This meeting is being called by Mr. Klingle to approve the Avalong Holdings Corporation 2009 Long-Term Incentive Plan.

Since the previous authorization of this stock has expired, they are re-authorizing the 1.3 million shares. Mr. Klingle can choose to issue stock options to management in the future. Also, they are amending the way the option plan works to permit reducing the option price.

For example, the Board approves option grants to executives at $2.70 (market price) to incentivize the management team. After 1 or 2 years if the stock goes back to $1.00 as it has in the past, and management does not make any money. At that point, the company can authorize to cut the exercise price to the market price, which is lower. Since they did a great job of driving the stock down to $1.00, the option price is being re-cut to $1.00. Instead of being rewarded for building the value of the company, management gets to take advantage of any movement in the stock price.

I feel that the prospects of issuing options at a huge discount to book value is unfair and dilutive to bonafide shareholders, particularly since it has been there for 11 years and it has failed to grow the value of the company or the share price. To reward that performance with options at a very low price is objectionable.

I am going to attend this meeting on October 6th. I am voting against this proposal. I welcome any comments.

Please refer to my website blog, points 20-25. Also I welcome you to view my website forum as well.

Anil C. Nalluri, M.D.
www.awxshareholdersfyi.com