Capital Raising for Public Companies

Registered Direct Offerings d PIPE U dand PIPEs Update

September 2009

FINRA / SIPC

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

Contents

Registered Direct Offerings (RDOs) 2What is a Registered Direct Offering? The Number of RDOs are on a Record Setting PaceAdvantages of RDOsAdvantages of RDOsFactors for a Successful RDOMutual Fund and Institutional Investors in RDOs

PIPEsWhat is a PIPE? 8Increasing Use of PIPE TransactionsPrivate Equity, Venture Capital and Hedge Fund Investors in PIPEs

M t 12Management 12Key Considerations

Cappello Capital 14ExpertiseExpertiseUnique Buy-Side and Operational ExperienceRole and Outline of the Process

Exhibits 18

1

RDO TransactionsPIPE Transactions

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

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

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

►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 2004Total Registered Direct Offerings Since 2004

180 $6,000

Total Value($ millions) # of Transactions

Total Registered Direct Offerings Since 2004Total Registered Direct Offerings Since 2004

90

120

150

$3 000

$4,000

$5,000

30

60

90

$1,000

$2,000

$3,000

-$02004 2005 2006 2007 2008 2009

Average Transaction Size

($ illi )

(1)

$27 $39 $34 $43 $44 $18

Total Value ($mm) Total Transactions

($ millions)

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

4

Advantages of RDOs

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

► 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► 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 f ll ff ifollow-on offerings

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

5

on offering

Factors for a Successful RDO

►U d t di th ifi i t t it i►Understanding the specific investment criteria, industry preferences and constraints for each targeted institutional investor

Most Active Sectors ($ millions)Most Active Sectors ($ millions)Biotechnology 530.7$ REITs 242.1 Energy: Oil & Gas 225.8 Pharmaceuticals 108 2

►Existing base of solid institutions attracts other like-minded investors and creates fundamental support

Pharmaceuticals 108.2 Electrical Components and Equipment 84.0 Healthcare 52.9 Banks 50.0 Systems Software 17.3 Other 120.9

► Prior validation of strategic support or interest

►Non deal roadshows are important in this

Most Active Sectors (# of Deals)Most Active Sectors (# of Deals)

Biotechnology

Total 1,431.9$

►Non-deal roadshows are important in this current environment

► Identification of an anchor investor (10% or 42.2%7.8%

7.8%

4.4%3.3%

1.1%Other

Pharmaceuticals

Energy: Oil & Gas(more of transaction)

12.2%

11.1%

10.0%

7.8%

Electrical Components and Equipment

Healthcare

REITS

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

Systems Software

Banks

Mutual Fund and Institutional Investors in RDOs

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

7

PIPEs

8

What is a PIPE?

► PIPE (P i t I t t i P bli E it )► PIPE (Private Investment in Public Equity)

Publicly traded issuer sells restricted securities in a private placement

6% Common Stock

All PIPEs By Type of SecurityAll PIPEs By Type of Security

securities in a private placement

Purchasers are accredited investors or institutions

61%

14%

1%

18% Convertible Preferred Stock

Preferred Stock

Convertible Debt

Issuer agrees to register the resale of the securities within a set period after closing

All PIPEs Total Capital RaisedAll PIPEs Total Capital Raised

Debt

Strategic investors in public companies often use PIPEs (e.g. Berkshire Hathaway)

pp

15,000

20,000

25,000

($ millions)

Because the securities are restricted, they are often sold at a steeper discount to market price, with warrants and/or other beneficial

‐

5,000

10,000

9

features

Source: Placement Tracker YTD as of August 31, 2009

Increasing Use of PIPE Transactions

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

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

► Th t ti i h t dil i d ti l l th t th

# of TransactionsTotal Value ($ billions)

Total PIPE Transactions Since 1995Total PIPE Transactions Since 1995

► The average transaction size has steadily increased particularly over the past three years

800

1,000

1,200

1,400

1,600

$80

$100

$120

$140

0

200

400

600

800

$0

$20

$40

$60

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Total Value Total Transactions

(1)

Average Transaction Size

($ millions)$12 $13 $11 $7 $15 $22 $16 $17 $15 $13 $15 $57 $113 $92$21

10

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

( )

Private Equity, Venture Capital and Hedge Fund Investors in PIPEs

► Sample list of private equity venture capital and hedge fund investors that have participated► Sample list of private equity, venture capital and hedge fund investors that have participated in at least one PIPE in the last 12 months (as of August 31, 2009)

Paulson & Co.

WL Ross & Co.

11

Management

12

Management’s Key Considerations

• Minimize shareholder dilution• Focus on day to day operations

Management Capital Raising

• Control of process and timing

• Reasonable terms and conditions

• Minimize time commitment

• No need for daily stock price monitoring

• Limit arbitrage in stock• Build relationships with shareholders

A i i f• Long-term institutional investors

• Passive index funds

• Lack of capital to execute business plan

• Wrong set of investors

Avoid PitfallsInvestor Base

Passive index funds

• Active small-cap investors, not traders

W o g set o vesto s

• Poor terms and conditions

13

• Strategic investors • Over-leveraged balance sheet

Cappello Capital

14

Cappello Capital’s Expertise

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

►Extensive experience in public company financings including: Registered Directs, PIPEs, p p 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

issues

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 E it► Private Equity

►Venture Capital

►Hedge Funds►Hedge Funds

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

►Extensive experience covering the money management industry as investment bankers►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 l ialternatives

►Assist in the preparation of investor presentation materials

► Facilitate and participate in non deal roadshows► Facilitate and participate in non-deal roadshows

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

► Identify and receive indications of interest from a select group of highly qualified► 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 offeringdecision 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”

17

p y gand 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

Exhibits

18

Recent RDOs (YTD as of 8/31/2009)Purchase Share Price

Filing Date Company Ticker IndustyMarket Cap($ millions)

Deal Size ($ millions)

Price Per Share ($)

One Day Before ($)

Discount/ (Premium)

06/10/2009 CB Richard Ellis Group, Inc. CBG Real Es tate Services 3,568 100.0 7.44 9.25 19.6% 05/27/2009 Chimera Inves tment Corporation CIM Mortgage REITs 2,648 15.1 3.22 3.39 5.0% 04/15/2009 Chimera Inves tment Corporation CIM Mortgage REITs 2,648 75.0 3.00 3.28 8.5% 02/23/2009 Developers Divers ified Realty Corp. DDR Real Es tate 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 C ll Th i I CTIC Bi h l 868 20 0 1 25 1 62 22 8%05/11/2009 Cell Therapeutics , Inc. CTIC Biotechnology 868 20.0 1.25 1.62 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 ARNA Biotechnolog 480 15 0 2 61 3 98 34 4%03/14/2009 Arena Pharmaceuticals , Inc. ARNA Biotechnology 480 15.0 2.61 3.98 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 Ins truments 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 SPPI Biotechnology 302 20 0 5 11 5 13 0 4%05/27/2009 Spectrum Pharmaceuticals , Inc. SPPI Biotechnology 302 20.0 5.11 5.13 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%05/18/2009 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. AVII Biotechnology 192 16.5 1.16 1.25 7.2%

19

p , gy




Price Per Share ($)

One Day Before ($)

Discount/ (Premium)

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% 06/15/2009 Generex Biotechnology Corp. GNBT Pharmaceuticals 175 10.9 0.63 0.76 17.1% 08/06/2009 Generex Biotechnology Corp. GNBT Pharmaceuticals 175 5.7 0.66 0.66 0.1% 05/15/2009 Generex Biotechnology Corp. GNBT Pharmaceuticals 175 5.0 0.33 0.44 25.0% 08/04/2009 Oncothyreon Inc ONTY Biotechnology 163 15.0 6.58 6.56 (0.3%)05/19/2009 O h I ONTY Bi h l 163 11 0 2 85 3 30 13 6%05/19/2009 Oncothyreon Inc ONTY Biotechnology 163 11.0 2.85 3.30 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 S stems Inc DCTH Healthcare Eq ipment 131 3 1 3 45 3 77 8 5%06/09/2009 Delcath Systems Inc. DCTH Healthcare Equipment 131 3.1 3.45 3.77 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 ANDS Biotechnology 97 18 0 2 09 1 98 (5 6%)06/03/2009 Anadys Pharmaceuticals Inc. ANDS Biotechnology 97 18.0 2.09 1.98 (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 Neurals tem Inc. CUR Biotechnology 65 1.0 1.25 1.04 (20.2%)06/30/2009 Neurals tem Inc. CUR Biotechnology 65 1.0 1.25 1.04 (20.2%)07/16/2009 Wave Systems Corp. W AVX Systems Software 61 3.2 0.92 1.08 14.8% 03/13/2009 Wave 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 RXi Pharmaceuticals Corporation RXII Biotechnology 45 8.4 3.50 4.59 23.7%

20

p gy




Price Per Share ($)

One Day Before ($)

Discount/ (Premium)

06/15/2009 China Direct Industries , Inc. CDII Divers ified 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 C l l Ph i l I CYCC Bi h l 23 3 4 0 85 1 00 15 0%07/23/2009 Cyclacel Pharmaceuticals , Inc. CYCC Biotechnology 23 3.4 0.85 1.00 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 Pluris tem 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% )Hi h 3 568 99 97 34 98 36 28 34 4%High 3,568 99.97 34.98 36.28 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 IndustryMarket Cap($ millions)


Price Per Share ($)

One Day Before ($)

Discount/ (Premium)

08/13/2009 Brookfield Properties Corporation BPO Divers ified Real Estate Activities 5,826.7 522.5 9.50 10.79 12.0% 06/26/2009 Boardwalk Pipeline Partners , LP BWP 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 Inves tment Corporation CIM Mortgage REITs 2,647.8 15.21 3.22 3.66 12.0% 04/21/2009 Chimera Inves tment 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 West Bancorp Inc. EWBC Regional Banks 834.0 27.5 5.50 8.84 37.8% 08/25/2009 PacWest 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 ti IO Oil d G E i t d S i 414 2 40 7 2 20 2 40 8 3%06/04/2009 ION Geophysical Corporation IO Oil and Gas Equipment and Services 414.2 40.7 2.20 2.40 8.3% 05/29/2009 Terremark Worldwide, Inc. TMRK Internet Software and Services 363.4 20.0 5.00 5.88 15.0% 06/22/2009 Microvis ion 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 SPPI Biotechnology 301 6 20 0 5 11 6 09 16 1%

22

05/29/2009 Spectrum Pharmaceuticals , Inc. SPPI Biotechnology 301.6 20.0 5.11 6.09 16.1%




Price Per Share ($)

One Day Before ($)

Discount/ (Premium)

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 C t i Th ti I CYTX Bi t h l 130 7 10 02 2 10 2 88 27 1%03/13/2009 Cytori Therapeutics , Inc. CYTX Biotechnology 130.7 10.02 2.10 2.88 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 PIP Biotechnology 110 3 5 5 2 60 2 44 (6 6%)

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03/27/2009 PharmAthene, Inc. PIP Biotechnology 110.3 5.5 2.60 2.44 (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%)




Price Per Share ($)

One Day Before ($)

Discount/ (Premium)

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 Neurals tem 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 Wave Systems Corp. WAVX 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. ARWR 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 Divers ified 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 Fi t N ti l B h I FNSC R i l B k 11 4 0 55 1 00 1 88 46 8%08/24/2009 Firs t National Bancshares Inc. FNSC Regional Banks 11.4 0.55 1.00 1.88 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 West Financial Group Inc. HWFG 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 20 00 2 66 13 0%

24

Median 203 4.84 20.00 2.66 13.0%Mean 493 42.35 4.96 5.62 14.5%

For more information, please contact:

Milton S. HahnManaging Director

[email protected]

Alexander L. CappelloManaging Director

[email protected]

100 Wilshire Blvd., Suite 1200

a @cappe oco p.co [email protected]

00 s e d , Su e 00Santa Monica, Ca 90401Phone: 310‐393‐6632Fax: 310‐393‐4838

www.cappellocorp.comFINRA/SIPC

25

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