Firm Overview

For Companies

www.lookoutcapital.com

Committed To Building Great Companies

Lookout Capital provides a combination of capital and financial, strategic andoperational advisory to up-and-coming entrepreneurs, small but growingcompanies as well as established businesses. The firm addresses a niche historicallyand currently underserved by the capital markets. Our style of investmentmanagement is to cultivate long-term partnerships between our firm, our portfoliocompanies and our investors.

We operate by two guiding principles: (1) We want to help entrepreneurs andmanagement grow their businesses and build great companies, and (2) We arepeople-focused, patient investors who seek superior long-term, risk-adjustedinvestment returns.

Lookout has a successful record of private company investing, growing businesses,corporate board service, and working closely with management teams. We are afirm of distinguished financial and business professionals who have demonstratedimpeccable integrity and sound business judgment. We invite you to learn moreabout us.

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About Lookout Capital

We invest in and work with companies that exist in the following general categories:

Growth Capital: Operating companies generating between $2 to $10 million inrevenue that are near break-even or slightly to solidly profitable

Buyout / Controlling Interest: Buyout or controlling interest investments inoperating companies with a transaction range of $5M - $20M

Early Stage: Early stage investments in healthcare and IT

Lookout seeks to only do deals where the interests of our investors and our portfoliocompanies are aligned. We conduct thorough due diligence, providing comprehensiveanalysis to our investors so they can make informed decisions. We get to know companieswell, working with management to construct plans before deals are consummated and thefirst Lookout dollars are invested.

Our investment management style with our portfolio companies is proactive and involved.We know the hard work begins after making an investment, so we contribute to ourcompanies’ causes by formally consulting with them and serving on Boards of each.

We strive to be a good partner to both our investors and our portfolio companies. In ouropinion, it’s the only way to do business.

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The Strategy

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The Principals

Merrette Moore – Managing Partner• Co-founder and day-to-day operating executive of Lookout Capital

• Over ten years RTP-area investment experience at MCNC, IDEA Fund Partners and Lookout Capital

• Serves or has served on numerous portfolio company boards as a director or observer

• Investment deal lead for iContact, an email marketing provider that grew from $1.2 million at thetime of investment to over $50 million in annual revenue; Sold to Vocus for $169 million in February2012

• Currently serving as advising consultant to Rex Health Ventures, an strategic investment fund recentlylaunched by Rex Healthcare

Bill Moore – Chairman

• Founder and CEO of specialty investment bank Trident Financial Corp., an industry leader in raisingcapital and M&A transactions for financial institutions; Trident was sold to KeyCorp in 1999

• Current Chairman of RTI International, one of the world’s leading nonprofit researchinstitutes

• Partner, Franklin Street Partners, a Chapel Hill-based investment management business withapproximately $2B under management

• Professor Emeritus of the Practice of Finance, Kenan-Flagler Business School, UNC-CH

• Interim CEO, MCNC, Inc., Led the highly-successful restructuring and reorganization of MCNC

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The PrincipalsTim Lavelle – Head of Investment Banking

• Over 26 years of Investment Banking experience

• Former Managing Director of Trident Financial Corporation

• Former Head of Financial Institutions Group at Morgan Keegan & Company

Sam Drew – Principal• Integral role in developing deals and guiding portfolio companies

• Actively involved in assisting firms in various stages of the growth cycle for his entire professionalcareer

• Former civil engineer, being the youngest person in the history of his company to run a division, hisconsistently posted the highest revenue and gross profits within the company

• Received his MBA from the University of North Carolina Kenan-Flagler Business School and was arecipient of the Johnson & Johnson MBA student leadership award

John Kane – Associate

• Responsible for deal sourcing, deal due diligence, fund raising, and support for the generaloperations of the firm

• Former President & COO of YF Atlantic, LLC, the master franchisee of the mid-Atlantic region for oneof the world’s largest frozen yogurt franchises

• Founder of Midtown Multisport, LLC, the producer of a series of endurance events throughout theSoutheast

Lookout Capital has assembled an all-star team of advisors and investors, provenentrepreneurs, executives and investors capable of identifying and evaluating uniqueinvestment opportunities, including:

Advisors

Tom Darden– CEO, Cherokee Funds; Former Chairman, Cherokee Sanford Group

Peter Scott– Former CFO, Progress Energy; Founder, Scott Madden and Associates

Paul Rizzo– Chairman Emeritus, Franklin Street Partners; Former CFO, IBM

Champ Mitchell– Former CEO, Network Solutions; Former EVP & COO RJR Tobacco, Co.;Former Partner, Womble Carlyle

Chip Andrews – Senior Chairman, FMI Corporation

Bill Ross– Of Counsel, Brooks Pierce; Former Secretary of NC DENR

Susan Gravely–Co-founder and CEO, Vietri

Tim Lavelle – Former Managing Director, Trident Financial Corporation

Neil Bagchi – Founder of Bagchi Law

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Our Advisors

Lookout is addressing a niche currently and historically underserved by the capital markets.Our general investment criteria includes:

Companies that desire and will benefit from operational, general management and strategic input from our principals & investors

Companies providing services or products with a demonstrable, sustainable competitive advantage

Companies either in large, highly-fragmented industries or in markets with high projected annual growth

We are industry agnostic, but will invest only in what we know and understand

Business model of recurring revenue or repeat customers

Companies primarily based in North Carolina, preferably within a 2-3 hour drive of Raleigh-Durham

Companies that are capital efficient and do not require a great deal of capital to scale profitability

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Investment Criteria

We segment the pre-funding process into 4 general steps:

1) Initial due diligenceConsists largely of getting to know the company management and familiarizingourselves with company operations and financials

2) Core due diligenceThe period where we dive into the company’s business and mutually determinewhether it is in our collective interest to structure an investment

3) Investment terms negotiationThe terms under which we will invest, subject to completion of duediligence, and get involved with the company are worked out

4) Final due diligence and deal closingDue diligence is completed and the investment is finalized

The entire process typically takes several months, with most of the time being spent with thefirst 2 steps. If a company is responsive, then the process timeline is likely to be compressed.

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Pre-Funding Process

Below is a summary of the deal terms we typically seek to obtain in ourtransactions. Of course, terms will vary from transaction to transaction.

Typical Terms:

• Preferred Stock or Subordinated Convertible Debenture

• $500K to $20 million transaction size

• Lookout may syndicate or act as a sponsor for larger transactions, butprefers to be the lead investor

• 5-8% annual rate, possible PIK in first 1-3 years

• Lookout representative(s) on board

• Required annual independent stock valuation

• Lookout-produced required annual evaluation of updated companystrategic plan and projected impact on shareholder value

• Active initial involvement by Lookout (via a management services orgeneral consulting agreement)

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Typical Deal Structure Example

• Immediately upon investment, Lookout personnel will serve in a part-timemanagement or consulting role. The portfolio company will compensate Lookoutfor this service.

• We will work closely with senior management teams of our portfolio companiesto develop annual operating plans and long term strategic plans

• We will have at least one Lookout representative on the Board of Directors

• Quarterly board meetings and monthly update calls will be required

• Every year, we will require the company get an independent appraisal of companyand stock valuation

• As it is appropriate, we will assist our companies in any financing, liquidity or exitprocess

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Post-Funding Investment Management

• We look at our relationships with portfolio companies as a collaboration -- We are apartner, not just an investor

• We are actively involved in providing strategic, operational and financial advisory toportfolio companies -- We want to be hands-on, but we are not micro-managers

• We have a wealth of experiences and skills among our principals, associates, andadvisory boards from which portfolio companies can draw -- We have a successfulrecord of private company investing, growing businesses, corporate board service,and working closely with management teams

• We are patient investors -- We are willing to remain an investor as long as ourcompanies continue to build shareholder value

• We can help our portfolio companies find liquidity -- We have a demonstrable trackrecord of and a unique ability to structure exit and liquidity events for companies

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Why Work With Lookout Capital

We encourage prospective companies and investors to meet with and get to know LookoutCapital’s principals, advisors and current investors. We have additional information anddocuments for review. If you wish to follow up with us, feel free to reach out via the contactinformation listed below:

Also, check out our website at

www.lookoutcapital.com

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Additional Information

W. Merrette MooreManaging Partner

Office: (919) 256-3633Mobile: (919) 491-1805

mmoore@lookoutcapital.com

John M. KaneAssociate

Office: Please use mobileMobile: (919) 720-3980

jkane@lookoutcapital.com

This document contains forward-looking statements. The forward-lookingstatements reflect our current expectations and views about future events andspeak only as of the date the statements were made. The forward-lookingstatements involve known and unknown risks, uncertainties and other factors thatmight cause our actual results, performance or achievements to be materiallydifferent from any future results, performance or achievements expressed orimplied by the forward-looking statements. Given these risks anduncertainties, you should not place undue reliance on the forward-lookingstatements.

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