The date of this Proxy Statement
is July 25, 2022. This Proxy Statement and the accompanying WHITE Proxy Cards are first being sent or given to stockholders on
or about July 25, 2022.
PROPOSAL
NO. 2
ELECTION PROPOSAL
The
Board is currently composed of five (5) directors, each with a term expiring at the 2022 Annual Meeting; however, effective upon stockholder
approval of the Board Expansion Proposal, the size of the Board will be increased to eleven (11) directors, resulting in six (6) vacancies
on the Board. Activist has nominated six (6) independent, highly-qualified Nominees for election to the Board to fill the six (6) vacancies
which would result from stockholder approval of the Board Expansion Proposal.
THE NOMINEES
The
following information sets forth the name, age, business address, present principal occupation, and employment and material occupations,
positions, offices, or employments for the past five years of each of the Nominees. The nominations were made in a timely manner and
in compliance with the applicable provisions of the Company’s governing instruments. The specific experience, qualifications, attributes
and skills that led us to conclude that the Nominees should serve as directors of the Company are set forth below. This information has
been furnished to us by the Nominees.
Avraham
Ben-Tzvi, Adv., age 51, is the Founder of ABZ Law Office, a boutique Israeli law firm specializing in outsourced general counsel
services for publicly traded as well as private companies and corporations, Investments & Securities Laws, Commercial Law & Contracts
and various civil law matters, which he established in January 2017. Mr. Ben-Tzvi served as Chief Legal Officer and General Counsel of
Purple Biotech Ltd. (formerly Kitov Pharma Ltd.) (NASDAQ/TASE: PPBT), a clinical-stage company advancing first-in-class therapies to
overcome tumor immune evasion and drug resistance, from November 2015 until April 2020. Prior to that, Mr. Ben-Tzvi served as General
Counsel and secretary at Medigus Ltd. (NASDAQ/TASE: MDGS), a minimally invasive endosurgical tools medical device and miniaturized imaging
equipment company, from April 2014 until November 2015. Mr. Ben-Tzvi is a member of the Israel Bar Association, and is also licensed
as a Notary by the Israeli Ministry of Justice. Prior to that he served as an attorney at one of Israel’s leading international
law firms where, amongst other corporate and commercial work, he advised companies and underwriters on various offerings by Israeli companies
listing in US and on various SEC related filings. Prior to becoming a lawyer, Mr. Ben-Tzvi worked in a number of business development,
corporate finance and banking roles at companies in the financial services, lithium battery manufacturing and software development industries.
Mr. Ben-Tzvi holds a B.A., magna cum laude, in Economics from Yeshiva University in New York and an LLB, magna cum laude with Honors,
in from Sha’arei Mishpat College of Law in Hod HaSharon, Israel.
Activist
believes that Mr. Ben-Tzvi’s extensive legal experience and knowledge in the field of civil-commercial law, and in corporate and
securities law, and his previous public company and commercial business experience will make him a valuable addition to the Board.
Peter
L. Chasey, Esq., age 49, currently serves as the Owner of Chasey Law Offices, a law practice specializing in personal litigation,
business litigation and commercial law, since founding the practice in 2005. Earlier in his career, Mr. Chasey served as staff counsel
for one of the largest insurance companies in the world defending general claims against insured businesses and also served as a land
surveyor. Mr. Chasey holds a B.S. in Political Science and Government from the University of San Diego and a J.D. from the University
of San Diego School of Law.
Activist
believes that Mr. Chasey’s commercial law expertise, coupled with his experience leading his own law firm, will make him a valuable
addition to the Board.
Eric
Greenberg, age 58, has over 40 years of capital markets experience. As a trader and portfolio manager at hedge funds, his areas of
expertise included the development of trading strategies, portfolio management and deal structuring. Mr. Greenberg was Co-Founder of
Blink Charging Co. (NASDAQ: BLNK), a leader in the EV charging infrastructure industry. In addition, Mr. Greenberg provides investor
relation and digital marketing services for companies across a variety of industries, such as life sciences, fintech, internet platforms
and others. Mr. Greenberg holds a B.B.A in Finance from Baruch College and an M.B.A. in Finance from Baruch College Zicklin School of
Business.
Activist
believes that Mr. Greenberg’s more than 40 years’ experience in trading, developing strategies, and portfolio management
and public markets experience in the microcap sector will make him a valuable addition to the Board.
David
E. Lazar, age 32, has served as the Chief Executive Officer of Custodian Ventures LLC, a company which specializes in assisting distressed
public companies through custodianship, since February 2018, and Activist Investing LLC, an actively managed investment fund, since March
2018. Previously, Mr. Lazar served as Managing Partner at Zenith Partners International Inc., a boutique consulting firm, from July 2012
to April 2018. In his role as Chief Executive Officer of Custodian Ventures LLC, Mr. Lazar has successfully served as a custodian to
numerous public companies across a wide range of industries, including without limitation, Zenosense, Inc. (OTCMKTS: ZENO), C2E Energy,
Inc. (OTCMKTS: OOGI), China Botanic Pharmaceutical Inc. (OTCMKTS: CBPI), One 4 Art Ltd., Romulus Corp., Moveix, Inc., Arax Holdings Corp.
(OTCMKTS: ARAT), ESP Resources, Inc. (OTCMKTS: ESPIQ), Adorbs, Inc., Exobox Technologies Corp. (OTCMKTS: EXBX), Petrone Worldwide, Inc.
(OTCMKTS: PFWIQ), Superbox, Inc. (OTCMKTS: SBOX), Sino Green Land Corp. (OTCMKTS: SGLA), SIPP International Industries, Inc. (OTCMKTS:
SIPN), Cereplast, Inc. (OTCMKTS: CERPQ), Energy 1 Corp. (OTCMKTS: EGOC), ForU Holdings, Inc. (OTCMKTS: FORU), China Yanyuan Yuhui National
Education Group, Inc. (OTCMKTS: YYYH), Pan Global Corp. (OTCMKTS: PGLO), Shengtang International, Inc. (OTCMKTS: SHNL), Alternaturals,
Inc. (OTCMKTS: ANAS), USA Recycling Industries, Inc. (OTCMKTS: USRI), Tele Group Corp., Xenoics Holdings, Inc. (OTCMKTS: XNNHQ), Richland
Resources International Group, Inc. (OTCMKTS: RIGG), AI Technology Group, Inc., Reliance Global Group, Inc. (NASDAQ: RELI), Melt, Inc.,
Ketdarina Corp., 3D MarkerJet, Inc. (OTCMKTS: MRJT), Lvpai Group Ltd., Gushen, Inc., FHT Future Technology Ltd., Inspired Builders, Inc.,
Houmu Holdings Ltd. (OTCMKTS: HOMU), Born, Inc. (OTCMKTS: BRRN), Changsheng International Group Ltd., Sollensys Corp. (OTCMKTS: SOLS),
Guozi Zhongyu Capital Holdings Co. (OTCMKTS: GZCC) and Cang Bao Tian Xia International Art Trade Center, Inc. Mr. Lazar currently serves
as an Advisor to PROMAX Investments LLC, a position he has held since July 2022, and as an Ambassador at Large for the Arab African Council
for Integration and Development, since March 2022.
Activist
believes that Mr. Lazar’s diverse knowledge of financial, legal and operations management; public company management, accounting,
audit preparation, due diligence reviews and SEC regulations will make him a valuable addition to the Board.
Matthew
C. McMurdo, Esq., age 50, currently serves as Managing Member of McMurdo Law Group, LLC, a corporate and securities law practice,
since 2010. Previously, Mr. McMurdo was a Partner at Nannarone & McMurdo, LLP, a boutique law firm, from 2008 to 2010. In addition,
Mr. McMurdo served as General Counsel of Berkley Asset Management LLC, the general partner of a real estate fund focused on opportunistic
and distressed real estate assets, from 2011 to 2013. Mr. McMurdo holds a B.S. in Finance from Lehigh University and a J.D., cum laude,
from Benjamin N. Cardozo School of Law.
Activist
believes that Mr. McMurdo’s extensive experience in corporate and securities law and advising many public companies with federal
securities law will make him a valuable addition to the Board.
David
Natan, age 69, currently serves as President and Chief Executive Officer of Natan & Associates, LLC, a consulting firm offering
chief financial officer services to public and private companies in a variety of industries, since 2007. In addition, Mr. Natan currently
serves as Executive Vice President and Chief Financial Officer for Airborne Motorworks, Inc., a privately-held aerospace transportation
company, since April 2020. From February 2010 to May 2020, Mr. Natan served as Chief Executive Officer of ForceField Energy, Inc. (OTCMKTS:
FNRG), a company focused on the solar industry and LED lighting products. From February 2002 to November 2007, Mr. Natan served as Executive
Vice President of Reporting and Chief Financial Officer of PharmaNet Development Group, Inc., a drug development services company, and,
from June 1995 to February 2002, as Chief Financial Officer and Vice President of Global Technovations, Inc., a manufacturer and marketer
of oil analysis instruments and speakers and speaker components. Prior to that, Mr. Natan served in various roles of increasing responsibility
with Deloitte & Touche LLP, a global consulting firm. Mr. Natan currently serves as a member of the Board of Directors and Chair
of the Audit Committee of Global Diversified Marketing Group, Inc. (OTCMKTS: GDMK), a manufacturer, marketer and distributor of food
and snack products, since February 2021 and serves as a member of the Board of Directors and Chair of the Audit Committee of Sunshine
Biopharma, Inc. (NASDAQ: SBFM), a pharmaceutical and nutritional supplement company, since February 2022. Previously, Mr. Natan served
as Chairman of the Board of Directors of ForceField Energy, Inc., from April 2015 to May 2020, and as a member of the Board of Directors
of Global Technovations, Inc., from December 1999 to December 2001. Mr. Natan holds a B.A. in Economics from Boston University.
Activist
believes that Mr. Natan’s reputation as a seasoned business executive and his extensive experience as a director of technology-enabled
public companies will make him a valuable addition to the Board.
The
principal business address of Mr. Ben-Tzvi is 15 Yad Harutzim St., Jerusalem, Israel. The principal business address of Mr. Chasey is
3295 N. Fort Apache Road, Suite 110, Las Vegas, Nevada 89129. The principal business address of Mr. Greenberg is 710 Carlyle Street,
Woodmere, New York 11598. The principal business address of Mr. Lazar is Villa 1, 14-43rd Street, Jumeirah 2, Dubai, United Arab Emirates.
The principal business address of Mr. McMurdo is 1185 Avenue of the Americas, 3rd Floor, New York, New York 10036. The principal business
address of Mr. Natan is 6720 NW 74th Court, Parkland, Florida 33067.
As
of the date hereof, none of Messrs. Ben-Tzvi, Chasey, Greenberg, McMurdo and Natan beneficially owns any securities of the Company or
has entered into any transactions in securities of the Company during the past two years (other than Mr. Greenberg whose transactions
in the securities of the Company during the past two years in an account jointly held with his child are included in Schedule I).
As
of the date hereof, Mr. Lazar directly beneficially owns 3,331,402 shares of Common Stock. Mr. Lazar, by virtue of his position as the
sole member and Chief Executive Officer of Activist Investing, may be deemed the beneficial owner of 359,066 shares of Common Stock directly
beneficially owned by Activist Investing. The shares of Common Stock directly beneficially owned by Mr. Lazar were purchased with personal
funds in the open market. Mr. Lazar disclaims beneficial ownership of such shares of Common Stock except to the extent of his pecuniary
interest therein. For information regarding transactions in the securities of the Company during the past two years by Activist Investing
and Mr. Lazar, please see Schedule I.
Each
of the Nominees has consented to being named as a Nominee, being named as a nominee in any proxy statement filed by Activist Investing
or its affiliates in connection with the solicitation of proxies for election of such Nominees at the Special Meeting and serving as
a director of the Company if elected.
Mr.
Ben-Tzvi is a citizen of the United States of America and Israel. Mr. Chasey is a citizen of the United States of America. Mr. Greenberg
is a citizen of the United States of America and Israel. Mr. Lazar is a citizen of Portugal and Israel. Mr. McMurdo is a citizen of the
United States of America. Mr. Natan is a citizen of the United States of America.
Activist
believes that each Nominee presently is, and if elected as a director of the Company, each of the Nominees would be, an “independent
director” within the meaning of applicable NASDAQ listing standards applicable to board composition, including Rule 5605(a)(2),
and Section 301 of the Sarbanes-Oxley Act of 2002. Notwithstanding the foregoing, Activist acknowledges that no director of a NASDAQ
listed company qualifies as “independent” under the NASDAQ listing standards unless the board of directors affirmatively
determines that such director is independent under such standards. Accordingly, Activist acknowledges that if any Nominee is elected,
the determination of such Nominee’s independence under the NASDAQ listing standards ultimately rests with the judgment and discretion
of the Board. No Nominee is a member of the Company’s compensation, nominating or audit committee that is not independent under
any such committee’s applicable independence standards.
Except
as otherwise set forth in this Proxy Statement (including the Exhibits hereto), (i) during
the past 10 years, no Nominee has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors); (ii) no Nominee directly or indirectly beneficially
owns any securities of the Company; (iii) no Nominee owns any securities of the Company which
are owned of record but not beneficially; (iv) no Nominee has purchased or sold any securities
of the Company during the past two years; (v) no part of the purchase price or market value
of the securities of the Company owned by any Nominee is represented by funds borrowed or
otherwise obtained for the purpose of acquiring or holding such securities; (vi) no Nominee
is, or within the past year was, a party to any contract, arrangements or understandings
with any person with respect to any securities of the Company, including, but not limited
to, joint ventures, loan or option arrangements, puts or calls, guarantees against loss or
guarantees of profit, division of losses or profits, or the giving or withholding of proxies;
(vii) no associate of any Nominee owns beneficially, directly or indirectly, any securities
of the Company; (viii) no Nominee owns beneficially, directly or indirectly, any securities
of any parent or subsidiary of the Company; (ix) no Nominee or any of his associates was
a party to any transaction, or series of similar transactions, since the beginning of the
Company’s last fiscal year, or is a party to any currently proposed transaction, or
series of similar transactions, to which the Company or any of its subsidiaries was or is
to be a party, in which the amount involved exceeds $120,000; (x) no Nominee or any of his
associates has any arrangement or understanding with any person with respect to any future
employment by the Company or its affiliates, or with respect to any future transactions to
which the Company or any of its affiliates will or may be a party; (xi) no Nominee has a
substantial interest, direct or indirect, by securities holdings or otherwise in any matter
to be acted on at the Special Meeting; (xii) no Nominee holds any positions or offices with
the Company; (xiii) no Nominee has a family relationship with any director, executive officer,
or person nominated or chosen by the Company to become a director or executive officer and
(xiv) no companies or organizations, with which any of the Nominees has been employed in
the past five years, is a parent, subsidiary or other affiliate of the Company. There are
no material proceedings to which any Nominee or any of his associates is a party adverse
to the Company or any of its subsidiaries or has a material interest adverse to the Company
or any of its subsidiaries. With respect to each of the Nominees, except as set forth in
this Proxy Statement, none of the events enumerated in Item 401(f)(1)-(8) of Regulation S-K
of the Exchange Act occurred during the past 10 years.
Other
than as set forth herein, there are no agreements, arrangements or understandings between Activist and the Nominees or any other person
or persons pursuant to which the nominations described herein are to be made.
If
Activist succeeds in obtaining stockholder approval for the election of five (5) or more of the Nominees at the Special Meeting, then
a change of control of the Board may be deemed to have occurred under the Company’s Third Amended and Restated 2015 Omnibus Incentive
Plan, which grants the Compensation Committee of the Board the right to trigger accelerated vesting of the outstanding equity awards
thereunder. We understand that the Compensation Committee of the Board intends to exercise its discretion under the Company’s Third
Amended and Restated 2015 Omnibus Incentive Plan to trigger accelerated vesting of (i) certain options underlying 125,137 shares with
an exercise price of $1.18 per share, which would otherwise continue to vest monthly through January 5, 2024 and (ii) certain options
underlying 86,667 shares with an exercise price of $4.02 per share, which would otherwise continue to vest monthly through February 10,
2023.
We
do not expect that any of the Nominees will be unable to stand for election, but, in the event any Nominee is unable to serve or for
good cause will not serve, the shares of Common Stock represented by the enclosed WHITE proxy card will be voted for substitute
nominee(s), to the extent this is not prohibited under the Bylaws and applicable law. In addition, we reserve the right to nominate substitute
person(s) if the Company makes or announces any changes to the Bylaws or takes or announces any other action that has, or if consummated
would have, the effect of disqualifying any Nominee, to the extent this is not prohibited under the Bylaws and applicable law. In any
such case, shares of Common Stock represented by the enclosed WHITE proxy card will be voted for such substitute nominee(s). We
reserve the right to nominate additional persons to fill any additional seats if the Company increases the size of the Board. Additional
nominations made pursuant to the preceding sentence are without prejudice to the position of Activist that any attempt to increase the
size of the current Board or to classify the Board constitutes an unlawful manipulation of the Company’s corporate machinery.
The
Election Proposal is subject to the concurrent approval of the Board Expansion Proposal. If the Board Expansion Proposal is not approved,
the Election Proposal will have no effect. A stockholder may vote for the election of less than all of the Nominees by designating the
names of one or more Nominees who are not to be elected on the line provided on the WHITE proxy card.
WE
URGE YOU TO VOTE FOR THE ELECTION OF THE NOMINEES ON THE ENCLOSED WHITE PROXY CARD.
VOTING
AND PROXY PROCEDURES
Holders
of Common Stock are entitled to one vote for each share of Common Stock held of record on the Record Date with respect to each matter
to be acted on at the Special Meeting. Only stockholders of record on the Record Date will be entitled to notice of and to vote at the
Special Meeting. Stockholders who sell their shares of Common Stock before the Record Date (or acquire them without voting rights after
the Record Date) may not vote such shares of Common Stock. Stockholders of record on the Record Date will retain their voting rights
in connection with the Special Meeting even if they sell such shares of Common Stock after the Record Date. Based on publicly available
information, Activist believes that the only outstanding class of securities of the Company entitled to vote at the Special Meeting is
the Common Stock.
Shares
of Common Stock represented by properly executed WHITE proxy cards will be voted at the Special Meeting as marked and, in the
absence of specific instructions, will be voted FOR the Board Expansion Proposal and FOR ALL NOMINEES with respect to the
Election Proposal.
How
to vote:
Stockholders
of Record:
(1)
Via the internet. You may use the internet to vote by visiting to the following internet address www.cesvote.com. Have
your WHITE proxy card in hand as you will be prompted to enter your 11-digit control number to create and submit an electronic
vote. If you vote in this manner, your “proxy,” whose name is listed on the enclosed WHITE proxy card, will vote your
shares as you instruct on the proxy card. If you sign and return the WHITE proxy card or submit an electronic vote but do not
give instructions on how to vote your shares, your shares will be voted as recommended by Activist.
(2)
By telephone. You may submit your vote by calling the following toll-free number 1-888- 450-7155. Have your WHITE proxy
card in hand as you will be prompted to enter your 11-digit control number to create and submit a telephonic vote. If you vote in this
manner, your “proxy,” whose name is listed on the enclosed WHITE proxy card, will vote your shares as you instruct
over the phone. If you sign and return the WHITE proxy card or submit a telephonic vote but do not give instructions on how to
vote your shares, your shares will be voted as recommended by Activist.
(3)
By mail. You may vote by mail. If you are a record holder, you may vote by proxy by filling out the proxy card, signing and dating
it and sending it back in the envelope provided.
(4)
In person. You may vote in person virtually at the Special Meeting by following the instructions when you log-in for the Special
Meeting. You may attend the Special Meeting virtually by visiting the following internet address https://www.cstproxy.com/titanpharm/sm2022.
Given
that the Special Meeting is currently scheduled to be held on August 15, 2022, we urge all stockholders to vote by Telephone or Internet.
QUORUM;
BROKER NON-VOTES; DISCRETIONARY VOTING
A
quorum is the minimum number of shares of Common Stock that must be represented at a duly called meeting in person or by proxy in order
to legally conduct business at the meeting under the Bylaws and Delaware Law. The presence, in person or by proxy, of the holders of
record of thirty-four percent (34%) of the shares then issued and outstanding and entitled to vote at the meeting shall constitute a
quorum at the Special Meeting.
Abstentions,
withhold votes and “broker non-votes” are counted as shares present and entitled to vote for purposes of determining a quorum.
However, if you hold your shares in street name and do not provide voting instructions to your broker, your shares will not be voted
on any proposal on which your broker does not have discretionary authority to vote (a “broker non-vote”). Under applicable
rules, your broker will not have discretionary authority to vote your shares at the Special Meeting on any of the proposals.
If
you are a stockholder of record, you must deliver your vote by mail, the Internet, by telephone or attend the virtual Special Meeting
in order to be counted in the determination of a quorum.
VIRTUAL
MEETING
The
Special Meeting will be held virtually via a live webcast. You will not be able to attend the Special Meeting in person at a physical
location. You are entitled to participate in the Special Meeting if you are a stockholder of record as of the close of business on the
Record Date or hold a legal proxy for the meeting provided by your broker, bank or other nominee.
You
may participate in the virtual Special Meeting by visiting the following web address https://www.cstproxy.com/titanpharm/sm2022.
Have your proxy card in hand as you may be prompted to enter your control number to attend and follow the instructions, if any, to complete
your registration for the Special Meeting.
We
encourage you to access the meeting site prior to the start time of the Special Meeting to allow ample time to log into the meeting webcast
and test your computer system.
Whether
or not you plan to attend the Special Meeting, we urge you to vote via the Internet or by telephone as instructed on the WHITE proxy
card as soon as possible. If you have any difficulty accessing the Special Meeting, please email info@investor-com.com.
VOTES
REQUIRED FOR APPROVAL
Approval
of the Board Expansion Proposal – The affirmative vote of the holders of a majority of the Common Stock having voting
power present in person or represented by proxy is required to approve the Board Expansion Proposal. Abstentions and broker
non-votes will have the same effect as a vote to withhold approval on the Board Expansion Proposal.
Approval
of the Election Proposal – The election of each Nominee requires the affirmative vote of a plurality of the shares
of Common Stock present in person or by proxy and entitled to vote at the Special Meeting cast in favor of such Nominee’s
election. Given the uncontested nature of the director elections at the Special Meeting, abstentions, withhold votes and broker
non-votes will have no effect on the election of any individual Nominee pursuant to the Election Proposal if just one vote is cast
in favor of any such Nominee’s election at the Special Meeting.
Under
applicable Delaware law, none of the holders of Common Stock is entitled to appraisal rights in connection with any matter to be acted
on at the Special Meeting. If you sign and submit your WHITE proxy card without specifying how you would like your shares voted,
your shares will be voted in accordance with Activist’s recommendations specified herein and in accordance with the discretion
of the persons named on the WHITE proxy card with respect to any other matters that may be voted upon at the Special Meeting.
REVOCATION
OF PROXIES
Stockholders
of the Company may revoke their proxies at any time prior to exercise by attending the virtual Special Meeting and voting in person (although
attendance at the virtual Special Meeting will not in and of itself constitute revocation of a proxy) or by delivering a written notice
of revocation. The delivery of a subsequently dated proxy which is properly completed will constitute a revocation of any earlier proxy.
The revocation may be delivered either to Activist in care of InvestorCom at the address set forth on the back cover of this Proxy Statement
or to the Company at 400 Oyster Point Boulevard, Suite 505, South San Francisco, California 94080 or any other address provided by the
Company. Although a revocation is effective if delivered to the Company, we request that either the original or photostatic copies of
all revocations be mailed to Activist in care of InvestorCom at the address set forth on the back cover of this Proxy Statement so that
we will be aware of all revocations and can more accurately determine if and when proxies have been received from the holders of record
on the Record Date of a majority of the outstanding shares of Common Stock. Additionally, InvestorCom may use this information to contact
stockholders who have revoked their proxies in order to solicit later dated proxies for the election of the Nominees.
IF
YOU WISH TO VOTE FOR THE ELECTION OF THE NOMINEES TO THE BOARD, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED WHITE PROXY CARD IN
THE POSTAGE-PAID ENVELOPE PROVIDED.
SOLICITATION
OF PROXIES
The
solicitation of proxies pursuant to this Proxy Statement is being made by Activist. Proxies may be solicited by mail, facsimile, telephone,
Internet, in person and by advertisements.
Activist
Investing has entered into an agreement with InvestorCom for solicitation and advisory services in connection with this solicitation,
for which InvestorCom will receive a fee not to exceed $10,000, together with reimbursement for its reasonable out-of-pocket expenses,
and will be indemnified against certain liabilities and expenses, including certain liabilities under the federal securities laws. InvestorCom
will solicit proxies from individuals, brokers, banks, bank nominees and other institutional holders. Activist Investing has requested
banks, brokerage houses and other custodians, nominees and fiduciaries to forward all solicitation materials to the beneficial owners
of the shares they hold of record. Activist Investing will reimburse these record holders for their reasonable out-of-pocket expenses
in so doing. It is anticipated that InvestorCom will employ approximately 25 persons to solicit stockholders for the Special Meeting.
The
entire expense of soliciting proxies is being borne by Activist. Costs of this solicitation of proxies are currently estimated to be
approximately $175,000 (including, but not limited to, fees for attorneys, solicitors and other advisors, and other costs incidental
to the solicitation). Activist estimates that through the date hereof its expenses in furtherance of, or in connection with, the solicitation
are approximately $125,000. The actual amount could be higher or lower depending on the facts and circumstances arising in connection
with any solicitation. Activist may seek reimbursement from the Company of all expenses it incurs in connection with this solicitation
but does not intend to submit the question of such reimbursement to a vote of security holders of the Company.
ADDITIONAL
PARTICIPANT INFORMATION
The
participants in the solicitation are anticipated to be Activist Investing, Mr. Lazar and the other Nominees (each a “Participant”
and collectively, the “Participants”).
The
business address of Activist Investing is 1185 Avenue of the Americas, 3rd Floor, New York, New York 10036. The business address of each
of the Nominees is as set forth elsewhere in this Proxy Statement.
The
principal business of Activist Investing is actively investing in distressed public companies. The principal occupation of each of the
Nominees is as set forth elsewhere in this Proxy Statement.
As
of the date hereof, Activist Investing is the direct beneficial owner of 359,066 shares of Common Stock. The class and number of securities
of the Company beneficially owned by each of the Nominees is as set forth elsewhere in this Proxy Statement. For information regarding
purchases and sales of securities of the Company during the past two years by each of the Participants, please see Schedule I
attached hereto. The securities of the Company purchased by Activist Investing were purchased with working capital (which may, at any
given time, include margin loans made by brokerage firms in the ordinary course of business) in the open market.
Except
as otherwise set forth in this Proxy Statement (including the Exhibits hereto), (i) during the past 10 years, no Participant has been
convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); (ii) no Participant directly or indirectly
beneficially owns any securities of the Company; (iii) no Participant owns any securities of the Company which are owned of record but
not beneficially; (iv) no Participant has purchased or sold any securities of the Company during the past two years; (v) no part of the
purchase price or market value of the securities of the Company owned by any Participant is represented by funds borrowed or otherwise
obtained for the purpose of acquiring or holding such securities; (vi) no Participant is, or within the past year was, a party to any
contract, arrangements or understandings with any person with respect to any securities of the Company, including, but not limited to,
joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits,
or the giving or withholding of proxies; (vii) no associate of any Participant owns beneficially, directly or indirectly, any securities
of the Company; (viii) no Participant owns beneficially, directly or indirectly, any securities of any parent or subsidiary of the Company;
(ix) no Participant or any of his or its associates was a party to any transaction, or series of similar transactions, since the beginning
of the Company’s last fiscal year, or is a party to any currently proposed transaction, or series of similar transactions, to which
the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeds $120,000; (x) no Participant or
any of his or its associates has any arrangement or understanding with any person with respect to any future employment by the Company
or its affiliates, or with respect to any future transactions to which the Company or any of its affiliates will or may be a party; (xi)
no Participant has a substantial interest, direct or indirect, by securities holdings or otherwise in any matter to be acted on at the
Special Meeting; (xii) no Participant holds any positions or offices with the Company; (xiii) no Participant has a family relationship
with any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer and (xiv)
no companies or organizations, with which any of the Participants has been employed in the past five years, is a parent, subsidiary or
other affiliate of the Company. There are no material proceedings to which any Participant or any of his or its associates is a party
adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.
Other
than as set forth herein, there are no agreements, arrangements or understandings between Activist Investing or any of the other Participants
and their respective affiliates and associates, and the Nominees or any other person or persons pursuant to which the nominations described
herein are to be made. Activist Investing and the other Participants and their respective affiliates and associates have no material
interest in such nominations (other than in their capacities as stockholders of the Company, as applicable), including any anticipated
benefit therefrom to Activist Investing or the other Participants and their respective affiliates and associates.