Wellfleet Partners, inc.

The financial service industry is changing perhaps more rapidly than other in the world today. The regulatory barriers that had maintained separation between financial service companies, banks and insurance companies have eroded heightening competition and encouraging massive cross-industry consolidation. The mutual fund industry has also grown in such an enormous manner that it seriously competes with the entire financial service industry. In addition, the rise of the Internet brokerage industry now is responsible for one of every four trades executed by individuals. So while financial service companies compete for the remaining business, this general upheaval is further compromised by the rising demand for quick and high performance financial services. The expanding economy together with an aging population with more disposable income necessitates rapid improvement. Firms cannot simply sit back and watch the industry change; those that do will either be acquired, marginalized or eventually simply cease operations.

Many firms offer substantial analytical research to augment their retail. It would be impossible for smaller boutiques to compete with their prodigious department's prognostications on the general market conditions, particular companies or industries at large. Yet, in our humble opinion, several key factors will dictate the general financial market conditions in 1999: The outlook for corporate profits remain uncertain as do the economics in Brazil, Russia and Asia. With the recent military action in Iraq, "Desert Fox", and the continuing impeachment saga at home, further uncertainly exits. Yet, on more favorable notes, the cost of oil is at Depression-era levels (adjusted for inflation), merger mania is gripping Wall Street especially in commodities related businesses, such as Amazon and AOL are at an all-time high and the IPO market has opened once again. The fortune hunters have forgotten the 3rd quarter of the 1998 and are on the prowl again. Finally, the Federal Reserve Chairman Alan Greenspan's term will expire in the year 2000 and we believe he will do everything in his power to stabilize the economy and cement his place in history as perhaps the greatest financial public servant this country has ever known. Since September alone there have been three interest rate cuts with perhaps more to come in 1999. Rate cuts together with low inflation usually leads to a lengthy Bull Market.

Managing wealth on the threshold of the 21st century is different today as the profile of the high-net-worth individual has radically changed. The population of millionaires has exploded, doubling from 1990. These wealthy individuals now include a new diverse group of Internet related entrepreneurs, corporate executives, personal injury lawyers, stock investors from the recent bull market… Clients, with their increasingly complex financial issues, are utilizing the services of private bankers or making direct private investments more than ever. Often, more than one advisor or financial institution are engaged to insure objectivity and diversification. Thus, Wellfleet Partners' goal was to likewise structure individual transactions to meet our clients' indigenous needs.

To compete in all areas of financial services such as money management and/or research was untenable, so we at WELLFLEET PARTNERS, Inc. ("WPs") needed to identify which of the major generic financial services we could offer to our clients that was unique yet had significant upside potential. Today's clients refuse to pay a premium for products and services that are simple commodities. The Internet and the cornucopia of other brokerage firms assure that; what we offer is particularized to specific investor. Interestingly, one of the companies we are seeking to finance is an online trading and brokerage firm! We actively seek out unique market niches, finance the transactions utilizing private placements and then add management and consulting expertise. WPs make controlled equity investments in small to mid-sized companies in consolidating or high growth industries in need of capital, financial or operational restructuring. Our hands-on approach includes assembling and improving the management team, developing a strategy for expansion, implementing internal controls and assisting in mergers and acquisitions. We want and expect senior management's goals and financial rewards to be aligned with ours and our investors. Our target financing candidates have a growing revenue base with an identified plan of profitability. Many of the aforementioned companies are susceptible to "growing pains" and lack the systems, management experience and/or capital to react favorably to adverse situations or capitalized on unique opportunities.

Our firm, due to the quality and breadth of experience of the professionals, offer numerous strategic advantages. WPs take calculated risks and our capital outlays do not jeopardize any other branch of our business. Our investment banking/corporate finance departments augment and support our merchant banking, research and consulting operations. Although we continue to closely monitor companies we and our clients are invested in (e.g. Savoir Technology Group, Inc., Response USA, Inc., Synergy Brands, Inc.) and our research encourages investment in new companies (i.e. Friedman Billings Ramsey Group, Inc., NYSE Symbol "FBG", see below), our forte will be in making private investments in emerging growth companies. To date we made three modest principal investments by purchasing equity interests in several companies we are involved with. WPs has also created strategic alliance with several other investment and merchant banking firms that we hope will serve us well in the future as we continue to enlarge our ever expanding list of professional associates and "Friends on the Street."

A company we have recently begun watching is Friedman, Billings, & Ramsey Co. ("FBG"), a nine year old full service investment banking and brokerage firm principally located in Arlington, Virginia with branch offices in Washington D.C., Boston, Irvine and London as well. It is a relatively new publicly traded company that specializes in underwriting initial public offerings for companies in the technology, financial services and real estate industries. As a niche player in a fragmented, yet consolidating market, FBG's revenues have grown tremendously over the past few years. Although management continuously reiterates its desire to stay independent, many potential acquires remain interested especially after it secured the first position in Securities Data Co.'s IPO underwriter's list for the first half of 1998.

In the third quarter of fiscal 1998, FBG, as well as many other financial service companies, sustained substantial losses from its trading positions and operations. FBG reported a $.71 per share third quarter loss due to a trading loss of $39.5 million combined with the near halting of all initial public offerings. This obviously had a deleterious effect on the stock, which traded as low as $3.625 from its prior year-high of $21.25. It is currently trading at $5.50 per share on the New York Stock Exchange. The Company has subsequently paired its overhead, diversified its business by increasing and enhancing other areas of income such as investment banking and asset management and, as many of you are aware, the market for IPOs has opened again. FBG has numerous companies in registration, which they expect will come to the market in early 1999. With a plan of diversification and cost reduction in place and many other publicly traded financial service companies in the sector recovering, many investors including Zachary and I, are confident that FBG will rebound greatly in 1999 and perhaps will even be an excellent candidate for a strong January bounce. We expect the Company's profitability to return to pre-summer of '98 levels and we believe management will do everything necessary to maximize shareholder value.

Zachary and I hope to finally be able to bring to our investors our first two private placements in the first quarter of 1999. In addition, we are working on several significant corporate developments that should come to fruition shortly. We hope you are enjoying the last few days of 1998 and the beginning of the new year. Invest wisely and cautiously. G-d Bless.