sixty  million
(60,000,000)  shares divided into 50,000,000  shares of common stock,  par value
$.005 per share,  and ten million  (10,000,000)  shares of preferred  stock, par
value $.01 per share.  Each ten (10) shares of the  Corporation's  Common  Stock
issued as of _________ ___, 2001 [Date amendment is filed] (the "Split Effective
Date"),  shall  be  automatically  changed  and  reclassified,  as of the  Split
Effective  Date  and  without  further  action,  into  one (1)  fully  paid  and
nonassessable share of the Corporation's Common Stock;  provided,  however, that
any fractional  interest resulting from such change and classification  shall be
rounded upward to the nearest whole share;                                      

3.   Pursuant to N.R.S.  Section 78.390, at a Special Meeting held on March ___,
     2001,  the holders of the Company's  outstanding  Common Stock approved the
     foregoing amendment. An aggregate of __________ shares of Common Stock were
     indisputably  represented at such meeting.  The  designation  and number of
     outstanding  shares  of  each  class  or  series  entitled  to  vote on the
amendment as a class or series were as follows:                       

CLASS OR SERIES                   NUMBER OF SHARES                              
---------------                   ----------------                              
Common Stock                                                                    

4.   The number of shares of each class  entitled to vote on the amendments as a
     class or series voted for or against each of such amendments, respectively,
which was sufficient for approval by that voting group, as follows:   

     (a) With  respect to the  amendment  to Article  Fourth of the  Articles of
Incorporation:                                                                  

CLASS OR SERIES             NUMBER OF SHARES FOR        NUMBER OF SHARES AGAINST
---------------             --------------------        ------------------------
Common Stock                                                                    

5.   The foregoing  amendment to the Company's  Articles of Incorporation  shall
     become effective as of 5:00 P.M. Mountain Standard Time on March ___, 2001.

DATED this ___ day of March, 2001.                                              

VITRIX, INC.,                              ATTEST:                              
a Nevada corporation                                                            

-------------------------------------      -------------------------------------
Thomas S. Bednarik                                                              
President and Secretary                                                         

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 VITRIX INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VITRIX INC.      
FOR THE SPECIAL MEETING OF SHAREHOLDERS                                         

The  undersigned   shareholder  of  Vitrix  Inc.,  a  Nevada   corporation  (the
"Company"),  hereby  acknowledges  receipt of the  Notice of Special  Meeting of
Shareholders  dated February __, 2001, and hereby appoints Thomas S. Bednarik or
Craig J. Smith, and each of them, proxies and attorneys-in-fact, with full power
of substitution,  on behalf and in the name of the undersigned, to represent the
undersigned at the Special Meeting of Shareholders of VITRIX, INC. to be held at
the offices of Squire,  Sanders & Dempsey L.L.P., 40 North Central Avenue, Suite
2700,  Phoenix,  Arizona  85004 on  __________  __,  2001 at ___ a.m.,  Mountain
Standard time, and at any adjournment(s) or postponement(s) thereof, and to vote
all shares of Common  Stock that the  undersigned  would be  entitled to vote if
then and there personally present, on the matters set forth below.              

1.   To approve an  amendment  to the  Company's  Articles of  Incorporation  to
     effect a reverse  stock  split of one  share of Common  Stock for every ten
shares of Common Stock that are issued and outstanding.               

  [ ] FOR               [ ] AGAINST              [ ] ABSTAIN

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 PROPOSAL  NO. 1 AND AS SAID  PROXIES  DEEM  ADVISABLE ON SUCH MATTERS AS MAY
COME BEFORE THE MEETING.                                                        

Dated: ________________, 2001                                         

                                   Please  sign  exactly  as your  name  appears
                                   above.  When  shares are held in common or in
                                   joint tenancy, both should sign. When signing
                                   as  attorney,  as  executor,   administrator,
                                   trustee or  guardian,  please give full title
                                   as  such.  If a  corporation,  sign  in  full
                                   corporate   name  by   President   or   other
                                   authorized officer. If a partnership,  please
                                   sign in  partnership  name  by an  authorized
person.   

 SIGNATURES:

                                   ---------------------------------------------

                                   ---------------------------------------------

                                   ---------------------------------------------

Please return by promptly mailing to the corporate offices of:                  

VITRIX, INC.                      
51 West Third Street, Suite 310                     
Tempe, Arizona 85281                      
Or by faxing the same to: (480) 967-5444; Attention: Secretary                  

I Will _____ Will not _____ attend the Meeting.                                 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
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Filed on:		2/21/01
		1/31/01		5
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