2008 D&O Symposium Symposium New York City ~ February 6 & 7, 2008 Life Cycle(s) of an IPO Company

Life Cycle of an IPO Company MODERATOR: Megan Colwell, Senior Vice President Woodruff-Sawyer & Co. Matthew Deneen, RPLU, Senior Vice President Hooghuis Group, LLC Deirdre Finn, Senior Vice President Navigators Pro Lauri Floresca, Senior Managing Director Carpenter Moore, a NASDAQ Company Keith Thomas, Executive Vice President Zurich Management Solutions Group Michael Torpey, Partner Orrick, Herrington & Sutcliffe LLP

Case Study YellowWire, Inc. Headquarters: Santa Clara, CA Founded: 2001 Market segment: Telecom Revenue: $8.5M as of YE05 Management team: founders Funding: $15M via Rounds A & B Company valuation: $25M

Reverse Merger History and Perceptions Historical View: Checkered past in the 70’s, 80’s and 90’s with “Pump and Dump schemes”. Mergers-R-Us.com GoPublicUSA.com “Take your private company public the easy way by purchasing a dormant, public shell company through a process known as a reverse merger...”

Successful Reverse Mergers Texas Instruments Inc. Berkshire Hathaway Inc. Tandy Corporation (Radio Shack Corporation) Occidental Petroleum Corporation Blockbuster Entertainment The New York Stock Exchange Frederick’s of Hollywood (1/28/08)

Reverse Mergers: How Popular Are They? Annual growth trends: Q107 : 53 RM’s/$3B Mkt cap = +100% growth University of Pittsburgh study:  91% of the companies that performed a RM are still in existence three years later.

“Formerly Shady Reverse Mergers Gain Credibility” USA TODAY, 6/28/07 (1)New SEC rules in past five years (2)IPO option: larger/more established companies (Post Dotcom/IPO Bubble)  2006: more reverse mergers than IPO’s (3) SPAC’s (Special Purpose Acquisition Companies)

SPAC’s: How Popular Are They?* 2007: 65 SPAC’s went public = $11.7B Average deal size: $183M (vs. $229M) Pipeline momentum  December 2007: 50% of new filings were SPAC’s  January 2008: 7 of 13 new filings were SPAC’s Currently:  75 SPAC’s seeking acquisition/reverse merger opportunities  Flush with cash! *Data from: Renaissance Capital’s SPAC Facts, Annual Review, January 2008

SPAC Statistics* No. of SPAC’s Total Proceeds $24.2M $491.1M $2.1B $3.2B $11.7B % IPO Market1.5% 5.6% 14.4% 14.8% 23% Avg SPAC Size $24.15M $40.9M $75M $95M$183M Avg IPO Size$224M $198M $175M $217M $229M *Data from: Renaissance Capital’s SPAC Facts, Annual Review, January 2008

“Traditional” Reverse Merger—Shell Company Reverse merger option  Faster, better, cheaper?  No real capital infusion; limited liquidity  PIPE financing = funding option