Any company, private or public, is a candidate for institutional financing. Institutional financing provides capital at a critical time for a company. Hankin & Co. professionals have developed expertise in placing senior and mezzanine debt and private equity capital.

Our experience allows us to match institutional and private investors with the unique financing requirements of our clients, including:

• Growth opportunities
• Buyouts
• Acquisitions
• Refinancings
• Recapitalizations

The Hankin process for institutional financing follows six identifiable phases as described below.

Phase I - Strategy and Scope

• Clarify the goals of the transaction; understand the company strategic needs and industry dynamics. ·
• Determine the amount of financing or capital desired, its purpose, the potential return, and the hold period.
• Determine the form and structure of the proposed transaction, including debt versus equity, etc. ·
• Establish agreement with the client on progress reporting procedures, company contacts, and timelines.

Hankin professionals have extensive experience in strategic planning. By understanding the company and the industry, we are able to clarify expectations more quickly, streamline communication, and identify the potential sources of transaction financing or capital.

Phase 2 - Compile Company and Industry Information

• Research the company's industry to determine the key competitive players, current market size, and growth projections. ·
• Become intimately familiar with the company, its opportunities, and its future goals and value drivers to adequately communicate to the financial community. ·
• Compile data describing the company and its processes, market, strategic objectives, and other relevant information to be featured in the company descriptive memorandum.

We work directly with the client to build the descriptive memorandum, which becomes the initial primary informational resource for interested sources.

Phase 3 - Valuation Analysis

The Hankin team of valuation experts utilizes its proprietary valuation models to determine a preliminary value estimate of the client business.

Valuation analysis provides information used to: ·

• Determine the level of financing required ·
• Estimate the percentage of stock or warrants to offer in an equity deal ·
• Qualify the investor's assessment of value ·
• Measure the value of the company with and without financing on a pro forma basis ·
• Test management's key assumptions that drive future value

Hankin proprietary valuation models measure and assess: ·

• Market comparables ·
• Transaction comparables ·
• Public company and industry guidelines ·
• Discounted cash flow ·
• Robustly integrated income statements, balance sheets, and cash flow statements ·
• Costs and enhancements from the financing

Hankin & Co. does not claim to ensure 100 percent accuracy with respect to the valuation study nor to its use as the sole source to determine any financing decisions. Hankin valuation models are intended to be used only to facilitate the decision process. Value of the company will ultimately be determined by:

• Management's ability to execute its business plan ·
• Conditions in the macro economy and industry ·
• Customer demand trends ·
• Technological innovation

Phase 4 - Search and Match Potential Institutional Sources

The strategic review and compilation of the company descriptive memorandum lead directly and logically to the parameters used to identify sources of potential financing. The parameters are tested by actual search and match results and, if necessary, are refined accordingly.

The Hankin firm works directly with the client to take those parameters and design from them a set of search criteria. ·

• Build a database table of potential financing sources including information such as: ·
  • Updates of any new information to support monitoring of significant events shaping the competitive landscape. ·
  • Additional updates regarding HIB contact with sources and narrowing of field.

The database allows the firm to maintain current information, track industry trends and acquisitions, and quickly identify potential financing sources having a high likelihood of being an appropriate "match."

As potential financing or capital sources are identified, Hankin professionals work with the client to prepare to present the opportunity by developing: ·

• A contact letter that properly identifies any appropriate niches and opportunities that would be of particular interest to the appropriate institutional resource. ·
• An executive summary describing the opportunity, benefits of alliance, operational, technical, and joint development issues, access to capital, and other aspects of the project.

Phase 5 - Follow Up with Interested Parties

• Send a company descriptive memorandum to each of the interested parties for evaluation. ·
• Respond to questions and provide additional information. ·
• Prepare client and management for site visits by prospective sources by reviewing the defined strategy, objectives, and deal status. ·
  • Upon completion of site visits, the Hankin firm works with the client to access the indications of interest by prospective sources and to select the finalists.

Phase 6 - Execution and Closing

Time is the enemy of all deals. The Hankin firm drives the process accordingly. ·

• Hankin professionals help the client develop a detailed, aggressive, realistic time and responsibility schedule with accountabilities. ·
• Hankin professionals assist the client and are involved throughout all phases of negotiations. ·
  • During Stage 1 of negotiations, initial possibilities are explored and a letter of intent is signed. ·
  • During Stage 2 of negotiations, agreement is reached on the transaction and plans are made for closure.

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Fees

• Fees are structured with input from the client to ensure that incentives are consistent with client objectives.

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