Paragon Technologies Files Litigation Against OPT Directors for Breach of Fiduciary Duties and Entrenchment Actions

EASTON, PA / ACCESSWIRE / October 9, 2023 /

Dear Shareholders of Ocean Power Technologies:

Paragon Technologies, Inc. ("Paragon") (OTC PINK:PGNT), a diversified holding company, owns approximately 3.9% of the outstanding shares of the Company, which we believe makes Paragon the single largest shareholder in OPT.

This week Paragon commenced litigation against Ocean Power Technologies, Inc. board of directors - Terence J. Cyran, Peter E. Slaiby, Clyde W. Hewlett, Natalie Lorenz-Anderson, Diana G. Purcel -- and CEO Philip Stratmann alleging violation of their fiduciary duty as directors of the Company.

Despite Paragon's numerous efforts and attempts to exercise its most basic lawful right as a shareholder, we believe OPT's board has taken and continues to take deliberate measures to prevent Paragon from doing so.

Paragon wrote to OPT's board a letter expressing our urgent concerns relating to the Company's future viability given what we believe to be OPT's alarming and precipitous financial record including:

• A lack of a coherent, measurable, and accountable business plan.
• Excessive and increasing director and executive compensation while OPT expenses and losses increase.
• Continued assurances from CEO Stratmann and CFO Bob Powers that OPT's "strategy is working," and costs are being managed "tightly" while OPT continues to report growing losses and expenses.

In that letter, Paragon requested that its three directors be appointed to a six-member OPT Board, given that Paragon believes it is OPT's largest shareholder. Rather than engage in a constructive dialogue with Paragon, OPT immediately adopted what we believe to be the most burdensome and extreme nomination by-laws found in the market today.

We believe that the timing of the Amended By-laws reflects an improper entrenchment purpose, and that the adoption of the By-laws may constitute a violation of the board's fiduciary duties. We also believe that the OPT board has used these burdensome advance notice provisions, not in the way intended under Delaware law, but to block Paragon's efforts to nominate a slate of directors.

Furthermore, on July 20, 2023, Paragon submitted an exemption request to OPT requesting an exemption to OPT's suddenly adopted poison pill granting Paragon the right to acquire up to 19.9% of the Company's common stock after having confirmed that the ownership by Paragon of up to 19.9% of OPT's outstanding shares should not place in jeopardy any of OPT's net operating losses. It has been over 60 days since Paragon made its exemption request and OPT has continued to ignore our request.