Dealflow Report the NEWS, INFORMATION, and ANALYSIS of SMALL CAP EQUITY FINANCE Report.Dealflowmedia.Comreport.Dealflow.Com

dealflow report THE NEWS, INFORMATION, AND ANALYSIS OF SMALL CAP EQUITY FINANCE report.dealflowmedia.comreport.dealflow.com

SMALL CAP FINANCING MARKET DECLINES IN FIRST QUARTER AS INVESTORS ESCHEW ILLIQUID INVESTMENTS by Dan Lonkevich The small cap and microcap equity the small cap equity financing market: (CEMI), a $5.5 million registered direct financing market contracted more than the decimalization of stock prices, the offering of common stock for Novelos expected in the first quarter as concern absence of small cap investment banks, Therapeutics (NVLT), and a $1.77 about the illiquidity of the smallest the lack of profitability in underwriting. million convertible debt placement for companies kept investors focused on The Jumpstart Our Business Start- CopyTele Inc. (COPY). large cap names that drove the broader ups Act was meant to solve some of “It’s a tale of two markets,” said market to record levels. these problems by making it easier for David Weild, chairman and chief The number of PIPE transactions companies to go public by relaxing dis- executive officer of Weild & Co., an declined by 3.1%, while initial public closure requirements, ending the ban investment banking and advisory firm. offerings slid 10%. Venture capital deals on general solicitation and advertising “You’ve got large cap companies set- declined 31%. Reverse mergers fell 44% of private placements and even allow- ting records and performing well and and alternative public offerings declined ing crowdfunding. The Securities and the bottom of the market grounding to by 81%. The IPO market for special Exchange Commission, however, has a halt.” purpose acquisition companies also fell been slow to finish the rule making that During the first quarter, Weild & 66.7%. Follow-on offerings, which were many observers are hoping will resus- Co. acquired some of the investment dominated by larger companies, were the citate the market. banking assets of ThinkEquity out of only outlier, rising 14.7%. bankruptcy. At one time, San Fran- The declines contrasted sharply to Wishful Thinking? cisco-based ThinkEquity had been a larger than expected 10% rise in the “It’s a cycle and there’s plenty of an active PIPE placement agent and Standard & Poor’s 500 Index, which set liquidity,” said John Borer, the head of underwriter of IPOs. a record close of 1569.19 on March 28, investment banking at The Benchmark “It is precisely because there are no above its previous high of 1565.15 in Co. in New York. “It’s just that insti- more incentives being committed to the October 2007. tutional investors think there’s more small cap and microcap market,” Weild “We’re moving toward a market money to be made right now in larger said. “This is a marketing and distri- that’s completely dominated by the cap companies.” bution problem and it’s a progressive large cap space,” said Mark Wood, Small to medium sized companies disease. It doesn’t mean you won’t get a partner with the law firm Katten aren’t getting many deals done, Borer said. cyclical upturns, but the new cyclical Muchin Rosenman in Chicago, who “I don’t remember a time when we upturns may start to look lower than the advises small cap and microcap com- had this few deals getting done,” he said. old cyclical downturns.” panies on capital raising. “The liquid- “I’ve been in this business for more than Weild noted that many provisions of ity’s there. The values are going up 15 years and usually when it feels this bad the JOBS Act -- ending the ban on gen- there more consistently. That’s where it means things are about to get better.” eral solicitation and advertising, easing the institutional investors are playing Borer previously worked at Rod- restrictions on offerings under Regula- and they drive the market.” man & Renshaw, the small cap invest- tion A of the Securities Act, allowing The small cap equity financing ment bank that declared bankruptcy companies to experiment with tick sizes space is pretty tough right now and I last September after a failed attempt to larger than a penny and crowdfunding don’t see that changing,” Wood said. transform into a financial technology -- have not been implemented yet. “Things like the JOBS Act aren’t help- company with an electronic platform for “We need to get on with it and set ing. I hope not, but the glory days of executing private placements. about repairing capital formation for small the small cap equity financing market In the first quarter, Benchmark cap and microcap companies,” he said. may be gone for good.” helped arrange a $6 million confiden- “It’s not going to be an overnight fix.” Wood cited a host of reasons that con- tially marketed public offering of com- To be sure, not everyone believes that tributed to the absence of liquidity in mon stock for Chembio Diagnostics the pullback in the small cap and microcap For use by original recipient only. It is illegal to forward or otherwise distribute without permission.

Market UpdatePIPES

equity finance market is unwarranted. million deal for Ventas Inc. (VTR), New York-based Cantor Fitzgerald “The market is smarter than it’s been and $500 million ATMs for Westar arranged 10 ATMs and one PIPE to raise in the past,” said Bryant Riley, chairman Energy (WR), American Campus as much as $673 million. In contrast, of boutique investment banking, advi- Communities (ACC) and El Paso Dawson James, in Boca Raton, Fla., sory and research firm B. Riley & Co. Pipeline Partners (EPB). arranged 11 PIPEs worth $70.9 million. in Los Angeles. “PIPEs, reverse mergers The largest non-ATM PIPEs were by Excluding the large ATM deals to and SPACs are all highly speculative. Cheniere Energy Partners (CQP) with large energy partnerships and real estate Investors are being more careful. I think a $365 million common stock place- investment trusts, “the deals getting it’s good. I hope we don’t go through ment, and ARIAD Pharmaceuticals done were minute,” Benchmark’s Borer another fad like reverse mergers in (ARIA) with a $323.2 million common said. And even on the smallest deals China, clean tech or the dot-com bubble. stock placement. there were often two or three banks Wall Street makes a lot of money when Of the 249 first-quarter PIPEs, 133 helping to arrange them, he said. Even that happens, but it’s better for investors involved the issuance of common stock, on ATMs, deals often have three or four when there’s more caution.” 25 the issuance of convertible preferred banks on them. stock, and only 23 the issuance of convert- Investment banks that used to special- PIPEs ible debt. In comparison, the first quar- ize in PIPEs have had to change their PIPE activity declined in the first ter of 2012 included 142 common stock focus, Borer said. quarter to 249 deals from 257 deals in deals, 21 convertible preferred deals, and “We’re focusing on M&A advisory the year-ago period. The 249 deals were 25 convertible debt deals. and private company financings,” he the fewest in a first quarter since the As usual, health care issuers dominat- said. “There’s a need to fill and it’s same period in 2009. Then, during the ed the PIPE market with 85 deals worth much less competitive.” height of the financial crisis, only 166 $1.83 billion, followed by technology, Competition for an ever shrinking PIPEs were issued. telecom and media issuers with 39 deals piece of the small cap equity financing Fewer companies raised more money worth $1.17 billion. market accelerated the demise of Rod- in the latest quarter, $9.63 billion com- Hedge funds accounted for almost man, ThinkEquity and other investment pared with $8.37 billion a year earlier. The half of the total PIPE investments in the banks in recent years. larger dollar volumes reflected an increase first quarter with 123 investments worth in the average dollar amount raised: $39.8 $461.7 million, followed by private equity IPOs million compared with $32.6 million. and venture capital with 32 investments IPO activity also cooled off in the first It also reflected an increase in the size worth $605.2 million. Corporate insiders quarter with only 35 deals raising $8.8 bil- of the companies issuing PIPEs. Forty and affiliates accounted for 30 invest- lion, compared with 39 deals worth $5.8 PIPE issuers had market values greater ments worth $50.1 million. billion a year ago, according to Dealogic. than $500 million and accounted for $6.94 The top 10 PIPE investors were led The number of companies that elect- billion of the total dollars raised. by Sabby Management, Hudson Bay ed to go public as emerging growth The number of unregistered PIPEs fell Capital Management and Downsview companies under the JOBS Act rose to to 143 worth $2.17 billion from 168 worth Capital, which each had six investments 28 that raised $3.6 billion. That was up $4.88 billion, a year ago. Registered deals worth $8.85 million, $5.62 million and from the 24 EGCs that raised $4.1 bil- increased to 102 worth $7.46 billion from $3.88 million respectively. lion in the fourth quarter. The JOBS Act, 89 worth $3.5 billion. The placement agent rankings were which created the new EGC category, The dollar volume figures also were led by RBC Capital Markets, which was signed into law April 5, 2012. exaggerated by the relatively large num- arranged 12 deals including six ATMs The top 10 first quarter IPOs were ber of at-the-market offerings, which and six PIPEs worth $2.02 billion. by Zoetis Inc. (ZTS), which raised increased the total but seldom if ever are ATM-specialist Cantor Fitzgerald and $2.24 billion; CVR Refining (CVRR), fully taken down. The first quarter includ- more traditional microcap PIPE spe- which raised $600 million; Pinnacle ed 40 ATMs pledging to raise as much as cialist Dawson James Securities tied Foods (PF), which raised $580 mil- $5.43 billion, compared with 27 commit- for second with 11 deals each. Dawson lion; Norwegian Cruise Line (NCLH), ting $1.45 billion, a year earlier. James is led by Michael Vasinkevich, which raised $447 million; West Corp. Indeed, eight of the 10 largest PIPEs the former vice chairman of the defunct (WSTC), which raised $426 million; were ATM deals including a $750 Rodman & Renshaw. Artisan Partners Asset Management The DealFlow Report © 2013 DealFlow Media 2 April 11, 2013 For use by original recipient only. It is illegal to forward or otherwise distribute without permission.

Market UpdatePIPES

(APAM), which raised $332 million; Part of the reason for the lower num- PitchBook. In last year’s first quarter, CyrusOne Inc. (CONE), which raised ber of IPOs may have to do with con- 1,095 venture capital equity deals raised $314 million; Aviv REIT (AVIV), tinued “repercussions from Facebook’s $7.95 billion. The results also were lower which raised $264 million; SunCoke failed IPO” last May, said Mitchell Litt- than in the fourth quarter when 811 deals Energy Partners (SXCP), which raised man, a partner with the law firm of Litt- raised $6.37 billion. $257 million; and Boise Cascade Co. man Krooks in New York. “People are Barry Kramer, a partner with the law (BCC), which raised $247 million. saying if that never popped nothing else firm of Fenwick & West in Menlo Park, The IPO market continues to be will. The Facebook effect is still there Calif., said the decline in venture capital “moribund” for small cap and microcap and holding things back.” deals reflects the trend over the last two companies with IPOs under $100 mil- years of limited partners being less enam- lion, said Borer. Follow-ons ored of venture capital in general. Steve Maletzky, director of equity cap- Follow-on offerings increased to “Venture capital is a funnel,” he said. ital markets at William Blair & Co. in 187 deals worth $48.7 billion from 163 “What you have at the top is limited Chicago, blamed the decline in IPOs “on worth $43.8 billion, according to Dea- partners putting money into venture poor sentiment at the end of 2012,” which logic. Of those follow-ons, 114 were capital funds and at the bottom you have is starting to diminish. accelerated book-builds with volume venture capital funds putting money into “It’s going to pick up and we’re already totaling $27.2 billion. companies.” seeing the IPO backlog trending higher,” “Follow-on activity is up because valu- For much of the past two years, the he said. “Issuers and selling shareholders ations are up and companies are able to money venture funds have been putting were caught off guard by the strong mar- access the capital markets quickly off into companies has exceeded the amount ket performance to start the year. Those an available shelf registration,” William coming in from LPs, he said. that pushed to get deals out experienced Blair’s Maletzky said. “We’re seeing “It’s not like there aren’t good entre- good price performance. IPO-like oversubscriptions in follow-ons. preneurial companies out there looking “Liquidity concerns are here to stay They’re performing very well.” for money,” Kramer said. for the time being in the microcap space,” The follow-on market is performing so The venture capital spigot won’t open Maletzky said. “Investors have a clear well, however, that one banker suggested up until the IPO market and merger and alternative to illiquid microcaps with larg- it might be getting a little ahead of itself. acquisition activity start to pick up again, er more liquid small and mid-cap compa- “People are chasing yield in the sec- Kramer said. nies that are performing well. Investors do ondary market,” B. Riley’s Riley said. “Last month, we did three venture- not want capital tied up in illiquid micro- Wall Street “is selling these yield plays backed tech IPOs in one week,” Kramer cap investments in a market where they because retail investors would rather said, citing deals for Silver Spring Net- can get outsized returns in larger, more have yield than equity. It’s getting a lit- works (SSNI), Model N (MODN) and stable opportunities.” tle crazy. Everybody’s refinancing their Marin Software (MRIN). “If the IPO As the public markets continue to debt. It feels a little frothy. But it’s a market for tech companies starts to pick improve and valuations increase, private way higher class of problem than spin- up and big tech companies start making equity and venture capital firms “will be ning reverse mergers in China.” acquisitions again it will help venture enticed back to the IPO market seeking During the quarter, B. Riley helped capital sentiment.” exits for their earlier-stage portfolio com- arranged a $112.5 million public offering panies,” he said. for real estate investment company Ken- SPACs “We will see more smaller IPOs but I nedy-Wilson Holdings (KW) and a $77.2 Only one special purpose acquisition do not see a significant increase in IPOs million offering of American depository company completed an IPO in the first below $50 million,” Maletzky said. shares for Chinese semiconductor maker quarter. HF2 Financial Management “We are consistently hearing that post- RDA Microelectronics (RDA). (HTWU) raised $153 million in its deal liquidity and float are important to March 27 IPO and intends to purchase Venture Capital investors.” a financial services business. That com- IPOs of less than $50 million have a Venture capital activity also cooled off pares with three SPAC IPOs in the first limited buyer universe and most institu- in the first quarter with private companies quarter of 2012. tional investors need larger deals to put raising only $6.36 billion from 753 ven- HF2 is only the second SPAC to go meaningful dollars to work, he said. ture equity deals, according to data from public with a financial structure that The DealFlow Report © 2013 DealFlow Media 3 April 11, 2013 For use by original recipient only. It is illegal to forward or otherwise distribute without permission.

Market UpdatePIPES

doesn’t include stock-purchase war- (SCGQ) on March 4 said it will merge taken its toll on the market. Just one rants. Hyde Park Acquisition Corp. with Symon Communications, a pro- China-based company, Xunna Infor- II (HPAC) became the first warrantless vider of digital signage, in a $45 million mation Technology (XUNA), complet- SPAC when it raised $75 million last deal. In February, Chicago-based SCG ed a reverse merger in the first quarter. August. The warrantless structure can said it would pay about $27.5 million in This compares to three deals a year ago make a SPAC more attractive to acquisi- stock and assumed debt to merge with and two Chinese reverse mergers in the tion candidates, since its stock won’t be RMG Networks, which provides digital fourth quarter. diluted as warrants are exercised. signage and advertising in airplanes. APOs also were down year-over-year Only one SPAC, Capitol Acquisi- Prime Acquisition Corp. (PACQ) in the first quarter. Four reverse mergers tion Corp. II (CLAQU), filed to go agreed to buy BHN LLC, an Italian finan- were completed with financing totaling public in the first quarter. The SPAC, cial advisory firm with a portfolio of real $15.76 million. Those numbers repre- which is sponsored by Venturehouse estate in southern Europe, for about $200 sented a decline of almost 81% from 21 Group, filed its S-1 on March 26 and million in stock and assumed debt. transactions worth $41 million, a year is planning a $150 million IPO, which ROI Acquisition Corp. (ROIQ) ago. The average deal size doubled to will be underwritten by Citigroup and agreed to merge with EveryWare Global, $3.94 million in the latest quarter from Deutsche Bank Securities. the maker of Oneida and Anchor Hocking $1.97 million a year ago. Another SPAC, Chardan Metropol brand dishes and flatware, in a cash and Forty percent of the reverse mergers Acquisition Corp., sponsored by stock deal valued at $420 million. completed were by foreign companies. Chardan Capital Markets and The Selway Capital Acquisition Corp. Companies from Germany, Brazil, Mex- Metropol Group of Companies, has (SWCA) agreed to pay at least $62 mil- ico, China, the U.K., and Canada closed been in registration since April 2012. lion in stock and debt to acquire Health- reverse mergers in the first quarter. Chardan is underwriting. care Corp. of America, the holding And 30% of those deals included PIPE The decline in SPACs reflects inves- company for a pharmacy benefit manager. financing. tor concern about their performance after China VantagePoint Acquisition Co. “I would guess that a need for they make their first business acquisition, (CHVPF) called off its $20 million acqui- financing in a timely manner is what said Kerry Propper, the chief executive sition of Black Diamond Holdings and drove the foreign deals,” Feldman said. officer of Chardan Capital. said it will return cash to shareholders. “For foreign companies, it is easier for “Some of the deals announced I think them to do a reverse merger than a self- are going to perform well, and as you see Reverse Mergers filing. We have done a couple of deals deals getting done and performing well Reverse merger activity was off 44% with Brazilian companies and we are it will re-energize the entrepreneurs who in the first quarter with the number of working on something with a German sponsor SPACs,” he said. deals dropping to 25 from 45, a year ago. company now.” Propper said he has decided to post- The decrease in reverse mergers “is pone the Chardan Metropol IPO until attributable to an increase in self-filings, With reporting by Bill Meagher. another Russian-focused SPAC, CIS the restrictive nature of the seasoning Acquisition (CISAA), completes its first regulations and the bad press and the Senior Editor Dan Lonkevich may be acquisition and he can see how the mar- bad feelings around some of the Chinese reached at [email protected]. ket reacts to it. CIS Acquisition raised $40 reverse mergers,” said David Feldman, million in its initial offering in December a partner with the law firm Richardson and has up to two years to complete its & Patel. first business combination. While it was clear that reverse merg- During the quarter, a number of SPACs ers were down, there are no shortage of announced business combinations. companies that want to go public, Feld- Blue Wolf Mongolia Holdings Corp. man said. (MNGL), a SPAC that raised $70 million “There is still interest in reverse merg- in an IPO in July 2011, agreed to merge ers, but the timing has to be right,” he with Li3 Energy (LIEG), a South Ameri- said. “We are working on several reverse can lithium miner. mergers right now.” SCG Financial Acquisition Corp. The wave of Chinese frauds has The DealFlow Report © 2013 DealFlow Media 4 April 11, 2013 For use by original recipient only. It is illegal to forward or otherwise distribute without permission.

Small Cap Equity Finance Activity

PIPE LEAGUE TABLES FOR Q1 2013 Investment Managers RANKED BY TOTAL DOLLARS INVESTED RANKED BY # OF INVESTMENTS Rank Investment Manager Total $m Avg. $m # Rank Investment Manager Total $m Avg. $m # 1 FTS International Inc. $310.00 $310.00 1 1 Sabby Management LLC $8.85 * $1.77 * 6 2 NGP Energy Capital Management $55.80 $55.80 1 1 Hudson Bay Capital Management LP $5.63 $0.94 6 3 White Deer Energy L.P. $50.00 $50.00 1 1 Downsview Capital, Inc. $3.88 $0.65 6 4 Blackstone Group L.P. $40.00 $40.00 1 4 Iroquois Capital L.P. $2.78 $0.56 5 5 Kayne Anderson Rudnick Investment Mgt $35.00 $35.00 1 5 Deerfield Management Company, L.P. $31.50 * $10.50 * 4 5 Oaktree Capital Group, LLC $35.00 $35.00 1 5 Frost Group, LLC $4.65 * $1.55 * 4 7 Deerfield Management Company, L.P. $31.50 * $10.50 * 4 7 Heights Capital Management, Inc. $9.00 $3.00 3 8 Steel Partners Holdings L.P. $30.00 $30.00 1 7 Gemini Strategies, LLC $1.75 $0.58 3 9 Castle Creek Partners, LLC $23.25 $11.63 2 7 Empery Asset Management, LP $1.05 $0.35 3 10 Crede Capital Group LLC $15.50 $7.75 2 7 Anson Capital, LP $0.88 $0.29 3 11 Carp Investments Ptd Ltd. $15.00 $15.00 1 11 Castle Creek Partners, LLC $23.25 $11.63 2 11 Cutlass Collieries LLC $15.00 $15.00 1 11 Crede Capital Group LLC $15.50 $7.75 2 11 Legg Mason, Inc. $15.00 $15.00 1 11 OrbiMed Advisors, LLC $11.76 $5.88 2 14 Tortoise Capital Advisors, LLC $13.00 $13.00 1 11 GCP Capital Partners Holdings LLC $10.25 $5.13 2 15 Harvest Fund Advisors LLC $12.51 $12.50 1 11 LH Financial Services Corp. $3.61 $1.81 2 15 Salient Partners $12.51 $12.50 1 11 Wolverine Asset Management $3.50 $1.75 2 17 Cyrus Capital Partners, LP $12.00 $12.00 1 11 Kingsbrook Partners LP $1.00 $0.50 2 17 Foundation Capital $12.00 $12.00 1 11 Manchester Management Company, LLC $0.55 $0.28 2 19 OrbiMed Advisors, LLC $11.76 $5.88 2 11 Parallax Fund LP $0.45 $0.23 2 20 Credit Suisse Group $11.58 $11.58 1 11 Preventive Cardiovascular Nurses Association $0.21 $0.11 2 21 Candlewood Investment Group $10.56 $10.56 1 21 FTS International Inc. $310.00 $310.00 1 22 GCP Capital Partners Holdings LLC $10.25 $5.12 2 21 NGP Energy Capital Management $55.80 $55.80 1 23 Harbinger Group Inc. $10.00 $10.00 1 21 White Deer Energy L.P. $50.00 $50.00 1 23 Plato & Associates, LLC $10.00 $10.00 1 21 Blackstone Group L.P. $40.00 $40.00 1 25 Sandstorm Gold Ltd. $9.98 $9.98 1 21 Kayne Anderson Rudnick Investment Mgt $35.00 $35.00 1

* EXCLUDES transactions where Investment Amount has not yet been disclosed * EXCLUDES transactions where Investment Amount has not yet been disclosed Placement Agents RANKED BY TOTAL DOLLARS RAISED RANKED BY # OF PLACEMENTS Rank Placement Agent Total $m Avg. $m # Rank Placement Agent Total $m Avg. $m # 1 Jefferies Group, LLC $673.50 $134.70 5 1 Dawson James Securities $40.88 $4.09 10 2 RBC Capital Markets $626.84 $125.37 5 2 Roth Capital Partners, LLC $73.67 $8.19 9 3 Leerink Swann LLC $550.32 $91.72 6 3 Lazard $134.30 $16.79 8 4 Evercore Partners, Inc. $540.11 $180.04 3 4 Cowen and Company, LLC $500.28 $71.47 7 5 RS Platou Markets AS $515.04 $128.76 4 5 Leerink Swann LLC $550.32 $91.72 6 6 Cowen and Company, LLC $500.28 $71.47 7 5 Ladenburg Thalmann & Co., Inc. $234.93 $39.16 6 7 Clarkson PLC $465.04 $232.52 2 7 Jefferies Group, LLC $673.50 $134.70 5 7 DNB Bank ASA $465.04 $232.52 2 7 RBC Capital Markets $626.84 $125.37 5 9 J.P. Morgan Chase & Co. $463.57 $154.52 3 7 Canaccord Financial Inc. $245.93 $49.19 5 10 UBS AG $397.15 $99.29 4 10 RS Platou Markets AS $515.04 $128.76 4 11 BMO Financial Group $344.34 $114.78 3 10 UBS AG $397.15 $99.29 4 12 Canaccord Financial Inc. $245.93 $49.19 5 10 Stifel Financial Corp. $131.62 $32.90 4 13 SEB AB $235.00 $235.00 1 10 Piper Jaffray & Co. $124.29 $31.07 4 14 Ladenburg Thalmann & Co., Inc. $234.93 $39.16 6 10 Wedbush Securities, Inc. $116.96 $29.24 4 15 Macquarie Capital Advisors $229.99 $114.99 2 10 Craig-Hallum Capital Group, LLC $71.33 $17.83 4 16 Capital One Southcoast, Inc. $225.00 $225.00 1 10 William Blair & Company $47.02 $11.75 4 16 Johnson Rice & Company L.L.C. $225.00 $225.00 1 17 Evercore Partners, Inc. $540.11 $180.04 3 18 Lazard $134.30 $16.79 8 17 J.P. Morgan Chase & Co. $463.57 $154.52 3 19 Stifel Financial Corp. $131.62 $32.90 4 17 BMO Financial Group $344.34 $114.78 3 20 Piper Jaffray & Co. $124.29 $31.07 4 17 Robert W. Baird & Co. Incorporated $121.49 $40.50 3 21 Robert W. Baird & Co. Incorporated $121.49 $40.50 3 17 Sandler O’Neill & Partners, L. P. $115.92 $38.64 3 22 Wedbush Securities, Inc. $116.96 $29.24 4 17 Global Hunter Securities, LLC $71.00 $23.67 3 23 Sandler O’Neill & Partners, L. P. $115.92 $38.64 3 17 Needham & Company, Inc. $63.45 $21.15 3 24 Citigroup Global Markets Inc. $93.31 $46.66 2 17 Maxim Group, LLC $39.18 $13.06 3 25 JMP Group, Inc. $88.01 $44.01 2 17 Cormark Securities Inc. $26.12 $8.71 3

All data is based on proprietary information from PrivateRaise, a service of DealFlow Analytics. Data includes PIPEs that are at least US$1.0 million and have been executed by public corporations domiciled in the U.S. or by public, foreign companies that have a primary listing or a significant or consistent trading presence on a U.S. stock exchange or market. Data is updated based on availability of public disclosures (e.g. press releases and SEC filings) and has been obtained from sources deemed reliable, including certain third party sources. However, DealFlow Analytics cannot guarantee the accuracy and completeness of this information. League tables exclude equity lines, at-the-market offerings, corporate investors, and PIPEs executed by foreign-based issuers that trade on the Over-The-Counter market (Pink Sheets). The DealFlow Report © 2013 DealFlow Media 5 April 11, 2013 For use by original recipient only. It is illegal to forward or otherwise distribute without permission.

Small Cap Equity Finance Activity

PIPE LEAGUE TABLES FOR Q1 2013 Investor Legal Counsel RANKED BY TOTAL DOLLARS ADVISED RANKED BY # OF PLACEMENTS ADVISED Rank Investor Legal Counsel Total $m Avg. $m # Rank Investor Legal Counsel Total $m Avg. $m # 1 Schulte Roth & Zabel LLP $483.42 $32.23 15 1 Schulte Roth & Zabel LLP $483.42 $32.23 15 2 Latham & Watkins LLP $365.00 $365.00 1 2 Greenberg Traurig, LLP $33.85 $5.64 6 2 Proskauer Rose LLP $365.00 $365.00 1 3 Ellenoff Grossman and Schole LLP $13.29 $4.43 3 4 Cooley LLP $175.00 $175.00 1 4 Baker Botts, L.L.P. $134.34 $67.17 2 5 Baker Botts, L.L.P. $134.34 $67.17 2 4 Vinson & Elkins L.L.P. $105.80 $52.90 2 6 Vinson & Elkins L.L.P. $105.80 $52.90 2 4 Katten Muchin Rosenman LLP $50.50 $25.25 2 7 Katten Muchin Rosenman LLP $50.50 $25.25 2 4 DLA Piper $45.00 $22.50 2 8 DLA Piper $45.00 $22.50 2 4 Wachtell, Lipton, Rosen & Katz $45.00 $22.50 2 8 Wachtell, Lipton, Rosen & Katz $45.00 $22.50 2 9 Latham & Watkins LLP $365.00 $365.00 1 10 Greenberg Traurig, LLP $33.85 $5.64 6 9 Proskauer Rose LLP $365.00 $365.00 1 11 Olshan Frome Wolosky LLP $30.00 $30.00 1 9 Cooley LLP $175.00 $175.00 1 12 Manatt, Phelps, & Phillips, LLP $17.50 $17.50 1 9 Olshan Frome Wolosky LLP $30.00 $30.00 1 13 Ellenoff Grossman and Schole LLP $13.29 $4.43 3 9 Manatt, Phelps, & Phillips, LLP $17.50 $17.50 1 14 Milbank, Tweed, Hadley & McCloy LLP $10.00 $10.00 1 9 Milbank, Tweed, Hadley & McCloy LLP $10.00 $10.00 1 15 Gallant Y.T. Ho & Co. $9.15 $9.15 1 9 Gallant Y.T. Ho & Co. $9.15 $9.15 1 16 Duane Morris LLP $8.73 $8.73 1 9 Duane Morris LLP $8.73 $8.73 1 17 Lowenstein Sandler PC $5.00 $5.00 1 9 Lowenstein Sandler PC $5.00 $5.00 1 18 Grushko & Mittman, P.C. $4.04 $4.04 1 9 Grushko & Mittman, P.C. $4.04 $4.04 1 19 Burak Anderson & Melloni, PLC $2.00 $2.00 1 9 Burak Anderson & Melloni, PLC $2.00 $2.00 1 20 John E. Parker $1.50 $1.50 1 9 John E. Parker $1.50 $1.50 1 20 Peter J. Weisman, P.C. $1.50 $1.50 1 9 Peter J. Weisman, P.C. $1.50 $1.50 1 22 Lane & Seidman LLP $1.00 $1.00 1 9 Lane & Seidman LLP $1.00 $1.00 1 22 McGrath North Mullin & Kratz, PC LLO $1.00 $1.00 1 9 McGrath North Mullin & Kratz, PC LLO $1.00 $1.00 1

Issuer Legal Counsel RANKED BY TOTAL DOLLARS ADVISED RANKED BY # OF PLACEMENTS ADVISED Rank Issuer Legal Counsel Total $m Avg. $m # Rank Issuer Legal Counsel Total $m Avg. $m # 1 Andrews Kurth LLP $567.24 $189.08 3 1 Cooley LLP $145.49 $20.78 7 2 Seward & Kissel LLP $498.44 $124.61 4 2 Troutman Sanders LLP $90.03 $15.00 6 3 Mintz, Levin, Cohn, Ferris, et. al., P.C $344.66 $114.89 3 3 Dorsey & Whitney LLP $74.82 $14.96 5 4 Akin, Gump, Strauss, Hauer & Feld, L.L.P. $225.00 $225.00 1 4 Seward & Kissel LLP $498.44 $124.61 4 5 Akerman Senterfitt $175.00 $175.00 1 4 Goodwin Procter LLP $143.26 $35.82 4 6 Cooley LLP $145.49 $20.78 7 4 Sichenzia Ross Friedman Ference LLP $46.73 $11.68 4 7 Goodwin Procter LLP $143.26 $35.82 4 4 Morgan, Lewis & Bockius LLP $30.53 $7.63 4 8 Gibson, Dunn & Crutcher LLP $142.98 $142.98 1 8 Andrews Kurth LLP $567.24 $189.08 3 9 Ropes & Gray LLP $102.78 $34.26 3 8 Mintz, Levin, Cohn, Ferris, et. al., P.C $344.66 $114.89 3 10 Reeder & Simpson P.C. $100.45 $33.48 3 8 Ropes & Gray LLP $102.78 $34.26 3 10 Thompson & Hine LLP $100.45 $33.48 3 8 Reeder & Simpson P.C. $100.45 $33.48 3 12 WilmerHale $92.50 $46.25 2 8 Thompson & Hine LLP $100.45 $33.48 3 13 Troutman Sanders LLP $90.03 $15.00 6 8 Perkins Coie LLP $46.90 $15.63 3 14 Bryan Cave LLP $76.00 $76.00 1 8 Vorys, Sater, Seymour and Pease LLP $42.00 $14.00 3 15 Sullivan & Cromwell LLP $75.08 $75.08 1 8 O’Melveny & Myers LLP $29.25 $9.75 3 15 Watson, Farley & Williams LLP $75.08 $75.08 1 8 DLA Piper $19.13 $6.38 3 17 Vinson & Elkins L.L.P. $75.00 $75.00 1 8 Baker, Donelson, Bearman, et. al., P.C. $18.59 $6.20 3 18 Dorsey & Whitney LLP $74.82 $14.96 5 8 Disclosure Law Group, LLP $4.65 $1.55 3 19 Hunton & Williams LLP $61.54 $30.77 2 19 WilmerHale $92.50 $46.25 2 20 Skadden, Arps, Slate, Meagher & Flom LLP $55.80 $55.80 1 19 Hunton & Williams LLP $61.54 $30.77 2 21 Venable LLP $52.81 $52.81 1 19 Fredrikson & Byron, P.A. $48.28 $24.14 2 22 Mayer Brown LLP $50.00 $50.00 1 19 Morrison & Foerster LLP $43.00 $21.50 2 23 Fredrikson & Byron, P.A. $48.28 $24.14 2 19 Arnold & Porter LLP $40.74 $20.37 2 24 Perkins Coie LLP $46.90 $15.63 3 19 Latham & Watkins LLP $36.42 $18.21 2 25 Sichenzia Ross Friedman Ference LLP $46.73 $11.68 4 19 Fenwick & West LLP $25.80 $12.90 2

All data is based on proprietary information from PrivateRaise, a service of DealFlow Analytics. Data includes PIPEs that are at least US$1.0 million and have been executed by public corporations domiciled in the U.S. or by public, foreign companies that have a primary listing or a significant or consistent trading presence on a U.S. stock exchange or market. Data is updated based on availability of public disclosures (e.g. press releases and SEC filings) and has been obtained from sources deemed reliable, including certain third party sources. However, DealFlow Analytics cannot guarantee the accuracy and completeness of this information. League tables exclude equity lines, at-the-market offerings, corporate investors, and PIPEs executed by foreign-based issuers that trade on the Over-The-Counter market (Pink Sheets). The DealFlow Report © 2013 DealFlow Media 6 April 11, 2013 For use by original recipient only. It is illegal to forward or otherwise distribute without permission.

Small Cap Equity Finance Activity

PIPE LEAGUE TABLES FOR Q1 2013 Placement Agent Legal Counsel RANKED BY TOTAL DOLLARS ADVISED RANKED BY # OF PLACEMENTS ADVISED Rank Placement Agent Legal Counsel Total $m Avg. $m # Rank Placement Agent Legal Counsel Total $m Avg. $m # 1 Davis Polk & Wardwell LLP $725.24 $181.31 4 1 Ellenoff Grossman and Schole LLP $35.48 $4.44 8 2 Proskauer Rose LLP $414.20 $59.17 7 2 Proskauer Rose LLP $414.20 $59.17 7 3 Goodwin Procter LLP $136.98 $19.57 7 2 Goodwin Procter LLP $136.98 $19.57 7 4 Covington & Burling LLP $135.30 $67.65 2 4 Davis Polk & Wardwell LLP $725.24 $181.31 4 5 Latham & Watkins LLP $100.67 $33.56 3 4 Lowenstein Sandler PC $53.45 $13.36 4 6 Ropes & Gray LLP $72.47 $36.23 2 6 Latham & Watkins LLP $100.67 $33.56 3 7 Lowenstein Sandler PC $53.45 $13.36 4 6 Sichenzia Ross Friedman Ference LLP $18.10 $6.03 3 8 Fried, Frank, Harris, Shriver & Jacobson $50.00 $25.00 2 8 Covington & Burling LLP $135.30 $67.65 2 9 Cooley LLP $40.00 $40.00 1 8 Ropes & Gray LLP $72.47 $36.23 2 10 Ellenoff Grossman and Schole LLP $35.48 $4.44 8 8 Fried, Frank, Harris, Shriver & Jacobson $50.00 $25.00 2 11 Dechert LLP $32.00 $32.00 1 8 LeClairRyan, P.C. $22.99 $11.49 2 11 Osler, Hoskin & Harcourt LLP $32.00 $32.00 1 8 Morgan, Lewis & Bockius LLP $22.56 $11.28 2 13 LeClairRyan, P.C. $22.99 $11.49 2 13 Cooley LLP $40.00 $40.00 1 14 Morgan, Lewis & Bockius LLP $22.56 $11.28 2 13 Dechert LLP $32.00 $32.00 1 15 Choate, Hall & Stewart LLP $20.13 $20.13 1 13 Osler, Hoskin & Harcourt LLP $32.00 $32.00 1 15 Stikeman Elliott LLP $20.13 $20.13 1 13 Choate, Hall & Stewart LLP $20.13 $20.13 1 17 Sichenzia Ross Friedman Ference LLP $18.10 $6.03 3 13 Stikeman Elliott LLP $20.13 $20.13 1 18 Taylor Wessing $15.00 $15.00 1 13 Taylor Wessing $15.00 $15.00 1 19 Faegre Baker Daniels LLP $13.08 $13.08 1 13 Faegre Baker Daniels LLP $13.08 $13.08 1 20 Kaufman & Canoles, P.C. $12.90 $12.90 1 13 Kaufman & Canoles, P.C. $12.90 $12.90 1 21 Reed Smith LLP $11.76 $11.76 1 13 Reed Smith LLP $11.76 $11.76 1 22 K&L Gates LLP $10.50 $10.50 1 13 K&L Gates LLP $10.50 $10.50 1 23 Jonathan D. Leinwand, P.A, $10.00 $10.00 1 13 Jonathan D. Leinwand, P.A, $10.00 $10.00 1 24 Dorsey & Whitney LLP $9.17 $9.17 1 13 Dorsey & Whitney LLP $9.17 $9.17 1 24 Wildeboer Dellelce LLP $9.17 $9.17 1 13 Wildeboer Dellelce LLP $9.17 $9.17 1