<SEC-DOCUMENT>0001477932-24-005909.txt : 20240925
<SEC-HEADER>0001477932-24-005909.hdr.sgml : 20240925
<ACCEPTANCE-DATETIME>20240924190842
ACCESSION NUMBER:		0001477932-24-005909
CONFORMED SUBMISSION TYPE:	PX14A6G
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20240925
DATE AS OF CHANGE:		20240924
EFFECTIVENESS DATE:		20240925

SUBJECT COMPANY:	

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FUELCELL ENERGY INC
		CENTRAL INDEX KEY:			0000886128
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRICAL INDUSTRIAL APPARATUS [3620]
		ORGANIZATION NAME:           	04 Manufacturing
		IRS NUMBER:				060853042
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		PX14A6G
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-14204
		FILM NUMBER:		241321064

	BUSINESS ADDRESS:	
		STREET 1:		3 GREAT PASTURE RD
		CITY:			DANBURY
		STATE:			CT
		ZIP:			06813
		BUSINESS PHONE:		2038256000

	MAIL ADDRESS:	
		STREET 1:		3 GREAT PASTURE ROAD
		CITY:			DANBURY
		STATE:			CT
		ZIP:			06813

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ENERGY RESEARCH CORP /NY/
		DATE OF NAME CHANGE:	19930328

FILED BY:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ROACH STEVE
		CENTRAL INDEX KEY:			0002038637
		ORGANIZATION NAME:           	

	FILING VALUES:
		FORM TYPE:		PX14A6G

	MAIL ADDRESS:	
		STREET 1:		1145 HIGHTOWER TRAIL
		CITY:			ATLANTA
		STATE:			GA
		ZIP:			30350
</SEC-HEADER>
<DOCUMENT>
<TYPE>PX14A6G
<SEQUENCE>1
<FILENAME>fcel_px14a6g.htm
<DESCRIPTION>PX14A6G
<TEXT>
<html><head><title>fcel_px14a6g.htm</title><!--Document created using EDGARMaster--></head><body style="TEXT-ALIGN: justify; FONT: 10pt times new roman; MARGIN-LEFT: 7%; MARGIN-RIGHT: 7%"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:center;">U.S. Securities and Exchange Commission</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:center;">Washington, DC 20549</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:center;"><strong>Notice of Exempt Solicitation</strong></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong>NAME OF REGISTRANT: </strong>FuelCell Energy, Inc.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong>NAME OF PERSON RELYING ON EXEMPTION: </strong>Steve Roach</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong>ADDRESS OF PERSON RELYING ON EXEMPTION: </strong>400 Kaywoody Court, Raleigh, NC 27615</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong>Written materials are submitted pursuant to Rule 14a-6(g)(1) promulgated under the Securities Exchange Act of 1934. Submission is not required of this filer under the terms of the Rule but is made voluntarily in the interest of public disclosure and consideration of these important issues.</strong></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:center;"><strong>Steve Roach Urges Stockholders to Vote &#8220;AGAINST&#8221; FuelCell&#8217;s Proposed Reverse Stock Split and Send a Strong Message to the FuelCell Board to Stop the Cycle of Stockholder Dilution</strong><strong>.</strong></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong>RALEIGH, NC</strong>&#8212;September 24, 2024&#8212;Steve Roach today issued an open letter to the stockholders of FuelCell Energy, Inc.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">The full text of the letter follows:</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">September 24, 2024</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">Dear Fellow Stockholders</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">FuelCell Energy, Inc. (&#8220;FuelCell&#8221; or the &#8220;Company&#8221;) is asking stockholders to approve (the &#8220;Reverse Stock Split Proposal&#8221;) an amendment to the Company&#8217;s certificate of incorporation that would effect a reverse stock split (the &#8220;Reverse Stock Split&#8221;) of between one for ten shares and one for thirty shares, with the specific ratio to be determined by FuelCell&#8217;s board of directors (the &#8220;Board&#8221;).<sup style="vertical-align:super">1</sup></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">While the ostensible purpose of the Reverse Stock Split is to regain compliance with Nasdaq Listing Rule 5450(a)(1), which requires a minimum bid price of $1 per share for continued listing on The Nasdaq Global Market, I believe the real reason for the Reverse Stock Split is to allow the Board to continue to fund a money-losing business model by constantly selling shares of the Company&#8217;s common stock (the &#8220;Common Stock&#8221;) into the market at lower and lower prices, diluting existing stockholders while attempting to evade any accountability to those stockholders.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">The last day that the closing price per share of Common Stock was greater than $1 per share was April 17, 2024. As of the close of trading today, the price per share of Common Stock was $0.40. I believe that the current price per share of Common Stock is the direct result of the Board&#8217;s decision to abandon any plan to ever achieve profitability in favor of subjecting existing stockholders to a death by a thousand cuts through repeated dilutive equity raises.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">___________________________</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><sup style="vertical-align:super">1</sup>Unless otherwise noted, the source of all information regarding the Reverse Stock Split is the Company&#8217;s <a href="http://www.sec.gov/Archives/edgar/data/886128/000155837024012846/0001558370-24-012846-index.htm">Definitive Proxy Statement</a> (the &#8220;Proxy Statement&#8221;) filed with the Securities and Exchange Commission on September 17, 2024.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="margin:0px"> <p style="margin:0px"> <p style="margin:0px"> <table style="border-spacing:0;font:10pt times new roman;width:100%" cellpadding="0"> <tr style="height:15px"> <td class="hpbhr">&nbsp;</td></tr> <tr style="height:15px"> <td style="BORDER-BOTTOM: black 1px solid; TEXT-INDENT: 0px;"></td></tr> <tr style="height:15px"> <td><p style='page-break-after: always'></p></td></tr> <tr style="height:15px"> <td>&nbsp;</td></tr></table></p> <p style="margin:0px"></p> <p style="margin: 0px"></p> <p style="margin:0px"> <p style="margin:0px"> <p style="margin:0px"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:center;"><strong><em>I believe that all FuelCell stockholders should consider a vote on the Reverse Stock Split Proposal as a referendum on the Board&#8217;s complete disregard for stockholders and stockholder value and I urge all FuelCell stockholders to join me in voting &#8220;AGAINST&#8221; the Reverse Stock Split Proposal.</em></strong></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">Here are some of the reasons given by the Company and the Board for the Reverse Stock Split besides regaining compliance with Nasdaq Listing Rule 5450(a)(1):</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="margin:0px"> <p style="margin:0px"> <p style="margin:0px"> <table style="border-spacing:0;text-align:justify;font:10pt times new roman;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;"> <p style="font-size:10pt;font-family:times new roman;margin:0px">&nbsp;</p></td> <td style="width:4%;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"><em>&#8220;The Board believes that implementing the Reverse Stock Split is likely to increase the market price for our Common Stock as fewer shares will be outstanding&#8221;</em>; and</td></tr> <tr style="height:15px"> <td> <p style="font-size:10pt;font-family:times new roman;margin:0px">&nbsp;</p></td> <td> <p style="font-size:10pt;font-family:times new roman;margin:0px;text-indent:30px">&nbsp;</p></td> <td> <p style="font-size:10pt;font-family:times new roman;margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="font-size:10pt;font-family:times new roman;margin:0px">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"><em>&#8220;The Board further believes that the Reverse Stock Split will extend the Board&#8217;s flexibility to make our Common Stock more attractive to a broader range of institutional and other investors, as we have been advised that the current market price of our Common Stock may affect its acceptability to certain institutional investors, professional investors and other members of the investing public.&#8221;</em></td></tr></table></p> <p style="margin:0px"></p> <p style="margin: 0px"></p> <p style="margin:0px"> <p style="margin:0px"> <p style="margin:0px"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">Left unsaid, however, is the fact that the Board has committed the Company to a business plan that has resulted in massive stockholder dilution and ever-increasing losses.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">On January 22, 2020, the Company announced its &#8220;Powerhouse&#8221; business strategy; a better name would be &#8220;Outhouse&#8221; given the returns it has generated for stockholders so far.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">As of October 31, 2019, the end of the last fiscal year before the announcement of the Powerhouse business strategy, the Company had 193,608,684 shares of Common Stock outstanding and recorded a net loss of approximately $77.5 million for FY 2019. In comparison, as of October 31, 2023, the end of the Company&#8217;s most recent fiscal year, the Company had 450,626,862 shares of Common Stock outstanding and recorded a net loss of approximately $108 million for FY 2023.<sup style="vertical-align:super">2</sup></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">Since announcing the Powerhouse business strategy, the Company has consistently lost more (based on Adjusted EBITDA) each year, with Adjusted EBITDA going from approximately $(17.7) million for FY 2020 to approximately $(102.8) million for FY 2023. At the same time, outstanding shares of Common Stock increased by 132%.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">The reason for the increase in shares of Common Stock outstanding is no mystery&#8212;to fund a money-losing business plan, the Company has continuously sold shares of Common Stock into the market at lower and lower prices as indicated by the below table.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="margin:0px"> <p style="margin:0px"> <p style="margin:0px"> <table style="border-spacing:0;font-size:10pt;border-right:#000000 1px solid;border-bottom:#000000 1px solid;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;width:25%;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">Period</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;width:25%;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">Shares Sold</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;width:25%;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">Average Sale Price Per Share</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;width:25%;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">Approximate Net Proceeds</p></td></tr> <tr style="height:15px"> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">June 16, 2020 to October 31, 2020</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">28.3 Million</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">$2.55</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">$70.1 Million</p></td></tr> <tr style="height:15px"> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">June 11, 2021 to April 30, 2022</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">64.0 Million</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">$7.78</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">$488.1 Million</p></td></tr> <tr style="height:15px"> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">July 12, 2022 to October 31, 2022</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">18.5 Million</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">$3.63</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">$65.4 Million</p></td></tr> <tr style="height:15px"> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">Twelve Months Ended October 31, 2023</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">44.3 Million</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">$2.25</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">$97.4 Million</p></td></tr> <tr style="height:15px"> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">Nine Months Ended July 31, 2024</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">101.7 Million</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">$0.72</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">$71.7 Million</p></td></tr> <tr style="height:15px"> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">July 31, 2024 to September 5, 2024</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">2.2 Million</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">$0.51</p></td> <td style="BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid;vertical-align:top;"> <p style="font-size:10pt;font-family:times new roman;text-align:center;margin:0px 0px 0px 0in">$1.1 Million</p></td></tr></table></p> <p style="margin:0px"></p> <p style="margin: 0px"></p> <p style="margin:0px"> <p style="margin:0px"> <p style="margin:0px"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">___________________________</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><sup style="vertical-align:super">2</sup>All financial data for the Company is per the Company&#8217;s filings with the Securities and Exchange Commission.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="margin:0px"> <p style="margin:0px"> <p style="margin:0px"> <table style="border-spacing:0;font:10pt times new roman;width:100%" cellpadding="0"> <tr style="height:15px"> <td class="hpbhr">&nbsp;</td></tr> <tr style="height:15px"> <td style="BORDER-BOTTOM: black 1px solid; TEXT-INDENT: 0px;text-align:center;">2</td></tr> <tr style="height:15px"> <td><p style='page-break-after: always'></p></td></tr> <tr style="height:15px"> <td>&nbsp;</td></tr></table></p> <p style="margin:0px"></p> <p style="margin: 0px"></p> <p style="margin:0px"> <p style="margin:0px"> <p style="margin:0px"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Utterly absent from the discussion of the Reverse Stock Split Proposal in the Proxy Statement is any acknowledgment that an actionable plan to achieve profitability within a reasonable timeframe and/or a commitment to end (or at least curb) dilutive equity raises might not only be far more effective at boosting the per share price for the Common Stock than the Reverse Stock Split but may actually create long lasting stockholder value.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:center;"><strong><em>Your &#8220;AGAINST&#8221; vote will send a message to the Board that a change in the Company&#8217;s business plan is urgently required.</em></strong></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">A vote &#8220;FOR&#8221; the Reverse Stock Split is effectively a ratification of the dilution that stockholders have already suffered and a license for the Board to continue diluting stockholders in the future.&nbsp; Hidden in the Proxy Statement is the fact that the Reverse Stock Split will not affect the number of shares authorized for issuance.&nbsp; Currently, there are 1,000,000,000 (or one billion) shares of Common Stock authorized for issuance and 556,009,549 shares of Common Stock issued and outstanding.&nbsp; A 1-for-10 Reverse Stock Split would result in 55,600,955 shares of Common Stock issued and outstanding and a 1-for-30 Reverse Stock Split would result in 18,533,652 shares of Common Stock issued and outstanding; in either case, the number of shares remaining available for issuance would increase dramatically.&nbsp; Given that the only fundamental limitation on the Board&#8217;s ability to issue stock is the number of shares available to be issued, any increase in which requires an amendment to the Company&#8217;s certificate of incorporation, which requires stockholder approval, the Reverse Stock Split will dramatically increase the Board&#8217;s ability to dilute stockholders in the future further without the need to obtain stockholder approval.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">It&#8217;s time to end this &#8220;rinse and repeat&#8221; cycle of stockholder dilution.&nbsp; Please join me in voting &#8220;AGAINST&#8221; the Reverse Stock Split Proposal.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;">/s/ Steve Roach</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:center;"><strong><em>PLEASE NOTE: This is not a solicitation of authority to vote any proxy card.&nbsp;&nbsp;I am NOT asking for your proxy card and cannot accept your proxy card.&nbsp;&nbsp;Please DO NOT send me your proxy card.&nbsp;</em></strong></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:center;">&nbsp;</p> <p style="margin:0px"> <p style="margin:0px"> <p style="margin:0px"> <table style="border-spacing:0;font:10pt times new roman;width:100%" cellpadding="0"> <tr style="height:15px"> <td class="hpbhr">&nbsp;</td></tr> <tr style="height:15px"> <td style="BORDER-BOTTOM: black 1px solid; TEXT-INDENT: 0px;text-align:center;">3</td></tr></table></p> <p style="margin:0px"></p> <p style="margin: 0px"></p> <p style="margin:0px"> <p style="margin:0px"> <p style="margin:0px"> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:center;">&nbsp;</p><body>
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