TDT DEVELOPMENT, INC.
140 De Liege O.
Montreal, Quebec
Canada H2P 1H2
INFORMATION STATEMENT PURSUANT TO
SECTION 14(f) OF THE SECURITIES EXCHANGE
ACT OF 1934 AND RULE 14f-1 THEREUNDER
This Information Statement is being mailed on or about May 15, 2002 to
holders of common stock of TDT Development, Inc. (the "Company"). You are
receiving this Information Statement in connection with the election of persons
designated by Stronghold Technologies, Inc., a New Jersey corporation
("Stronghold") and Stanford Venture Capital Holdings, Inc., a Delaware
corporation ("Stanford") to a majority of seats on the Board of Directors of the
Company (the "Board"), as more fully described below.
On or about May 15, 2002, the Company and TDT Acquisition Corp., a New
Jersey corporation and a wholly-owned subsidiary of the Company ("Acquisition"),
plan to enter into a Merger Agreement and Plan of Merger (the "Merger
Agreement") with Stronghold. The Merger Agreement provides that, subject to the
satisfaction or waiver of certain conditions, Stronghold will be merged with and
into Acquisition (the "Merger"). Following consummation of the Merger,
Acquisition will survive as the Company's wholly-owned subsidiary corporation
and will be renamed "Stronghold Technologies, Inc." At the effective time of the
Merger (the "Effective Time"), the issued and outstanding shares of common stock
of Stronghold shall be surrendered in exchange for an aggregate of 7,000,000
shares of the Company's common stock, $0.0001 par value per share (the "Common
Stock").
Also on or about May 15, 2002, the Company plans to enter into a Securities
Purchase Agreement with Stronghold and Stanford in which Stanford will make an
investment of $3 million in the Company in exchange for 2,000,000 shares of the
Company's Series A Convertible Preferred Stock and warrants to purchase
2,000,000 shares of the Company's Common Stock. The total investment will be
made in four separate installments of $750,000 on each of May 16, 2002, July 3,
2002, July 11, 2002 and July 19, 2002.
As a result of the transactions described above, (i) Stronghold and
Stanford together will have the right to designate all of the members of the
Board, and (ii) the stockholders of Stronghold will own a majority of the
Company's outstanding Common Stock. The post-Merger Company shall be referred to
herein as the "Post-Merger Company." In addition, Stronghold and Stanford have
agreed that after the Merger (y) the name of the Post-Merger Company will be
changed from TDT Development, Inc. to Stronghold Technologies, Inc. and (z) the
Post-Merger Company will be reincorporated in the state of Delaware.
This Information Statement is being mailed to you in accordance with
Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and Rule 14f-1 promulgated thereunder. Information set forth herein
related to Stronghold or the Designees (as defined herein) has been provided by
Stronghold. You are urged to read this Information Statement carefully. You are
not, however, required to take any action in connection with the matters set
forth herein.
GENERAL
The Common Stock is the only class of equity securities of the Company
outstanding which is entitled to receive this information statement. As of May
10, 2002, there were 8,381,000 shares of Common Stock outstanding. See "Security
Ownership of Certain Beneficial Owners and Management--Security Ownership"
below.
RIGHT TO DESIGNATE DIRECTORS AND DESIGNEES
THE BOARD OF DIRECTORS OF THE COMPANY
Subject to compliance with Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder, at the Effective Time of the Merger, Stronghold shall be
entitled to designate four directors of the five-person Board of Directors of
the Post-Merger Company. Stanford shall be entitled to designate one director
(Stanford's and Stronghold's designees, together, the "Designees"). Prior to the
closing of the Merger, the Company is obligated to provide the resignation of
the existing directors.
NAME, AGE, PRINCIPAL OCCUPATION AND EMPLOYMENT HISTORY
Stronghold and Stanford have informed the Company that they have selected
the Designees and that each of the following individuals has consented to serve
as a director of the Post-Merger Company. None of the Designees are currently
directors of, or hold any positions with, the Company. Stronghold and Stanford
have advised the Company that, to their knowledge, except as set forth below,
none of the Designees or any of their associates beneficially owns any equity
securities or rights to acquire the Company's securities, nor has any such
person been involved in any transaction with the Company or any of its
directors, executive officers or affiliates that is required to be disclosed
pursuant to the rules and regulations of the SEC. The name, age, present
principal occupation or employment and five-year employment history of each of
the Designees are set forth below. The current business address for each
Designee listed below, unless indicated below, is c/o Stronghold Technologies,
Inc., 777 Terrace Avenue, Hasbrouck Heights, NJ 07924. Telephone: (908)
630-9696. Each Designee is a citizen of the United States.
Christopher J. Carey, 50, is the Founder, President, and Chief Executive
Officer of Stronghold Technologies, Inc. Since its founding in 2000, Mr. Carey
has set the strategic direction and corporate vision for Stronghold, drawing on
over 25 years of experience building successful, technology-focused businesses.
From 1976 until 1996, Mr. Carey was President and Chief Executive Officer of
Datatech Industries, Inc., which became North America's largest specialist in
the rapid deployment of network and computing systems. After negotiating a
merger with Glasgal Communications in 1996, Mr. Carey became President and Chief
Exective Officer of Datatech Systems, Inc., the combined entity. Mr. Carey is
currently a member of Board of Trustees of The Albert Dorman Honors College, New
Jersey Institute of Technology, and a member of the Board of the New Jersey
Chapter Young President's Organization.
Robert J. Corliss, 49, has been, since 1998, the President and Chief
Executive Officer of the Athlete's Foot Group, Inc., a privately owned,
800-store retail chain with operations in 50
countries. From 1996 until 1998, Mr. Corliss was the President and Chief
Executive Officer of Infinity Sports, Inc., a manufacturer, distributor and
licensor of athletic products primarily under the brand Bike Athletic. Prior to
founding Infinity Sports, Inc., Mr. Corliss was the Chief Executive Officer and
President of Hermann's Sporting Goods retail chain. Mr. Corliss is very active
in the sporting goods industry and serves on the Board of Directors of The
Athlete's Foot Group, Inc. and Bike Athletic Company, Inc. He is on the Advisory
Council for the Sporting Goods Manufacturers Association's recently announced
Physical Education for Progress (P.E.P.) initiative. Additionally, Mr. Corliss
serves as a Director and Executive Committee member of the National Retail
Federation and the National Retail Foundation and serves on the Board of
Directors for The World Federation of the Sporting Goods Industry. He is also an
Advisor for Emory University's Goizueta Business School.
Robert Cox, 61, is a retired business executive. From 1998 until 2000, Mr.
Cox served as President and a Director of Summit Bancorp, a $39 billion NJ bank
holding company. Mr. Cox was the Chief Executive Officer of The Summit
Bancorporation from 1994 until 1998, when Summit Bancorporation merged into UJB
Financial. Mr. Cox is currently a member the Board of Trustees of NJ SEEDS, a
state-wide educational not-for-profit. Mr. Cox also sits on the Board of
Directors of the Bay View Bank and the Bay View Capital Corporation in San
Mateo, CA. Active in New Jersey's business and community service organizations,
Mr. Cox is a former Chairman of the New Jersey Bankers Association (NJBA) and is
an honorary chairman of its Board of Directors.
William Lenahan, 51, has been the Chief Executive Officer of KMC Telecom
Holdings, Inc. since 2000. KMC is a $500 million revenue fiber optics network
provider in 40 cities, providing voice and data services to over 14,000 wired
buildings. From 1994 until 2000 Mr. Lenahan was the President and Chief
Executive Officer of the Bell South wireless data group.
Luis Delahoz, 42, is the current President and Chief Executive Officer of
TWS International, Inc. From 1998 until 2001, Mr. Delahoz was the Executive Vice
President of Client Soft, Inc., a provider of e-business solutions. In 1996, Mr.
Delahoz co-founded TOC Global Communications, Inc., where he served as Vice
President until 1998. Currently, Mr. Delahoz is a member of the Boards of
Directors of TWS, Inc. and TWS International, Inc.
CURRENT BOARD OF DIRECTORS OF THE COMPANY
The Company's current Board of Directors consists of three directors. At
each annual meeting of stockholders, directors are elected for a term of one
year to succeed those whose terms are expiring.
The name, age, present principal occupation or employment and five-year
employment history of each of the Company's current directors are set forth
below. There are no family relationships among any of the directors and the
executive officers of the Company.
Pietro Bortolatti, 47, has been President, Chief Executive Officer, Chief
Financial Officer and Director of the Company since its inception on September
8, 2000. Since 1999, Mr. Bortolatti has been president and sole shareholder of
Terre di Toscana, Inc. and Terres Toscanes, Inc., the Company's operating
subsidiaries. Mr. Bortolatti has been in the food import/export
business for the past twelve years. From 1995 to 1999 Mr. Bortolatti was
president of Bortolatti Enterprises' Inc., a restaurant development company.
From 1992 to 1998 Mr. Bortolatti was president of Under the FarmTree, Inc., a
food importer. From 1988 to 1992 Mr. Bortolatti was the Director of Export-USA
for Rancilio Spa, a food products and hotel equipment company based in Italy.
Mr. Bortolatti works full time for the Company.
Mr. Bortolatti earned his Bachelors Degree in Economic Sciences and
Accounting from Cesare Battisti Commercial Technical Institute in Bolzano, Italy
in 1974; his Master Degree in Economic Science and Business Administration from
Bocconi University, Italy 1979; and his Ph.D. in Economic Science and Business
Administration from Bocconi University, Italy.
Tiziana Di Rocco, 40, has served as Vice President Marketing and Director
of the Company since its formation. From 1995 to 1996 Ms. Di Rocco was a
translator of government texts for Traductions GAB in Laval, Quebec, Canada.
From 1996 to 1997 she worked for the Italian Embassy in Ottawa, Ontario, Canada
as a translator of legal and administrative texts. From 1997 to 1999 she was the
office manager of Bortolatti Enterprises in Miami Florida. Ms. Di Rocco works
full time for the Company. Ms. Di Rocco earned a Bachelor of Arts Degree in
Italian Literature and Italian to French and English Translations from Concordia
University in Montreal, Canada.
David Rector, 55, has served as Director of the Company since its
formation. Since 1992, Mr. Rector has been a principal of the David Stephen
Group, a business consulting firm located in the San Francisco Bay Area, which
focuses on the needs of emerging companies. From August 1996 to January 1999,
Mr. Rector served as a Director of Tamboril Cigar Company ("Tamboril"). From
August 1996 to March 1997, Mr. Rector served as the Executive Vice President and
General Manager of Tamboril. He has also served as the Secretary of Tamboril.
From 1996 to the present Mr. Rector has been a director of Fullcomm Tech, Inc.,
a designer and developer of Internet encryption hardware. Shares of Fullcom
Tech, Inc. are traded on the OTCB under the trading symbol FLTI. From June 1992
to April 1994, Mr. Rector served as the President and Chief Executive Officer of
Supercart International, a distributor of shopping carts. Prior to that, from
1985 to 1992, Mr. Rector was a principal of Blue Moon, a women's fashion
accessory company specializing in fasteners. From 1980 to 1985, Mr. Rector
served as President of Sunset Designs, a designer of leisure time craft. From
1972 to 1980, Mr. Rector held various financial and marketing positions with
Crown Zellerbach Corporation, a multi-billion dollar manufacturer of paper and
forest products. Mr. Rector holds a Bachelors degree in Business Administration
from Murray State University, Murray, Kentucky.
DIRECTOR COMPENSATION
In the past, the Company has not paid compensation to any director for
acting in such capacity, except for the grant of shares of Common Stock or
options and reimbursement for reasonable out-of-pocket expenses in attending
meetings.
Following consummation of the Merger, the Post-Merger Company will initiate
a Board Compensation Program. All directors of the Post-Merger Company will
receive an annual fee of $10,000 plus $1,000 for participation on each board
committee that is established. In addition, each Post-Merger Company Board
member will receive an option grant to purchase 40,000
shares of the Post-Merger Company's common stock, which will vest 50% on each of
the first and second anniversaries of the date of grant.
The Company currently has no formal committees. Although the Company does
not have an Audit Committee, the entire Board has the responsibility of:
- monitoring the Company's financial reporting process and internal
control systems;
- reviewing and appraising the audit efforts of the Company's
independent accountants and internal auditing functions;
- reviewing compliance with laws and regulations under which the
Company's is required to operate, including compliance with the Nasdaq
corporate governance standards; and
- providing an open avenue of communication among the Company's
independent accountants, financial and senior management, internal
auditing department and Board of Directors.
The Board of Directors does not have a standing nominating committee.
Nominations for election to the Board of Directors may be made by the Board of
Directors or by any shareholder entitled to vote for the election of directors
in accordance with the Company's bylaws and Nevada Law.
Meetings may be held from time to time to consider matters for which
approval of the Company's Board of Directors is desirable or is required by law.
The Company's Board of Directors met one time during fiscal year 2001.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
SECURITY OWNERSHIP
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of April 25, 2002. The information in
this table provides the ownership information for:
- each person known by the Company to be the beneficial owner of more
than 5% of its Common Stock;
- each of the Company's directors;
- each of the Company's executive officers; and
- the Company's executive officers, directors and director nominees as a
group.
Beneficial ownership has been determined in accordance with the rules and
regulations of the SEC and includes voting or investment power with respect to
the shares. Unless otherwise indicated, the persons named in the table below
have sole voting and investment power with respect to the number of shares
indicated as beneficially owned by them. Common Stock beneficially owned and
percentage ownership are based on 8,381,000 shares outstanding. There are
currently no outstanding options or warrants to purchase, or securities
convertible into the Company's Common Stock.
Name and Address Number of Percentage
of Beneficial Owner Shares Beneficially Owned Beneficially Owned
------------------- ------------------------- ------------------
Pietro Bortolatti 5,000,000 60%
President, Chief Executive
Officer & Chairman of the Board
c/o TDT Development, Inc.
1844 SW 16th Terrace
Miami, Florida 33145
Tiziana DiRocco 0 less than 1%
Vice President of Marketing
and Director
David Rector 15,000 less than 1%
Director
All Executive Officers 5,015,000 60%
and Directors as a Group
(3 persons)
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than ten percent of a registered class of the Company's
equity securities ("Reporting Persons"), to file with the SEC reports of
ownership and reports of changes in ownership of the Common Stock and other
equity securities of the Company. Reporting Persons are required by SEC
regulations to furnish the Company with copies of all Section 16(a) reports they
file.
To the Company's knowledge, no officers, directors, or beneficial owners of
more than ten percent of any class of the Company's equity securities registered
pursuant to Section 12 of the Exchange Act or any other person subject to
Section 16 of the Exchange Act with respect to the Company, failed to file on a
timely basis reports required by Section 16(a) of the Exchange Act during the
most recent fiscal year.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The Company has not paid any salaries or bonuses to any of its officers
from its inception in November 1999 through April 25, 2002. Other compensation
is noted below.
The following table shows compensation paid during the fiscal years ended
October 31, 2001 and 2000 to the Company's President and Chief Executive
Officer, and highest paid executives.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
-------------------
NAME AND OTHER ANNUAL
PRINICIPAL COMPENSATION ($) ALL OTHER COMPENSATION
POSITION YEAR SALARY ($) BONUS ($) (1) ($) (2)
-------- ---- ---------- --------- --- -------
Pietro Bortolatti 2001 0 0 20,500 0
President, Chief
Executive Officer & 2000 0 0 4,000 0
Chairman of the Board
Tiziana DiRocco 2001 0 0 15,370 0
Vice President of
Marketing and Director 2000 0 0 20,800 0
David Rector 2001 0 0 0 16,244
Director
2000 0 0 0 37,677
----------
(1) Commissions of sales from Terre Di Toscana, Inc., and Terres Toscanas, Inc.
(2) Includes consulting service fees paid to the David Stephen Group, of which
David Rector is a principal.
EMPLOYMENT AGREEMENTS
The Company currently does not have employment agreements in place with any
of its employees. Following the Merger, Christopher Carey, the President and
Chief Executive Officer of Stronghold Technologies, Inc. will sign an Employment
Agreement with Acquisition, the surviving entity of the Merger.
THE EXECUTIVE OFFICERS OF THE POST-MERGER COMPANY
The name, age and employment history of the Post-Merger Company executive
officers are set forth below. Prior to the closing of the Merger, the Company is
obligated to provide the resignation of the existing executive officers.
Christopher Carey, whose biography is set forth above under the section titled
"Right to Designate Directors and Designees," will be the President of the
Post-Merger Company.
Lenard Berger, 33, is the Chief Technology Officer and Vice President of
Stronghold Technologies, Inc. Prior to the founding of Stronghold in 2000, Mr.
Berger was the President of eBNetworks, a division of Computer Horizons, Inc.
From 1990 until 1999, Mr. Berger was the Vice President of RPM Consulting, Inc.
James Cummiskey, 39, is the Vice President of Sales and Marketing of
Stronghold Technologies, Inc. Prior to the founding of Stronghold in 2000, Mr.
Cummiskey was the Vice President of Sales and Marketing for Payback Training
Systems, Inc. From 1996 until 1998, Mr. Cummiskey was the Vice President of
Marketing for Datatec Industries, Inc.
Salvatore D'Ambra, 42, is the Vice President and Chief Engineer for
Stronghold Technologies, Inc. Prior to the founding of Stronghold in 2000, Mr.
D'Ambra was the President and Chief Executive Officer of Pagecount, Inc. From
1985 until 1996 Mr. D'Ambra was a Professor of Graduate Engineering at Loyola
College of Maryland.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Company issued 5,000,000 shares of its Common Stock to its president
Pietro Bortolatti in exchange for the transfer from Mr. Bortolatti to the
Company of all of the outstanding shares of Terre di Toscana, Inc. The assets of
Terre di Toscana, Inc. included rights in several customer agreements. The
Company values the 5,000,000 shares issued to Mr. Bortolatti at par value,
$.0001 per share.
KGL Investments, Ltd. received 30,000 shares of the Company's Common Stock
in exchange for $3,000 worth of legal services rendered by Kaplan Gottbetter &
Levenson, LLP, counsel to the Company (the shares were valued at $.10 per
share). Kaplan Gottbetter & Levenson, LLP is the beneficial owner of these
shares. The legal services did not include the preparation of this prospectus or
the prior private placement memorandum.
From November, 2000 through January, 2001 the Company sold 3,351,000 shares
of the Company's Common Stock at $.10 per share in a private offering.
David Rector is a director of the Company, and a principal of The David
Stephens Group. The Company has engaged The David Stephens Group to perform
certain management consulting services for which the Company has paid The David
Stephens Group $26,243.70 as of January 31, 2001.
The Company believes that the terms of the above transactions are
commercially reasonable and no less favorable to the Company than it could have
obtained from an unaffiliated third party on an arm's length basis. To the
extent that the Company may enter into any agreements with related parties in
the future, the Board of Directors has determined that such agreements must be
on similar terms.