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

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Financial Performance & Scoring -- © 2007 Gaskins IPO Desktop/IPOdesktop
Pre-IPO analysis, grading & scoring -- updated March 25
. 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 (based on recent results)
(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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March 26 week IPO schedule
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Aruba Networks (ARUN)	$677	6.6	-29	8.5	8.5	11%
secure data wireless networking: C+, 8						Post-IPO shrs: 75mm

Capital Prod L.P (CPLP)	$420	28.0	91	1.9	1.9	56%
shipping vessel partnership: C+, 7						Post-IPO shrs: 21mm

eTelecare Global (ETEL)	$374	1.6	17	4.0	4.8	20%
voice-based business outsourcing: C+, 7						Post-IPO shrs:28mm ADS equiv

Flagstone Reinsure FSR	$1,141	3.0	6	1.0	1.1	15%
property and casualty reinsurance: C+, 7						Post-IPO shrs: 85mm

GSI Technology (GSIT)	$199	3.4	25	2.6	2.6	29%
SRAM integrated circuits: C+, 6		March 31 fiscal				Post-IPO shrs: 28mm

SenoRx (SENO)	$180	7.0	-12	2.6	3.4	37%
medical devices: C, 8						Post-IPO shrs: 15mm

Super Micro (SMCI)	$300	0.7	15	2.6	2.6	28%
high performance servers: B-, 7						Post-IPO shrs: 29mm
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March 26 week analysis
Aruba Networks	ARUN, C+, 8
secure data wireless networking			July 31 fiscal			Post-IPO shrs: 75mm
Sunnyvale, CA	2004	2005	2006	Jan 06*	Jan 07*	IPO Mkt
Rev ($mm)	$1	$12	$73	$28	$51	Cap (mm)
Gross Profit %	-136%	25%	59%	55%	61%	$677
Profit (loss) ($mm)	($22.5)	($32.6)	($12.0)	($9.0)	($11.8)	@$9
Profit (loss) %	-2045%	-272%	-17%	-32%	-23%
				6 months ended Jan 31
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Aruba Networks (ARUN)	$677	6.6	-29	8.5	8.5	11%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	2	2	8
Business
. Enterprise mobility solution that enables secure access to data, voice and video applications
across wireless and wireline enterprise networks.
. The Aruba Mobile Edge Architecture allows end-users to roam to different locations within an
enterprise campus or office building while maintaining secure and consistent access to all of their
network resources.
. ARUN's architecture also enables IT managers to establish and enforce policies that control
network access and prioritize application delivery based on an end-user's organizational role and
authorization level.
. ARUN enables enterprise customers to extend the same user-centric solution to remote locations
such as branch offices and home offices connected over the Internet.
ARUN's solution
ARUN's solution integrates the ArubaOS operating system, optional value-added software
modules, a centralized mobility management system, high-performance programmable mobility
controllers, and wired and wireless access points.
Relationship with Microsoft
. ARUN's strategic relationship with Microsoft began in June 2005, when Microsoft chose
ARUN's products for a worldwide deployment, pursuant to which Microsoft has installed ARUN
products in various sites in the United States, Asia and Europe.
. As part of the relationship, ARUN supports Microsoft's Network Access Protection (NAP)
architecture for enterprise security and provide interoperability with Microsoft products such as
the Internet Authentication Server (IAS) and Network Policy Server (NPS).
. In addition, ARUN entered into a stock issuance agreement with Microsoft, pursuant to which,
upon the closing of the initial public offering, ARUN will issue shares of common stock to
Microsoft with a value of $3.5 million, based on the initial public offering price.
. Upon completion of this offering, and assuming all other revenue recognition criteria have been
met, ARUN will recognize revenues on sales to Microsoft in excess of $3.5 million.
(looks like ARUN is paying Microsoft to be a customer)
Six months comparison, Jan 31 2007 versus Jan 31 2006
. Total revenues increased 85% over the six months ended January 31, 2007 due to a $33.1 million
increase in product and related professional services and support sales to new and existing
customers, partially offset by a $9.6 million decrease in ratable product and related professional
services and support revenues.
. In the three months ended January 31, 2007, total revenues increased 9% over the three months
ended October 31, 2006 due to a $4.1 million increase in product and related professional services
and support sales to new and existing customers, partially offset by a $1.9 million decrease in
ratable product and related professional services and support revenues.
. ARUN expects ratable product and related professional services and support revenues to continue
to decrease in absolute dollars and as a percentage of total revenues in future periods., see note
below
Note:
. In Q2 of fiscal 2006 (May, 2005 quarter) revenue began to be recognized when program
segments were delivered and accepted, instead of over the life of the support contract.
. Before, the policy was that revenue was initially deferred and then released to the income
statement over the life of the support contract
. At January 31, 2007, had $7.8 million in deferred revenue associated with ratable product and
professional services and support revenues, of which $2.1 million will be amortized to revenue
over the remainder of fiscal 2007 and $3.5 million, $1.4 million and $800,000 will be amortized to
revenue in fiscal 2008, 2009 and 2010, respectively.
Product differentiation
. ARUN believes that the Aruba Mobile Edge Architecture is fundamentally different from "fixed
edge" mobility solutions such as Wireless Local Area Networks (WLANs), open access to fixed
ports and Virtual Private Networks (VPNs).
. ARUN's user-centric architecture enables a new "mobile edge" that allows users to enjoy secure,
high performance access to network applications as they roam across the enterprise network and to
remote locations that have an Internet connection.
. Using ARUN's architecture, IT departments can manage user-based network access and enforce
application delivery policies from a single integrated point-of-control in a consistent manner.
StockValution by an outside third party for stock option purposes
'4/30/2006: $2.19
'6/30/2006 $2.33
'10/2/2006: $3.63
'11/7/2006: $4.94
'11/21/2006: $5.12
'12/13/2006: $5.74
'1/25/2007: $7.21
History
. Founded in 2002 with the intention to develop a new approach to enabling secure enterprise
mobility.
. ARUN believes that end-users and IT departments were demanding mobility solutions, but
traditional approaches were limited by security, application performance and scalability
challenges.
. Began commercial shipments in June 2003. Since that time, ARUN's products have been sold to
more than 2,000 end customers worldwide, including some of the largest and most complex global
organizations such as Burlington Northern Santa Fe, Google, Guangzhou Metro, NTT Data
Corporation, The Ohio State University, Pu Dong International Airport (Shanghai), SAP, Saudi
Aramco, United States Air Force and University of Washington.
Competition
. Primary competitors include Cisco Systems, primarily through its Wireless Networking Business
Unit, and Symbol Technologies (which was recently acquired by Motorola for $3.9 billion).
. Also faces competition from a number of smaller private companies and new market entrants.
Use of $64.6mm in IPO proceeds
. Based on ARUN's current cash and cash equivalents balances, ARUN does not expect that it will
have to utilize the net proceeds of this offering to fund operations during the 12 months following
this offering.
. Currently plans to use the net proceeds for working capital and general corporate purposes,
including further expansion of sales and support functions for both direct and indirect sales
channels.
. Specifically, plans to hire additional personnel and anticipate incurring additional facilities costs
associated with such increased sales headcount.
. Also expects to increase investments in research and development by hiring additional engineers.
===================
Capital Product Partners	CPLP, C+, 7
shipping vessel partnership						Post-IPO shrs: 21mm
Piraeus, Athens, Greece				2006		IPO Mkt
Rev ($mm)				$15		Cap (mm)
Profit (loss) ($mm)				$4.6		$420
Profit (loss) %				31%		@$20
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales*	Earnings	BookValue	TangibleBV	in IPO
Capital Prod L.P (CPLP)	$420	28.0	91	1.9	1.9	56%
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 with withdrawn IPO of the parent Capital Maritime in the summer of 2005
Capital MaritimeCPM	$945	3.1	4.7	2.5	2.5	27%
Capital Prod L.P (CPLP)	$420	28.0	91	1.9	1.9	56%
Initial anticipated distribution rate
. $0.3750 per unit, or $1.50 per year.
. 7.5% on an annual basis
Business
. An international owner of product tankers, newly formed by Capital Maritime, an international
shipping company with a long history of operating and investing in the shipping market.
. Charters vessels under medium to long-term time and bareboat charters (two to ten years, with an
average remaining term of approximately 6.3 years) to large charterers.
Note: the parent Capital Maritime pulled it's proposed IPO at the last minute in the summary of 2005, see below
Limited operating history
As of December 31, 2006, only five of the vessels in the initial fleet had been delivered to the
relevant vessel-owning subsidiaries
Following the offering
. Initial fleet will consist of eight newly built, Ice Class 1A, double-hull, medium-range (MR)
product tankers, each of which is capable of carrying crude oil, refined oil products, such as
gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, such as ethanol.
. CPLP plans plan to leverage the expertise and reputation of Capital Maritime to pursue growth
opportunities in this market.
. Upon the closing of this offering, Capital Maritime will own a 44.0% interest in CPLP
New vessels
. Have an agreement to purchase seven additional vessels from Capital Maritime comprised of
four Ice Class 1A sister vessels that are scheduled for delivery in 2007 and three MR product
tanker sister vessels that are scheduled for delivery in 2008, all of which will be under time or
bareboat charters that commence at the time of delivery.
. CPLP expects that by the end of the third quarter of 2008, the contracted fleet will consist of 15
MR double-hull product tankers with an average age of approximately 1.3 years
Use of Proceeds
100% to Capital Maritime
++++++++++++++++++++++++++++
Capital Maritime	CPM -- offering pulled in the summary of 2005
product tankers, oil-bulk-ore carriers and bulk carrier vessels					Post-IPO shrs:63mm
Athens, Greece	2002	2003	2004	Mrch3mos	IPO Mkt
Revenue ($mm)	$18	$78	$189	$76	Cap (mm)
Voyage Ops Exp %	53%	44%	32%	32%	$945
Net Income*	$1.7	$26.1	146.00	50.80	@$15
Net Income %	10%	34%	77%	67%
EBIDTDA %	33%	50%	89%	80%
*no taxes according to the filing
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Capital MaritimeCPM	$945	3.1	4.7	2.5	2.5	27%
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
. International shipping company that owns, operates and actively manages a diverse fleet of
product tankers, oil-bulk-ore carriers, or OBOs, and bulk carrier vessels in the highly fragmented
international shipping market.
. As of June 3, 2005, existing fleet was comprised of 26 product tankers, including four OBOs,
and nine bulk carriers, ranging in size from 12,000 dwt to 103,203 dwt. The aggregate carrying
capacity of the fleet as of that date was approximately 1.7 million dwt.
Dividend Policy
Currently targeting an annual dividend of $1.05 per share, payable quarterly
. $66mm per year, 7% annual rate at price range midpoint of $15
Risk
. Charter hire rates in the spot market are at or near historically high levels
. The shipping industry is cyclical with attendant volatility in charter hire rates and profitability
. The degree of charter hire rate volatility among different types of product tanker, OBO and bulk
carrier vessels has varied widely, and charter hire rates for COM's vessels are currently at or near
historically high levels.
. Currently, most of CPM's vessels are employed in the spot market on time and voyage charters
that were fixed for agreed periods of 12 months or less
Competition
Arranges voyage and time charters in the spot market through the use of shipbrokers.
. The international tanker industry is highly fragmented and is divided among major oil companies
and independent tanker owners.
. Ownership of dry bulk carriers is highly fragmented and is divided among many independent dry
bulk carrier owners.
Use of $230mm in IPO proceeds
o $60.0 million of short-term debt used to facilitate the purchase of vessels delivered in the period
January 1, 2005 to date; and
o $157.3 million of long-term debt to partially finance the acquisition cost of 24 vessels
o Balance for general corporate purposes
===================
eTelecare Global Solns	ETEL, C+, 7
voice-based business outsourcing						Post-IPO shrs:28mm ADS equiv
Quezon City, Philippines	2003	2004	2005	2006		IPO Mkt
Rev ($mm)	$32	$98	$152	$195		Cap (mm)
Cost of Servicet %	63%	73%	75%	70%		$374
Profit (loss) ($mm)	($4.5)	$4.4	$2.4	$12.2		@$13.5
Profit (loss) %	-14%	4%	2%	6%
		L:ast four quarters
		March	June	Sept	Dec
Rev ($mm)		$41	$42	$52	$59
Profit (loss) ($mm)		$1.7	$1.5	$4.4	$5.6
Profit (loss) %		4%	4%	8%	9%
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales*	Earnings*	BookValue	TangibleBV	in IPO
eTelecare Global (ETEL)	$374	1.6	17	4.0	4.8	20%
			*annualizing Dec results
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
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	Price
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	28-Mar
eTelecare Global (ETEL)	$429	1.8	19	5.5	5.5	$15.50
ExLS (EXLS) (a)	$591	3.8	25	5.7	6.1	$20.91
PeopleSupport Inc. (PSPT) (b)	$280	2.3	18	1.5	1.5	$11.89
WNS Holdings (WNS) (c)	$1,160	2.8	41	6.3	8.4	$28.88
IPO-July 26, 2006 at $20
(a) IPO'd October 19, 2006 @$13.50
(b) IPO'd Oct 1, 2004 @$7
(c) IPO'd July 26, 2006 @$20
American Depositary Shares (one ADS represents two shares)
Business
. A leading provider of business process outsourcing, or BPO, services focusing on the complex,
voice-based segment of customer care services delivered from both onshore and offshore
locations.
. Provides a range of services including technical support, financial advisory services, warranty
support, customer service, sales, customer retention and marketing surveys and research.
11 delivery centers, 9.800 employees
Services are delivered from four delivery centers in the Philippines and seven delivery centers in
the United States, with approximately 6,800 employees in the Philippines and approximately
3,000 employees in the United States as of December 31, 2006.
Clients
Largest clients in terms of revenue for the year ended December 31, 2006 were American Express
Company, AOL LLC, Cingular Wireless LLC, Dell Inc., Intuit Inc., Sprint Nextel Corporation and
Vonage Holdings Corp., together representing approximately 91% of revenue.
Top line revenue comparisons
> 2006
. In 2006, service revenue increased $42.9 million, or 28.2%, over the prior year.
. This increase was primarily driven by new service programs with two new and two existing
clients and, to a lesser extent, expansion of existing service programs with four existing clients.
. These increases were partially offset by the ramping down of service programs or loss of clients.
. ETEL declined to reduce pricing with respect to the two largest clients that were lost and another
client terminated services due to a decline in its business.
> 2005
. In 2005, which included a full year of Phase 2 operations, service revenue increased $54.4
million, or 55.6%, over the prior year.
. This increase was primarily due to our addition of six new programs with four existing clients,
which ETEL believes was the result of demonstrating value per dollar spent by these clients for
existing programs, and expansion of a client relationship that gained through our acquisition of
Phase 2.
. In addition, revenue in 2005 increased over 2004 due to expansion of existing programs with
existing clients and the addition of 18 programs with 11 new clients.
. The increase in revenue in 2005 was partially offset by revenue lost as a result of the decision to
reduce a significant client program due to ETEL's inability to negotiate satisfactory pricing terms,
the bankruptcy of one clients and loss of another client, whose direct response marketing program
was not well suited to ETEL's delivery model due to its sporadic call arrival patterns.
A Different Business Model?
See competition below
. Founded in 1999 by alumni of the management consulting firm McKinsey & Company, who
implemented analytical tools and a focus on quantifiable value for the client in the customer care
BPO market.
. Business model has three key elements: a focus on delivering complex, voice-based BPO
services via a multi-shore delivery platform; making significant investments in the quality of
ETEL's people and processes; and entering into contracts that contain pricing terms that clients
agree are based on the value created per dollar spent by the client,
. Rather than a pricing model focused solely on being able to deliver the least expensive service
offering, or a cost-based commodity pricing model, that ETEL believes is most often emphasized
in its industry.
Competition
o offshore-based customer care BPO companies with offshore delivery center services
capabilities, such as Ambergris Solutions Inc., ePLDT, Inc., ExlService Holdings, Inc.,
PeopleSupport, Inc., and Wipro
o U.S.-based customer care BPO companies with onshore and offshore delivery center services
capabilities, such as APAC Customer Services Inc., ClientLogic Corporation, Convergys
Corporation, ICT Group, Inc., Sutherland Global Services, Inc., SITEL Corporation, Sykes
Enterprises, Incorporated, TeleTech Holdings, Inc. and West Corporation;
o broad-based U.S. outsourcing companies such as Accenture Ltd., Affiliated Computer Services,
Inc., Electronic Data Systems Corporation, and IBM Global Services; and
o numerous smaller companies, including 24/7 Customer, NuComm International Inc.,
SlashSupport and Vision-X, Inc.
Use of $66mm in IPO proceeds
. Repay $30mm in debt
. Balance for working capital
===================
Flagstone Reinsurance	FSR, C+, 7
property and casualty reinsurance						Post-IPO shrs: 85mm
Hamilton, Bermuda				2006		IPO Mkt
Gross Premiums written ($mm)				$302		Cap (mm)
Net premiums				$282		$1,141
Net premiums earned				$192		@$13
Profit (loss) ($mm)				$152
Profit (loss) %				50%
Loss ratio			14%
Acquisition cost ratio			16%
G&A ratio			18%
Combined ratio			48%
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Flagstone Reinsure FSR	$1,141	3.0	6	1.0	1.1	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
Dividend policy
. Expects to pay a quarterly cash dividend of $0.04 per common share
. 2.5% annual rate
Business
. Bermuda-based global reinsurance company
. Through subsidiaries, writes primarily property, property catastrophe and short-tail specialty and
casualty reinsurance.
Background
. Formed by Haverford, a company controlled and capitalized by Mark Byrne, the Executive
Chairman of the Board of Directors, and David Brown, Chief Executive Officer
. Commenced operations in December 2005.
. Since formation raised approximately $850 million through three closings of the private
placement of common shares and the issuance of Deferrable Interest Debentures.
. Through the year ended December 31, 2006, we wrote $302.5 million in gross premiums, of
which $219.1 million was property catastrophe reinsurance.
Cyclical business
Current Market Environment
> The property and casualty insurance and reinsurance industry historically has been a cyclical
business. During periods of excess underwriting capacity, competition generally results in lower
pricing and less favorable policy terms and conditions for both insurers and reinsurers. During
periods of diminished underwriting capacity, industry-wide pricing and policy terms and
conditions become more favorable for insurers and reinsurers.
> During the 1980s and extending into the late 1990s, the worldwide insurance and reinsurance
industry was characterized by highly competitive market conditions. Excess industry underwriting
capacity, declining premium rates, less favorable policy terms and adverse reserve developments
all contributed to poor underwriting results.
> The disasters resulting from the 2005 hurricane season have helped to create much more
favorable market conditions for providers of reinsurance. That season included several of the
largest insured losses in history:
o Hurricane Katrina, which struck Louisiana, Mississippi, Alabama and surrounding areas in August 2005
o Hurricane Rita, which struck Texas and Louisiana in September 2005 and
o Hurricane Wilma, which struck Florida and the Yucatan Peninsula of Mexico in October 2005.
> Losses from Hurricane Katrina represented the largest insured catastrophe in the history of the
insurance industry, surpassing the $20.7 billion in property losses from the terrorist attacks of
September 11, 2001, and the $22.3 billion in losses from Hurricane Andrew in August 1992,
previously the largest insured event in history.
> Of the ten largest insured losses to date, three of which occurred in the latter half of 2005:
Hurricanes Katrina, Rita and Wilma
Competition
Competes with reinsurers that provide property-based lines of reinsurance, such as ACE Tempest
Reinsurance Ltd., AXIS Capital Holdings Ltd., Lloyd's of London, Montpelier Re Holdings Ltd.,
RenaissanceRe Holdings Ltd., XL Re Ltd., and similar companies.
Employees
. As at March 13, 2007, we had 114 employees
. $10mm valuation per employee
Use of $159mm in IPO proceeds
To Flagstone to increase the underwriting capacity of its reinsurance operations, less underwriting
expenses of $16.3mm
===================
GSI Technology	GSIT, C+, 6
SRAM integrated circuits		March 31 fiscal				Post-IPO shrs: 28mm
Santa Clara, CA	2004	2005	2006	Dec 31, 05*	Dec 31, 06*	IPO Mkt
Rev ($mm)	$35	$46	$43	$32	$44	Cap (mm)
Gross Profit %	25%	33%	32%	31%	39%	$199
Profit (loss) ($mm)	($0.7)	$4.8	$4.2	$2.9	$6.0	@$7.25
Profit (loss) %	-2%	10%	10%	9%	14%
				*nine months ended Dec 31
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
GSI Technology (GSIT)	$199	3.4	25	2.6	2.6	29%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	1	1	6
Business
. Develops and market "Very Fast" static random access memory, or SRAM, products that are
incorporated primarily in high-performance networking and telecommunications equipment, such
as routers, switches, wide area network infrastructure equipment, wireless base stations and
network access equipment.
. In addition, serves the ongoing needs of the military, industrial, test equipment and medical
markets for high-performance SRAMs.
Note: . March & June quarters expected to be impacted negatively by Cisco's transistion to a 'lean
manufacturing' program, see 'customers' below
Markets
> Gartner Dataquest divides the SRAM market into segments based on speed.
. The highest performance segment is comprised of SRAMs that operate at speeds of less than 10
nanoseconds, which GSIT refers to as "Very Fast SRAMs."
. Gartner Dataquest estimates that this segment of the SRAM market will be greater than $1 billion
in 2007.
. Based on the performance characteristics of its products and the breadth of GSIT's product
portfolio, GSIT considers itselfe to be a leading provider of Very Fast SRAMs.
> High-performance networking and telecommunications equipment requires Very Fast SRAMs,
and GSIT expects that the emerging variety of applications within this market will continue to
drive a need for an increasing number of specialized Very Fast SRAMs.
Customers
> Sells products to leading networking and telecommunications OEMs, including Alcatel-Lucent,
> Cisco sales expected to decline
. Cisco Systems is the largest OEM customer and accounted for between 28% and 34% of our net
revenues in each of the last three fiscal years and the nine months ended December 31, 2006.
. GSIT expects Cisco Systems to account for a lesser percentage of net revenues for the quarter
ending March 31, 2007.
. Cisco Systems has announced the implementation of a "lean manufacturing" program under
which it plans to reduce the levels of inventory carried by it and by its contract manufacturers.
. GSIT believes that the transition to this new program will result in reductions in purchases of
GSIT products by Cisco Systems' contract manufacturers during the quarter ending March 31,
2007, as they draw down their existing inventories, and that such reductions will likely result in
GSIT net revenues for the quarter being less than in the previous quarter.
. This transition could also impact GSIT revenues in the quarter ending June 30, 2007.
GSIT expects quarterly fluctuations in revenue
. Historically, orders on hand at the beginning of each quarter are insufficient to meet revenue
objectives for that quarter and are generally cancelable up to 30 days prior to scheduled delivery. .
Accordingly, GSIT depends on obtaining and shipping orders in the same quarter to achieve
revenue objectives.
. In addition, the timing of product releases, purchase orders and product availability could result
in significant product shipments at the end of a quarter.
Pending Litigation
. On October 23, 2006, GSIT was served with a civil antitrust complaint filed by Reclaim Center,
Inc. and other plaintiffs in the United States District Court for the Northern District of California
against the Company and a number of other semiconductor companies.
. The complaint was filed on behalf of a purported class of indirect purchasers of SRAM products
throughout the United States. The complaint alleges that the defendants conspired to raise the
price of SRAM in violation of Section 1 of the Sherman Act, the California Cartwright Act, and
several other state antitrust, unfair competition and consumer protection statutes. Shortly
thereafter, a number of similar complaints were filed by other plaintiffs in various jurisdictions on
behalf of purported classes of both direct and indirect purchasers. We have been served in some
but not all of these subsequent actions
. GSIT believes it has meritorious defenses to the allegations in the complaints, and intend to
defend these lawsuits vigorously.
Intellectual property
Currently holds three United States patents, expiring between November 2022 and April 2023, and
has ten patent applications pending.
. Does not consider existing patents to be materially important to the business
Competition
. Cypress Semiconductor, Integrated Device Technology, Integrated Silicon Solution, NEC,
Renesas and Samsung Electronics. While some competitors offer a broad array of memory
products and offer some of their products at lower prices than we do, GSIT believes that its focus on
and performance leadership in low latency, high density Very Fast SRAMs provide us with key
competitive advantages.
. The market for Very Fast SRAM products is competitive and is characterized by technological
change, declining average selling prices and product obsolescence.
. Competition could increase in the future from existing competitors and from other companies
that may enter our existing or future markets with solutions that may be less costly or provide
higher performance or more desirable features than our products. This increased competition may
result in price reductions, reduced profit margins and loss of market share.
In addition
. In addition, GSIT is vulnerable to advances in technology by competitors, including new SRAM
architectures as well as new forms of DRAM and other new memory technologies.
. Because GSIT has limited experience developing IC products other than Very Fast SRAMs, any
efforts by GSIT to introduce new products based on a new memory technology may not be
successful and its business may suffer.
Use of $40mm in IPO proceeds from sale of 6.1mm shares
(selling stockholders intend to see 1.9mm shares)
Working capital and other general corporate purposes, including capital expenditures and research
and development.
===================
SenoRx	SENO, C, 8
medical devices						Post-IPO shrs: 15mm
Aliso Viejo, California	2003	2004	2005	2006		IPO Mkt
Rev ($mm)	$10	$14	$19	$26		Cap (mm)
Gross Profit %	52%	53%	47%	47%		$180
Profit (loss) ($mm)	($8.7)	($6.8)	($8.6)	($15.4)		@$12
Profit (loss) %	-84%	-49%	-45%	-60%
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
SenoRx (SENO)	$180	7.0	-12	2.6	3.4	37%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	2	2	8
Note on grading/scoring: we believe SENO has very good long term potential (scored of (8) , but because it is losing
money at a current high rate, it is graded C,.
Business
. Minimally-invasive medical devices for the diagnosis of breast cancer.
. Initial product focus has been biopsy systems and breast tissue markers.
. Also developing products for use in the treatment of breast cancer that SENO will seek to
commercialize beginning in the second half of 2007, subject to receipt of required regulatory
approvals, including a radiation balloon for localized radiation therapy and cutting devices for
both excision of tissue and cosmetic reconstruction.
. Since first products in 2002, SENO has established over 1,000 customer accounts.
EnCor product
. Flagship diagnostic product, the EnCor system, is a minimally-invasive, vacuum-assisted breast
biopsy system.
. EnCor allows users to obtain multiple biopsy samples with a quick, single probe insertion. In
contrast to existing competitive systems, EnCor is the only "open/closed" tissue collection system,
providing the operator with a clear view of tissue samples through a proprietary transparent
collection chamber, and the ability to either open the chamber to examine and remove one or
more samples or to continue uninterrupted collection of multiple samples.
. The EnCor system incorporates novel programmability, and is designed the system to be
compatible with the most commonly used imaging modalities, including x-ray, ultrasound, and
magnetic resonance imaging, or MRI.
. With its ease of use and functionality, SEND believes that EnCor can play an important role in
the paradigm shift from invasive open surgical procedures to minimally-invasive biopsy
procedures.
EnCor FDA clearance & marketing
. SENO received clearance for the EnCor system from the U.S. Food and Drug Administration, or
FDA, and conducted marketing preference testing in late 2004.
. Subsequently progressed with a full commercial launch in November 2005.
. As of December 31, 2006, we had an installed base of 317 EnCor systems and had sold more
than 50,000 EnCor disposable probes.
. In launching the EnCor system, first targeted customers using SEND's ultrasound-guided,
vacuum-assisted biopsy system launched in 2003, the SenoCor 360, because both the EnCor and
SenoCor handpieces are compatible with the same modular console.
. More broadly, SENO intends to leverage its base of over 1,000 customers as potential EnCor
customers.
. SENO's tissue markers, first introduced in 2002, are competitively differentiated given their
visibility under ultrasound, bioresorbability and compatibility not only with our biopsy devices,
but also with other companies' devices.
Radiation Balloon
. In breast care surgery and therapeutics, SENO is developing minimally-invasive products for
removal of lesions, treatment of the lesion site and cosmetic reconstruction following therapy.
. SEND's Radiation Balloon, for which SENO expects to apply for FDA 510(k) clearance in the
second half of 2007, is designed as a novel radiation therapy device that uses a vacuum to remove
excess fluid and to adhere often irregularly shaped lumpectomy cavities closely to the balloon, as
well as multiple radiation seed lumens to deliver precise radiation dosing.
. SENO believes that its radiation balloon can play an important role in the paradigm shift from
traditional whole breast radiation therapy to localized partial breast radiation therapy.
Net Revenues
. Breast biopsy systems, the EnCor and SenoCor 360, consist of two primary components:
reusable handpieces and disposable probes, and are used in conjunction with the SenoRx Breast
Biopsy Console.
. The disposable probes form the basis of a recurring revenue stream and also contribute to the
sales of tissue markers.
. SENO expects that sales of biopsy disposable, biopsy capital and marker products will continue
to grow in 2007.
. SENO further expects that the sales of adjunct and excision products will also grow, though at a
slower rate.
Revenue comparison, year ended December 31, 2006 compared to 2005
. Net revenues increased $6.25 million, or 32.5%, to $25.5 million in the 2006 from $19.25 million
in 2005.
. The increase was primarily attributable to a $4.8 million increase in biopsy disposable revenues,
comprised of a $4.7 million increase in EnCor biopsy disposable revenues and a $0.1 million
increase in SenoCor biopsy disposable revenues. The remaining $1.5 million increase resulted
from increased biopsy marker product revenues of $1.25 million, increased adjunct product
revenues of $0.35 million, largely related to increased Gamma Finder sales and a decrease in
excision and biopsy capital product revenues of $0.1 million and $50,000, respectively.
. The $4.7 million increase in EnCor biopsy disposable revenues discussed above was primarily
due to an increase in the installed base of EnCor systems from approximately 164 as of December
31, 2005 to 317 as of December 31, 2006.
Intellectual property
As of December 31, 2006, had
. 41 issued United States patents primarily covering devices relating to breast biopsy, including
biopsy site marking devices, excision devices and balloon products, the earliest of which will
expire in 2018 and the last of which will expire in 2022,
. Two granted European regional patents and, based on the grant of these two European regional
patents, a total of 13 granted national patents from eight different European countries.
. In addition, has 65 pending United States patent applications, nine pending PCT (international)
patent applications, 16 pending European patent applications, 18 pending Canadian patent
applications, 11 pending Japanese patent applications, and four pending Australian patent
applications.
Competition
. Breast biopsy and marker products compete with, among others, products sold by Johnson &
Johnson, C.R. Bard and Suros Surgical Systems, the latter of which was acquired by Hologic in '06
. SENO expects the Radiation Balloon, if it receives the required regulatory approval, to compete
against well-established external beam radiation devices, as well as current and potential future
manufacturers of balloon brachytherapy devices.
. Expects to compete directly with the current industry leader, Cytyc, as well as other companies
that have minimally-invasive therapeutic devices in various stages of development.
. SENO's commercial success will depend on a general market shift from whole to partial breast
radiation.
Use of $59mm in IPO proceeds
. $1.8mm to repay interest
. $36.0 million for sales and marketing initiatives to support the ongoing commercialization of the
EnCor system and other products and products under development; and
. $9.0 million for research and development activities, including support of product development,
regulatory and clinical initiatives.
. Remainder of for general corporate purposes
===================
Super Micro Computer	SMCI, B-, 7
high performance servers		June 30, fiscal				Post-IPO shrs: 29mm
San Jose, CA	2004	2005	2006	Dec, 05*	Dec, 06*	IPO Mkt
Rev ($mm)	$167	$212	$302	$137	$204	Cap (mm)
Gross Profit %	17%	16%	20%	19%	18%	$300
Profit (loss) ($mm)	$4.9	$7.1	$16.9	$7.0	$9.7	@$10.5
Profit (loss) %	3%	3%	6%	5%	5%
				*6 months ended Dec 31
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings*	BookValue	TangibleBV	in IPO
Super Micro (SMCI)	$300	0.7	15	2.6	2.6	28%
			*annualized six months ended Dec 31, 2006
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	2	1	7
Summary:
Very good long term business, low gross margin, consistently profitable
Business
. Began operations in 1993 and has been profitable every year since inception.
. Designs, develops, manufactures and sells application optimized, high performance server
solutions based on an innovative, modular and open-standard x86 architecture.
. Application optimized servers are configured to meet specific customer needs in contrast to
typical servers which are offered in limited standardized configurations.
. As of December 31, 2006, we offered over 3,850 SKUs (stock keeping units), including SKUs
for server systems, serverboards, chassis and power supplies and other system accessories.
Sales & distribution
. Sells server systems and components primarily through distributors, which include value added
resellers and system integrators, and to a lesser extent to OEMs
. As well as through a direct sales force.
. During fiscal year 2006, SMCI's products were purchased by over 400 customers, most of which
are distributors in more than 70 countries.
Sales comparison of Six Months Ended December 31, 2005 and 2006
. Net sales increased by $67.1 million, or 49.1%, from $136.6 million to $203.8 million, for the six
months ended December 31, 2005 and 2006, respectively.
. This was due primarily to an increase in unit volumes and average selling prices. For the six
months ended December 31, 2006, the approximate number of units sold increased 39.5% to
1,017,000 compared to 729,000 for the six months ended December 31, 2005.
. Growth in unit volumes was primarily due to the introduction and growth of x7, AMD and PD
series motherboards and an increase in sales of accessories such as memory and disk drives offset
in part by lower sales of x5 motherboards.
. The growth in average selling prices was due to the increase in server systems average selling
prices primarily due to increased components being added to our server systems.
. For the six months ended December 31, 2006, the approximate number of units sold in server
systems increased 22.6% to 65,000 compared to 53,000 for the six months ended December 31, 05
. The average selling price of units sold in server systems increased 22.2% to approximately
$1,100 in the six months ended December 31, 2006 compared to approximately $900 in the six
months ended December 31, 2005 primarily due to higher sales of an AMD series of server
systems offset in part by declines in average selling prices of more mature products.
. Sales of server systems increased by $27.0 million or 60.1% from the six months ended
December 31, 2005 to the six months ended December 31, 2006 primarily due to increase in OEM
servers and shipments of 6000 Series configurations of servers.
. Sales of server systems represented 32.9% of net sales for the six months ended December 31,
2005 as compared to 35.3% of net sales for the six months ended December 31, 2006.
Value of common stock, by an outside valuation firm
For each of the quarters in fiscal year 2006 and the first two quarters of fiscal year 2007:
September 30, 2005, $4.87
December 31, 2005, $8.56
March 31, 2006, $13.70
June 30, 2006, $12.05
September 30, 2006, $12.85
December 31, 2006, $13.89
The increase in the fair value of common stock during fiscal year 2006 and the first two quarters
of fiscal year 2007 was due primarily to the following factors:
. Continued net sales growth of 42.9% from $211.8 million in fiscal year 2005 to $302.5 million in
fiscal year 2006. Net sales grew from $136.6 million to $203.8 million from the six months ended
December 31, 2005 to the six months ended December 31, 2006.
. Net income growing faster than sales at 139.0% from $7.1 million in fiscal year 2005 to $16.9
million in fiscal year 2006. Net income increased from $7.0 million to $9.8 million from the six
months ended December 31, 2005 to the six months ended December 31, 2006.
. Increasing percentage of our sales from server systems, which generally have higher gross
margins than sales of our components.
. Introduction of new products based on AMD and Intel processors.
. Addition of our chief financial officer in May 2006 and significant expansion of accounting and
finance department to meet the demands of a public reporting company.
. Decreases in marketability discount from 31.1% at June 30, 2005 to 27.2% at September 30,
2005 to 23.3% at December 31, 2005 to 9.8% at March 31, 2006 to 6.5% at June 30, 2006 to 3.3%
at September 30, 2006 and to 0% at December 31, 2006 reflecting increasing expectations of an
eventual initial public offering
. The decrease in fair value of our common stock at June 30, 2006 relative to March 31, 2006 was
primarily due to changes in our long term model after review of projected revenue growth rates for
the industry by the new chief financial officer.
. The increase in fair value of common stock at September 30, 2006 relative to June 30, 2006 was
primarily due to decreases in marketability discount and risk free rate utilized to reflect a
increasing expectation of an eventual initial public offering and resolution of some of the
uncertainties regarding legal matters.
. The increase in fair value of common stock at December 31, 2006 relative to September 30, 2006
was primarily due to the elimination of the marketability discount to reflect our increasing
expectation of an eventual initial public offering and other factors including fluctuations in the
market value of a peer group of companies.
Competition
. Global technology vendors such as Dell Inc., Hewlett-Packard Company, International Business
Machines Corporation and Intel;
. Specialized server vendors, such as Rackable Systems, Inc.; and
. Original Design Manufacturers, or ODMs, such as Quanta Computer, Inc.
Use of $59mm in IPO proceeds from sale of 6.4mm shares
(shareholders intend to sell 1.6mm shares)
. Repay $19mm in debt
. Balance for working capital and general corporate purposes.
. Presently has no intention to acquire any businesses, products or technologies
===================



Financial Performance & Scoring -- © 2007 Gaskins IPO Desktop/IPOdesktop
Pre-IPO analysis, grading & scoring -- updated March 18
. 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 (based on recent results)
(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
===================
SEARCH BY COMPANY		In your browser use 'Edit/Find' to search for companies
or ticker for analysis		scheduled below
===================
March 19 week IPO schedule
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
CastlePoint (CPHL)	$499	6.3	48	1.1	1.4	17%
property/casualty insurance/reinsurance: C+, 7						Post-IPO shrs: 35.7mm

Cheniere Enrgy Prt CQP	$3,302	25.0	-381	1.8	-21.1	8%
LP for LNG terminal in Louisiana: C+, 7						Post-IPO shrs: 165mm

Glu Mobile (GLUU)	$312	5.5	-34	2.5	3.9	26%
Publishes games for mobile telephones: C+, 7						Post-IPO shrs: 28.4mm

===================
March 19 week analysis

CastlePoint	CPHL, C+, 7
property/casualty insurance/reinsurance						Post-IPO shrs: 35.7mm
Hamilton, Bermuda				2006		IPO Mkt
Net earned premiums				$79		Cap (mm)
Profit (loss) ($mm)				$10.5		$499
Profit (loss) %				13.3%		@$14
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
CastlePoint (CPHL)	$499	6.3	48	1.1	1.4	17%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	2	1	7
Dividend policy
. Currently intends to authorize the payment of an annual cash dividend of $0.10 per common share
to our shareholders of record, payable on a quarterly basis
. Annualized 2.85% rate at $14 per share, can be expected to increase
Business
. Bermuda holding company organized to provide property and casualty insurance and reinsurance
business solutions, products and services primarily to small insurance companies and program
underwriting agents in the United States.
. Incorporated in November 2005 to take advantage of opportunities believed to exist in the
insurance and reinsurance industry
. For traditional quota share reinsurance, insurance risk-sharing and program business as well as
insurance company services that can be purchased on a stand-alone, or unbundled basis, to small
insurance companies and program underwriting agents.
Sponsor, Tower Group Inc. (TWGP), $750mm market cap
Tower Group, Inc., a Delaware corporation, is the sponsor and CPHL's largest customer for
reinsurance and risk-sharing products
. Tower Group, Inc., through its subsidiaries, provides a range of specialized property and casualty
insurance products and services to small to mid-sized businesses and individuals principally in the
New York City, and operates in three segments: Insurance, Reinsurance, and Insurance Services
. Tower Group was incorporated in 1989
Competitive Strengths
o Access to Profitable Book of Business from Tower.
. Pursuant to agreements with Tower, we reinsure and, effective January 1, 2007 (subject to
regulatory approval by the New York State Insurance Department), also expect to pool, a
significant amount of the brokerage business that Tower writes, which generated an average gross
loss ratio of 57.7% for the three years ended December 31, 2005.
. Access to Established Insurance Company Infrastructure. Through our service and expense
sharing agreement with Tower's subsidiaries, we and our clients will be able to access Tower's
well established insurance company infrastructure, including claims handling and administration,
policy administration systems, technology, underwriting acumen, program design, regulatory
compliance and other services. We believe that access to these capabilities will enable us to
successfully write traditional program business, specialty program business and insurance risk
sharing business, while avoiding the significant cost of establishing a primary insurance company
infrastructure.
o Operations in Bermuda and Access to Distribution Sources in the United States.
Access to favorable business and regulatory environment through the reinsurance subsidiary in
Bermuda, CastlePoint Re, provides CPHL with the ability to develop cost-effective insurance and
reinsurance products.
o Strong Market Relationships
. Market our reinsurance products, and expect to market insurance products, principally through
management's existing industry contacts and through independent reinsurance intermediaries.
. Senior management team has extensive industry relationships, including relationships with a
number of reinsurance intermediaries, program underwriting agents and insurance companies.
. CPHL believes that these relationships will allow CPHL to quickly establish a presence in the
reinsurance and insurance markets.
o New Insurance Company.
. As a recently formed company, we are unencumbered by historical liability exposures currently
affecting competitors, including claims relating to asbestos and environmental remediation and
other mass torts.
. In addition, as a start-up company, does not have outdated technology systems, as many larger
competitors do, that require costly updating or replacement.
Competition
. QBE Insurance Group Limited, PartnerRe Ltd., Max Re Ltd., Munich Reinsurance America Inc.
and General Reinsurance Corporation, all of which offer proportional reinsurance.
. In addition, faces competition from specialty insurance companies, program underwriting agents
and intermediaries, as well as diversified financial services companies
> Reinsurers for U.S. clients
. ACE Insurance Company of North America, American International Group, Inc., CNA Financial
Corporation, The Hartford Financial Services Group, Inc., St. Paul Travelers Companies, Inc., XL
America Group, Partner Reinsurance Companies, RenaissanceRe Holdings Ltd., Swiss
Reinsurance Company, Berkshire Hathaway Inc., Lloyd's, Munich Reinsurance America Inc.,
QBE Insurance Group Limited, General Reinsurance Corporation and Max Re Ltd.
. In addition, there are Bermuda reinsurers with whom CPHO competes, such as Arch Capital
Group Ltd., Endurance Specialty Holdings Ltd., AXIS Capital Holdings Limited, Allied World
Assurance Company, Ltd. and Platinum Underwriters Holdings, Ltd.
> Furthermore, following the recent hurricanes, newly formed and existing insurance industry
companies have raised capital to meet perceived demand in the current environment and address
underwriting limit issues, although CPHL believes many of these new entrants plan to focus on
property excess of loss, offshore marine and energy and retrocessional coverage and therefore not
compete directly with CPHL in most cases
> Insurance
W.R. Berkley Corporation, Markel Corporation, Philadelphia Consolidated Holding Corp., RLI
Corp., Arch Capital Group Ltd., Meadowbrook Insurance Group, Inc. and Argonaut Group, Inc.
> Unbundled Insurance Services
Leading third party administrators are Gallagher Bassett Services, Inc., Crawford & Company, and
GAB Robins North America, Inc
Employees and Administration
. Relatively small staff of employees
. As of February 9, 2007, employed a total of 21 employees, 18 of whom were full-time
Use of $75.5 of IPO proceeds
. Further capitalize CastlePoint Re
. For general corporate purposes
===================
Cheniere Energy Partners	CQP, C+, 7
LP for LNG terminal in Louisiana						Post-IPO shrs: 165mm
Houston, Texas						IPO Mkt
Forecast for four quarters ended June 30, 2010						Cap (mm)
Cash available ($mm)		$295				$3,302
Amout payable to public units		$21				@$20
Amount payable to other units		$260
Surplus		$14
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Cheniere Enrgy Prt CQP	$3,302	25.0	-381	1.8	-21.1	8%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	2	1	7
Anticipated payout of $1.70 per unit, or 8.5%
Compare & contrast			Initial Div			%
		IPO	based on	IPO	Price	change
		Date	on IPO price	Price	3/19/97	from IPO
Duncan Energy Ptr (DEP)		Jan 30, 07	7.6%	$21.00	25.78	8.7%
Legacy Reserve (LGCY)		Jan 11, 07	8.6%	$19.00	25.35	9.6%
MV Oil Trust (MVO)		Jan 18, 07	10.0%	$20.00	24.48	9.1%
Targa Resources (NGLS)		Feb 8, 07	6.4%	$21.00	25.75	8.7%
Cheniere Enrgy Prt CQP			8.5%
Business
. Limited partnership formed in November 2006 by Cheniere Energy, Inc (LNG, $1.65bb market
cap).
. Wholly-owned subsidiary, Sabine Pass LNG, will develop, own and operate the Sabine Pass
LNG receiving terminal currently under construction in western Cameron Parish, Louisiana on the
Sabine Pass Channel.
Take or pay contracts
All of the capacity has been contracted for under three 20-year, firm commitment terminal use
agreements, or TUAs.
. Each customer must make payments on a "take-or-pay" basis, which means that the customer
will be obligated to pay the full contracted amount of monthly fees whether or not it uses any of its
reserved capacity.
. Provided the Sabine Pass LNG receiving terminal has achieved the required level of commercial
operation, which CQP expects will occur in the third quarter of 2008, these "take-or-pay" TUA
payments will be made as follows:
Expects to pay $.425 on a quarterly basis
. CQP is a development stage company without any revenues, operating cash flows or operating
history and does not expect that revenues from its take or pay contracts with Total and Chevron to
begin until the second and third quarter of 2009, respectively. Therefore, does not expect to
generate sufficient cash from operations to fund distributions to unitholders until the third quarter
of 2009.
. Prior to June 30, 2009, we will use funds from the distribution reserve to pay the initial quarterly
distribution of $0.425 on all of our outstanding common units, as well as related distributions to
Use of $97mm in IPO proceeds from sales of 5.2mm units
The parent will sell 7.3mm units and receive about $132mm)
. All of the net proceeds to purchase U.S. treasury securities to fund a distribution reserve to pay
the $0.425 initial quarterly distribution on all common units, as well as related distributions to our
general partner, through the distribution made in respect of the quarter ending June 30, 2009
. The selling (parent/sponsor) unitholder expects to receive $132.0 million in net proceeds
===================
Glu Mobile	GLUU, C+, 7
Publishes games for mobile telephones						Post-IPO shrs: 28.4mm
San Mateo, CA	2003	2004	2005	2006		IPO Mkt
Rev ($mm)	$2	$7	$26	$46		Cap (mm)
Gross profit	83%	76%	50%	66%		$312
Profit (loss) ($mm)	($3.8)	($8.3)	($17.9)	($12.3)		@$11
Profit (loss) %	-211.1%	-118.6%	-69.9%	-26.6%
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Glu Mobile (GLUU)	$312	5.5	-34	2.5	3.9	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
Business
. A leading global publisher of mobile games.
. Developed and published a portfolio of more than 100 casual and traditional games to appeal to a
broad cross section of the over one billion subscribers served by more than 150 wireless carriers
and other distributors.
. Creates games and related applications based on third-party licensed brands and other intellectual
property, as well as on original brands and intellectual property.
Industry Overview
50% annual expected compound growth
. Juniper Research, a market research firm, in its June 2006 "Mobile Games: Subscription &
Download, 2006-2011" report, estimates that the worldwide market for mobile games will grow
from $3.1 billion in 2006 to $10.5 billion in 2009, a compound annual growth rate of 50.2%.
. "The face of mobile entertainment is expected to change significantly over the next five years as
next-generation mobile services continue to be rolled out," said Bruce Gibson, an analyst with
Juniper.
Revenue model
. Generates the vast majority of revenues from wireless carriers that market and distribute GLUU's
games.
. These carriers generally charge a one-time purchase fee or a monthly subscription fee on their
subscribers' phone bills when the subscribers download our games to their mobile phones
Customer concentration for the year ended Dec 31, 2006
> Four customers accounted for 54% of revenue
. Verizon Wireless: 20.6%
. Sprint Nextel: 12.6
. Cingular Wireless: 11.3%
. Vodafone: 10.6%
> In 2006, the largest wireless carrier customers in each region by revenues were
. North America: Verizon Wireless, Sprint Nextel, Cingular Wireless and T-Mobile USA
. Europe: Vodafone, Hutchinson 3G, O2 and Orange
. Latin America: TelCel and Vivo
. Australia: Hutchinson 3G Australia
. Asia Pacific: Vodafone and New Zealand Telecom
Top line revenue
. Revenues increased $20.5 million, or 80.0%, from $25.7 million in 2005 to $46.2 million in
2006, almost entirely as a result of volume increases.
. The increase resulted from sales of games that released in 2006, including Ice Age 2, Diner Dash
and Super K.O. Boxing, and sales of games acquired from iFone. Revenues in 2006 from games
released in 2006 were $12.6 million.
. Revenues in 2006 from games released prior to 2006 declined by $767,000 from the revenues
derived from those games in 2005.
> Acquisition of iFone games
. Revenues from iFone games from March 29, 2006, when iFone was acquired, to December 31,
2006 totaled approximately $8.7 million, primarily in Europe and the United States.
. By utilizing carrier relationships and our marketing and development resources, GLUU was able
to increase worldwide distribution and handset porting of iFone games and thus to increase
significantly the revenues derived from the licenses that we acquired from iFone.
> Top 10 games
. Revenues from top ten games increased from $13.5 million in 2005 to $24.6 million in 2006
. International revenues, defined as revenues generated from carriers whose principal operations
are located outside the United States, increased $10.0 million from $10.7 million in 2005 to $20.7
million in 2006. A majority of this increase resulted from the acquisition of iFone in 2006.
Games
. Games based on licensed intellectual property include Deer Hunter, Diner Dash, Monopoly,
Sonic the Hedgehog, World Series of Poker and Zuma.
. Original games based on GLUU's own intellectual property include Alpha Wing, Ancient
Empires, Blackjack Hustler, Brain Genius, Stranded and Super K.O. Boxing.

Ranked in top three during 2006 4th quarter
One of the top three mobile game publishers during the fourth quarter of 2006 in terms of mobile
game market share in North America,
. As measured by NPD Group, Inc., a market research firm, in its December 2006 "Mobile Game
Track Highlight Report,"
. And in terms of unit sales volume in North America and Europe among titles tracked by
m:metrics, another market research firm.
Mobile games versus console games
. Once developed, mobile games, may need to be customized, or ported, to more than 1,000
different handset models, many with different technological requirements.
. Therefore, the ability to port mobile games quickly and cost effectively can be a competitive
differentiator among mobile game publishers and a barrier to entry for other potential market
entrants.
Recent valuation for stock options
. On December 13, 2006, January 22, 2007 and January 25, 2007, granted options with an exercise
price of $10.65 per share.
. The fair value of common stock as of September 7, 2006 was $10.53 per share based upon Duff
& Phelps' retrospectively prepared valuation report, which was finalized on October 25, 2006.
. The fair value of our common stock as of December 31, 2006 changed minimally to $10.65 per
share based upon Duff & Phelps' retrospectively prepared valuation report, which was finalized on
February 13, 2007.
Competition
Publicly held: Electronic Arts Inc. (ERTS) $15bb market cap (EA Mobile division), THQ Inc.
(THQI), $2.2bb market cap
. Primary competitors include Digital Chocolate, Electronic Arts (EA Mobile), Gameloft, Hands
On Mobile, I-play, Namco and THQ,
. Electronic Arts has the largest market share of any company in the mobile games market.
. In the future, likely competitors include major media companies, traditional video game
publishers, content aggregators, mobile software providers and independent mobile game
publishers.
. EA entered the mobile games market in 2005 and promptly acquired established player Jamdat
for $680 million on February 15, 2006. For the last quarter reported by Jamdat (Sept, 2005),
Jamdat reported $20mm in revenue and $1.4mm in after-tax profits.
Use of $72mm in IPO proceeds
$10.9 million to repay loan to Pinnacle Ventures
Balance for
o expansion of domestic and international sales and marketing activities, which may include
increasing the number of direct sales and marketing personnel and investing in advertising and
marketing to increase brand awareness for specific games and for the Glu brand;
o expansion of international development and quality assurance capabilities in Asia Pacific, Latin
America and EMEA, which may include hiring additional personnel in current offices and opening
new offices to expand development and porting capacity;
o activities to increase carrier and other distribution channels;
o possible advances for license agreements
===================


===================
Financial Performance & Scoring -- © 2007 Gaskins IPO Desktop/IPOdesktop
Pre-IPO analysis, grading & scoring -- updated March 11
. 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 (based on recent results)
(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
===================
SEARCH BY COMPANY		In your browser use 'Edit/Find' to search for companies
or ticker for analysis		scheduled below
===================
March 12 week IPO schedule
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
BigBand Netwrks BBND	$628	2.5	18	6.3	6.5	19%
network platforms for service providers: B-, 8						Post-IPO shrs: 57mm

FCStone Group (FCSX)	$380	0.2	15	3.3	3.3	28%
commodity risk management consulting: C+, 7						Post-IPO shrs: 17mm

Photowatt Tech (PHWT)	$440	3.3	-51	1.7	1.7	40%
solar cells & modules: C+, 7						Post-IPO shrs: 27.5mm

Tongjitang ChiMed TCM	$536	8.6	31	2.9	3.0	30%
modernized trad Chinese medicine: C+, 8						Post-IPO shrs: 33.5mm ADS equivalents
===================
March 12 week analysis
BigBand Networks	BBND, B-, 8
network platforms for service providers						Post-IPO shrs: 57mm
Redwood City, California		2004	2005	2006		IPO Mkt
Rev ($mm)		$36	$98	$176		Cap (mm)
Gross Profit %		34%	39%	53%		$628
Operating Income %		-92%	-23%	7%		@$11
Profit (loss) ($mm)		($34.0)	($25.5)	$8.9
Profit (loss) %		-96%	-26%	5%
		L:ast four quarters
		March	June	Sept	Dec
Rev ($mm)		$33	$38	$43	$63
Gross Profit %		51%	49%	52%	57%
Profit (loss) ($mm)		($1.0)	($0.6)	$1.6	$8.9
Profit (loss) %		-3%	-2%	4%	14%
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
BigBand Netwrks BEND	$628	2.5	18	6.3	6.5	19%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	2	2	8
Business
Develops, markets and sells network-based platforms that enable cable operators and telephone
companies, collectively called service providers, to offer video, voice and data services across
coaxial, fiber and copper networks.
Profitable
Has been profitable on a quarterly basis since the three months ended September 30, 2006, and
first achieved profitability on an annual basis in 2006.
Intelligent, High-Bandwidth Video Networks Are Needed
. Service providers derive most of their revenue from consumer subscriptions and advertising
. Service providers are increasingly bundling disparate video, voice and data services into
integrated offerings, also known as "triple-play" services.
. Video is the most technically demanding, provides the richest user experience and currently
offers the greatest revenue per subscriber of the triple-play services.
. As of December 2006, Yankee Group Research estimates that, on average, consumers spend $68
per month for digital video services compared to $47 for voice and $33 for data services.
Applications
. BEND software and hardware product applications are used by leading service providers
worldwide to offer video, voice and data services to tens of millions of subscribers, 24 hours a
day, seven days a week.
. Has sold product applications to more than 100 customers globally, including Cablevision,
Charter, Comcast, Cox, Time Warner Cable and Verizon, which are six of the ten largest service
providers in the United States.
First to implement
. BEND believes it was the first to implement what BEND believes has become the industry's de
facto network architecture for digital simulcast, an application that facilitates the insertion of
advertising and the transmission of video in a digital format across a network while still providing
service to analog subscribers.
. Product applications of Digital Simulcast, TelcoTV, Switched Broadcast, and High-Speed Data
and Voice-over-IP are a combination of BEND's modular software and programmable video and
data hardware platforms.
Limited number of customers
. Due to the nature of the cable and telecommunications industries, sells products to a limited
number of large customers, which have varied over time.
. For the quarter ended December 31, 2006 and the years ended December 31, 2006, 2005 and
2004, derived approximately 90%, 79%, 69% and 61% of net revenues from the top five
customers, respectively.
. In 2006, Comcast, Cox, Time Warner Cable and Verizon each represented 10% or more of net
revenues.
. In 2005, Adelphia, Cox and Time Warner Cable each represented 10% or more of net revenues
. In 2004, Adelphia, Comcast, Cox and Time Warner Cable each represented 10% or more of net
revenues.
History
. Founded in December 1998, and through 2001 was engaged principally in research and
development.
. First generated meaningful product revenues in 2002, principally from the initial media
processing platform designed for video.
. Since 2003, expanded customer base to include six of the ten largest service providers in the
United States, including Cablevision, Comcast, Charter, Cox, Time Warner Cable and Verizon.
Acquisition
. To expand the breadth of products, in June 2004, acquired the high-speed data equipment BAS
division of ADC Telecommunications, Inc.
. From 2003 through 2005, experienced significant revenue growth that was derived primarily
from cable operators.
. Beginning in 2005, commenced sales efforts to telephone companies and began recognizing
significant revenues from one of these companies in 2006.
Intellectual property
. As of February 15, 2007, BEND held 26 issued U.S. patents, 16 of which relate to video products
and ten of which relate to CMTS products.
. Additionally, had 58 U.S. patent applications pending, 33 of which relate to video products and
25 of which relate to CMTS products.
Competition
Includes Cisco Systems and Motorola
Use of $74mm in IPO proceeds from sale of 7.5mm shares
(shareholders intend to sell 3.2mm shares)
. Repay $14mm in debt
. Remaining net proceeds for working capital, capital expenditures and other general corporate
purposes.
===================
FCStone Group	FCSX, C+, 7
commodity risk management consulting			Aug 31 fiscal			Post-IPO shrs: 17mm
West Des Moines, Iowa	2004	2005	2006	Nov, 05*	Nov, 06*	IPO Mkt
Rev ($mm)	$1,624	$1,401	$1,295	$350	$500	Cap (mm)
Cost of commodities sold	94%	91%	86%	89%	88%	$380
		* 3 months ended Nov 30				@$22.5
Profit (loss) ($mm)	$6.4	$6.6	$15.3	$3.4	$6.3
Profit (loss) %	0.4%	0.5%	1.2%	1.0%	1.3%
				% change	% contribution
		Nov, 05*	Nov, 06*	Nov, 06*	Nov, 06*
Rev net of commdities cost		$39.3	$57.3	46%
. Gross profit on commodities		$4.5	$6.5	44%	11%
. Commissons & Clearing Fees (CCF)		$23.0	$33.0	43%	58%
. Serivces, consulting, brokerage		$6.9	$9.1	32%	16%
. Interest		$4.3	$8.4	95%	15%
. Oither		$0.5	$0.5	0%
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
FCStone Group (FCSX)	$380	0.2	15	3.3	3.3	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
Business
. An integrated commodity risk management (C&RM*) company providing risk management
consulting and transaction execution services to commercial commodity intermediaries, end-users
and producers.
* FCSX's C&RM segment operates as an integrated FCM (futures commission merchant), which
is an organization which solicits or accepts orders to buy or sell futures contracts or commodity
options and accepts money or other assets from customers in connection with such orders
. Assists primarily middle-market customers in optimizing their profit margins and mitigating
commodity price risk.
. In addition to risk management consulting services, operates one of the leading independent
clearing and execution platforms for exchange-traded futures and options contracts.
. In fiscal 2006, we served more than 7,500 customers and transacted more than 47.8 million
contracts in the exchange-traded and OTC (over-the-counter) markets.
. As a natural complement to commodity risk management consulting services, also assists
customers with the financing, transportation and merchandising of their physical commodity
inventories.
Industry Growth
. The total international notional value outstanding of exchange-traded and OTC derivative
contracts has expanded rapidly in recent years, evidencing the large growth potential of the
commodity risk management industry.
. According to data from the Bank for International Settlements, the notional value outstanding of
exchange-traded contracts has grown at a CAGR of 27.1% over the past seven and a half years,
while the OTC market has grown at a CAGR of 22.6% over the same time period.
Customer Acceptance of Risk Management
. The growing sophistication of company managers and the heightened expectations of investors
have increased the acceptance of commodity risk management strategies. Demand for risk
management consulting services is growing in industries that have not traditionally been
significant users of hedging techniques and the derivatives market.
. This increased demand drives FCSX's fee revenue from risk management consulting services
and commission and interest income generated from the trading activity of our customers.
. As FCSX's expands its customer base beyond the traditional users of derivative products,
FCXS's ability to provide an analysis of the commodity markets and advise customers about how
to manage the commodity risk inherent in their businesses will continue to be an important driver
in its ability to generate future revenues.
Industry segments
. The commodity risk management industry is noted for both its fragmented nature and its overall
breadth, as it serves commodities intermediaries, end-users and producers.
. The industry can generally be segmented into providers of either one, or both, of two services to
customers: risk management consulting, and trade execution and clearing services.
Two services
. Risk management consulting is an advisory function by which a company advises its customer
on strategies to manage its commodity risk.
. Trade execution and clearing services are performed by serving as an intermediary between a
customer and a commodity exchange or other counterparty.
FCSX operations in four segments
. Commodity and Risk Management Services ("C&RM")
. Clearing and Execution Services
. Financial Services
. Grain Merchandising
Competition
> The commodity and risk management industry can generally be classified into four basic types
of companies: (1) pure consultants, (2) clearing FCMs (futures commission merchants) providing
trade execution but not broad-based consulting services, (3) captive businesses providing
consulting and trade execution as divisions of financial institutions or larger commodity-oriented
companies, and (4) integrated FCMs (futures commission merchants) providing both consulting
and trade execution from an independent platform.
> FCSX believes that its C&RM segment, which operates as an integrated FCM (futures
commission merchant), serves the needs of middle-market companies that require both the
personalized consulting services provided by FCXS's risk management consultants and the trade
execution services offered as an FCM.
> Exchange-traded futures & options execution
. Competitors in the exchange-traded futures and options sector include international brokerage
firms, national brokerage firms, regional brokerage firms (both cooperatives and non
cooperatives) as well as local introducing brokers, with competition driven by price level and
quality of service.
. Many of these competitors offer OTC trading programs as well. In addition, there are a number
of financial firms and physical commodities firms that participate in the OTC markets, both
directly in competition with FCSX and indirectly through firms like FCXS.
> Financial services segment
Compete with traditional lenders, including banks and asset-based lenders.
. Also compete with specialized investment groups that seek to earn an investment return based on
commodities transactions.
> Grain merchandising
Competition is intense and profit margins are low.
. Grain merchandising operations compete with numerous larger grain merchandisers, including
major grain merchandising companies such as Archer-Daniels-Midland Co., Cargill, Incorporated,
CHS Inc., ConAgra Foods, Inc., Bunge Ltd., and Louis Dreyfus Group,
. Each of which handles grain volumes of more than one billion bushels annually.
Use of $95mm in IPO proceeds
o to redeem $45mm of stock (2,159,997 shares), 15% of shares pre-IPO
o pay $26.3 to reduce debt
o increase regulatory capital of the FCM (futures commission merchant) subsidiary by $15.0
million
o $8.9 million for general corporate purposes, which may include acquisitions, capital expenditures
and additions to working capital.
===================
Photowatt Tech	PHWT, C+, 7
solar cells & modules		March 31 fiscal				Post-IPO shrs: 27.5mm
Cambridge, Ontario, Canada	2004	2005	2006	Dec 05*	Dec 06*	IPO Mkt
Rev ($mm)	$66	$113	$121	$87	$99	Cap (mm)
Gross profit	20%	20%	26%	24%	27%	$440
				* 9 months ended Dec 31		@$16
Profit (loss) ($mm)	$1.1	$6.8	($98.0)	($0.1)	($6.5)
Profit (loss) %	1.7%	6.0%	-81.0%	-0.2%	-6.6%
fiscal 2006 includes $94mm in assest impairment charge of R&D capitalized assets
	2004	2005	2006	Dec 05*	Dec 06*
Photowatt operating				* 9 months ended Dec 31
net of Spheral Solar	$3	$11	$20	$12	$14
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Photowatt Tech (PHWT)	$440	3.3	-51	1.7	1.7	40%
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
. Designs, manufactures and sells photovoltaic products, commonly referred to as solar cells and
modules. Solar cells and modules provide clean, renewable energy by converting sunlight into
electricity through a process known as the photovoltaic effect.
. Operates through two segments, Photowatt International, the core business that is based on a
wafer technology, and Spheral Solar™, a development project that is based on a spheral
technology.
Photowatt International
. Designs, manufactures and sells solar modules and installation kits, and provides solar power
system design and other value-added services, principally in Western Europe.
. Most of Photowatt International's products are manufactured in the Photowatt France facility
outside of Lyon, France.
. Photowatt USA, our facility in Albuquerque, New Mexico, performs certain module assembly
operations for Photowatt International. Photowatt International, through its French and U.S.
operations, sells its products under the Photowatt and Matrix brands to a network of independent
solar power systems distributors and installers.
. Solar modules manufactured by Photowatt International are used by businesses, institutions and
homeowners to generate electric power. Photowatt International has been developing and selling
photovoltaic products since 1979.
. Photowatt International accounted for all of our combined revenue for our fiscal 2006 and for the
nine months ended December 31, 2006.
Spheral Solar
Is a development project for a light weight, flexible crystalline solar module designed to compete
with both conventional crystalline and thin film technologies.
. PHWT's Spheral Solar technology incorporates thousands of tiny silicon spheres, bonded
between thin, flexible aluminum foil substrates to form solar cells.
. PHWT believes that its Spheral Solar technology, if successfully developed, would have
advantages over conventional crystalline solar cells, including lower silicon utilization, better
aesthetics and greater physical flexibility.
. However, regarding PHWT's "Spheral Solar Technology," the technological and
commercialization challenges associated with the development of spheral technology are
substantial, and PHWT may discontinue development of this technology at any time.
Business Strategy
o Expand annual integrated manufacturing capacity. In response to demand for products, which is
currently greater than the capacity to produce them, intends to increase annual integrated
manufacturing capacity to approximately 400 MW by the end of calendar year 2011.
o Establish reliable, long-term silicon supply. Strategy is to establish a long-term supply of
polysilicon and polysilicon alternatives from a variety of sources to support continued growth.
o Continue to invest in research and development to improve cell efficiency. Expects to continue
to devote substantial resources to research and development efforts, either through direct
investment or collaborative activities, aimed at increasing the efficiency of solar cells and reducing
silicon usage per watt.
o Commercialize Spheral Solar technology. Working on development and process engineering in
an effort to commercialize Spheral Solar technology, which PHWT acquired in 1997.
Spheral Solar Technology
. Currently evaluating a proposed partnership and cross-licensing arrangement with Clean Venture
21 Corporation and Fujipream Corporation, Japanese companies with expertise in the
development and manufacture of solar products, to assist PHWT in further developing and
commercializing Spheral Solar technology, and has signed a non-binding letter of intent with these
companies.
. However, the technological and commercialization challenges associated with the development
of spheral technology are substantial, and PHWT may discontinue development of the technology
at any time.
. For the year ended March 31, 2006, PHWT recognized an after-tax, non-cash asset impairment
charge of $94.3 million pre-tax due to the uncertainty in resolving technological challenges
associated with commercialization and resulting delays in realizing cash flows.
. Additionally, based in part on a report delivered by outside consultants, PHWT concluded that
attempting to overcome certain technological challenges relating to Spheral Solar technology on
PHWT's would involve significant additional time and costs
Silicon Supply
. Polysilicon is the primary raw material used in the production of solar cells and modules. Silicon
is currently in short supply and its price has increased significantly over the past 18 months.
. PHWT believes that it has secured or identified sources of silicon for Photowatt International's
planned capacity to the end of September 2008.
. The majority of these silicon requirements are expected to be filled by inventory on hand and by
confirmed purchase orders. PHWT expects that the balance of requirements will be satisfied by
outstanding purchase orders with existing suppliers and by other identified sources.
. Currently producing solar cells and modules using refined metallurgical silicon, and in the third
quarter of fiscal 2007, produced 7% of solar modules using refined metallurgical silicon.
. Based on contractual commitments for the supply of refined metallurgical silicon that we have
entered into or expect to enter into, PHWT believes that in excess of two thirds of its total silicon
requirement during fiscal 2008 will be met with refined metallurgical silicon.
Facilities
. Lease a building from ATS with 193,000 square feet of space.
. This building also houses PHWT Spheral Solar technology development facility. Photowatt's
facility occupies a total of 130,000 square feet of manufacturing space in a building PHWT owns
near Lyon, France.
. Photowatt USA leases a sales and module assembly facility in Albuquerque, New Mexico.
Spin-off of ATS
. Parent company, ATS, is a leading designer and producer of turn-key automated manufacturing
and test systems, which are used primarily by multinational corporations operating in a variety of
industries including: automotive, computer/ electronics, healthcare, and consumer products.
. As of December 31, 2006, ATS employed 3,500 people at 25 manufacturing facilities in Canada,
the United States, Europe, southeast Asia and China. ATS' shares are traded on the Toronto Stock
Exchange under the symbol ATA.
. In March 2006, ATS announced that, following a review of the strategic alternatives for its solar
business, it decided to pursue an initial public offering of the solar business segment.
Patents and Trademarks
. Holds a number of patents, primarily in connection with various aspects of Spheral Solar
technology and also in connection with the ability to purify polysilicon fines, which is significant
to our silicon supply strategy.
. The patents that PHWT's consider to be of the greatest importance to Spheral Solar technology
will expire between 2008 and 2023 and has been issued primarily in the United States, although
PHWT's also has patent protection in certain jurisdictions in Europe and Asia for some of the
same technology that is covered by PHWT's U.S. patents.
. Also holds a number of patents in the United States, France and other European countries, which
will expire between 2007 and 2024, relating to some of the technology used in Photowatt
International.
. The patents relating to the technology used in Photowatt International cover a small portion of
the overall end-to-end manufacturing process, the balance of the technology being either public
domain technology or technology developed by us and treated as trade secrets
Competition
. Competitors include companies such as Sharp, Q-Cells, Kyocera, Sanyo, Mitsubishi, Schott,
Suntech, Sunpower and BP Solar.
. Many competitors are developing or currently producing products based on new solar
technologies, including amorphous silicon, ribbon, sheet and nano technologies, which they
believe will ultimately cost the same as or less than crystalline technologies similar to PHWT on a
cost per watt basis.
. The two ribbon technologies on the market launched commercially at about 11% efficiency with
a 10 g/W silicon consumption. These technologies are currently limited to small cell areas of 100-125 cm2.
. PHWT's polysilicon wafer technology has a higher efficiency at the same silicon utilization and
on larger cell sizes.
. PHTW's Spheral Solar technology, if successfully developed, could combine 11% targeted
efficiency with the flexibility of thin film technology in one module and is expected to have a
lower silicon utilization than conventional crystalline devices. Most amorphous technologies use
double glass construction to increase life expectations beyond ten years, and commercial launches
for these technologies were on products with approximately 6.5% efficiency.
. Nano-technologies, which are not yet commercialized, are expected to have close to 5%
efficiency with life expectancies of several years for double glass construction.
. Compared to these competing technologies, PHWT believes the majority of its products have
higher efficiencies and longer lifetimes without the need for double glass construction.
Use of $158mm in IPO proceeds
. Finance capital expenditures associated with the first and second phases of manufacturing
capacity expansion plan at Photowatt International estimated to be $113 million
. Finance $12 million in capital expenditures in connection with the first phase of the proposed
business partnership and cross-licensing agreement for developing PHWT's Spheral Solar
technology,
. Repay $9 million of debt
. Balance for general corporate purposes, including the procurement of silicon supply contracts,
working capital and investments that will enhance manufacturing, silicon supply or research and
development capabilities
===================
Tongjitang Chinese Med	TCM, C+, 8
modernized trad Chinese medicine						Post-IPO shrs: 33.5mm ADS equivalents
Shenzhen, Guangdong, China		2004	2005	2006		IPO Mkt
Rev ($mm)				$62		Cap (mm)
Gross profit %		46%	59%	67%		$536
Profit (loss) ($mm)				$17.2		@$16
Profit (loss) %		5%	32%	28%
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Tongjitang ChiMed TCM	$536	8.6	31	2.9	3.0	30%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	2	2	8
American Depositary Shares, each ADS represents four shares
Tax issues
. Currently, Tongjitang Pharmaceutical is entitled to (a) an exemption from the national enterprise
income tax for 2006 and 2007, and (b) a 7.5% national enterprise income tax rate for 2008, 2009
and 2010.
. After 2010, Tongjitang Pharmaceutical will be subject to a 15.0% tax rate as long as it maintains
its manufacturing FIE status in the Guiyang economic and technological development zone.
Uniform tax rate in process
. However, since China joined the World Trade Organization, or WTO, in November 2001,
preferential tax treatments have been criticized as not being WTO-compliant. On October 4, 2006,
China Securities Daily reported that the State Council of China recently approved a draft bill to
apply a uniform tax rate to both foreign-invested enterprises and domestic enterprises and plans to
submit this draft bill to the National People's Congress, the Chinese legislature, for review and
possible enactment in March 2007.
. According to this report, the uniform tax rates range from 24.0% to 27.0% and there is likely to
be a three to five year transition period for foreign-invested enterprises during which they would
be able to continue to enjoy their existing preferential tax treatments.
. If the uniform tax regime is adopted, then the effective tax rate of Tongjitang Pharmaceutical
could increase significantly
Business
. Specialty pharmaceutical company in China
. Flagship product, Xianling Gubao, is the leading traditional Chinese medicine for the treatment
of osteoporosis in China
. Sales of Xianling Gubao accounted for 68.7%, 66.6% and 77.2% of net revenues in 2004, 2005
and 2006, respectively.
. TCM expects that the sales of Xianling Gubao will continue to comprise a substantial majority of
revenues in the near future.
Xianling Gubao product
Approved in 2002 by the SFDA as both a prescription medicine and an OTC medicine for the
treatment of osteoporosis.
> Hospitals. In 2004, 2005 and 2006, 1,602, 1,982 and 2,257 Chinese hospitals, respectively,
included Xianling Gubao on their lists of approved prescription medicines, or formularies
. Under the PRC Ministry of Health hospital classification system, the best and largest hospitals in
China are designated as "Class 3" hospitals, followed by lower-ranked "Class 2" and "Class 1"
hospitals.
. Of the formulary hospitals for Xianling Gubao, 361 in 2004 and 441 in 2005 were "Class 3"
hospitals, representing 38.7% and 46.6% of all "Class 3" hospitals in China, respectively.
. The number of "Class 3" formulary hospitals for Xianling Gubao increased to 488 in 2006.
> Retail stocking pharmacies
. Since May 2004, has also been marketing Xianling Gubao as an OTC medicine to retail
pharmacies.
. In 2005 and 2006, over 20,000 and 37,000 retail pharmacies in China stocked Xianling Gubao,
> National catalog
. In September 2004, Xianling Gubao was added to the national medicine catalog of the National
Medical Insurance Program, a government-administered medical insurance program, which is the
largest in China.
. As of the end of 2006, the number of participants enrolled in this program was 157.4 million,
according to a statement made on January 18, 2007 by the Ministry of Labor and Social Security,
or the MLSS.
. According to a statement made by the MLSS on February 21, 2006, the Chinese government
intends to expand program enrollment to 300 million by the end of 2010.
Seasonal Variations
Sales of Xianling Gubao are affected by seasonal variations in consumer demand. In most regions
in China, winter starts in the last quarter of each year. The
. Lower temperatures in winter normally result in a higher incidence of pain and other symptoms
associated with osteoporosis, arthritic rheumatism and other bone-related diseases and conditions.
. As a result, hospitals and retail pharmacies typically experience seasonal peaks in demand for
Xianling Gubao in the last quarter of each year.
. Accordingly, hospitals and retail pharmacies begin to stock greater quantities of Xianling Gubao
in September, and the fourth quarter is our peak season for sales.
. In the first quarter, strong winter-season sales are usually offset by the slow-down of businesses
during the Chinese New Year holiday season that effectively lasts more than half a month.
. During this holiday season, many businesses in China, including retail pharmacies and most
departments in hospitals, are either closed or substantially reduce the level of their activities
. Conversely, TCM typically experiences seasonal lows in demand for Xianling Gubao in
summer, affecting sales in the third quarter
Intellectual property
. Owns 17 patents, all of which are registered in the PRC.
. As of December 31, 2006, we owned six invention patents and 11 external design patents. We
also have 15 pending invention patent applications in China
Competition
. According to the 2006 China Pharmaceutical Market Research Report prepared by Compass
International, a Beijing-based research company, in 2005 there were over 1,200 traditional
Chinese medicine manufacturers in China (not including manufacturers of traditional sliced
herbs).
. Of these manufacturers, in 2005, large-sized manufacturers contributed to 27.4% of the total
sales of this sector, compared to 30.3% and 42.3% of sales by small- and medium-sized
manufacturers, respectively, according to the same research report.
> TCM faces competition from other China-based manufacturers of traditional Chinese medicines.
Primary traditional Chinese medicines competing with Xianling Gubao are:
. Qiang Gu (Bone-Strengthening) Capsules, and
. Gu Song Bao Capsules/Granules.
> Qiang Gu Capsules are manufactured by Guizhou Fuhua Pharmaceutical Co., Ltd. and Gu Song
Bao Capsules are manufactured by Beijing Qihuang Pharmaceutical Co., Ltd. Both companies are
PRC domestic pharmaceutical companies.
. In addition, TCM faces competition from manufacturers of western medicine with similar
curative effects, which therefore can be used as substitutes for TCM's traditional Chinese
medicine products.
. The major western medicines that compete with Xianling Gubao include (1) calcium
supplements such as Osteoform, Caltrate and Gai Zhong Gai, (2) hormonal replacement therapies
such as Livial, Premarin, Ipriflavone and Ranoxifene, (3) bisphosphonates such as Fosamax, and
(4) calcitonin derivatives, such as elcatonin.
. Except for Gai Zhong Gai, these western medicines are manufactured by the PRC subsidiaries of
U.S.- or European-based pharmaceutical companies.
. Many of these western medicines, including calcium supplements and bisphosphonates, are also
included in the national and provincial medicine catalogs and therefore purchases of them are
reimbursable to National Insurance Program participants.
> The following sets forth the primary SFDA-approved medicines that compete with TCM's other
principal products:
. Alprazolam (Xanax)
. Zolpidem (Ambien)
. Flunarizine (Sibelium)
Use of $119mm in IPO proceeds
. US$40.0 million to enhance marketing of Xianling Gubao and other products
. US$10.0 million to strengthen the research and development infrastructure and broaden and
commercialize the product pipeline
. balance to fund working capital and for general corporate purposes, which may include product
licensing and strategic acquisitions of businesses, business units
===================

Financial Performance & Scoring -- © 2007 Gaskins IPO Desktop/IPOdesktop
Pre-IPO analysis, grading & scoring -- updated March 2
. 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 (based on recent results)
(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
===================
SEARCH BY COMPANY		In your browser use 'Edit/Find' to search for companies
or ticker for analysis		scheduled below
===================
March 5 week IPO schedule
Clearwire Corp (CLWR)	$3,792	37.9	-13	2.2	2.0	13%
wireless broadband networks: B-, 8						Post-IPO shrs: 158mm

Xinhua Finance (XFML)	$888	14.3	-404	2.8	2.8	34%
Chinese media company: B-, 8						Post-IPO ADS equivalents: 68mm

Sourcefire	$300	6.7	-334	3.3	3.4	25%
Computer network security: C+, 7						Post-IPO shrs: 23mm

===================
March 5 week analysis
Clearwire Corp	CLWR, B-, 8
wireless broadband networks						Post-IPO shrs: 158mm
Kirkland, WA		2004	2005	2006		IPO Mkt
Rev ($mm)		$15	$34	$100		Cap (mm)
Cost of Equip & Services%		84%	70%	70%		$3,792
SG&A		158%	317%	215%		@$20
Profit (loss) ($mm)		($33.0)	($140.0)	($284.0)
Profit (loss) %		-216%	-418%	-284%
Capital expenditures		$80	$138	$152
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Clearwire Corp (CLWR)	$3,792	37.9	-13	2.2	2.0	13%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		3	2	1	2	8
Summary
CLWR could become a major company
WiMax definition:
. Trade name for a family of new technologies related to the IEEE 802.16 wireless standards.
. Has the potential for very long range (5 - 30 miles) and high speeds.
Business
. Builds and operates next generation wireless broadband networks that enable fast, simple,
portable, reliable and affordable Internet communications.
. CLWR's wireless broadband networks cover entire communities and deliver a high-speed
Internet connection that not only creates a new communications path into the home or office, but
also provides a broadband connection anytime and anywhere within the coverage area.
. CLWR intends to evolve its network and services to facilitate a greater range of mobile
communications services than currently offered.
Expanded offerings
. CLWR intends to introduce a PC Card for its Expedience network in the second half of this year
that will facilitate greater mobile access to CLWR's services.
. Currently offers VoIP telephony services in 13 markets, and plans to expand this offering to
other markets in the future.
. Also plans to offer other premium services and applications, which may include WiFi hotspots,
public safety services, security services, and subscription-based technical support.
. CLWR believes that its planned mobile WiMAX deployment will enable it to offer additional
premium services that take advantage of the capabilities of this technology.
Sprint Nextel competition
Sprint Nextel, which CLWR believes is the largest holder of spectrum in the 2.5 GHz band in the
United States, recently announced that it intends to deploy a mobile WiMAX network covering
100 million people in the United States by the end of 2008.
Intel joint development program
. CLWR and Intel have agreed to jointly develop, promote and market a mobile WiMAX service
offering as a co-branded service available only over Clearwire's mobile WiMAX network in the
United States.
. This service will target users of notebook computers, ultramobile PCs, and other mobile
computing devices containing Intel microprocessors.
Industry
. In its November 2006 Worldwide WiMAX Forecast, Gartner Dataquest estimates that the size of
the North American WiMAX market will increase from approximately 30,000 connection
installed bases in 2006 to 21.2 million in 2011
. And the worldwide market will increase from 180,000 connection installed bases in 2006 to 84.8
million in 2011.
. In addition to growing broadband demand, the rapid growth of mobile email products, as well as
sales of notebook computers and ultramobile PCs, leads us to believe that subscribers will
increasingly favor Internet access that provides for the portability offered by CLWR's existing
network and, once commercially deployable, the mobility offered by WiMAX.
Demand for mobile applications
. As wireless broadband becomes more widely available, CLWR believes demand for mobile
applications will dramatically increase, including demand for email, web browsing, VoIP
telephony, streaming audio and video, video conferencing, gaming, e-commerce, music and video
downloading and file transfers.
. For instance, the U.S. VoIP-based broadband telephony market is expected to grow from 4.3
million households in 2005 to 22.5 million households by 2010, according to Jupiter Research's
Broadband / Voice Over IP (September 2006) report, representing approximately a 39%
compound annual growth rate.
. The worldwide VoIP telephony market is expected to experience similar growth trends,
according to iSuppli's August 2006 Wired Communications Topical Report.
CLWR Competitive Strengths
CLWR believes its business model is unique
> Attractive Spectrum Position
. The supply of licensed spectrum is limited, creating significant barriers to entry for competing
wireless services.
. CLWR believes that it has the second largest spectrum position in the 2.5 GHz (2495-2690 MHz)
band in the United States with a spectrum portfolio that as of December 31, 2006 includes
approximately 12.0 billion MHz-POPs, an industry metric that represents the amount of spectrum
in a given area, measured in Megahertz, multiplied by the estimated population of that area.
. As of December 31, 2006, CLWR's spectrum rights in the United States covered an estimated
214 million people.
. CLWR is continuing to acquire additional spectrum in the United States. For instance, in
February 2007, CLSR agreed to acquire all of the 2.5GHz spectrum held by AT&T. When
completed, the acquisition will increase CLWR's spectrum holdings by 1.7 billion MHz-POPs in
the southeastern United States.
. In Europe, as of December 31, 2006, CLWR held 8.7 billion MHz-POPs of spectrum,
predominantly in the 3.5 GHz band, covering approximately 199 million people.
. CLWR plans to continue acquiring spectrum in markets that it believes are attractive for CLWR
service offerings
> Efficient Economic Model
. CLWR believes its economic model is replicable and scalable in individual markets
. As of December 31, 2006, 29 of CLWR's 34 markets in the United States had positive cash flow
from operations before marketing expenses and four markets in the United States had positive cash
flow from operations.
> World-Class Management Team
. Regarded as a pioneer and leader in the wireless communications industry, Mr. McCaw has been
an active entrepreneur, operator and investor in the industry for more than 35 years.
. In addition to Mr. McCaw, CLWR's senior management team consists of a core group of eight
senior executives, who together average almost 23 years of experience in or serving the
communications and technology industries with companies such as McCaw Cellular, AT&T
Wireless, Nextel Communications, Nextel Partners, Intel and others.
> Strong Strategic Relationships
. Key strategic relationships with three industry leaders, Intel, Motorola and Bell Canada, which,
directly or through their affiliates, have invested a total of approximately $1.1 billion in CLWR's
equity securities.
. CLWR believes its strategic relationships with Intel, Motorola and Bell Canada place CLWR in
an advantageous position with respect to access to equipment, deployment of mobile WiMAX and
development of other value added services, such as VoIP telephony
Wireless broadband network
. Based on proprietary non-line-of-sight, or NLOS, Orthogonal Frequency Division Multiplexing,
or OFDM, technologies.
. CLWR is committed to deploy networks based on the IEEE mobile Worldwide Interoperability
of Microwave Access 802.16e-2005, or mobile WiMAX, standard once mobile WiMAX
equipment is commercially available and meets CLWR's requirements.
. As with CLWR's current network infrastructure equipment, the company expects mobile
WiMAX to support fixed, portable and mobile service offerings using a single network
architecture.
. In addition, because mobile WiMAX is a standards-based technology, CLWR expects
manufacturers to eventually offer a number of handheld communications and consumer electronic
devices that will be enabled to communicate using CLWR's mobile WiMAX network, including
notebook computers, ultramobile personal computers, or PCs, personal data assistants, or PDAs,
gaming consoles, MP3 players, and other handheld devices.
Current services
. Both competitive with and complementary to existing wireline and wireless networks.
. Subscribers may access the same rich content, applications and services as subscribers of
wireline broadband services, while also experiencing much of the freedom and flexibility that
large scale wireless networks enable.
. CLWR believes its network combines some of the best features of cellular, cable modem, digital
subscriber line, or DSL, and wireless fidelity, or WiFi, networks into a single service offering that
legacy networks do not currently match.
. As CLWR's capabilities evolve, CLWR also expects to develop and offer additional innovative
and differentiated products and services.
. CLWR's recently introduced voice over Internet protocol, or VoIP, telephony service is one
example of a service that complements the current wireless broadband offering
History & coverage
. Founded by telecommunications pioneer Craig O. McCaw, Chairman, in October 2003
. Launched our first market in August 2004.
. By December 31, 2006, offered our services to more than 9.6 million people in the United States
and Europe.
. CLWR's network in the United States is deployed in 34 markets across more than 350
municipalities and covers an estimated 8.6 million people.
. Markets range from major metropolitan areas to small, rural communities, and all sizes in
between.
. As of December 31, 2006, also offered our wireless broadband services in Brussels, Belgium and
Dublin, Ireland, where CLWR's network covers approximately 1.0 million people.
Subscribers
. Have grown from 1,000 wireless broadband Internet subscribers as of September 30, 2004 to
206,200 as of December 31, 2006.
. CLWR believes that substantially all of the households it covers have access to cable modem
and/or DSL Internet services
. Leading CLWR to conclude that its rapid subscriber growth rates reflect mass market appeal and
robust customer demand for CLWR's differentiated services, even in the presence of highly
competitive wireline broadband alternatives.
Competition
Principal competitors include cable and DSL operators, wireless telephone providers, WiFi and,
prospectively, WiMAX providers, satellite providers and others.
> Cable Modem and DSL Services
Principal competitors include cable companies, such as Time Warner and Comcast, as well as
incumbent telephone companies, such as AT&T, Qwest and Verizon.
> Cellular and PCS Services
> Wireless Broadband Service Providers
. CLWR believes that, as network infrastructure based on mobile WiMAX technology becomes
commercially available and manufacturers develop and sell handheld communications and
consumer electronic devices that are enabled to communicate using mobile WiMAX networks,
other network operators will introduce mobile WiMAX services comparable to CLWR's in both
domestic and international markets.
. For instance, Sprint Nextel, which CLWR believes is the largest holder of spectrum in the 2.5
GHz band in the United States, recently announced that it intends to deploy a mobile WiMAX
network covering 100 million people in the United States by the end of 2008.
> Satellite
. Satellite providers like Wild Blue and Hughes Network Services offer broadband data services
that address a niche market, mainly less densely populated areas that are unserved or underserved
by competing service providers.
. Although satellite offers service to a large geographic area, latency caused by the time it takes for
the signal to travel to and from the satellite may challenge the ability to provide some services,
such as VoIP, and reduces the size of the addressable market
> WISPs and WiFi
Also competes with other wireless Internet service providers that use unlicensed spectrum. In
addition to these commercial operators, many local governments, universities and other
governmental or quasi-governmental entities are providing or subsidizing WiFi networks over
unlicensed spectrum, in some cases at no cost to the user
. CLWR relies exclusively on licensed spectrum for its network and does not expect significant
competition from providers using unlicensed spectrum to deliver services to their customers.
> Other
. CLWR believes that other emerging technologies may also enter the broadband services market
. For example, certain Internet service providers are working with electric distribution utilities to
install broadband over power line, or BPL, technology on electric distribution lines to provide
broadband services.
. These Internet service and BPL providers are potential competitors.
. BPL technology may turn electrical lines into large unshielded transmitting antennas that would
allow transmission of data over these lines, but could potentially create interference with some
wireless networks.
Use of $445mm in IPO proceeds
Market and network expansion, spectrum acquisitions and general corporate purposes.
===================
Xinhua Finance Media	XFML, B-, 8
Chinese media company.						Post-IPO ADS equivalents: 68mm
Shanghai, China				2006		IPO Mkt
Rev ($mm)			proforma ====>	$62		Cap (mm)
Operating income %				1%		$888
Profit (loss) ($mm)				($2.2)		@$13
Profit (loss) %				-4%
The unaudited pro forma condensed consolidated statements of operations for the year ended
December 31, 2006 present adjustments as if the acquisitions had been consummated on January
1, 2006., for proforma results see page 11 of the S-1 filed Feb 21, 2007
. XFML's consolidated financial statements are prepared and presented in accordance with United
States generally accepted accounting principles
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Xinhua Finance (XFML)	$888	14.3	-404	2.8	2.8	34%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	3	2	1	8
Compare & contrast-- with international advertising agencies
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	Price
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	March 2
Xinhua Finance (XFML)	$888	14.3	-404	2.8	2.8
Interpublic Grp (IPG)	$5,450	0.9	-151	2.8	-5.5	$12.36
Omnicom Group (OMC)	$17,480	1.5	20	4.5	-5.6	$103.78
Publicis Groupe SA (PUB)	$8,290	1.5	14	n/a	n/a	$45.13
Note: valuation ratios for XFML are closest to IPG
. Same price-to-book value of 2.8
. Looks like XFML mis-stated its price-to-tangible book value ratio
. XFML's comparative price to sales ratios appears quite high
Summary comments:
. A China-based advertising agency with increasing critical mass, could become a leader in the
business and financial media areas, focused on an affluent segment of China's market.
. Right now most revenue (76%) is from advertising agency-related sources
. On a combined basis XFML also generates and markets its own media content, although that
division's revenue doesn't yet make a significant contribution
. Strong, unique agreements to sell advertising space, some exclusively, see 'strategic
partnerships' below
. Consolidated financial statements present in accordance with United States generally accepted
accounting principles (GAAP), which is a good sign for the investment community in the United
States
. Valuation ratios seem high
Business
. Established on November 7, 2005 by the parent, Xinhua Finance Limited. Acquired companies
to build an integrated platform of media products and services
. Outlets reach an estimated 210 million potential television viewers, a potential listening audience
of 33 million people, and the readers of leading magazines and newspapers.
2006 Sources of Revenue
And % of revenues for 2006) plus cost of revenues (% of revenues)
o advertising services, 76.1%--47%
o advertising sales, 11.3%--3.2%
o content production, 11.1%--4.8%
o publishing services, 1.5%--2.4%
Five operating groups
o Advertising
which refers to XFML's advertising agency that creates and places advertising for television, print
media and campus billboards;
o Media production
which refers to the in-house production studios that create and produce a diverse array of high
quality programs, including business, entertainment, educational and animation shows;
o Broadcasting
which refers to the distribution of programming through Inner Mongolia Satellite Television;
production and syndication of the Fortune China series of financial programs, including Fortune
Morning 7 a.m., a popular financial news programs in China; and the production and distribution
of bilingual content for China Radio International's EasyFM stations in Beijing and Shanghai;
o Print
which refers to XFML's exclusive rights to sell advertising for and provide management and
information consulting services to, Money Journal magazine and the Economic Observer
newspaper;
o Research
which refers to XFML's market research group that provides research services on products,
advertisements and markets.
The biggest component is advertising services, 76% of revenues
XFML generates advertising services in several way
o Acts as an advertising agent to place advertisements on certain programs aired by Beijing
Television Station and other television stations, on billboards on some university campuses in
Shanghai and in certain print and electronic media (by the advertising group);
o Designs and produces television, print and billboard advertisements (by the advertising group);
o Markets services, primarily events organization (by the print group, the broadcasting group and
the advertising group);
o Research services (by the research group); and
o Advertising, sponsorship and sponsored programming on Inner Mongolia Satellite Television
and provision of content and advisory services to Shanghai Camera (by the broadcasting group).
Strategic partnerships
> Some of these key contracts have long terms, while others have short terms ranging from one
year to a few years and will need renewal. The longer term contracts, which all expire in 2014 or
later, or have no expiration, include, but are not limited to, the following:
o agreements to provide consulting and advisory services to, offer content to, and be the exclusive
external advertising agent for, Shanghai Camera Media Investment Co., Ltd., or Shanghai Camera,
which has the exclusive rights to sell advertising for and provides most of the content of Inner
Mongolia Satellite Television;
o agreements with Economic Observer Press Office that allow us to have the exclusive rights to
sell advertising for the Economic Observer and to provide management and information
consulting services;
o agreement with the exclusive advertising agent for China Radio International that allow us to
have the exclusive rights to sell advertising for and the right to provide content to its EasyFM
stations in Beijing and Shanghai. We intend to only provide non-news content pursuant to this
agreement; and
o agreement with Money Journal Press Office that allows us to have the exclusive rights to sell
advertising for, and to provide management and information consulting services to, Money
Journal.
> Shorter term contracts, which expire in 2009 or earlier, include, but are not limited to, the
following:
o agreement with Hunan Television Station that allows us to broadcast Fortune Morning 7 a.m. on
Hunan Satellite Television;
o agreement with Dow Jones that allows Money Journal to publish Dow Jones content; and
o agreement with Beijing Television Station's advertising agents that allow us to act as advertising
agent for certain programs.
> XFML's business relies on certain key contracts to which it is not a party. Instead, XFML has
contracts with the companies that in turn have those key contracts with third parties. The contracts
XFML has allow XFML to benefit financially and strategically from its contracting
counterparties' roles in the following key contracts:
o contracts with Shanghai Camera, which has the exclusive rights to sell advertising for and
provides most of the content of Inner Mongolia Satellite Television under a contract it has with
Inner Mongolia Television Station;
o contracts with Beijing Guoguang Guangrong Advertising Co., Ltd., or Guoguang Guangrong,
the exclusive advertising agent for China Radio International's domestic stations, giving XFML
the exclusive rights to sell advertising for and the rights to provide content to the EasyFM radio
stations in Beijing and Shanghai; and
o contracts with Beijing Television Station's advertising agents that allow XFML to act as
advertising agent for certain television programs.
Growth by acquisition
Acquired companies include EconWorld Media (the predecessor), Beijing Century Media, Xinhua
Finance Advertising Limited (formerly known as Ming Shing International Limited, or Ming
Shing), Accord Group Investments Limited, Beijing Perspective Orient Movie and Television
Intermediary Co., Ltd., and Shanghai Hyperlink Research Co., Ltd., or Hyperlink
Competition
Each of XFML's businesses is subject to significant competition, much of it from state-owned
competitors. XFML believes it can distinguish itself from competitors by being the only company
that can provide a full range of production services, including animation, broadcast design and
post-production for television commercials, while having a partnership with a research group and
distribution channels through various types of media outlets.
> Media production
Competes against a strong field of competitors in media production, including large state-owned
production companies. There are approximately 1,160 licensed television production companies in
China and approximately 700 companies producing drama series.
> Broadcasting
. XFML and its strategic partners face many competitors in the Chinese broadcast market. Within
each province or city, there are up to 16 China Central Television satellite channels and up to 30
regional satellite channels, which compete with Inner Mongolia Satellite Television. There may
also be local cable channels and local terrestrial channels.
. The major competitors of XFML's Fortune China operations are China Central Television
Channel 2, a satellite television channel covering many cities throughout China, and Fortune One,
a financial news program broadcast primarily in Shanghai.
. The radio markets in Beijing and Shanghai are very competitive. EasyFM has only a small share
of the Beijing and Shanghai radio markets, respectively.
> Print
. The Economic Observer, a weekly newspaper, faces competition from several financial
newspapers in China, including 21st Century, which prints three times a week, CBN, which prints
daily and China Business.
. Money Journal competes against several financial magazines, both international and domestic,
such as Caijing Magazine, Harvard Business Review, and the Chinese versions of Business Week,
Fortune and Forbes.
> Advertising
. Primary competition in advertising comes from the American Association of Advertising
Agencies, or 4A, advertising companies, which are the dominant international advertising
companies.
. Although XFML has relationships with them in which they act as advertising agents, at the same
time the 4A companies have much of the market share both globally and in China and are
XFML's competitors.
> Research
. There are approximately 2,000 research companies in China, but many of these are capable only
of data gathering.
. International firms also make up a large portion of the research market in China.
Shareholders
Upon completion of this offering, will be 36.7% owned by the parent, Xinhua Finance Limited,
8.0% owned by Patriarch Partners Media Holdings, LLC, and 5.8% owned by Fredy Bush, Chief
Executive Officer and the Chairman of our Board
About the parent, Xinhua Finance Limited
Employed: 588 end of 2005
Xinhua Finance webcast
http://www.xinhuafinance.com/en/for-investors/
click, then go to 'ceo webcast' in upper right
. SHANGHAI, February 15, 2007 - Xinhua Finance (TSE Mothers: 9399 and OTC: XHFNY),
China's premier financial information and media service provider, today announced, under
International Financial Reporting Standards ("IFRS"), consolidated revenue of US$175.0 million
and net income of US$18.7 million, which represented gains of 59% and 82% respectively over
those of the last fiscal year
. Xinhua Finance Limited. The Group's principal activity is the provision of China-specific
indices, financial news feeds, credit ratings, investor relations services, financial publishing in
books and magazines and television consulting and distribution. Its operating in three segments:
Provision of News and Financial information, Provision of Service and Solutions and Provision of
Financial Media. The Group acquire 60% of the equity interest in EconWorld Media Limited in
May-2005, Taylor Rafferty Associates Inc and 60% of the equity interest in Shanghai Pobo Data
and Information Network Consulting Co Limited in Jun-2005, Washington Analysis Corporation
in Jul-2005, Beijing Century Media Culture Co Limited (Century Media) in Sep-2005 and 50% of
the equity interest in Shanghai Far East Credit Rating Co Limited in Nov-2005.
Use of $204mm in IPO proceeds from sale of 17mmm ADSs
(shareholders intend to sell 5.8mm ADSs)
o $50 million to repay parent and Xinhua Financial Network Limited.
o an undetermined amount for strategic acquisitions of complementary businesses. At this time has
not entered into advanced discussions or negotiations regarding potential acquisitions except for
the acquisition of the remaining equity of Beijing Perspective;
o balance to fund working capital and for other general corporate purposes.
===================
Sourcefire (FIRE)	FIRE, C+, 7
computer network security						Post-IPO shrs: 23mm
Columbia, Maryland		2003	2004	2005	2006	IPO Mkt
Rev ($mm)		$10	$17	$33	$45	Cap (mm)
Gross Profit %		68%	68%	75%	70%	$300
SG&A		95%	75%	52%	46%	@$13
Profit (loss) ($mm)		($8.9)	($10.5)	($5.5)	($0.9)
Profit (loss) %		-94%	-63%	-17%	-2%
Capital expenditures		$80	$80	$138	$152
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Sourcefire	$300	6.7	-334	3.3	3.4	25%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	1	2	7
Summary
Based on top line revenue trends and decreasing losses, breakeven is in sight
Business
Intrusion prevention, vulnerability management and unified threat management,
. A leading provider of intelligence driven, open source network security solutions that enables customers
to protect their computer networks in an effective, efficient and highly automated manner.
. Sells security solutions to a diverse customer base that includes more than 25 of the Fortune 100
companies and over half of the 30 largest U.S. government agencies.
. Also manages one of the security industry's leading open source initiatives, Snort.
. For the year ended December 31, 2006, generated 81% of revenue from customers in the U.S. and 19%
from international customers
. In 2006, FIRE closed its fourth round of institutional financing, raising $23 million from the sale of Series
D convertible preferred stock, and achieved the first quarter of cash flow positive results.
Highly seasonal revenue
. Revenue from product sales has been highly seasonal, with more than one-third of total product
revenue in recent fiscal years generated in the fourth quarter.
. The timing of year-end shipments could materially affect fourth quarter product revenue in any fiscal year
and sequential quarterly comparisons.
. Revenue from government customers has occasionally been influenced by the September 30th fiscal year
end of the U.S. federal government, which has historically resulted in our revenue from government
customers being highest in the third quarter.
The Industry
. FIRE believes, based on a review of various industry sources, that the network security industry was
estimated to be a $18.4 billion market in 2006 and is projected to grow to $26.9 billion in 2009,
representing a compound annual growth rate of over 13%.
. Addressable markets include intrusion prevention, vulnerability management and unified threat
management, which were collectively projected to total $2.9 billion in 2006 and are expected to grow at a
compound annual growth rate in excess of 21% to $5.2 billion in 2009, according to industry sources we
reviewed.
Products
. Family of network security products forms a comprehensive Discover, Determine and Defend, or 3D,
approach to network security. Using this approach, FIRE's technology can automatically:
o Discover potential threats and points of vulnerability;
o Determine the potential impact of those observations to the network; and
o Defend the network through proactive enforcement of security policy.
Sourcefire's 3D approach is comprised of three key components:
> RNA. At the heart of the Sourcefire 3D security solution is Real-time Network Awareness, or RNA, a
network intelligence product that provides persistent visibility into the composition, behavior, topology (the
relationship of network components) and risk profile of the network
> Intrusion Sensors. The Intrusion Sensors utilize open source Snort® and proprietary technology to
monitor network traffic.
> Defense Center. The Defense Center aggregates, correlates and prioritizes network security events from
RNA Sensors and Intrusion Sensors to synthesize multipoint event correlation and policy compliance
analysis
Snort
. The traffic inspection engine used in FIRE's intrusion prevention products is the open source technology
called Snort. Martin Roesch, the founder and Chief Technology Officer, created Snort in 1998.
. FIRE employees, including Mr. Roesch, have authored all major components of Snort, and FIRE
maintains control over the Snort project, including the principal Snort community forum, Snort.org. Snort,
which has become a de facto industry standard, has been downloaded over 3 million times.
. FIRE believes that a majority of the Fortune 100 companies and all of the 30 largest U.S. government
agencies use Snort technology to monitor network traffic and that Snort is the most widely deployed
intrusion prevention technology worldwide.
. The ubiquitous nature of the Snort user community represents a significant opportunity for FIRE to sell
proprietary products to customers that require a complete enterprise solution.
Broad Industry Recognition.
. FIRE has received numerous industry awards and certifications, including recognition by Gartner, Inc. as
a "leader" in the network intrusion prevention systems market, supporting FIRE's position as one of a
select few companies that best combines "completeness of vision" with "ability to execute."
. RNA is one of only five network security products to receive the NSS Gold award, which is awarded by
The NSS Group only to those products that are distinguished in terms of advanced or unique features, and
which offer outstanding value.
Competition
o Large companies, including Symantec Corporation, Cisco Systems, Inc., Internet Security Systems, Inc.
(which has recently been acquired by IBM), Juniper Networks, Inc., 3Com Corporation, Check Point
Software Technologies, LTD and McAfee, Inc., that sell competitive products and offerings, as well as
other large software companies that have the technical capability and resources to develop competitive
products;
o Software or hardware network infrastructure companies, including Cisco Systems, Inc., 3Com
Corporation and Juniper Networks, Inc., that could integrate features that are similar to FIRE's products
into their own products;
. Mergers or consolidations among these competitors, or acquisitions of competitors by large companies,
present competitive challenges to the business.
. For example, Symantec Corporation, Cisco Systems, Inc., McAfee, Inc., 3Com Corporation and Juniper
Networks, Inc. have acquired during the past several years smaller companies, which have intrusion
detection or prevention technologies and Internet Security Systems, Inc. has recently been acquired by
IBM.
Shareholders
Post-IPO will be about 50% owned by venture capital firms, including Sierra Ventures, New Enterprise
Associates, Inflection Point, Core Capital Partners and Sequoia Capital
Check Point Software merger not completed
. In October 2005 entered into a definitive merger agreement to be acquired by Check Point Software
Technologies Ltd., an Israeli company, for $225.0 million.
. As a result of the merger announcement and during the period following the announcement, FIRE's U.S.
government business was curtailed as certain government agencies apparently became unwilling to buy
products from a company being acquired by a foreign entity and instead purchased and installed products
sold by our competitors.
. In April 2006, the proposed acquisition was mutually terminated in response to objections from the
Committee on Foreign Investment in the United States.
. FIRE's business, including business with the U.S. government, continued to grow following the
termination.
Use of $72mm in IPO proceeds
Working capital and other general corporate purposes, including financing growth, developing new
products and funding capital expenditures
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