Financial Performance & Scoring -- © 2006 Gaskins IPO Desktop/IPOdesktop

Pre-IPO analysis, grading & scoring -- updated Nov 3

. Business Model Rating Criteria

A = high growth market, potential leader; B = more competitive market; C= 'public venture capital'

. Calculations

. IPO Price to annualized Sales Ratio -- (Price / Sales)

Numerator

Denominator

IPO market capitalization…

Annualized Sales (last six month's revenues times 2)

(post-IPO # of shares times mid-point of IPO price range)

. IPO Price to annualized Earnings (loss) -- (Price / Earnings)

Numerator

Denominator

IPO market cap

Annualized Earnings (loss) from the last quarter

=========================================================================

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or ticker for analysis

scheduled below

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Summary ratios for the week of Nov 6 (IPOs not previously analyzed, scored & graded)

(P/E ratios based on annualizing recent results, see notes)

VALUATION RATIOS

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (mm)

Sales

Earnings

BookValue

TangibleBV

in IPO

ACA Capital (ACA)

$589

1.4

11

1.2

1.2

29%

financial guaranty ins & asset mgt: C+, 7

Post-IPO shrs:14.9mm

ActivBiotics (ACTV)

$194

n/a

-10

3.2

3.1

27%

biotech-inflammatory/bacterial: C, 5

Post-IPO shrs:14.9mm

Canadian Solar (CSIQ)

$382

9.7

53

3.8

3.8

28%

solar module products: C+, 7

Post-IPO shrs:27.3mm

Capella Education CPLA

$285

1.7

28

3.7

3.7

26%

online post-secondary education: C+, 7

Post-IPO shrs:15.4mm

KBW Inc. (KBW)

$608

1.6

16

1.7

1.8

21%

invesment bank -- financial services: B-, 7

Post-IPO shrs:30.4mm

Metabolix (MBLX)

$239

31.5

-28

2.7

2.8

32%

biotech,environmentally safe alternatives: C, 7

Post-IPO shrs:18.4mm

OneBeacon Insrnce (OB)

$2,500

1.2

9

1.5

2.0

20%

property/casualty insurer: C+, 7

Post-IPO shrs:100mm

PhysiciansFormulaPHYS

$219

2.1

27

3.9

-12.8

46%

cosmetics-high end mass market: C+, 7

Post-IPO shrs13.7mm

Thermage (THRM)

$269

5.0

-35

3.6

3.6

27%

devices for wrinkles: C, 7

Post-IPO shrs:22.4mm

=========================================================================

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or ticker for analysis

scheduled below

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ACA Capital Holdings

ACA, C+, 7

financial guaranty ins & asset mgt

Post-IPO shrs:14.9mm

New York, NY

2003

2004

2005

June 05*

June 06*

IPO Mkt

Rev ($mm)

$112

$193

$331

$145

$215

Cap (mm)

Premiums earned

$19

$30

$33

$16

$13

$589

Investment income

$53

$126

$255

$114

$160

@$16

Interest Exp ($mm)

$39

$101

$214

$95

$137

Interest % of rev

35%

52%

65%

66%

64%

Profit (loss) ($mm)

$20

-$4

$29

$13

$26

Profit (loss) %

18%

-2%

9%

9%

12%

*for the six months ended June 30

Six months ended June 30, 2006 compared with six months ended June, 2005

Net premiums down, investment income up

. The growth in total revenues was primarily due to increases in investment income as a result of

the impact of rising short-term interest rates

. Aan increase in insured credit swap premiums received in ACA’s Structured Credit line of

business attributable to its growing volume of business in this area and fee income in the CDO

Asset Management line of business as a result of increased assets under management and the

increase in deals closed in 2006 to date compared to the same period in 2005.

VALUATION RATIOS

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (mm)

Sales

Earnings

BookValue

TangibleBV

in IPO

ACA Capital (ACA)

$589

1.4

11

1.2

1.2

29%

SCORECARD

Mgt

Market

Market Do-

Proprie-

Total

1-5, 5 is high

Growth

mination

tary

rating

20 is perfect

2

2

2

1

7

Business

. Provides financial guaranty insurance products to participants in the global credit derivatives

markets, structured finance capital markets and municipal finance capital markets.

. Also provides asset management services to specific segments of the structured finance capital

markets.

Three principal operating business lines:

. Structured Credit

. Municipal Finance, which are both financial guaranty insurance lines of business, and

. CDO Asset Management business.

. Conducts the financial guaranty insurance businesses through ACA Financial Guaranty

Corporation, ACA "A" rated, regulated insurance subsidiary.

. Conducts the asset management business through ACA Management, L.L.C., a subsidiary of

ACA Financial Guaranty.

. As of June 30, 2006, had insured credit exposure of $31.4 billion and assets under management

for third parties were $12.1 billion

Risk

FASB Financial Guaranty Insurance Review.

. In January and February 2005, the SEC staff discussed with several financial guaranty industry

participants the differences in loss reserve recognition practices in the industry.

. In June 2005, at the request of the SEC, the FASB added a project to their agenda to review and

codify accounting standards for financial guaranty insurance contracts as they relate to loss

reserving policies and later added a review of accounting policies in the financial guaranty

insurance industry as they relate to premium recognition and deferred policy acquisition costs

. Proposed guidance is expected to be issued by the FASB later in 2006 and final guidance is

expected to be issued in 2007. When the FASB reaches a conclusion, ACA and the financial

guaranty insurance industry may have to change certain aspects of ACA’s, and the industry's,

relevant accounting policies.

. The impact…could be material. Until the issue is resolved, ACA will continue to apply its

existing accounting policies as disclosed in the audited financial statements as of December 31,

2005 and 2004 and for the years ended December 31, 2005, 2004 and 2003.

. ACA believes that any new guidance would principally impact its Municipal Finance business.

2004 Recapitalization

. In 2004, ACA recapitalized its balance sheet and reinforced its credit profile with a $169.7

million equity capital investment, including $105.0 million from Bear Stearns Merchant Banking

and $64.7 million of incremental capital from pre-existing stockholders, management and an

additional institutional stockholder.

. This capital raise was necessitated by the revised minimum capital requirements established by

S&P, which increased requirements had precipitated the placement of ACA Financial Guaranty's

financial strength rating on CreditWatch negative by S&P.

. Following the capital raise, ACA Financial Guaranty was removed from CreditWatch negative

and allowed to retain its "A" financial strength rating by S&P, to expand ACA current businesses

and to increase ACA’s product offerings

Employees

As of June 30, 2006, had 102 full-time employees.

Competition

Structured Credit Business (credit protection in the form of credit swaps)

Compete with hedge funds, insurance companies including financial guarantors that, like ACA

Financial Guaranty, insure the obligations of subsidiaries providing credit protection through

swaps, banks, derivative products companies such as Athilon Capital Corp. and non-bank financial

institutions.

Municipal Finance Business

As the sole "A" rated financial guarantor, ACA’s target market in the municipal finance line of

business is different than that of other financial guarantors.

. Does not compete directly with "AAA" rated financial guarantors. Radian Group Inc., as the only

AA rated financial guarantor, is able to participate in ACA’s target market, although to a lesser

degree than ACA.

. Strongest competition in the target market is from letter of credit banks and high-yield municipal

mutual funds that purchase uninsured non-investment grade municipal obligations.

. Also competes with structural alternatives to third-party credit enhancement, including senior

subordinated structures

CDO Asset Management Business.

. The financial services industry, and in particular, the market for CDO Asset Management

services, is highly competitive with low barriers to entry.

. Competitors include The TCW Group, Inc., Vanderbilt Capital Advisors, LLC, Blackrock

Financial Management, Inc., Clinton Group Inc. and GSC Partners, among many financial

institutions

Use of $122mm in IPO proceeds from sale of 6.9mm shares

(shareholders intend to sell 3.9mm shares)

General corporate purposes

==========================================================

ActivBiotics

ACTV, C, 5

biotech-inflammatory/bacterial

Post-IPO shrs:14.9mm

Lexington, MA

2003

2004

2005

June 05*

June 06*

IPO Mkt

Profit (loss) ($mm)

-$17.0

-$15.2

-$23.4

-$9.1

-$9.6

Cap (mm)

*for the six months ended June 30

$194

@$13

VALUATION RATIOS

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (mm)

Sales

Earnings

BookValue

TangibleBV

in IPO

ActivBiotics (ACTV)

$194

n/a

-10

3.2

3.1

27%

SCORECARD

Mgt

Market

Market Do-

Proprie-

Total

1-5, 5 is high

Growth

mination

tary

rating

20 is perfect

2

2

1

5

Business

. Biopharmaceutical focused on treatment of inflammatory diseases and bacterial infections.

Product candidates

Rifalazil

. Lead product candidate, Rifalazil, is a proprietary, orally administered antibacterial agent, which

is in a Phase III clinical trial for the treatment of intermittent claudication associated with

peripheral arterial disease, or PAD.

. PAD is a result of atherosclerosis of the arteries of the lower extremities. Intermittent

claudication is pain, cramping or fatigue in the lower extremities brought on by exertion or

walking and is the most common symptom of PAD.

M40403

. Second product candidate, M40403, is a proprietary small molecule that is designed to mimic the

function of a naturally occurring enzyme, which plays a role in several inflammatory disease

states.

. ACTV plans to initiate a Phase II clinical trial of M40403 for the management of post-operative

ileus, or POI, which is the temporary impairment of bowel function following surgery.

Accounting problems

. ACTV's accounting fim reported material weaknesses due to inadequate finance department

resources, and specifically a lack of sufficiently trained financial staff, which led to an overall

inadequate design in and operating effectiveness of ACTV's internal controls over financial

reporting, as these controls did not provide reasonable assurance that transactions were recorded as

necessary to permit preparation of our financial statements in accordance with generally accepted

accounting principles.

. Recently, ACTV reorganized the finance department and retained an independent senior financial

consultant, who works with ACTV 16 hours a week, or more if we request, for the next three

months or longer by mutual agreement.

. ACTV estimates the aggregate cost of employing these individuals to be $500,000 annually.

Employees

21 employees as of September 30, 2006.

Competition

ACTV expects that competitive products for its product candidates, if successfully developed,

may include the following:

o Rifalazil for Intermittent Claudication Associated with PAD. Cilostazol and pentoxifylline are

approved for use in treating intermittent claudication but have the limitations

. ACTV believes that Kos Pharmaceuticals and Takeda Pharmaceuticals, which currently co

market Advicor for the treatment of high cholesterol, may be seeking to expand the label for this

therapy to include intermittent claudication.

. In addition, ACTV is are aware of several therapeutics for PAD that are in various stages of

clinical development using a variety of therapeutic approaches.

. The companies currently sponsoring the development of these agents include Genzyme, Otsuka,

Taisho, Atherogenics, Flow Medic, Corautus and deCode Genetics.

. ACTV believes that no product on the market or product candidate in development other than

Rifalazil seeks to target intermittent claudication associated with PAD using an anti-Chlamydial

agent.

o Rifalazil for Carotid Artery Atherosclerosis.

. There are no currently approved drug treatments for the reduction of the progression of carotid

artery atherosclerosis.

. However, ACTV is aware of several companies that are sponsoring clinical trials for possible

label expansions of existing products to address this indication. The companies currently

sponsoring such studies include Kos Pharmaceuticals, AstraZeneca, Takeda Pharmaceuticals and

Pfizer.

. ACTV believes that no product on the market or product candidate in development other than

Rifalazil is designed to be a once-weekly short course therapy to reduce progression of carotid

artery atherosclerosis related to Chlamydia infection.

o M40403 for POI.

. There are no approved therapies directly targeted for the management of POI. ACTV is aware of

two other companies, Aeolus Pharmaceuticals Corporation and Eukarion, Inc., whose business

plan is based on SOD mimetic technology.

. To ACTV's knowledge, neither company is focused on POI. Tranzyme Pharma is developing

TZP-101, currently in a Phase I clinical trial, for the management of gastrointestinal motility

disorders, such as POI. Adolor Corporation, in partnership with GlaxoSmithKline, has submitted a

NDA that is under current review by the FDA for Entereg, a selective opioid antagonist, for the

management of POI due to opioid-induced effects on bowel function.

. In addition, Wyeth Corporation and Progenics Corporation are co-developing methylnaltrexone,

a peripheral opioid antagonist, for the management of POI. Wyeth Corporation and Progenics

Corporation recently completed enrollment in their second pivotal Phase III trial for this product

candidate.

Use of $53mm in IPO proceeds

o to fund clinical trials of Rifalazil;

o to fund clinical trials of M40403; and

o for other research and development activities and for general corporate purposes.

=========================================================

Canadian Solar Inc.

CSIQ, C+, 7

solar module products

Post-IPO shrs:27.3mm

Jiangsu, China

2003

2004

2005

June 05*

June 06*

IPO Mkt

Rev ($mm)

$4

$10

$18

$7

$26

Cap (mm)

Gross Profit %

41%

33%

39%

44%

28%

$382

Operating Income %

16%

19%

28%

31%

20%

@$14

Profit (loss) ($mm)

$0.8

$1.5

$3.8

$1.9

-$4.6

Profit (loss) %

18.5%

15.5%

20.8%

27.1%

-17.7%

Note: June 30, 2006 six months includes $8.2mm loss on financial instruments

$4.4

$7.6

$9.2

$4.4

*for the six months ended June 30

VALUATION RATIOS

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (mm)

Sales

Earnings

BookValue

TangibleBV

in IPO

Canadian Solar (CSIQ)

$382

9.7

53

3.8

3.8

28%

SCORECARD

Mgt

Market

Market Do-

Proprie-

Total

1-5, 5 is high

Growth

mination

tary

rating

20 is perfect

2

2

2

1

7

Note: based on a shortage of silicon for solar modules, the gross profit margin is not in contrl

Business

. Solar module products that convert sunlight into electricity for a variety of uses. Solar modules

are an array of interconnected solar cells encased in a weatherproof frame

. Sell products to customers located in various markets worldwide, including Germany, Spain,

Canada, China and Japan.

. Incorporated in Canada and conducts all manufacturing operations in China.

Risk for growth

. Current industry wide shortage of high-purity silicon that may constrain CSIQ's revenue growth

and decrease gross margins and profitability"

. CSIQ believes its current silicon raw material supply agreements and toll manufacturing

arrangements will enable CSIQ to secure solar cells sufficient for a major portion of estimated

2006 and a portion of estimated 2007 production output.

Government Subsidies

. CSIQ believes that the near-term growth of the market for on-grid applications depends in large

part on the availability and size of government subsidies and economic incentives.

. Today, the cost of implementing and operating a solar power system substantially exceeds the

cost of purchasing power provided by the electric utility grid in many locations.

Products

Products are sold primarily under CSIQ's own brand name and also produced on an OEM basis

for customers.

Standard solar modules

. Range of standard solar modules built to general specifications for use in a wide range of

residential, commercial and industrial solar power generation systems.

. Currently sells standard solar modules to distributors and system integrators.

Specialty solar modules

. Also designs and produces specialty solar modules and products based on customers'

requirements.

. Specialty solar modules and products consist of customized modules that CSIQ's customers

incorporate into their own products, such as solar-powered bus stop lighting, and complete

specialty products, such as solar-powered car battery chargers.

Services

Also implements solar power development projects, primarily in conjunction with government

organizations to provide solar power generation in rural areas of China.

Competitors

. International competitors include BP Solar International Inc., or BP Solar, Sharp Solar

Corporation, or Sharp Solar, SolarWorld AG, or SolarWorld

. Competitors located in China such as Suntech Power Holdings Co., Ltd. or Suntech Power.

Technology trends

. CSIQ believes many of its competitors are developing and are currently producing products

based on new solar power technologies that may ultimately have costs similar to, or lower than,

CSIQ's projected costs.

. For example, while crystalline technology currently accounts for 94% of the solar power market,

some of competitors are developing or currently producing products based on alternative solar

technologies, such as thin film photovoltaic materials, which they believe will ultimately cost the

same as or less than crystalline silicon technologies, which CSIQ uses.

. Solar modules produced using thin film materials, such as amorphous silicon and cadmium

telluride, require significantly less silicon to produce than crystalline silicon solar modules, such

as CSIQ's products, and are less susceptible to increases in silicon costs.

. CSIQ may also face competition from semiconductor manufacturers, several of which have

already announced plans to start production of solar modules. In addition, the entry barriers are

relatively low in the solar module manufacturing business given the low capital requirements and

relatively less technological complexity involved.

. Due to the scarcity of high-purity silicon, supply chain management and access to financing are

key entry barriers at present. However, if high-purity silicon capacity increases, these barriers may

no longer exist and many new competitors may enter into the industry resulting in rapid industry

fragmentation and loss of CSIQ's market share.

Use of $77.4mm in IPO proceeds from sale of 6.3mm shares

(shareholders intend to sell 1.4mm shares)

o $30.0 million to purchase or prepay for solar cells and silicon raw materials;

o $35.0 million for expansion into solar cell manufacturing, including purchasing

o Remaining amount for general corporate purposes

========================================================

Capella Education

CPLA, C+, 7

online post-secondary education

Post-IPO shrs:15.4mm

Minneapolis, Minnesota

2003

2004

2005

Sept 05*

Sept 06*

IPO Mkt

Rev ($mm)

$82

$118

$149

$107

$129

Cap (mm)

Instructional costs&services

53.7%

50.0%

47.7%

48.6%

47.7%

$285

Operating income ($mm)

$4.1

$9.9

$14.9

$10.6

$10.2

@$18.5

Operating income %

5.0%

8.4%

10.0%

9.9%

7.9%

Profit (loss) ($mm)

$4.4

$18.9

$10.3

$7.3

$7.7

Profit (loss) %

5.4%

16.0%

6.9%

6.8%

6.0%

Enrollment

9,313

12,252

14,613

13,308

16,374

Note: 2004 includes a tax benefit of $8.2mm

*for the nine months ended Sept 30

For the nine months ended Sept 30 notice operating income is down both on an absolute and % basis

VALUATION RATIOS

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (mm)

Sales

Earnings

BookValue

TangibleBV

in IPO

Capella Education CPLA

$285

1.7

28

3.7

3.7

26%

SCORECARD

Mgt

Market

Market Do-

Proprie-

Total

1-5, 5 is high

Growth

mination

tary

rating

20 is perfect

2

2

2

1

7

Compare & contrast

IPO Mrkt

Price /

Price /

Price /

Price /

Price

Cap (mm)

Sales

Earnings

BookValue

TangibleBV

Nov 7

Apollo Group Inc. (APOL)*

$6,100

2.8

19

13.8

15.1

$35.25

Career Education (CECO)

$2,070

1.1

60

2.2

3.7

$21.86

Capella Education CPLA

$285

1.7

28

3.7

3.7

26%

* (University of Phoenix) quarter ended February 28, 2006 because

November 4, 2006: Apollo has announced that a restatement of its historical financial statements will be

certain "to record additional charges for compensation expenses" relating to its stock options granting

practices. This is a material development from the Company's October 18, 2006 announcement that a

restatement could be "possible." In addition, the Company also announced on Friday that its Chief

Financial Officer and Treasurer Kenda B. Gonzales ("Ms. Gonzales") has resigned and Chief Accounting

Officer Dan Bachus ("Mr. Bachus") has been placed on "administrative leave."

Business

. An exclusively online post-secondary education services company.

. Through the wholly owned subsidiary, Capella University, offers a variety of doctoral, master's

and bachelor's programs in the following disciplines: business, organization and management;

education; psychology; human services; and information technology.

. At September 30, 2006, offered 766 online courses and 13 academic programs with 76

specializations to 16,400 learners.

Competition

. Competes primarily with public and private degree-granting regionally accredited colleges and

universities.

. As well as a number of for-profit institutions offering online programs such as Walden

University and the University of Phoenix.

Use of $61.5mm in IPO proceeds from sale of 3.6mm shares

(shareholders intend to sell 368,000 shares)

. CPLA declared a special distribution payable post-IPO to shareholders of record as of October 3, 2006

. Aggregate amount of the special distribution will be equal to the gross proceeds received by CPLA from the IPO

. CPLA says it is a return of capital to existing shareholders without requiring shareholders to sell their shares

=========================================================

KBW Inc.

KBW, B-, 7

invesment bank -- financial services

Post-IPO shrs:30.4mm

New York, NY

2003

2004

2005

June 05*

June 06*

IPO Mkt

Rev ($mm)

$272

$300

$308

$139

$193

Cap (mm)

Employee comp & benefit

$147.0

$170.0

$187.0

$85.0

$113.0

$608

Employee comp %

54%

57%

61%

61%

59%

@$20

Profit (loss) ($mm)

$38.0

$31.0

$17.4

$6.1

$18.6

Profit (loss) %

14%

10%

6%

4%

10%

Note:

*for the six months ended June 30

March 31 quarter earnings were $10.1mm, larger than June 30 quarter earnings of $8.4mm

Note on Expenses

. In mid 2004, expanded research and equity sales and trading to include European financial

services industry equities.

. This expansion resulted in substantial growth in the London office personnel which increased

employee compensation and related communication and data processing expense and occupancy

expense.

. In addition, the majority of the personnel who joined in 2004 in connection with this expansion

had employment contracts that included guaranteed year-end bonuses for 2004 and 2005, which

guarantees did not carry over to 2006.

VALUATION RATIOS

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (mm)

Sales

Earnings

BookValue

TangibleBV

in IPO

KBW Inc. (KBW)

$608

1.6

16

1.7

1.8

21%

Compare & contrast

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (mm)

Sales

Earnings

BookValue

TangibleBV

in IPO

KBW Inc. (KBW)

$608

1.6

16

1.7

1.8

21%

Cowen Group (COWN)

$219

0.6

9.1

1.1

1.4

$14.60

Piper Jaffray (PJC)

$1,360

1.3

12.1

1.7

2.3

$65.38

TWeisel (TWPG)

$446

1.6

24.8

1.8

1.8

$17.25

Note: TWPG income for the June, 2006 six months eliminates the tax benefit & applies a 40% combined tax rate

COWN income for the June, 2006 six months eliminates gain on exchange membership, and applies 40% tax rate

---------------------------------------------------------------------------------------------------------------------

Segment % comparison

Investment

Commiss

Other

six months ended June 30, 2006

Banking%

%

%

KBW Inc. (KBW)

49%

32%

19%

Cowen Group (COWN)

50%

12%

38%

TWeisel (TWPG)

46%

45%

9%

Piper Jaffray (PJC)

51%

34%

15%

SCORECARD

Mgt

Market

Market Do-

Proprie-

Total

1-5, 5 is high

Growth

mination

tary

rating

20 is perfect

2

2

2

1

7

---------------------------------------------------------------------------------------------------------------------

Business

. Full service investment bank specializing in the financial services industry, founded in 1062

. Principal activities are:

• Investment banking (50% of revenue for the quarter ended June 30, 2006)

Provides a full range of investment banking services, including mergers and acquisitions ("M&A")

and other strategic advisory services, equity and fixed income securities offerings, structured

• Equity and fixed income sales and trading (35% of revenue for the quarter ended June 30, 2006)

Trades a broad array of financial services stocks, with an emphasis on the small and mid cap

segment, and a wide range of fixed income securities. Sales force is trained in the analysis of

financial services companies and has strong relationships with many of the world's largest

institutional investors.

• Equity and fixed income research

. Provides fundamental, objective analysis that identifies investment opportunities and helps

investor customers make better investment decisions.

. As of June 30, 2006, KBR’s research department covered an aggregate of 489 financial services

companies, including 352 companies in the United States and 137 in Europe.

. KBR believes it covers more financial services companies in the United States and in Europe

than any other firm.

Service expansion

. Within its full service business model, KBR has expanded from a focus on the bank and thrift

sector

. To include insurance companies, broker-dealers, mortgage banks, asset management companies,

mortgage real estate investment trusts ("REITs"), consumer and specialty finance firms, financial

processing companies and securities exchanges.

Client (company) Focus

. Emphasizes serving clients in the small and mid cap segments of the financial services industry,

market segments KBR believes have traditionally been underserved by larger investment banks

. Dedicated to building long-term relationships and growing with our clients, providing them with

capital raising opportunities and strategic advice at every stage of their development

Industry recognition

Investment banking:

• Number one ranking as U.S. M&A advisor to financial services companies in each of the years

‘2005, 2004 and 2003, ranked by number of deals.

• Prominent presence in recent large cap financial services M&A including the following advisory

engagements: the pending sale of North Fork Bancorporation to Capital One Financial Corporation;

the acquisition by Bank of America Corporation of MBNA Corporation; the sale of

Household International to HSBC; and the pending sale of Texas Regional Bancshares to BBVA.

• Number one ranking as manager of U.S. IPOs and follow-on equity offerings for financial

services companies in each of the years 2005 and 2004, ranked by number of deals.

Sales and trading:

• Number one All-America financial services equity sales team in each of the years 2005, 2004

and 2003, as ranked by Institutional Investor.

• Number one ranking by trading volume as trader of U.S. bank stocks with less than $5 billion

market capitalization for 2005 and for the first six months of 2006.

• Among the leading traders by trading volume of the Nasdaq 100 Financial Index and one of the

top three market makers for 52% of its constituent stocks, as measured during the twelve months

ending June 30, 2006.

Research:

• Number one in five of the seven categories of KBR’s research coverage, and second place in the

other two categories, in the December 2005 "Best of the Boutiques" survey by Institutional

Investor.

• Five of KBR analysts named in the Wall Street Journal's "Best on the Street 2006 Analysts

Survey" in May 2006.

Employee owned

. Since KBR’s founding has been entirely employee owned.

. As of June 30, 2006, over 300 of our 430 employees were stockholders, and there is currently no

single holder with more than 4.2% of outstanding shares.

. KBR has a high degree of employee loyalty, low turnover, and a collective commitment to join

our resources and ideas to create integrated solutions to meet client and customer needs.

Competition

Investment banking

. Many competitors have substantially greater capital and resources than KBW does and offer a

broader range of financial products and services.

. The scale of competitors has increased in recent years as a result of substantial consolidation

among companies in the securities and investment banking industries.

. In addition, a number of large commercial banks, insurance companies and other broad-based

financial services firms have established or acquired underwriting or financial advisory businesses

and broker-dealers or have merged with other financial institutions.

. In particular, the ability to provide financing has become an important advantage for some of

larger competitors and, because KBR does not provide such financing, it may be unable to

compete as effectively for clients in a significant part of the investment banking market.

Trading commissions

. KBR has experienced intense price competition in some of its businesses, in particular discounts

in trading commissions.

. A particular source of this pricing pressure has been Internet-based and other alternative trading

platforms, the expansion of which has led to a reduction of trading commissions. KBR believes

that this trend toward alternative trading systems will continue.

. In addition, the trend, particularly in the equity underwriting business, toward multiple book

runners and co-managers has increased the competitive pressure in the investment banking

industry, and may lead to lower average transaction fees.

Asset management

KBR faces competition in the pursuit of investors for investment funds, in the identification and

completion of investments in attractive portfolio companies and in the recruitment and retention of

asset management professionals.

Use of $67.3mm in IPO proceeds from sale of 3.75mm shares

(shareholders intend to sell 2.7mm shares)

For general corporate purposes, including support of and expansion of existing businesses, and to

fund strategic investments as they arise in the future

===========================================================

Metabolix (MBLX)

MBLX, C, 7

biotech,environmentally safe alternatives

Post-IPO shrs:18.4mm

Cambridge, MA

2003

2004

2005

June 05*

June 06*

IPO Mkt

Rev ($mm)

$2

$4

$3

$2

$4

Cap (mm)

Profit (loss) ($mm)

-$6.6

-$5.1

-$7.6

-$3.4

-$4.3

$239

Profit (loss) %

-275%

-138%

-271%

-227%

-113%

@$13

*for the six months ended June 30

VALUATION RATIOS

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (mm)

Sales

Earnings

BookValue

TangibleBV

in IPO

Metabolix (MBLX)

$239

31.5

-28

2.7

2.8

32%

SCORECARD

Mgt

Market

Market Do-

Proprie-

Total

1-5, 5 is high

Growth

mination

tary

rating

20 is perfect

2

2

2

1

7

Business

. Biotechnology company that develops and plans to commercialize environmentally sustainable,

economically attractive alternatives to petrochemical-based plastics, fuels and chemicals.

. Strategy is to develop technology platforms that integrate advanced biotechnology with current

industrial practice and to commercialize these platforms with industry leading strategic partners.

. From founding in 1992, has been engaged solely in research and development activities and has

not had significant sales of PHA Natural Plastics.

. Currently producing and selling pre-commercial quantities of PHA Natural Plastics at a pilot

plant for market development.

Archer Daniels Midland (ADM) Agreement to Purchase Shares

ADM has agreed to purchase $7.5 million of MBLX shares of common stock in a private

placement concurrent with the IPO

First platform:

Strategic alliance with Archer Daniels Midland (ADM)

. MBLX’s first platform, which MBLX will be commercializing through a strategic alliance with

Archer Daniels Midland Company, or ADM, is a proprietary, large-scale fermentation system for

producing a versatile family of naturally occurring polymers known as polyhydroxyalkanoates,

which MBLX calls PHA Natural Plastics.

. Through the alliance with ADM, MBLX intends to sell these polymers as environmentally

friendly, but functionally equivalent alternatives to petrochemical-based plastics in a wide range of

commercial applications, including disposable goods, packaging, agricultural products, consumer

goods and electronics.

. Also, as part of the strategic alliance with ADM, MBLX has announced plans to build a 50,000

ton annual capacity commercial scale plant, or Commercial Manufacturing Facility, that will

produce biodegradable PHA Natural Plastics out of corn sugar, an abundant agriculturally

produced renewable resource.

. MBLX is currently producing pre-commercial quantities of PHA Natural Plastics jointly with

ADM at a pilot plant having a capacity of 8 tons per month.

ADM is repaid first

. The cost of planning, designing, constructing and operating the Commercial Manufacturing

Facility being developed to serve the alliance with ADM Polymer Corp., a wholly-owned

subsidiary of ADM, and the cost of ancillary facilities and services related to the production of

PHA Natural Plastics by the Joint Sales Company, will be very significant.

. Although the final costs of construction have not been determined, MBLX estimates that its

portion of these expenses will be between $25 and $35 million.

. ADM will be advancing a disproportionate share of the financial capital needed for such

activities and as such, all profits, after payment of all royalties, reimbursements and fees, from the

Joint Sales Company will first be distributed to ADM until ADM's disproportionate investment in

the Joint Sales Company has been returned.

Second platform:

. An early stage, is a system using switchgrass to co-produce both PHA Natural Plastics and

biomass feedstock for the production of ethanol.

. MBLX believes that using switchgrass to co-produce these products can offer superior economic

value and productivity as compared to single product systems that produce them individually.

. MBLX has already achieved significant milestones in this program and can produce small

amounts of PHA Natural Plastics in switchgrass.

. MBLX goals for this program are to have commercially viable switchgrass varieties in pilot field

trials within four years and to establish strategic alliances with attractive partners to commercially

exploit this platform.

. Since MBLX’s switchgrass program is still in the research and development stage, MBLX has

not yet determined a commercialization strategy for this program, which would include a business

plan for procuring commercial quantities of switchgrass.

ADM & BP, mostly deferred revenue

. Entered into the alliance with ADM in November 2004 and a joint development arrangement

with BP in February 2005.

. As of June 30, 2006, all payments received from ADM had been recorded as deferred revenue on

the balance sheet.

. MBLX expects that future payments from ADM, through at least the construction phase of the

Commercial Alliance Agreement, including quarterly operating payments, and other payments

will be classified as deferred revenue as well.

. MBLX anticipates recognizing revenue for the payments received from ADM after the

obligations under the multiple element arrangements are delivered.

. The deferred revenue associated with the BP arrangement was recognized in full during the first

quarter of 2006 when the alliance was terminated.

Payments received from ADM & BP

MBLX received the following payments from these arrangements to offset operating cash needs

during 2004 and 2005 and first six months of 2006:

• upfront payment of $3.0 million from ADM in November 2004;

• milestone payment of $2.0 million from ADM in May 2006;

• cost sharing payments from ADM for pilot manufacturing plant construction and operations of

$620,000 during 2005 and an additional $587,000 during the first six months ended June 30, 2006; and

• upfront payment of $1.0 million and three subsequent quarterly payments of $500,000 each,

totaling $2.5 million in payments from BP during 2005 and 2006.

United States Government Contracts and Grants

As of June 30, 2006, gross proceeds of $3.13 million remained to be received under MBLX’s

various government contracts and grants, which include amounts for reimbursement to

subcontractors, as well as reimbursement for MBLX’s employees' time and benefits and other

expenses related to performance under the various contracts.

MIT intellectual property relationship

. A substantial portion of MBLX’s core technology is protected by patents that are owned by

Massachusetts Institute of Technology, or MIT, and exclusively licensed to MBLX for the life of

the patents.

. The MIT license covers 11 issued U.S. patents, one U.S. application and numerous foreign

counterparts.

Use of $75.3mm in IPO proceeds

• $10 to $15 million will be used to acquire plant and equipment for pilot manufacturing

operations and for formulation operations related to the Commercial Manufacturing Facility;

• $15 to $20 million will be used to conduct pilot manufacturing, sales and marketing activities

related to developing the market for PHA Natural Plastics prior to operations commencing at the

Commercial Manufacturing Facility;

• $35 million will be used for continued research and development related to: the ADM alliance,

expansion of the switchgrass biomass biorefinery program and the initiation of new programs to

extend the platform technology (for example to the production of certain key chemicals and

chemical intermediates); and

• the balance of the funds will be used for administrative expenses related to the expansion of

commercial and research and development activities noted above and costs related to being a

publicly traded company as well as for working capital and other general corporate purposes

========================================================

OneBeacon Insurance

OB, C+, 7

property/casualty insurer

Post-IPO shrs:100mm

Hanover, NH

2005

Sept 9mos*

IPO Mkt

Net writte premiums ($mm)

proforma results ==>

$1,989

$1,526

Cap (mm)

Income from continuing operations

$214

$210

$2,500

Profit (loss) %

10.8%

13.8%

@$25

*for the nine months ended Sept 30

Combined ratio (loss and expense)

. Declined from 131.8% in 2001 to 98.6% in 2005 and to 95.6% in the first nine months of 2006.

. Less than 100% combined ratio suggests profitability in the insurance business

VALUATION RATIOS

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (mm)

Sales

Earnings

BookValue

TangibleBV*

in IPO

OneBeacon Insrnce (OB)

$2,500

1.2

9

1.5

2.0

20%

SCORECARD

Mgt

Market

Market Do-

Proprie-

Total

1-5, 5 is high

Growth

mination

tary

rating

20 is perfect

2

2

2

1

7

*Note on price-to-tangible book value

subtracts deferred acquisition costs of $243mm, and other assets of $212mm from capitalization of $1683mm

Parent on NYSE

White Mountains Insurance Group Ltd. (NYSE:WTM), $6.12bb market cap

Dividend Policy

. Intends to pay quarterly cash dividends at an initial rate of $0.21 per common share, $.84

annualized

. 3.36% annualized rate at the range mid-point of $25

Business

. Property and casualty insurance writer that provides a range of specialty insurance products as

well as a variety of segmented commercial and personal insurance products.

. With roots dating back to 1831, OB has been operating for more than 175 years and has many

long-standing relationships with independent agencies, which constitute the primary distribution

channel.

Financial overview

. OB manages its Primary Insurance Operations, the predominant segment, through three separate

but related underwriting units: specialty lines, commercial lines and personal lines.

. In 2005, net written premiums totaled $2.1 billion

. At December 31, 2005 OB had total assets of $10.3 billion and total common shareholder's

equity of $1.6 billion

Competition

Property and casualty insurance is highly competitive.

. In specialty lines, OB competes with numerous regional and national insurance companies, most

notably The Chubb Corporation, American International Group, The St. Paul Travelers

Companies, CNA Financial Corporation and the regional Farm Bureaus.

. In commercial and personal lines, OB competes with numerous regional and national insurance

companies, most notably The St. Paul Travelers Companies, Inc., Zurich Financial Services

Group, CNA Financial Corporation, Hartford Financial Services Group, Inc., The Hanover

Insurance Group, Inc., W.R. Berkley Corporation, The Chubb Corporation, The Progressive

Corporation, Allstate Insurance Company and Liberty Mutual Insurance Company.

Ratings

. OB currently have an "A" rating with a stable outlook from A.M. Best ("Excellent", the third

highest of 15 ratings), "A" rating with a stable outlook from Standard & Poor's ("Strong", the sixth

highest of 21 ratings), "A2" rating with a stable outlook by Moody's ("Good", the sixth highest of

21 ratings), and "A" rating with a stable outlook by Fitch ("Strong", the sixth highest of 24

ratings).

. These financial strength ratings do not refer to OB's ability to meet non-insurance obligations

and are not a recommendation to purchase or discontinue any policy or contract issued by OB or

to buy, hold, or sell OB securities.

Employees

As of September 30, 2006, OB employed approximately 3,400 persons

Selling shareholder

. 100% of proceeds from sale of 20mm shares to White Mountains Holdings Bermuda Ltd., a

direct wholly owned subsidiary of White Mountains

. Acquired by White Mountains in 2001. White Mountains is a holding company whose principal

businesses provide property and casualty insurance and reinsurance

. Post IPO White Mountains will 80% of the equity interest in OB and will have 97.6% combined

voting power

=======================================================

Physicians Formula

PHYS, C+, 7

cosmetics-high end mass market

Post-IPO shrs13.7mm

Azusa, CA

2004

2005

June 05*

June 06*

IPO Mkt

Rev ($mm)

$62

$79

$43

$51

Cap (mm)

Gross Profit %

61.3%

59.5%

60.5%

57.6%

$219

Profit (loss) ($mm)

$4.2

$7.8

$5.1

$4.0

@$16

Profit (loss) %

6.8%

9.9%

11.9%

7.8%

Adjusted EBITDA ($mm)

$13.0

$18.0

$10.7

$11.4

Adjusted EBITDA %

21%

23%

25%

22%

*for the six months ended June 30

VALUATION RATIOS

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (mm)

Sales

Earnings

BookValue

TangibleBV

in IPO

PhysiciansFormulaPHYS

$219

2.1

27

3.9

-12.8

46%

SCORECARD

Mgt

Market

Market Do-

Proprie-

Total

1-5, 5 is high

Growth

mination

tary

rating