Since the mid-1990s, there have been more than 40 acquisitions involving U.S. brokerage and investment banking firms. Many of the resulting consolidated financial institutions have undergone restructuring and downsizing, choosing to pursue clients and transactions with larger market capitalizations, which has led to a further reduction of investment banking and brokerage resources allocated to small and middle-market companies and their investors. As a consequence, many of these growth companies now receive reduced research coverage, corporate finance and advisory services, and access to capital.

Recent changes in the brokerage industry, such as program trading and the adoption of electronic trading systems, have put downward pressure on commission rates and the profitability of equity sales and trading operations. In response, many large investment banks have opted to reduce research coverage—particularly of small and middle-market companies—and to reduce sales and trading staff, choosing to devote remaining resources to the most liquid, largest capitalization equities.

Certain larger institutions have opted to rely on their own analysis of large capitalization stocks, increasingly turning to outside sources only for research on small and middle-market companies.

The Company currently specializes in six growth industries: business services, consumer, financial services, health care, real estate, and technology. The Company’s investment banking professionals provide capital raising, mergers and acquisitions transaction and other strategic advisory services to corporate clients.

Since its inception in 1999 through September 30, 2006, the Company has completed 235 investment banking transactions with an aggregate value of $23.5 billion, including 119 public equity offerings raising $15.9 billion, 57 private securities offerings raising $2.5 billion and 59 mergers, acquisitions or advisory engagements with an aggregate value of $5.2 billion.

The Company assists its public and private corporate clients in capital raising activities, which include the underwriting of a wide range of securities, including common, preferred and convertible securities. The Company also acts as an agent for private placements of equity and trust preferred securities and arrange private investments in public equity, or PIPE, transactions on behalf of its public company clients. In addition, the Company arranges registered direct stock offerings, in which it places the equity securities of a public company but does not commit its own capital.

From the beginning of 2003 through September 30, 2006, the Company executed 29 initial public offerings, raising $5.9 billion of gross proceeds. The Company also underwrote 69 follow-on equity offerings, raising $8.5 billion of gross proceeds. Additionally, during this time, the Company underwrote seven preferred equity offerings totaling $572.2 million in gross proceeds.

Since the beginning of 2003, the Company has executed 23 private placements, including PIPE offerings and Rule 144A private offerings, raising a total of $952.3 million of gross proceeds. In addition, the Company acted as placement agent for trust preferred securities in 34 transactions and $1.5 billion in gross proceeds.

The Company offers a wide range of mergers and acquisitions and other strategic advisory services. The Company provides its advice to management teams and boards of directors of client companies in connection with transactions that typically are of significant strategic and financial importance to these companies.

Total expenses decreased $7.5 million, or 10.9%, from $68.7 million for the nine months ended September 30, 2005 to $61.2 million for the nine months ended September 30, 2006.

Net income increased $0.2 million, or 10.7%, from $2.2 million for the nine months ended September 30, 2005, compared with $2.4 million for the nine months ended September 30, 2006.