Capital Raising for Public Companies

Registered Direct Offerings
and PIPE U d
d PIPEs Update

September 2009

FINRA / SIPC

Los Angeles ♦ Austin ♦ Beijing ♦ Mexico City ♦ Seoul ♦ Taipei

Contents

Registered Direct Offerings (RDOs) 2
What is a Registered Direct Offering?
The Number of RDOs are on a Record Setting Pace
Advantages of RDOs
Factors for a Successful RDO
Mutual Fund and Institutional Investors in RDOs
PIPEs
What is a PIPE? 8
Increasing Use of PIPE Transactions
Private Equity, Venture Capital and Hedge Fund Investors in PIPEs
Management
M t 12
Key Considerations
Cappello Capital 14
Expertise
Unique Buy-Side and Operational Experience
Role and Outline of the Process
Exhibits 18
RDO Transactions
PIPE Transactions
1

Registered Direct Offerings

2

What is a Registered Direct Offering (RDO)?

► A hybrid offering combining the marketing appeal of a PIPE with the pricing of an
underwritten public offering which is quicker to close than both

► A public offering of registered securities pursuant to an effective shelf registration statement
on Form S-3 (F-3 for foreign issuers) sold directly to a select group of institutional investors

► The issuer can offer and sell a variety of securities, however most issue common stock
securities

► Marketed to potential institutional investors before an offering is announced, allowing
issuers to test the market without the publicity (
p y (and opportunities for arbitrage) associated
pp g )
with traditional public offerings

► Privately negotiated transaction with investors who are typically required to enter into
confidentiality agreements b f
fid i li before b i provided with full information about the offering
being id d i h f ll i f i b h ff i

► RDOs are typically announced and priced on the same day

3

The Number of RDOs are on a Record Setting Pace
Total Registered Direct Offerings Since 2004
Total Value
($ millions) # of Transactions
$6,000 180

$5,000 150

$4,000 120

$3,000
$3 000 90

$2,000 60

$1,000 30

$0 -
(1)
2004 2005 2006 2007 2008 2009
Average
Transaction Size $27 $39 $34 $43 $44 $18
($ millions)
illi )
Total Value ($mm) Total Transactions

(1) YTD as of August 31, 2009
Source: Private Raise

4

Advantages of RDOs

► F t confidential, flexible, and efficient fi
Fast, fid ti l fl ibl d ffi i t financing alternative to follow-on offerings
i lt ti t f ll ff i

► Issuers can “test” the market without attracting publicity using targeted marketing to a select
group of qualified institutional investors

► Issuer’s stock usually does not become exposed to the speculative trading that often
accompanies a fully marketed follow-on offering (less likely to have “shorting” activity)

► Confidential undertaking until an actual transaction is announced, typically immediately
prior to pricing or at pricing

► Particularly useful way to respond to reverse inquiry opportunities or to accommodate
institutional investors that would like to accumulate a significant position in a company

► Does not require steep discounts to market price relative to typical PIPEs; priced similarly to
follow-on offerings
f ll ff i

► Faster, less expensive and less management time commitment than an underwritten follow-
on offering

5

Factors for a Successful RDO

► U d t di the specific investment criteria,
Understanding th ifi i t t it i
Most Active Sectors ($ millions)
industry preferences and constraints for each
targeted institutional investor Biotechnology $ 530.7
REITs 242.1
Energy: Oil & Gas 225.8
Pharmaceuticals 108.2
108 2
► Existing base of solid institutions attracts other Electrical Components and Equipment 84.0
Healthcare 52.9
like-minded investors and creates fundamental Banks 50.0
support Systems Software 17.3
Other 120.9
Total $ 1,431.9

► Prior validation of strategic support or interest
Most Active Sectors (# of Deals)
Biotechnology
► Non deal roadshows are important in this
Non-deal 3.3%
1.1%

current environment 4.4% Other

Pharmaceuticals
7.8%

Energy: Oil & Gas
► Identification of an anchor investor (10% or
( 7.8% 42.2%

more of transaction) Electrical Components
and Equipment
10.0%
Healthcare

11.1% REITS

12.2%
Systems Software

Banks

Source: Placement Tracker
YTD as of August 31, 2009 6

Mutual Fund and Institutional Investors in RDOs

►S
Sample li t of mutual funds and institutional investors, excluding hedge funds, that have
l list f t lf d d i tit ti l i t l di h d f d th t h
participated in at least one RDO in the last 12 months (as of August 31, 2009)

7

What is a PIPE?

► PIPE (Private Investment in Public Equity)
(P i t I t t i P bli E it ) All PIPEs By Type of Security

Publicly traded issuer sells restricted 6% Common Stock

securities in a private placement Convertible Preferred
18%
Stock
Preferred Stock
1%
Purchasers are accredited investors or 61%

institutions 14% Convertible Debt

Debt

Issuer agrees to register the resale of the
securities within a set period after closing
All PIPEs Total Capital Raised
p
($ millions)

Strategic investors in public companies often 25,000

use PIPEs (e.g. Berkshire Hathaway) 20,000

15,000

10,000

Because the securities are restricted, they are 5,000

often sold at a steeper discount to market ‐

price, with warrants and/or other beneficial
features

YTD as of August 31, 2009
9

Increasing Use of PIPE Transactions
► PIPE issuances have grown significantly in recent years emerging as a major source of raising capital
years,

► The total value of PIPE transactions has increased significantly since 1995, surpassing $1 trillion in 2007

► Th average transaction size has steadily increased particularly over the past three years
The t ti i h t dil i d ti l l th t th

Total PIPE Transactions Since 1995
Total Value
# of Transactions
($ billions)
$140 1,600

$120 1,400

1,200
$100
1,000
$80
800
$60
600
$40
400
$20 200

$0 0
(1)
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Total Value Total Transactions
Average
Transaction Size $12 $13 $11 $7 $15 $22 $16 $17 $15 $13 $15 $21 $57 $113 $92
(
($ millions)
)

(1) YTD as of August 31, 2009
Note: Includes all PIPE, 144-A and Reg-S Transactions; excluding Structured Equity Lines and Canadian OTC-BB/PS Companies
10

Private Equity, Venture Capital and Hedge Fund Investors in PIPEs
► Sample list of private equity, venture capital and hedge fund investors that have participated
equity
in at least one PIPE in the last 12 months (as of August 31, 2009)

Paulson & Co.

WL Ross & Co.

11

Management’s Key Considerations

Management Capital Raising
• Focus on day to day operations • Minimize shareholder dilution

• Minimize time commitment • Control of process and timing

• No need for daily stock price monitoring • Reasonable terms and conditions

• Build relationships with shareholders • Limit arbitrage in stock

Investor Base Avoid i f
A i Pitfalls
• Long-term institutional investors • Lack of capital to execute business plan

• Passive index funds • Wrong set of investors
Wo g o vesto s

• Active small-cap investors, not traders • Poor terms and conditions

• Strategic investors • Over-leveraged balance sheet

13

Cappello Capital

14

Cappello Capital’s Expertise

► Focused on small cap ($25 million to $1 billion market capitalization) publicly-traded
companies

► Extensive experience in p
p public company financings including: Registered Directs, PIPEs,
p y g g g , ,
equity, debt, and convertible securities

► Early pioneer in PIPE transactions; completed its first PIPE transaction in the 1970’s

► Seasoned advisor in private placements and an innovator in creative financing solutions
custom tailored to meet the needs of issuers and investors

► Ranked by Thompson Financial as a leading placement agent by proceeds for PIPE
transactions

► Numerous relationships with mutual funds, institutional investors and large hedge funds

► Instrumental in working with the SEC, NASDAQ, FINRA, FASB, and other regulatory
agencies on modernizing their regulation and accounting treatment of PIPEs and Rule144
issues

15

Cappello Capital’s Unique Buy-Side and Operational Experience

► Our experience as senior executives of buy-side funds and public companies offers an
enhanced perspective to our clients

► Numerous public and private company investments through our merchant banking division,
the Cappello Group

► Prior experience as senior executives of buy-side funds

► P i t Equity
Private E it

► Venture Capital

► Hedge Funds

► Held senior executive and board positions at publicly-traded companies

► Extensive experience covering the money management industry as investment bankers

► Collectively have over 75 years of senior executives experience at buy-side firms and
publicly traded companies

16

Cappello Capital’s Role and Outline of the Process

► As a placement agent retained by an issuer, Cappello Capital will provide the following
services.

► Understand management’s objectives and goals as well as explore financing
alternatives
l i

► Assist in the preparation of investor presentation materials

► Facilitate and participate in non-deal roadshows
non deal

► “Test” the market on a confidential basis utilizing publicly disclosed information

► Identify and receive indications of interest from a select group of highly qualified
institutional investors

► Based on indications of interest from investors, an issuer can make an informed
decision about whether to proceed with an offering

► Negotiate the best terms and conditions available based on market conditions

► Keep the identity of the issuer confidential until an investor is brought “over-the-wall”
p y g
and informed of the specific nature and terms of the potential offering, thereby
restricting an investor from trading the issuer’s securities until the offering has been
completed or terminated
17

Recent RDOs (YTD as of 8/31/2009)
Purchase Share Price
Market Cap Deal Size Price Per One Day Discount/
Filing Date Company Tick er Industy ($ millions) ($ millions) Share ($) Before ($) (Premium)
06/10/2009 CB Richard Ellis Group, Inc. CBG Real Estate Services 3,568 100.0 7.44 9.25 19.6%
05/27/2009 Chimera Investment Corporation CIM Mortgage REITs 2,648 15.1 3.22 3.39 5.0%
04/15/2009 Chimera Investment Corporation CIM Mortgage REITs 2,648 75.0 3.00 3.28 8.5%
02/23/2009 Developers Diversified Realty Corp. DDR Real Estate Services 1,584 52.0 3.50 2.63 (33.1%)
06/04/2009 Interoil Corp. IOC Integrated Oil and Gas 1,042 69.6 34.98 36.28 3.6%
04/02/2009 Savient Pharmaceuticals, Inc. SVNT Biotechnology 987 31.0 5.23 4.94 (5.9%)
05/11/2009 Cell Th
C ll Therapeutics, Inc.
i I CTIC Biotechnology
Bi h l 868 20.0
20 0 1.25
1 25 1.62
1 62 22.8%
22 8%
06/25/2009 BPZ Resources, Inc. BPZ Oil and Gas Exploration and Production 857 87.1 4.66 5.33 12.6%
08/25/2009 PacW est Bancorp PACW Regional Banks 690 50.0 18.36 18.63 1.4%
01/29/2009 Pharmasset, Inc. VRUS Biotechnology 639 46.0 9.73 10.75 9.5%
06/22/2009 Fuel Systems Solutions, Inc. FSYS Auto Parts and Equipment 617 30.0 20.00 23.76 15.8%
03/18/2009 Prospect Capital Corporation PSEC Asset Management 537 12.0 8.20 7.61 (7.8%)
06/30/2009 Novavax, Inc. NVAX Biotechnology 485 30.0 2.74 3.28 16.5%
03/31/2009 Novavax, Inc. NVAX Biotechnology 485 11.0 0.88 0.87 (1.1%)
03/14/2009 Arena Pharmace ticals Inc.
Pharmaceuticals, Inc ARNA Biotechnology
Biotechnolog 480 15.0
15 0 2.61
2 61 3.98
3 98 34.4%
34 4%
03/04/2009 Optimer Pharmaceuticals, Inc. OPTR Pharmaceuticals 457 33.0 10.00 11.00 9.1%
08/24/2009 China Security & Surveillance Technology, Inc. CSR Electronic Equipment and Instruments 415 25.4 6.25 7.18 13.0%
08/20/2009 Rentech, Inc. RTK Oil and Gas Refining and Marketing 347 15.0 1.75 1.85 5.4%
06/24/2009 Rentech, Inc. RTK Oil and Gas Exploration and Production 347 6.4 0.58 0.58 0.0%
06/16/2009 FuelCell Energy Inc. FCEL Electrical Components and Equipment 328 24.1 3.59 3.80 5.5%
06/30/2009 Spectrum Pharmaceuticals, Inc. SPPI Biotechnology 302 20.7 7.15 7.65 6.5%
06/15/2009 Spectrum Pharmaceuticals, Inc. SPPI Biotechnology 302 10.0 5.83 5.83 0.0%
05/27/2009 Spectrum Pharmaceuticals, Inc.
Pharmaceuticals Inc SPPI Biotechnology 302 20.0
20 0 5.11
5 11 5.13
5 13 0.4%
0 4%
05/06/2009 Spectrum Pharmaceuticals, Inc. SPPI Biotechnology 302 1.2 2.70 2.65 (1.9%)
06/24/2009 Northern Oil and Gas, Inc. NOG Oil and Gas Exploration and Production 282 13.5 6.00 6.08 1.3%
06/24/2009 Northern Oil and Gas, Inc. NOG Oil and Gas Exploration and Production 282 13.5 6.00 6.08 1.3%
02/19/2009 Ariad Pharmaceuticals Inc. ARIA Biotechnology 273 24.0 1.69 1.98 14.6%
05/04/2009 Capstone Turbine Corp. CPST Heavy Electrical Equipment 264 13.0 0.87 0.86 (1.2%)
05/06/2009 Kodiak Oil & Gas Corp. KOG Oil and Gas Exploration and Production 264 7.0 0.75 0.75 0.0%
06/23/2009 CEL-SCI Corp. CVM Biotechnology 262 5.0 0.40 0.47 14.9%
05/18/2009 Hemispherx Biopharma, Inc. HEB Biotechnology 259 15.5 1.30 1.93 32.6%
05/10/2009 Hemispherx Biopharma, Inc. HEB Biotechnology 259 15.0 1.10 1.38 20.3%
05/18/2009 Cytokinetics Inc. CYTK Biotechnology 243 14.0 1.97 1.85 (6.5%)
07/22/2009 Chelsea Therapeutics International Ltd. CHTP Biotechnology 231 12.8 4.00 4.92 18.7%
07/27/2009 Vical Inc. VICL Biotechnology 226 10.0 3.63 3.19 (13.8%)
05/21/2009 Vical Inc. VICL Biotechnology 226 20.0 2.31 2.20 (5.0%)
07/20/2009 OncoGenex Pharmaceuticals OGXI Biotechnology 218 9.5 20.00 20.60 2.9%
07/16/2009 Electro-Optical Sciences, Inc. MELA Healthcare Equipment 200 15.0 6.25 7.48 16.4%
01/29/2009 AVI Biopharma, Inc.
p , AVII Biotechnologygy 192 16.5 1.16 1.25 7.2%

19

07/29/2009 Inovio Biomedical Corporation INO Biotechnology 188 30.0 2.70 3.18 15.1%
08/06/2009 Generex Biotechnology Corp. GNBT Pharmaceuticals 175 5.7 0.66 0.67 1.5%
08/04/2009 Oncothyreon Inc ONTY Biotechnology 163 15.0 6.58 6.56 (0.3%)
05/19/2009 Oncothyreon I
O h Inc ONTY Biotechnology
Bi h l 163 11.0
11 0 2.85
2 85 3.30
3 30 13.6%
13 6%
06/05/2009 XOMA Ltd. XOMA Biotechnology 156 12.0 1.15 1.18 2.5%
05/15/2009 XOMA Ltd. XOMA Biotechnology 156 10.0 0.85 0.85 0.0%
06/30/2009 Raser Technologies, Inc. RZ Auto Parts and Equipment 150 25.3 2.98 3.85 22.6%
02/26/2009 Parkervision Inc. PRKR Communications Equipment 149 1.0 1.85 1.85 0.0%
06/16/2009 STAAR Surgical Company STAA Healthcare Supplies 146 8.1 1.88 2.34 19.7%
06/26/2009 Phoenix Technologies Ltd. PTEC Systems Software 141 13.1 2.25 3.19 29.5%
05/22/2009 Altair Nanotechnologies, Inc. ALTI Specialty Chemicals 136 13.9 1.17 1.35 13.3%
06/09/2009 Delcath Systems Inc.
S stems Inc DCTH Healthcare Equipment
Eq ipment 131 3.1
31 3.45
3 45 3.77
3 77 8.5%
8 5%
03/09/2009 Cytori Therapeutics, Inc. CYTX Biotechnology 131 9.8 2.10 2.31 9.1%
05/08/2009 Discovery Laboratories Inc. DSCO Pharmaceuticals 126 11.0 0.81 0.90 10.0%
07/24/2009 CytRx Corporation CYTR Biotechnology 124 20.0 1.31 1.29 (1.6%)
06/18/2009 EpiCept Corporation EPCT Biotechnology 115 9.6 0.80 0.90 11.1%
08/28/2009 Kratos Defense & Security Solutions, Inc. KTOS Aerospace and Defense 111 18.7 0.72 0.77 6.5%
03/23/2009 PharmAthene, Inc. PIP Biotechnology 110 5.5 2.60 3.25 20.0%
07/15/2009 Oxigene Inc. OXGN Biotechnology 100 10.0 1.60 1.98 19.2%
06/03/2009 Anadys Pharmaceuticals Inc.
Inc ANDS Biotechnology 97 18.0
18 0 2.09
2 09 1.98
1 98 (5.6%)
(5 6%)
07/24/2009 Antares Pharma Inc. AIS Healthcare Equipment 92 8.5 0.80 0.90 11.1%
08/19/2009 Cerus Corporation CERS Healthcare Supplies 90 13.2 2.20 2.88 23.6%
02/19/2009 Beacon Power Corporation BCON Heavy Electrical Equipment 90 6.0 0.38 0.47 19.9%
05/27/2009 GenVec Inc. GNVC Biotechnology 89 6.0 0.62 0.79 21.0%
06/19/2009 AEterna Zentaris Inc. AEZ Biotechnology 88 10.0 1.88 1.97 4.6%
06/22/2009 Superconductor Technologies Inc. SCON Electronic Components 73 11.1 3.00 3.33 9.9%
08/06/2009 NGAS Resources Inc. NGAS Oil and Gas Exploration and Production 70 10.3 1.90 2.15 11.6%
06/30/2009 Neuralstem Inc. CUR Biotechnology 65 1.0 1.25 1.04 (20.2%)
07/16/2009 W ave Systems Corp. W AVX Systems Software 61 3.2 0.92 1.08 14.8%
03/13/2009 W ave Systems Corp. W AVX Systems Software 61 1.0 0.55 0.58 5.2%
05/21/2009 Pure Bioscience PURE Life Sciences Tools and Services 59 3.0 2.12 2.37 10.5%
05/19/2009 Rexahn Pharmaceuticals, Inc. RNN Biotechnology 57 3.0 1.05 1.42 26.1%
06/09/2009 MDRNA, Inc. MRNA Pharmaceuticals 57 10.5 2.00 2.70 25.9%
07/09/2009 Skystar Bio Pharmaceutical Company SKBI Pharmaceuticals 56 20.0 13.04 12.08 -8.0%
04/28/2009 CombiMatrix Corporation CBMX Life Sciences Tools and Services 51 8.3 7.50 8.20 8.5%
07/30/2009 p
RXi Pharmaceuticals Corporation RXII Biotechnology
gy 45 8.4 3.50 4.59 23.7%

20

06/15/2009 China Direct Industries, Inc. CDII Diversified Metals and Mining 44 5.0 1.85 2.24 17.4%
02/26/2009 Akeena Solar, Inc. AKNS Electrical Components and Equipment 42 2.0 1.12 1.34 16.4%
08/21/2009 NovaBay Pharmaceuticals, Inc. NBY Pharmaceuticals 41 2.5 2.00 2.00 0.0%
08/19/2009 Emisphere Technologies, Inc. EMIS Pharmaceuticals 30 4.0 0.70 0.90 22.2%
07/22/2009 New Generation Biofuels Holdings, Inc. NGBF Oil and Gas Refining and Marketing 27 3.4 1.05 1.40 25.0%
05/19/2009 Converted Organics Inc COIN Fertilizers and Agricultural Chemicals 26 2.0 1.40 1.76 20.5%
07/23/2009 Cyclacel Ph
C l l Pharmaceuticals, Inc.
i l I CYCC Biotechnology
Bi h l 23 3.4
34 0.85
0 85 1.00
1 00 15.0%
15 0%
07/31/2009 Hudson Technologies Inc. HDSN Environmental and Facilities Services 22 1.7 1.15 1.30 11.5%
02/25/2009 Aradigm Corp. ARDM Healthcare Equipment 20 1.0 0.10 0.11 9.1%
02/20/2009 Aradigm Corp. ARDM Healthcare Equipment 20 4.0 0.10 0.12 16.7%
05/05/2009 Pluristem Therapeutics, Inc. PSTI Biotechnology 19 1.0 1.50 1.62 7.4%
08/13/2009 ZBB Energy Corporation ZBB Electrical Components and Equipment 16 2.5 1.20 1.25 4.0%

Low $ 16 $ 1.00 $ 0.10 $ 0.11 (33.1% )
High
Hi h 3,568
3 568 99.97
99 97 34.98
34 98 36.28
36 28 34.4%
34 4%

Median 163 11.00 1.94 2.08 9.3%
Mean 329 15.91 3.60 3.90 9.3%

21

Recent PIPEs (YTD as of 8/31/2009)
PIPE Share Price
Filing Date Company Ticker Industry ($ millions) ($ millions) Share ($) Before ($) (Premium)
08/13/2009 Brookfield Properties Corporation BPO Diversified Real Estate Activities 5,826.7 522.5 9.50 10.79 12.0%
06/26/2009 Boardwalk Pipeline Partners, LP BW P Oil and Gas Storage and Transportation 4,872.5 147.0 21.99 22.84 3.7%
01/29/2009 Nuance Communications, Inc. NUAN Application Software 3,954.7 175.24 10.06 13.85 27.4%
06/10/2009 CB Richard Ellis Group, Inc. CBG Real Estate Services 3,568.3 100.0 7.44 10.45 28.8%
08/03/2009 Kansas City Southern NYSE:KS Railroads 2,698.5 22.51 20.00 22.35 10.5%
06/02/2009 Chimera Investment Corporation CIM Mortgage REITs 2,647.8 15.21 3.22 3.66 12.0%
04/21/2009 Chimera Investment Corporation CIM Mortgage REITs 2,647.8 74.87 3.00 3.31 9.4%
01/27/2009 Omniture Inc. OMTR Internet Software and Services 1,691.8 25.0 8.76 13.68 36.0%
07/01/2009 TC Pipelines LP TCLP Oil and Gas Storage and Transportation 1,544.8 78.4 30.04 36.58 17.9%
05/20/2009 Seattle Genetics Inc. SGEN Biotechnology 1,436.0 11.45 9.72 12.20 20.3%
04/15/2009 Equity One Inc. EQY Retail REITs 1,376.9 35.04 14.30 15.21 6.0%
04/03/2009 Ocwen Financial Corp. OCN Thrifts and Mortgage Finance 1,073.6 60.19 11.00 14.30 23.1%
06/04/2009 Hecla Mining Co. HL Precious Metals and Minerals 1,022.0 60.0 3.45 2.93 (17.7%)
05/11/2009 Cell Therapeutics, Inc. CTIC Biotechnology 867.9 20.0 1.25 1.41 11.3%
06/30/2009 BPZ Resources, Inc. BPZ Oil and Gas Exploration and Production 857.3 87.4 4.66 6.52 28.5%
07/14/2009 East W est Bancorp Inc. EW BC Regional Banks 834.0 27.5 5.50 8.84 37.8%
08/25/2009 PacW est Bancorp PACW Regional Banks 689.9 50.0 18.36 15.38 (19.4%)
06/01/2009 Opko Health, Inc. OPK Biotechnology 677.2 31.0 1.00 1.73 42.2%
07/24/2009 hhgregg, Inc. HGG Computer and Electronics Retail 669.2 16.5 16.50 18.10 8.8%
02/05/2009 Pharmasset, Inc. VRUS Biotechnology 638.9 45.52 9.73 11.69 16.8%
06/22/2009 Fuel Systems Solutions, Inc. FSYS Auto Parts and Equipment 617.1 30.0 20.00 22.76 12.1%
02/18/2009 Cadence Pharmaceuticals Inc. CADX Pharmaceuticals 571.8 86.6 7.13 11.35 37.2%
08/17/2009 Prospect Capital Corporation PSEC Asset Management and Custody Banks 536.8 29.32 8.50 9.76 12.9%
03/19/2009 Prospect Capital Corporation PSEC Asset Management and Custody Banks 536.8 12.3 8.20 9.40 12.8%
07/01/2009 Novavax, Inc. NVAX Biotechnology 485.4 3.0 2.74 2.90 5.5%
03/04/2009 Optimer Pharmaceuticals, Inc. OPTR Pharmaceuticals 457.5 32.95 10.00 14.58 31.4%
01/30/2009 Flagstar Bancorp Inc. FBC Thrifts and Mortgage Finance 445.1 5.32 0.80 0.69 (15.9%)
03/02/2009 Affymax, Inc. AFFY Biotechnology 438.4 42.0 11.25 18.26 38.4%
05/07/2009 Sonic Automotive Inc. SAH Automotive Retail 430.5 2.8 5.74 11.10 48.3%
08/24/2009 China Security & Surveillance Technology, Inc. CSR Electronic Equipment and Instruments 414.8 25.35 6.25 7.70 18.8%
06/04/2009 ION G h i l C
Geophysical Corporation
ti IO Oil and Gas Equipment and Services
dG E i t dS i 414.2
414 2 40.7
40 7 2.20
2 20 2.40
2 40 8.3%
8 3%
05/29/2009 Terremark W orldwide, Inc. TMRK Internet Software and Services 363.4 20.0 5.00 5.88 15.0%
06/22/2009 Microvision Inc. MVIS Electrical Components and Equipment 347.3 15.0 1.86 2.82 34.0%
06/24/2009 Rentech, Inc. RTK Oil and Gas Refining and Marketing 347.3 6.38 0.58 0.57 (1.8%)
08/20/2009 Atlas Pipeline Partners LP APL Oil and Gas Storage and Transportation 337.5 17.08 6.35 7.30 13.0%
06/19/2009 FuelCell Energy Inc. FCEL Electrical Components and Equipment 328.2 24.2 3.59 3.99 10.0%
06/30/2009 Spectrum Pharmaceuticals, Inc. SPPI Biotechnology 301.6 21.0 7.15 5.24 (36.5%)
06/18/2009 Spectrum Pharmaceuticals, Inc. SPPI Biotechnology 301.6 10.0 5.83 7.65 23.8%
05/29/2009 Spectrum Pharmaceuticals, Inc.
Pharmaceuticals Inc SPPI Biotechnology 301.6
301 6 20.0
20 0 5.11
5 11 6.09
6 09 16.1%
16 1%

22

PIPE Share Price
06/05/2009 Vantage Drilling Company VTG Oil and Gas Drilling 295.3 21.84 1.40 1.70 17.6%
01/09/2009 Vantage Drilling Company VTG Oil and Gas Drilling 295.3 8.0 1.45 1.91 24.1%
07/07/2009 Jazz Pharmaceuticals, Inc. JAZZ Pharmaceuticals 294.2 7.0 3.69 2.99 (23.4%)
06/30/2009 Northern Oil and Gas, Inc. NOG Oil and Gas Exploration and Production 281.9 13.5 6.00 7.59 20.9%
02/25/2009 Ariad Pharmaceuticals Inc. ARIA Biotechnology 273.1 24.3 1.69 1.76 4.0%
06/04/2009 Alphatec Holdings, Inc. ATEC Healthcare Equipment 272.5 10.0 2.54 2.83 10.2%
06/25/2009 BioMimetic Therapeutics Inc. BMTI Pharmaceuticals 269.7 2.92 8.50 9.71 12.5%
04/07/2009 BioMimetic Therapeutics Inc. BMTI Pharmaceuticals 269.7 8.0 8.50 9.07 6.3%
05/07/2009 Capstone Turbine Corp. CPST Heavy Electrical Equipment 264.2 12.5 0.87 0.86 (1.2%)
05/14/2009 Kodiak Oil & Gas Corp. KOG Oil and Gas Exploration and Production 263.9 7.2 0.75 1.16 35.3%
05/19/2009 Hemispherx Biopharma, Inc. HEB Biotechnology 258.8 16.0 1.34 1.94 30.9%
06/11/2009 Valence Technology Inc. VLNC Electrical Components and Equipment 244.9 2.5 1.99 2.06 3.4%
05/18/2009 Cytokinetics Inc. CYTK Biotechnology 243.2 14.0 1.97 1.83 (7.7%)
07/28/2009 Chelsea Therapeutics International Ltd. CHTP Biotechnology 230.7 13.3 4.00 4.00 0.0%
07/27/2009 Vical Inc. VICL Biotechnology 226.4 10.0 3.63 2.66 (36.5%)
05/22/2009 Vical Inc. VICL Biotechnology 226.4 20.04 2.31 2.29 (0.9%)
07/24/2009 OncoGenex Pharmaceuticals, Inc. OGXI Biotechnology 218.1 9.5 20.00 26.10 23.4%
01/30/2009 AVI Biopharma, Inc. AVII Biotechnology 192.4 16.5 1.16 1.26 7.9%
08/04/2009 Antigenics Inc. AGEN Biotechnology 181.1 10.0 2.28 2.07 (10.1%)
08/03/2009 Antigenics Inc. AGEN Biotechnology 181.1 10.0 2.00 2.23 10.3%
08/07/2009 Oncothyreon Inc ONTY Biotechnology 162.6 15.0 6.58 6.56 (0.3%)
04/20/2009 Bryn Mawr Bank Corp. BMTC Regional Banks 157.1 2.5 16.66 19.02 12.4%
05/19/2009 XOMA Ltd. XOMA Biotechnology 155.6 10.0 0.85 0.76 (11.8%)
07/07/2009 Raser Technologies, Inc. RZ Auto Parts and Equipment 150.4 25.48 2.98 3.94 24.4%
03/03/2009 Parkervision Inc. PRKR Communications Equipment 148.8 0.66 1.85 2.99 38.1%
02/24/2009 EnteroMedics, Inc. ETRM Healthcare Equipment 145.1 15.9 1.15 1.99 42.2%
07/02/2009 Phoenix Technologies Ltd. PTEC Systems Software 140.7 13.05 2.25 2.65 15.1%
01/07/2009 Pacific Continental Corp. PCBK Regional Banks 136.3 10.13 13.50 11.86 (13.8%)
05/22/2009 Altair Nanotechnologies, Inc. ALTI Specialty Chemicals 136.1 14.03 1.17 1.33 12.0%
05/14/2009 Cytori Therapeutics, Inc. CYTX Biotechnology 130.7 4.24 2.28 2.82 19.1%
03/13/2009 Cytori Th
C t i Therapeutics, Inc.
ti I CYTX Biotechnology
Bi t h l 130.7
130 7 10.02
10 02 2.10
2 10 2.88
2 88 27.1%
27 1%
08/27/2009 Sierra Bancorp BSRR Regional Banks 126.9 21.29 11.00 13.62 19.2%
05/13/2009 Discovery Laboratories Inc. DSCO Pharmaceuticals 125.8 11.34 0.81 1.39 41.7%
01/30/2009 Lime Energy Co. LIME Electrical Components and Equipment 125.7 6.28 3.51 3.96 11.4%
05/22/2009 Odyssey Marine Exploration Inc. OMEX Research and Consulting Services 122.5 5.1 2.97 3.49 14.9%
07/13/2009 Apollo Gold Corp. APG Gold 118.9 11.22 0.47 0.52 10.4%
06/18/2009 EpiCept Corporation EPCT Biotechnology 115.4 9.6 0.80 0.62 (29.0%)
08/28/2009 Kratos Defense & Security Solutions, Inc. KTOS Aerospace and Defense 111.0 18.72 0.72 0.77 6.5%
03/27/2009 PharmAthene, Inc
PharmAthene Inc. PIP Biotechnology 110.3
110 3 5.5
55 2.60
2 60 2.44
2 44 (6.6%)
(6 6%)
06/11/2009 EXACT Sciences Corp. EXAS Biotechnology 102.8 8.2 1.90 1.98 4.0%
01/27/2009 EXACT Sciences Corp. EXAS Biotechnology 102.8 6.0 2.00 1.86 (7.5%)

23

PIPE Share Price
08/17/2009 US Geothermal Inc. HTM Independent Power Producers 100.5 9.86 1.35 1.63 17.2%
05/27/2009 AC Moore Arts & Crafts Inc. ACMR Specialty Stores 98.1 10.0 2.50 3.39 26.3%
06/03/2009 Anadys Pharmaceuticals Inc. ANDS Biotechnology 97.4 17.5 2.09 2.49 16.1%
05/29/2009 GenVec Inc. GNVC Biotechnology 89.2 6.0 0.62 0.63 1.6%
06/02/2009 Middleburg Financial Corporation MBRG Regional Banks 87.0 5.0 11.00 14.75 25.4%
01/07/2009 Columbia Laboratories Inc. CBRX Pharmaceuticals 77.2 0.75 1.66 1.47 (12.9%)
06/30/2009 Neuralstem Inc. CUR Biotechnology 64.6 1.0 1.25 1.30 3.8%
06/01/2009 Oculus Innovative Sciences, Inc. OCLS Pharmaceuticals 63.4 2.0 1.17 1.45 19.3%
02/24/2009 Oculus Innovative Sciences, Inc. OCLS Pharmaceuticals 63.4 1.0 1.13 1.05 (7.6%)
02/06/2009 Oculus Innovative Sciences, Inc. OCLS Pharmaceuticals 63.4 1.75 1.17 1.16 (0.9%)
04/18/2009 W ave Systems Corp. W AVX Systems Software 61.1 0.43 0.55 0.54 (2.8%)
05/27/2009 Pure Bioscience PURE Life Sciences Tools and Services 59.0 3.0 2.12 2.03 (4.4%)
06/05/2009 Rexahn Pharmaceuticals, Inc. RNN Biotechnology 57.1 3.0 1.05 1.11 5.4%
05/01/2009 CombiMatrix Corporation CBMX Life Sciences Tools and Services 51.2 8.25 7.50 9.28 19.2%
05/29/2009 Active Power Inc. ACPW Heavy Electrical Equipment 48.6 3.0 0.50 0.54 7.4%
08/04/2009 RXi Pharmaceuticals Corporation RXII Biotechnology 44.9 8.35 3.50 4.19 16.5%
03/03/2009 Akeena Solar, Inc. AKNS Electrical Components and Equipment 41.7 2.0 1.12 1.57 28.7%
08/21/2009 NovaBay Pharmaceuticals, Inc. NBY Pharmaceuticals 40.6 2.45 2.00 1.58 (26.6%)
04/30/2009 Regenerx Biopharmaceuticals Inc. RGN Biotechnology 40.5 0.6 0.57 0.74 23.0%
08/06/2009 Arrowhead Research Corp. ARW R Life Sciences Tools and Services 32.1 2.76 0.30 0.35 14.3%
07/22/2009 Response Genetics, Inc RGDX Life Sciences Tools and Services 27.5 3.98 1.30 1.40 7.1%
03/02/2009 Response Genetics, Inc RGDX Life Sciences Tools and Services 27.5 2.0 1.00 1.50 33.3%
07/28/2009 New Generation Biofuels Holdings, Inc. NGBF Oil and Gas Refining and Marketing 27.5 3.2 1.05 1.07 1.9%
03/30/2009 New Generation Biofuels Holdings, Inc. NGBF Oil and Gas Refining and Marketing 27.5 3.17 0.80 0.94 14.9%
02/12/2009 XATA Corp. XATA Systems Software 24.8 3.01 2.22 1.90 (16.8%)
08/19/2009 LightPath Technologies Inc. LPTH Electronic Equipment and Instruments 23.4 1.64 1.26 1.14 (10.5%)
01/20/2009 Digital Angel Corporation DIGA Communications Equipment 19.0 0.13 0.50 0.65 23.1%
08/05/2009 Royale Energy Inc. ROYL Oil and Gas Drilling 19.0 1.1 1.99 2.28 12.7%
07/31/2009 Metalline Mining Co. MMG Diversified Metals and Mining 17.6 1.02 0.25 0.46 45.5%
06/30/2009 Voxware Inc. VOXW Application Software 13.1 2.5 1.75 2.23 21.5%
08/24/2009 First N ti
Fi t National Bancshares Inc.
lB h I FNSC Regional Banks
R i lB k 11.4
11 4 0.55
0 55 1.00
1 00 1.88
1 88 46.8%
46 8%
08/02/2009 IA Global, Inc. IAO Alternative Carriers 11.3 0.06 0.04 0.05 22.3%
05/26/2009 Socket Mobile, Inc. SCKT Computer Storage and Peripherals 10.3 1.05 1.80 2.81 35.9%
03/31/2009 Harrington W est Financial Group Inc. HW FG Thrifts and Mortgage Finance 8.4 0.398 1.59 1.20 (32.5%)

Low $ 8 $ 0.06 $ 0.04 $ 0.05 (36.5% )
High 5,631 522.50 30.04 36.58 48.3%

Median 203 4.84
4 84 20.00
20 00 2.66
2 66 13.0%
13 0%
Mean 493 42.35 4.96 5.62 14.5%

24

For more information, please contact:

Milton S. Hahn Alexander L. Cappello
Managing Director Managing Director
a @cappe oco p.co
mhahn@cappellocorp.com ac@cappellocorp.com

100 Wilshire Blvd., Suite 1200
00 s e d , Su e 00
Santa Monica, Ca 90401
Phone: 310‐393‐6632
Fax: 310‐393‐4838
www.cappellocorp.com
FINRA/SIPC

Los Angeles ♦ Austin ♦ Beijing ♦ Mexico City ♦ Seoul ♦ Taipei

25

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