The ZATS PIPE Index

Zealous ATS is creating the first-ever index to track the returns of the PIPE (Private Investment in a Public Equity) market. The "ZATS PIPE Index" will track activity and returns of various PIPE structures and sectors for all domestic financings of $1.0 million or greater, including foreign companies that issue securities using PIPE financing in the U.S.

The "ZATS PIPE Index" will be transaction size-weighted, will include applicable warrants and discounts to the underlying equity to assess index calculations, and will not consider volatility analysis for measuring the value of warrants.

The Growing PIPE Market

According to private placement publications which track the space, PIPE financings have grown dramatically since 1995 from approximately 114 financings with a dollar value of $1.3 billion to approximately 1169 financings with a dollar value of over $43 billion so far in 2007.

Given the current growth of alternative public offerings (reverse merger into a public shell and simultaneous private placement) this trend should continue in the foreseeable future.

The Need for an Index

Considering the current trends for both traditional PIPES and APO financings for domestic and foreign companies, there is clearly a need for participants to track returns for this asset class. After the index is launched users will be able to track daily performance, starting with 2007 index returns using a rolling 12-month calculation, which will replace the twelfth month with the most recent month.

The index will provide a detailed breakdown of industry sectors, countries and financing structures. We believe the ZATS PIPE Index will provide a valuable benchmark for investors to analyze returns and assess risk.