Plastic2Oil Inc (PTOI)

[MorningLightMountain]

Reasons for the Increase in Authorized Common Stock

Currently, the Company is authorized to issue 150,000,000 shares of Common Stock. Of the 150,000,000 shares of Common Stock authorized, as of the Record Date, there were 98,002,772 shares of Common Stock issued and outstanding, and 13,770,449 shares of Common Stock reserved for issuance upon the conversion of the outstanding Series B Preferred Stock and 16,627,817 shares of Common Stock reserved for issuance upon the exercise of outstanding warrants and options, including, without limitation, options issued pursuant to the Company’s 2012 Long Term Incentive Plan. Consequently, as of the Record Date, the Company had 21,398,962 shares of Common Stock available for general corporate purposes.

As a general matter, the Board of Directors does not believe the currently available number of authorized but unissued shares of Common Stock is an adequate number of shares to assure that there will be sufficient shares available for issuance in connection with the exercise or conversion of the outstanding Series B Preferred Stock, warrants and options as well as possible equity and equity-based financings, future acquisitions, possible future awards under employee benefit plans, stock dividends, stock splits, and other corporate purposes. Therefore, the Board of Directors approved the increase in authorized shares of Common Stock to 250,000,000 as a means of providing us with the flexibility to act with respect to the issuance of Common Stock or securities exercisable for, or convertible into, Common Stock in circumstances which we believe will advance the interests of the Company and our stockholders without the delay of seeking an amendment to the Articles of Incorporation at that time.

The Board of Directors is considering, and will continue to consider, various financing options, including the issuance of Common Stock or securities convertible into Common Stock from time-to-time to raise additional capital necessary to support operations and future growth of the Company. As a result of the Share Increase, the Board of Directors will have more flexibility to pursue opportunities to engage in possible future capital market transactions involving Common Stock or securities convertible into Common Stock, including, without limitation, public offerings or private placements of such Common Stock or securities convertible into Common Stock. There are no specific financing transactions under consideration at this time that would require the issuance of the additional authorized shares of Common Stock included in the Charter Amendment.

In addition, our growth strategy may include the pursuit of selective acquisitions to execute our business plan. We could also use the additional Common Stock for potential strategic transactions, including, among other things, acquisitions, spin-offs, strategic partnerships, joint ventures, restructurings, divestitures, business combinations and investments. There are no specific acquisitions under consideration at this time that would require the issuance of the additional authorized shares of Common Stock included in the Charter Amendment.

PLEASE NOTE THAT THE INCREASE IN OUR AUTHORIZED COMMON STOCK WILL NOT CHANGE YOUR PROPORTIONATE EQUITY INTERESTS IN OUR COMPANY. HOWEVER, ISSUANCES OF SIGNIFICANT NUMBERS OF ADDITIONAL SHARES OF COMMON STOCK IN THE FUTURE WILL DILUTE STOCKHOLDERS’ PERCENTAGE OWNERSHIP OF THE COMPANY AND, IF SUCH SHARES ARE ISSUED AT PRICES BELOW WHAT CURRENT STOCKHOLDERS PAID FOR THEIR SHARES, MAY DILUTE THE VALUE OF CURRENT STOCKHOLDERS’ SHARES.

http://www.sec.gov/Archives/edgar/data/1381105/000121390014003588/pre14c0414_jbiinc.htm