rom time to time additional capital likely will be necessary to fund acquisitions and meet our objectives. "Raising capital" in the financial industry is frequently done to support buyout activity. Very often, merchant banks, as well as other "buyout" entities, lead with other people's money, usually from passive investors. Ideally, it is our desire to internally support our business plan and we have done so to date. We believe this keeps us very focused and serves to better manage risk.

From time to time, we offer or arrange loans for member companies to "bridge" the various stages of capital provided. If such a financing arrangement is entered, Mooers Branton & Company, as both an owner and steward works to assure that the loan is, in fact, a bridge loan - in effect one where the permanent financing on the other side of the bridge has already been identified before the loan is made. The terms of these loans would be designed to generate significant returns through the efficient and effective use of capital.

Mooers Branton & Company can meet the financing needs in the early financing stages, has relationships enabling it to provide permanent financing when required, and possesses the requisite skills to guide companies through the public offering process. In effect, investors' funds may bridge these stages or be provided as selective and timely private placements, while offering them an attractive investment opportunity.

Investment bankers and venture capitalists are typically motivated to raise large amounts from investors to support buyout activities. However, as merchant bankers, we philosophically believe that perpetually raising larger and larger buyout funds is not essential if the funds already on hand are prudently employed. We believe that raising smaller capital though selective private placements in holding companies provides a more secure relationship for all parties. We can generate better percentage returns by selecting only those mergers and acquisitions that are the best candidates for sound investments and by limiting the need to invest excess funds in marginal deals.

Properly structured, investors are provided with an opportunity to participate in lucrative areas of finance that are usually only reserved for institutions or controlled by full service investment banks.