Edgar Filing: KANZER STEVE H

As filed, via EDGAR, with the Securities and Exchange Commission on
May 30, 2002.
File No.:________
ICA No.: _________
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the registrant |_|
Filed by a party other than the registrant |X|
Check the appropriate box:
|X| Preliminary proxy statement |_| Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
| | Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting material pursuant to
Rule 14a-11(c) or Rule 14a-12

DOR BIOPHARMA, INC.
(Name of Registrant as Specified in Its Charter)

STEVE H. KANZER

(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:

(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:

NOTICE AND CALL FOR A SPECIAL MEETING OF STOCKHOLDERS AND PROXY FOR
DOR BIOPHARMA, INC.

This notice and call for Special Meeting of stockholders of DOR Biopharma
Inc. (this "Notice and Proxy") is furnished to you by Steve H. Kanzer (the
"Solicitor") in connection with a solicitation of written notification and
proxies from the holders of common stock, par value $0.001 per share (the
"Common Stock"), and Series B convertible preferred stock, par value $0.05 per
share (the "Preferred Stock"; together with the Common Stock, the "Stock"), of
DOR Biopharma, Inc., a Delaware corporation ("DOR" or the "Company"), to take
the following actions at a Special Meeting of stockholders of DOR, as permitted
by the Delaware General Corporation Law (the "DGCL"):

1. The undersigned holder of capital stock of record as of May 30,
2002, 9:00 a.m. Eastern Daylight Time of DOR Biopharma, Inc. ("DOR"), does
hereby call for a Special Meeting of stockholders at 10:00am Eastern time
on the first business day that is twenty (20) days after the date on which
Steve H. Kanzer (the "Solicitor") receives a number of Notice and Proxies
constituting a majority of the shares of capital stock of record of DOR as
of May 30, 2002 including any adjournments or postponements thereof for
the purpose of considering the proposals described below (the "Special
Meeting").

2. The undersigned holder of capital stock of DOR, hereby appoints
Steve H. Kanzer, by proxy for the undersigned, with full powers of
substitution, to represent the undersigned and to vote on behalf of the
undersigned all shares of common stock and Series B preferred stock of DOR
that the undersigned is entitled to vote at the Special Meeting of DOR in
the following manner:

A. To remove (i) all members of DOR's Board of Directors (the "Board
of Directors") other than Steve H. Kanzer, Paul Rubin, M.D., Richard
Dunning, Peter Kleim, Guy Rico, and Steven Thornton (the "Remaining
Directors"), and (ii) any other person or persons (other than the persons
elected at the Special Meeting) elected or appointed to the Board of
Directors prior to the Special Meeting (including any persons elected or
appointed in lieu of the Remaining Directors) to fill any newly-created
directorship or vacancy on the Board of Directors or otherwise.

B. To elect Gilbert Goldstein, Larry J. Kessel, M.D. and Peter
Salomon, M.D., FACG (collectively, the "Nominees") as directors of DOR to
serve until their respective successors are duly elected and qualified
(the "Director Election Proposal").

C. To repeal any amendment to the By-Laws adopted by the Board of
Directors subsequent to May 30, 2002.

D. To transact such business as may properly come before the Special
Meeting.

The Solicitor asks that stockholders of DOR provide notice of a call for
the Special Meeting and consent to the empowerment of to act on their behalf as
their proxy reprehensive vote their shares in favor of the Solicitor Proposals
as indicated on the accompanying Notice and Proxy at the Special Meeting by
marking the enclosed Notice and Proxy appropriately, signing and dating it, and
returning it promptly in accordance with the instructions set forth below.

This Notice and Proxy Statement and the enclosed Notice and Proxy form are
first being furnished to DOR's stockholders on or about June __, 2002.

SUMMARY OF NOTICE AND PROXY PROCEDURE

On May 24, 2002 the Solicitor filed an Initial Consent Statement (the
"Initial Consent Statement") with the Securities and Exchange Commission ("SEC")
seeking the nearly identical resolutions contained herein by written consent of
majority of the stockholders of DOR. Simultaneous therewith, on May 24, 2002 the
Solicitor delivered by U.S. mail, facsimile and overnight mail the Solicitor's
own written consent as a stockholder taken in lieu of a meeting to DOR
Biopharma, Inc. Regarding the Initial Consent Statement, under the DGCL, the
record date of a written consent unless fixed by the board of directors of the
corporation is the date on which the first consent is delivered to the
corporation but may not be dated more than sixty (60) days following the
delivery of the first written consent. Pursuant to SEC regulations, the
Solicitor will not be permitted to solicit written consents from stockholders of
DOR pursuant to the Initial Consent Statement until such date and time that the
Initial Consent Statement is reviewed and declared effective for use by the SEC.
Accordingly, until the Initial Consent Statement is declared effective by the
SEC, the Solicitor's sixty (60) day "window" to solicit consents under the
Initial Consent Statement is reduced by each passing day. In the event that the
SEC review process extends beyond sixty (60) days from May 24, 2002, the
Solicitor may be effectively precluded from seeking any consents based upon the
record date of May 24, 2002 utilizing the date of delivery of the Solicitor's
initial written consent.

On May 28, 2002, subsequent to the filing if the Initial Consent Statement
and delivery of the Solicitor's initial written consent to DOR, the Chairman of
DOR called a special meeting of the board of directors to take place on May 30,
2002, specifically including the purpose of amending the bylaws of DOR. A draft
of such new amended and restated bylaws of DOR (the "Draft Amended and Restated
Bylaws") were circulated to the board of directors of DOR by the Chairman of
DOR, for their consideration at the upcoming board of directors meeting called
for May 30, 2002 at 10:00am Central Daylight Time. As of the date of this
writing, May 30, 2002, the Draft Amended and Restated Bylaws have not yet been
approved by the board of directors of DOR.

Among other amendments, such as the inclusion of a prenotification period
for the nomination of individuals to serve on the board of directors, the Draft
Amended and Restated Bylaws, if approved by the board of directors as drafted,
eliminate the ability of the stockholders of DOR to call a special meeting of
stockholders which would also effectively eliminate the ability of the
stockholders to act by written consent in lieu of a meeting without the consent
of the board of directors of DOR. In light of such potential disenfranchisement
of the stockholders of DOR and the potential for a protracted review process by
the SEC in light of the Draft Amended and Restated Bylaws, that the Initial
Consent Statement and this Notice and Proxy Statement seek to revoke and declare
null and void, the Solicitor decided to file this Notice and Proxy Statement
which is in addition to, and specifically not in lieu of the Initial Consent
Statement. This Notice and Proxy Statement is intended to be a protective
"back-up" measure by the Solicitor in the event that a protracted SEC review
process substantially curtails or eliminates the sixty (60) day window beginning
May 24, 2002 for the Solicitor to seek written consents pursuant to the Initial
Consent Statement.

Prior to the board of directors meeting of May 30, 2002, the Solicitor
delivered via facsimile, and certified mail a notice that he intends to call for
special meeting of the stockholders of DOR. This notice was send via facsimile,
certified mail and overnight delivery.

This Notice and Proxy Statement is similar to the Initial Consent
Statement in form and objectives with one essential difference. Pursuant to this
Notice and Proxy Statement, the Solicitor intends to call for a Special Meeting
of the stockholders of DOR to effect the changes of the Board of Directors of
the corporation as opposed to by a written consent procedure taken in lieu of a
meeting of stockholders. The Solicitor does not intend to deliver the Notice and
Proxies calling for a Special Meeting until after this Notice and Proxy
Statement is declared effective by the SEC. Pursuant to this Notice and Proxy
Statement.

This Notice and Proxy Statement also seeks to revoke any amendment to the
bylaws of DOR effective after May 30, 2002. This will necessarily include the
Draft Amended and Restated Bylaws if such bylaws are approved by the board of
directors of DOR on or after May 30, 2002. Although the Special Meeting be held
after the date of enactment of the Draft Amended and Restated Bylaws, if so
enacted, the Solicitor believes that the Solicitor's prior notice given to the
Board of Directors of DOR pursuant to the notice delivered to DOR on the morning
of May 30, 2002 and the Solicitors Initial Consent Statement dated May 24, 2002
and this Notice and Proxy Statement filed with the SEC on May 30, 2002, should
preserve the record date of May 30, 2002 as the record date for the Special
Meeting and thereby revoke any subsequent amendments to the bylaws of DOR
enacted by the board of directors subsequent to May 30, 2002, 10:59am EDT.

The acts of the management of DOR and the board of directors of DOR should
not disenfranchise powers held by the stockholders of record of May 24, 2002 or
May 30, 2002, the dates in which the board of directors of DOR had notice that
the Solicitor intended to seek either written consents and/or notice and call
for a Special Meeting of stockholders to effect the Solicitor Proposals. It is
the Solicitor's belief that such outcome is in accordance with both the letter
and intent of the laws of the State of Delaware and regulations of the SEC.

Once the Solicitor obtains the majority of the notices from the
outstanding stockholders of DOR, the Solicitor will call for a Special Meeting
of Stockholders, whereby the Solicitor's Proposals will be voted upon. The
Solicitor's Proposals will become effective on the date of the Special Meeting
of Stockholders, which will occur approximately twenty (20) days after the
Solicitor obtains the written Notices and Proxies of holders of a majority of
the shares of Stock outstanding on May 30, 2002, as determined in accordance
with Delaware law (the "Record Date"), are delivered to DOR.

Although the Special Meeting will be after the date in which the Draft
Amended and Restated Bylaws are adopted by the Board of Directors of DOR, if so
adopted, the Solicitor believes that his notification to DOR on the morning of
May 30, 2002 before 10:00am Central Daylight Time in the form of a written
notice to file this Notice and Proxy Statement and delivery to DOR and/or the
filing of this Notice and Proxy Statement, should not disenfranchise
stockholders of record of such date that continue to be stockholders of record
as of the later Record Date pursuant to the Bylaws of DOR in effect when DOR was
notified of the Solicitors intention to seek proxies and when this statement was
filed with the SEC. In particular, the stockholders of DOR currently have the
right to (a) call a special meeting of stockholders "at the request in writing .
.. . of the stockholders owning a majority of the shares of capital stock of
[DOR] issued and outstanding and entitled to vote." Article II, Section 4,
Bylaws of DOR (as successor to Biological Therapeutics, Inc. (a Delaware
corporation)) and (b) the right to act by written consent "without a meeting,
without prior notice, and without a vote, if a written consent, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present or

represented by proxy or voted." Article II, Section 10, Bylaws of DOR (as
successor to Biological Therapeutics, Inc.

To the Solicitor's knowledge, at the close of business on May 30, 2002,
there were approximately 20,825,710 shares of Common Stock and 108,442 shares of
Preferred Stock outstanding and entitled to vote. Each holder of Common Stock is
entitled to one vote for each share of Common Stock held by it as of the Record
Date. Each holder of Preferred Stock is entitled to one vote for each share of
Common Stock into which a share of Preferred Stock was convertible as of the
Record Date. As of the record date, the Solicitor believes each share of
Preferred Stock is convertible into 13.55 shares of Common Stock. Consequently,
as of the Record Date, the Preferred Stock was entitled to an aggregate of
1,469,404 votes. The total voting power represented by the Common Stock and the
Preferred Stock as of the Record Date is 22,295,114, with 11,147,557 votes
constituting the majority required for adoption of the Solicitor Proposals.

As of the May 30, 2002, Mr. Kanzer owned 391,674 shares of Common Stock,
and options exercisable within 60 days for 416,800 shares of Common Stock,
representing in the aggregate approximately 3.62% of the voting power of the
outstanding Stock as of the Record Date. As of the Record Date, Mr. Goldstein
owned 50,423 shares of Common Stock representing in the aggregate approximately
0.23% of the voting power of the outstanding Stock as of the Record Date. Mr.
Goldstein's three adult children own approximately 16,807 shares of Common
Stock, as to which Mr. Goldstein disclaims beneficial ownership. As of the
Record Date, Dr. Kessel owned no shares of Common Stock, although his wife owns
12,500 shares of Common Stock as to which Dr. Kessel disclaims beneficial
ownership. As of the Record Date, Dr. Salomon does not own any shares of Common
Stock. Accordingly, taken together the Solicitor and the Nominees own a total of
858,897 shares of Common Stock and options exercisable within 60 days,
representing in the aggregate approximately 3.85% of the outstanding Stock as of
the Record Date.

The Solicitor recommends that you consent to each of the Solicitor
Proposals by marking the enclosed consent form appropriately, signing and dating
it, and returning it promptly in the postage-paid envelope provided. Failure to
sign and return your consent will have the same effect as voting against the
Solicitor Proposals.

If your shares are held in the name of a brokerage firm, bank nominee or
other institution, you should contact the person responsible for your account
and give instructions for the consent form representing your shares to be
marked, dated, signed and mailed. Only that institution can execute a Notice and
Proxy form with respect to your shares held in the name of that institution and
only upon receipt of specific instructions from you. The Solicitor urges you to
confirm in writing your instructions to the person responsible for your account
and to provide a copy of those instructions to the Solicitor at the address set
forth below so that the Solicitor is aware of all instructions given and can
attempt to ensure that those instructions are followed.

The Solicitor currently intends to cease the solicitation of Notice and
Proxies once he has determined that valid and unrevoked Notice and Proxies
representing a majority of the voting power represented by issued and
outstanding shares of Stock as of the Record Date have been obtained and to
deliver those Notice and Proxies to DOR in the manner required by Article II of
the bylaws of DOR as in effect as of May 30, 9:00 Eastern Daylight Time or as
soon as practicable thereafter. A stockholder may revoke his or her notice and
call for a special meeting at any time before the Solicitor receives written
notices constituting a majority of the outstanding shares of capital stock of
DOR and will thereafter be able to revoke

his or her proxy at ant time before or at the Special Meeting of stockholders so
called.

Please return your completed Notice and Proxy form (or institution
instructions), and direct any questions, to Steve H. Kanzer at the following
coordinates:

Steve H. Kanzer
C/O Accredited Ventures, Inc.
801 Brickell Ave., Suite 900
Miami, FL 33131
Phone: (305) 789-6692
Facsimile: (305) 789-6664

WHY YOU SHOULD CONSENT TO THE SOLICITOR PROPOSALS

The Solicitor is concerned about the Company's current rate of spending and
headcount relative to its available working capital. According to the Company's
most recent 10QSB filing on May 15, 2002, the Company had $4.7 million in
working capital, with a quarterly loss of $1.9 million (an increase of 61% from
a loss of $1.2 million for the first quarter 2001). The Solicitor disagrees in
particular with the Company's rate of spending in the areas of management
salaries, headcount, legal and accounting expenditures, and research and
development relating to early stage, as opposed to late stage, pharmaceutical
product opportunities. In addition, according to the Company's most recent 10QSB
filing, "the Company may also seek to obtain funds from possible future public
or private sales of our securities". The Solicitor would consider such a sale
currently to be inadvisable given the Company's low stock price.

The Solicitor believes that DOR has substantial inherent value, and sufficient
working capital to meet its objectives, if properly focused. The Solicitor is
proposing the removal of all directors who are or were members of management and
replacing such directors with directors that are independent of the Company's
current or former management. If the Notice and Proxy solicitation is
successful, the Solicitor is hopeful that the reconstituted board will direct
management to: (i) institute a significant cost cutting program, reduction of
Company management and reduction in headcount from its current level of 22
full-time employees; (ii) preserve the Company's existing capital ($4.7 million
as of the most recent 10QSB filing); (iii) focus the Company's remaining
existing financial and human resources on completing the ongoing pivotal phase
III clinical trial of orBecTM1 for Intestinal Graft-Vs-Host Disease (IGVHD) and
Phase II trial for Crohn's disease; and (iv) as a consequence, hopefully avoid
the need for any immediate dilutive financing transaction(s).

RESULTS OF THE DOR 2002 ANNUAL MEETING OF SHAREHOLDERS

At DOR's Annual Meeting of Stockholders held on May 23, 2002 (the "2002
Annual Meeting"), Mr. Kanzer nominated three individuals to be considered for
election to the board of directors of DOR, Mr. Goldstein, Dr. Kessel and a third
individual, Mr. Nicholas Stergis. At the 2002 Annual Meeting, Mr. Kanzer voted
his 380,258 shares of Common Stock and voting proxies from eight (8) additional
stockholders of record representing an additional approximately 7,948,850 shares
of Common Stock and shares of Common Stock into which the Preferred Stock is
convertible in favor of election of Mr. Goldstein, Dr. Kessel and Mr. Stergis.
At the 2002 Annual Meeting, the approximately 8,099,621 total votes cast in
favor of Mr. Goldstein, Dr. Kessel and Mr. Stergis were not sufficient to
successfully elected these individuals to the board of directors due

to the approximately 11,500,000 majority of votes cast in favor of the
reelection of Mr. Colin Bier, the current Chairman and Chief Executive Officer
of DOR, Mr. Michael Rosen, the current President and Chief Operating Officer of
DOR and Kenneth Tempero, M.D., Ph.D., the former Chairman of DOR, whom this
Notice and Proxy seeks to remove from the board of directors. Of the 11,500,000
shares voting in favor of Messrs. Bier, Rosen and Dr. Tempero, approximately
8,400,000 shares were voted by transfer agents and various brokerage firms
holding shares of Common Stock in "street name" on behalf of other beneficial
owners. The Solicitor believes that most of these transfer agents and brokerage
firms have abided by the common practice of voting such "street name" shares for
which the beneficial owners fail to respond to a Company proxy in a so-called
"uncontested election" in favor of the slate of directors recommended by the
Company absent alternative instructions received from the beneficial owners. The
precise number of votes cast under standing instructions as described is not
known by the Solicitor.

THE SOLICITOR PROPOSALS

The Solicitor is seeking written Notice and Proxies from the holders of
shares of Stock to call for and hold a Special Meeting of the Stockholders of
DOR, remove certain members of the board of directors of DOR, elect the Nominees
and adopt the other Solicitor Proposals and to take the following actions as
permitted by the DGCL and the Company's By-Laws. The effectiveness of each of
the Solicitor Proposals is subject to, and conditioned upon, the adoption of
each of the other Solicitor Proposals by the holders of record, as of the close
of business on the Record Date, of a majority of the voting power of the shares
of Stock then outstanding. If, however, the By-Laws Proposal is not so adopted,
the Solicitor reserves the right to waive this condition, but only with respect
to the By-Laws Proposal.

Special Meeting of Stockholders Proposal

Resolved, that the stockholders owning a majority of the shares of capital
stock of DOR issued and outstanding as of May 30, 2002 do hereby call for a
special meeting of stockholders at 10:00am Eastern time on the first business
day that is twenty (20) days after the date on which Steve H. Kanzer receives a
number of Notice and Proxies constituting a majority of the shares of capital
stock of DOR as of May 30, 2002 for the purpose of considering the Solicitor
Proposals, unless such proposals are adopted by written Notice and Proxy in lieu
of a meeting.

Board Removal Proposal

This proposal would remove each of the current members of the Board of
directors other than the Remaining Directors (as defined below) and the persons
elected pursuant to this Notice and Proxy. The text of the resolution is as
follows:

RESOLVED, that (1) each current member of the Board of Directors of DOR,
other than Steve H. Kanzer, Peter Kliem, Guy Rico, Richard Dunning, Paul Rubin,
M.D., and Steven Thornton (those current members, the "Remaining Directors"),
and (2) any other person or persons (other than the persons elected pursuant to
this Notice and Proxy) elected or appointed to the Board of Directors of DOR
prior to the effective time of this resolution, in addition to or in lieu of any
of such current members (including any persons elected or appointed in lieu of
the Remaining Directors) to fill any newly created directorship or vacancy on
the Board of Directors of DOR, or otherwise, is hereby removed and the office of
each such member of the Board of Directors of DOR is hereby declared vacant.

Delaware law provides that directors of DOR may be removed, with or
without cause, by the holders of a majority of the shares of stock then entitled
to vote at an election of the directors. This Solicitor Proposal would remove
three (3) of the current nine

(9) directors (other than the Remaining Directors) so that the three (3)
Nominees would, if elected, constitute, along with the six (6) Remaining
Directors all of the nine (9) members of the Board of Directors. Each member of
the Board of Directors would then serve until a successor is elected and
qualified or until he resigns or is removed.

Director Election Proposal

This proposal would elect Gilbert Goldstein and Drs. Larry J. Kessel and
Peter Salomon as directors of DOR. The text of the resolution is as follows:

RESOLVED, that Gilbert Goldstein, Larry J. Kessel, M.D. and Peter Salomon,
M.D. are hereby elected as directors of DOR, to serve until their respective
successors are duly elected and qualified.

The Solicitor seeks to replace Mr. Rosen, and Drs. Bier and Tempero with
the three (3) Nominees. Pursuant to this Solicitor Proposal, the three (3)
Nominees would, if elected, constitute, along with the six (6) Remaining
Directors all of the nine (9) members of the Board of Directors. The Solicitor
proposes that the Nominees named above, once elected, serve until the next
annual meeting of the stockholders and until their successors have been duly
elected and qualified. Each of the Nominees has executed and a consent to serve
as a director of DOR if elected. See "Certain Information Regarding the
Solicitor and the Nominees" for more information about the Nominees.

By-Laws Proposal

This proposal would repeal each provision of any amendment to the By-Laws
adopted on or after to May 30, 2002 (the day Mr. Kanzer delivered a notice to
DOR of his intention to seek Notice and Proxy of the majority of the
stockholders of DOR and initially filed his Notice and Proxy solicitation
documents for review by the Securities and Exchange Commission ("SEC")), and
prior to the effectiveness of the Solicitor Proposals. This proposal is designed
to prevent the existing Board of Directors from taking actions to amend the
By-Laws which might prevent the stockholders from accomplishing the objectives
described in this Notice and Proxy Statement. Pursuant to this proposal, the
Draft Amended and Restated Bylaws, if adopted by the board of directors of DOR
on or after May 30, 2002 would be repealed upon effectiveness of the Solicitor
Proposals. If the current Board of Directors adopts any other material
amendments they would be repealed upon effectiveness of the Solicitor Proposals.
The Solicitor will provide stockholders with additional materials regarding the
Draft Amended and Restated Bylaws if adopted by the board of directors and of
any other amendments as described above. The text of the resolution is set forth
below.

RESOLVED, that all By-Laws adopted on or after May 30, 2002, and prior to
the effectiveness of this resolution are null and void and of no force and
effect.

Section 109 of the DGCL provides that "the power to adopt, amend or repeal
bylaws shall be in the stockholders entitled to vote ...; provided, however, any
corporation may, in its certificate of incorporation, confer the power to adopt,
amend or repeal bylaws upon the directors .... The fact that such power has been
so conferred upon the directors ... shall not divest the stockholders ... of the
power, nor limit their power to adopt, amend or repeal bylaws." The Solicitor
believes that such an unequivocal statement makes it clear that the stockholders
of DOR have the power under Delaware law to repeal By-Laws as provided by the
By-Laws Proposal, whether or not the By-Laws so amended or repealed are known to
the stockholders. To the knowledge of the Solicitor, the Delaware courts have
not addressed the validity of

a proposal in the form of the By-Laws Proposal. Based upon a review of the
By-Laws on file with the Commission as of May 30, 2002, the Solicitor does not
believe that the invalidity of this proposal would have an adverse effect on the
stockholders or this Notice and Proxy solicitation. Upon effectiveness of this
proposal, all By-Laws adopted subsequent to May 30, 2002, whether they could be
considered as beneficial or detrimental to the stockholders, will be repealed.
If prior to the effectiveness of the Solicitor Proposals the Board of Directors
adopts any material amendments to the By-Laws that are relevant to the Solicitor
Proposals, the Solicitor will forward additional solicitation materials to DOR's
stockholders regarding those actions.

CERTAIN INFORMATION REGARDING THE SOLICITOR AND THE NOMINEES

Set forth below are the name, age, present principal occupation and
employment history of each of the Nominees for at least the past five years. The
information regarding each Nominee has been furnished to the Solicitor by that
Nominee. Each of the Nominees has consented to serve as a director of DOR, and
is at least 18 years of age.

Larry J. Kessel, M.D., 47, currently is in private practice in internal and
geriatric medicine and has been since 1985. He has served as medical director at
Integrated Health Services, a conglomerate involved in geriatric care. He has
been a clinical instructor at Jefferson Medical College since 1984. Dr. Kessel
holds a position on the Board of Directors of Cypress Biosciences, Inc., a
publicly traded biotechnology company.

Peter Salomon, M.D, FACG, 48, is a Board Certified Gastroenterologist in private
practice with Gastroenterology Associates of South Florida. An active clinical
researcher in the treatment of Crohn's disease, Dr. Salomon has seen several
thousand patients suffering from inflammatory bowel disease. Dr. Salomon has
authored numerous peer reviewed publications on the subject of Crohn's disease
and is co-author of the chapter of the leading gastroenterology textbook,
Sleisinger & Fordtran's, Gastrointestinal & Liver Diseases. Dr. Salomon received
his undergraduate degree from New York University in 1981 and his Medical Degree
from New York University in 1985. Dr. Salomon received his training in Internal
Medicine and Gastroenterology at The Mount Sinai Hospital in New York where he
also held a grant from the Crohn's and Colitis Foundation to perform research in
inflammatory bowel disease.

Gilbert Goldstein, 72, is a private investor in the field of real estate
investment and development of shopping centers, office buildings, industrial
parks, condominium projects, and land development. Mr. Goldstein is also
actively involved in venture capital investments. Mr. Goldstein was an officer
in the U.S. Air Force and is a graduate of Pennsylvania State University.

Set forth below are the name, age, present principal occupation and
employment history for at least the past five years of the Solicitor.

Steve H. Kanzer, C.P.A., Esq., 38, has served as a member of the Board of
Directors since June 1996. From December 1997 until November 29, 2001, Mr.
Kanzer was President and Chief Executive Officer of Corporate Technology
Development, Inc., CTD, which was acquired by DOR in November 2001. Since
December 2000, Mr. Kanzer has also been Chairman, Chief Executive Officer and
President of Accredited Equities, Inc., ("Accredited"), a NASD member investment
banking firm specializing in the biopharmaceutical industries that is based in
Miami, Florida. Since January 2001,

Mr. Kanzer is Chairman and Chief Executive Officer of Accredited Ventures, Inc.,
a venture capital group specializing in the biopharmaceutical industry. Since
December 2000, Mr. Kanzer has severed as the President and Chief Executive
Officer of Vertical Memories, Inc. and General Fiber, both private medical
technology companies. Since January 2001, Mr. Kanzer has served as the President
and Chief Executive Officer of CD4 Biosciences, Inc., Developmental
Therapeutics, Inc., Pipex, Inc. and Solovax, Inc., all private biotechnology
companies. Mr. Kanzer is also President and Chief Executive Officer of several
other private biotechnology companies From 1992 until December 1998, Mr. Kanzer
was a founder and Senior Managing Director of Paramount Capital, Inc., an
investment bank specializing in the biotechnology and biopharmaceutical
industries, and Senior Managing Director--Head of Venture Capital of Paramount
Capital Investments, LLC, a biotechnology and biopharmaceutical venture capital
and merchant banking firm that is affiliated with Paramount Capital, Inc. From
1994 until June 2000, Mr. Kanzer was a founder and Chairman of Discovery
Laboratories, Inc., a publicly traded pharmaceutical research and development
company. Mr. Kanzer is a member of the board of directors of Atlantic Technology
Ventures, Inc., a publicly traded pharmaceutical research and development
company. Prior to joining Paramount Capital, Inc., Mr. Kanzer was an attorney
with Skadden, Arps, Slate, Meagher & Flom LLP in New York, New York from
September 1988 to October 1991. He received his J.D. from New York University
School of Law in 1988 and a B.B.A. in Accounting from Baruch College in 1985.
Mr. Kanzer is currently the designated nominee of Aries Select, Ltd. and Aries
Select I LLC to the board of directors of DOR. See "Certain Relationships and
Transactions", below.

The Solicitor has, during the past 10 years, not been convicted in a
criminal proceeding (excluding traffic violations and similar misdemeanors).

Certain Relationships AND TRANSACTIONS

Steve H. Kanzer is a director of DOR and the former President and Chief
Executive Officer and a director of CTD, a biotechnology company that DOR
acquired on November 29, 2001. Mr. Kanzer serves on the board of directors of
DOR as a nominee of the Aries Master Fund II and the Aries Domestic Fund, who
subsequently transferred their right to nominate a member to the board of
directors of DOR to Aries Select, Ltd., or Aries, and Aries Select I LLC, or
Aries I, each of which is a principal stockholder of DOR. Aries Select II LLC,
or Aries II, is also a stockholder of DOR. From February 1992 until December
1998, Mr. Kanzer was a Senior Managing Director of Paramount. Paramount Capital
Asset Management, Inc., or PCAM, is the investment manager of Aries and the
managing member of each of Aries I and Aries II. Lindsay A. Rosenwald, M.D. is
the Chairman and sole stockholder of PCAM and Paramount Capital, Inc., or
Paramount. As of May 30, 2002, Dr. Rosenwald beneficially owned approximately
25% of DOR's common stock. Paramount has acted as a placement agent in
connection with certain private placements of DOR's common stock, as a finder in
connection with a private placement of DOR's common stock and warrants, and as a
financial advisor to DOR. In addition, certain officers, employees and
associates of Paramount and its affiliates own securities of DOR and a
subsidiary of DOR. Dr. Rosenwald is also the Chairman and sole stockholder of
Huntington Street Company, or Huntington Street, and June Street Company, or
June Street, and is the sole member of Paramount Capital Drug Development
Holdings LLC, or Paramount Holdings.

On June 13, 1996, Dominion Resources, Inc. entered into an agreement with The
Aries Fund and the Aries Domestic Fund, L.P., collectively referred to herein as
the Aries Funds, with the Company as a party to the agreement, whereby the Aries
Funds purchased an aggregate of 266,667 shares of the Company's common stock
from Dominion Resources. As part of the transaction, Dominion Resources
transferred to the Aries Funds certain of its rights under an existing agreement
with the Company, including the right to designate one of the directors of the
Company and the right to have the shares registered under the Securities Act.
Upon completion of the transaction, Mr. Kanzer, also the Solicitor, was elected
to the Board of Directors as a designee of the Aries Funds. On June 26, 1996,
the Aries Funds purchased from the Company an additional 333,334 shares of
common stock. The purchase agreements relating to such shares contains various
representations and warranties concerning the Company and its

activities and also various affirmations and negative covenants. The agreements
grant to the Aries Funds the right to have the shares registered under the
Securities Act and restrict the Company from entering into mergers,
acquisitions, or sales of the Company's assets without the prior approval of the
Aries Funds and the Aries Fund nominee on the Board. In 2001, the Aries Funds
transferred the shares of the Company's common stock and the rights under the
purchase agreements to Aries Select, Ltd. and Aries Select I LLC. Aries Select,
Ltd. and Aries Select I LLC each beneficially own in excess of 5% of the
Company's common stock, based upon the shares of common stock and shares of
common stock issuable upon exercise of warrants beneficially owned by each of
them.

In connection with a credit agreement entered into by the Company and the Aries
Funds on May 19, 1997, the Company issued to the Aries Funds warrants to
purchase an aggregate of 66,668 shares of common stock. PCAM is the investment
manager of the Aries Funds and the general partner of the Aries Domestic Fund,
L.P. In 2001, the Aries Funds transferred their Company warrants to Aries
Select, Ltd. and Aries Select I LLC, both of which are affiliates of PCAM, or
Paramount, and Lindsay Rosenwald, M.D.

Pursuant to a Financial Advisory Agreement dated as of October 18, 2001 between
Paramount and the Company, Paramount provided to the Company financial advisory
services regarding the merger between the Company and CTD. Paramount received as
compensation for these services, options to purchase 46,000 shares of the
Company's common stock at an exercise price of 1.25 per share. These options
vested immediately upon issuance and expire on February 21, 2011. Additionally
on November 29, 2001, the closing date of the CTD merger, the Company issued
Paramount additional "success fee" options to purchase 54,000 shares of the
Company's common stock at an exercise price of $0.90 per share. These options
vested immediately upon issuance and expire on November 29, 2011.

Except as set forth in this Notice and Proxy Statement, to the knowledge of the
Solicitor, none of the Solicitor or Nominees (i) owns beneficially, directly or
indirectly any securities of DOR, (ii) owns beneficially, directly or indirectly
any securities of any parent or subsidiary of DOR, (iii) owns any securities of
DOR of record but not beneficially, (iv) has purchased or sold any securities of
DOR within the past two years, (v) has incurred indebtedness for the purpose of
acquiring or holding securities of DOR, (vi) is or has within the past year been
a party to any contract, arrangement or understanding with respect to any
securities of DOR, (vii) since the beginning of DOR's last fiscal year has been
indebted to DOR or any of its subsidiaries in excess of $60,000 or (viii) has
any arrangement or understanding with respect to future employment by DOR or
with respect to any future transactions to which DOR or any of its affiliates
will or may be a party. In addition, to the best knowledge of the Solicitor,
except as set forth in this Notice and Proxy Statement, since the beginning of
DOR's last fiscal year, none of the Solicitor or Nominees has had or is to have
a direct or indirect material interest in any transaction or proposed
transaction with DOR in which the amount involved exceeds $60,000.

Except as set forth in this Notice and Proxy Statement, to the knowledge
of the Solicitor, none of the Nominees, since the beginning of DOR's last fiscal
year, has been affiliated with (i) any entity that made or received, or during
DOR's current fiscal year proposes to make or receive, payments to or from DOR
or its subsidiaries for property or services in excess of 5% of either DOR's or
that entity's consolidated gross revenues for its last full fiscal year, or (ii)
any entity to which DOR or its subsidiaries was indebted at the end of DOR's
last full fiscal year in an aggregate amount exceeding 5% of DOR's total
consolidated assets at the end of such year. Except as set forth in this Notice
and Proxy Statement, none of the Nominees is or during DOR's last fiscal year
has been affiliated with any law or investment banking firm that has performed
or proposes to perform services for DOR.

To the knowledge of the Solicitor, except for Mr. Kanzer, in the case of
CTD, none of the corporations or organizations in which each of the Nominees has
conducted his principal occupation or employment was a parent, subsidiary or
other affiliate of DOR, and no Nominee holds any position or office with DOR or
has any family relationship with any executive officer or director of DOR or has
been involved in any proceedings, legal or otherwise, of the type required to be
disclosed by the rules governing this solicitation.

THE NOTICE AND PROXY PROCEDURE

Article II of the bylaws of DOR as in effect as of 10:59 EDT of May 30,
2002 provides that a Special Meeting of stockholders may be called by a majority
of the outstanding shares of capital stock of DOR, if notice in writing, setting
forth the proposals to be considered, are signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. These Notice and Proxies must be delivered
to the corporation by delivery to its registered office in Delaware, its
principal place of business or an officer or agent of the corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded.

The Solicitor currently intends to cease the solicitation of Notice and
Proxies once he has determined that valid and unrevoked Notice and Proxies
representing a majority of the voting power represented by issued and
outstanding shares of Stock as of the Record Date have been obtained. He then
intends to call for a special meeting of stockholders of DOR on approximately
the first business day that is at least the twentieth day following receipt of
such Notices and Proxies by the Solicitor and their subsequent delivery to DOR,
or as soon as practicable thereafter as may be adjourned. When the Solicitor
Proposals for which Notice and Proxies are given become effective, a stockholder
will be unable to revoke his or her Notice but will be able to revoke his or her
proxy.

Notice and Proxies may only be executed by stockholders of record at
10:59am EDT on May 20, 2002. To the knowledge of the Solicitor, as of the close
of business on May 29, 2002 there were outstanding approximately 20,825,710
shares of Common Stock and 1,469,404 shares of Preferred Stock. Given that the
Solicitor owns in the aggregate shares accounting for less than 4% of the voting
power of the Stock, Notice and Proxies of stockholders owning approximately 49%
of the voting power of the outstanding shares of Stock other than those owned by
the Solicitor on the Record Date are still required to adopt the Solicitor
Proposals. Since the Solicitor must receive Notice and Proxies from the holders
of a majority of the voting power represented by DOR's outstanding shares in
order for the Solicitor to call for a special meeting and for the Solicitors
Proposals to be adopted, a broker non-vote or direction to withhold authority to
vote on the Notice and Proxy form will have the same effect as a "no" vote with
respect to the Solicitor's solicitation.

Notice and Proxy Form Special Instructions

If you were a record holder as of the close of business on the Record Date, you
may elect to Notice and Proxy to, withhold Notice and Proxy or abstain with
respect to each Solicitor Proposal by marking the "FOR," "AGAINST," or "ABSTAIN"
box, as applicable, underneath EACH Solicitor Proposal on the accompanying
Notice and Proxy form and signing, dating and returning it promptly in the
enclosed postage-paid envelope. Each Notice and Proxy form will be voted in
accordance with the stockholder's instruction on that Notice and Proxy form. As
to the Solicitor Proposals set forth herein, stockholders may Notice and Proxy
to an individual Solicitor Proposal

or may withhold their Notice and Proxy by marking the proper box in the Notice
and Proxy form. If any stockholder who has executed and returned the Notice and
Proxy form has failed to check a box marked "FOR," "AGAINST," or "ABSTAIN" for
any or all of the Solicitor Proposals, that stockholder's Notice and Proxy form
will be voted in favor of that Solicitor Proposals or those Solicitor Proposals
so selected. If the enclosed Notice and Proxy form is signed and returned and no
direction is given, it will be voted in favor of all of the Solicitor Proposals.
If the Notice and Proxy form is signed and returned and not dated, it will be
dated on or about the date it is received.

The Solicitor recommends that you Notice and Proxy to each of the
Solicitor Proposals. Your Notice and Proxy is important. Please mark, sign and
date the enclosed Notice and Proxy form and return it promptly in the enclosed
postage-paid envelope to the address set forth under "Summary of Notice and
Proxy Procedure." Failure to return your Notice and Proxy form will have the
same effect as voting against the Solicitor Proposals.

If your shares are held in the name of a brokerage firm, bank nominee or
other institution, you should contact the person responsible for your account
and give instructions for the Notice and Proxy form representing your shares to
be marked, dated, signed and mailed. Only that institution can execute a Notice
and Proxy form with respect to your shares held in the name of the institution
and only upon receipt of specific instructions from you. The Solicitor urges you
to confirm in writing your instructions to the person responsible for your
account and to provide a copy of those instructions to Steve H. Kanzer at the
address set forth under "Summary of Notice and Proxy Procedure" so that the
Solicitor is aware of all instructions given and can attempt to ensure that such
instructions are followed.

The Solicitor urges each stockholder to ensure that the record holder of
his or her shares marks, signs, dates and returns the enclosed Notice and Proxy
form as soon as possible.

REVOCATION; COSTS OF NOTICE AND PROXY SOLICITATION

A Notice and Proxy executed by a stockholder may be revoked at any time
before its exercise by submitting (i) a written, dated revocation of that Notice
and Proxy or (ii) a later dated Notice and Proxy covering the same shares. A
revocation may be in any written form validly signed by the record holder as
long as it clearly states that the Notice and Proxy previously given is no
longer effective and must be executed and delivered prior to the time that the
action authorized by the executed Notice and Proxy is taken. The revocation may
be delivered to Steve H. Kanzer, c/o Accredited Ventures, Inc. 801 Brickell
Avenue, Suite 900, Miami, FL 33131.

The purpose of the Solicitor's Proposals being made by the Solicitor in
this Notice and Proxy Statement is to advance the interests of all of DOR's
stockholders. Therefore, the Solicitor believes that his expenses in connection
with the Notice and Proxy solicitation, which are being paid by the Solicitor,
should be reimbursed by DOR. The Solicitor intend to seek reimbursement of their
expenses from DOR if the Solicitor Proposals become effective. This request will
not be submitted to a stockholder vote. Costs related to the solicitation of
Notice and Proxies to the Solicitor Proposals include expenditures for attorneys
and postage and are expected to aggregate approximately $30,000. To date, the
Solicitor has incurred costs of approximately $10,000. The actual costs and
expenses could be materially different than the estimate set for above, and, in
particular, could be substantially higher if for any reason litigation is
instituted in connection with the matters related to this Notice and Proxy
Statement.

Upon the effectiveness of this Proxy Statement, the Solicitor plans to retain a
proxy solicitation firm to aid in the assistance in contacting DOR stockholders.

Your Notice and Proxy is important. No matter how many or how few shares
you own, please grant your Notice and Proxy to the Solicitor Proposals by
marking, sign, dating, and mailing the enclosed Notice and Proxy form promptly.

Steve H. Kanzer

May 30, 2002

ANNEX 1

SECURITY OWNERSHIP OF NOMINEES AND THE SOLICITOR

The table below sets forth information regarding the beneficial ownership
of the Company's common stock and Series B preferred stock as of March 30, 2002,
by the following Nominees and the Solicitor.

Beneficial ownership is determined in accordance with the rules of
the SEC and generally includes voting or investment power with respect to
securities. Shares of the Company's common stock that are subject to warrants,
options or other convertible securities that are presently exercisable or
exercisable within 60 days of May 30, 2002 are deemed to be outstanding and
beneficially owned by the person holding the warrants or stock options for the
purpose of computing the percentage of ownership of that person, but are not
treated as outstanding for the purpose of computing the percentage of any other
person. Unless otherwise indicated, each person has sole investment and voting
power with respect to the shares shown below. As of May 30, 2002, the Company
had 20,825,710 shares of common stock outstanding.

Common Stock Series B Convertible
Beneficially Percent Preferred Stock Percent
Name and Address of Beneficial Owner Owned of Class Beneficially Owned of Class
------------------------------------ ------------ -------- --------------------- --------

Steve H. Kanzer (1) 808,434 3.62%
c/o Accredited Ventures, Inc.
801 Brickell Avenue
Suite 900
Miami, FL
33131

Gilbert Goldstein (2)
c/o G&G Enterprises, Inc.
13161 Burgundy Dr. South
Palm Beach Gardens, FL 33410 50,423 *

Larry J. Kessel, M.D. (3)
8200 Henry Avenue, Suite G-1
Philadelphia, PA 19128 12,500 *

Peter Salomon, M.D., FACG
5258 Linton Blvd., Suite 202
Delray Beach, FL 33433 0 *

All Nominees and the Solicitor as a group 858,857 3.86%
(4 persons)

* Represents less than 1% of outstanding common stock or voting power.

(1) Includes 416,800 shares of common stock issuable upon the exercise within 60
days of the Record Date.

(2) Excludes 16,807 shares of common stock owned by Mr. Goldstein's adult
children as to which Mr. Goldstein disclaims beneficial ownership.

(3) Includes 12,500 shares of common stock owned by Dr. Kessel's wife as to
which Dr. Kessel disclaims beneficial ownership.

DOR BIOPHARMA, INC.

NOTICE AND PROXY OF STOCKHOLDER TO CALL FOR A
SPECIAL MEETING OF STOCKHOLDERS

THIS NOTICE AND PROXY IS SOLICITED BY
STEVE H. KANZER (THE "SOLICITOR")

Unless otherwise indicated below, the undersigned, a stockholder on May
30, 2002 (the "Record Date") of DOR Biopharma, Inc. ("DOR"), hereby Notice and
Proxies, pursuant to the Certificate of Incorporation of DOR, Article II of the
bylaws of DOR as in effect as of 10:59am EDT on May 30, 2002 and the General
Corporation Law of the State of Delaware, with respect to all shares of Common
Stock, par value $0.001 per share, of DOR (the "Common Stock") and Series B
Convertible Preferred Stock, par value $0.05 per share, of DOR (the "Preferred
Stock," and together with the Common Stock, the "Stock"), held by the
undersigned, the following notice of a call for a Special Meeting of
stockholders of DOR and authorization to Steve H. Kanzer to vote their shares by
proxy in favor of the following proposals.

THE SOLICITOR RECOMMENDS THAT YOU CALL FOR A SPECIAL
MEETING OF STOCKHOLDERS AS FOLLOWS:.

1. The undersigned holder of capital stock of record as of May 30,
2002, 9:00 a.m. Eastern Daylight Time of DOR Biopharma, Inc. ("DOR"), does
hereby call for a special meeting of stockholders at 10:00am Eastern time
on the first business day that is twenty (20) days after the date on which
Steve H. Kanzer (the "Solicitor") receives a number of Notice and Proxies
constituting a majority of the shares of capital stock of DOR as of May
30, 2002 including any adjournments or postponements thereof for the
purpose of considering the proposals described below (the "Special
Meeting"), unless such proposals are earlier adopted by written consent of
stockholders in lieu of a meeting.

|_| CALL FOR MEETING |_| WITHHOLD NOTIFICATION TO DOR FOR A MEETING

THE SOLICITOR RECOMMENDS THAT YOU GIVE YOUR PROXY TO THE SOLICITOR TO VOTE
AT THE SPECIAL MEETING SO CALLED TO VOTE ALL OF YOUR SHARES HELD AS OF
MAY, 30, 2002, 10:59am EDT IN FAVOR OF THE FOLLOWING PROPOSALS:

2. The undersigned holder of capital stock of DOR, hereby appoints
Steve H. Kanzer, as proxy for the undersigned, with full powers of
substitution, to represent the undersigned and to vote on behalf of the
undersigned all shares of common stock and Series B preferred stock of DOR
that the undersigned is entitled to vote at the Special Meeting of DOR in
the following manner:

Directors) to fill any newly-created directorship or vacancy on the Board
of Directors or otherwise.

|_| CONSENT |_| WITHHOLD CONSENT |_| ABSTAIN

(To withhold consent to the removal of any director as requested by the
Solicitor, write his or her name in the following
space:_______________________.)

|_| CONSENT |_| WITHHOLD CONSENT |_| ABSTAIN

(To withhold consent to the election of either Dr. Kessel, or Dr. Salomon,
or Mr. Goldstein, write his name in the following
space:_______________________.)

C. To repeal any amendment to the By-Laws adopted by the Board of
Directors on or after May 30, 2002.

By executing this written proxy, the undersigned hereby revokes any proxy
previously given.

Please sign exactly as your name as it appears on DOR's stockholder list of
record as of May 30, 2002, 10:59am EDT. If the stock is registered in the names
of two or more persons, each person should sign. Executors, administrators,
trustees, guardians and attorneys-in-fact should add their titles. If signer is
a corporation, please give full corporate name and have a duly authorized
officer sign, stating title. If signer is a partnership, please sign in
partnership by an authorized party. This proxy votes all shares held in all
capacities.

--------------------------------------
Stockholder Name as of the Record Date

--------------------------------------
(Signature)

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

(Date)

--------------------------------------
(Title)

--------------------------------------
(Signature, if held jointly)

THIS NOTICE AND PROXY SHALL ONLY BE VALID IF DELIVERED TO STEVE H. KANZER
AND SUBSEQUENTLY DELIVERED TO DOR.

PLEASE DATE, SIGN AND MAIL THE NOTICE AND PROXY PROMPTLY,
USING THE ENCLOSED ENVELOPE.