Wellfleet Partners, inc.

It would be remiss of us not to express our deepest condolences and sympathies for those victims of both Hurricane Katrina and Rita which devastated the Southern tip of Mississippi, Alabama and Texas this past month and the recent devastating earthquake in Pakistan. Thousands of evacuees remain homeless, without water, electricity or shelter. Many locations still do not have functioning hospitals, transportation systems or schools. Most of us up north and in other parts of the country have been primarily affected by shell-shock at the pump. While the price of oil will have material effect on most businesses both nationally and internationally, we should never lose sight of the human effect of nature’s wrath. Those that complain that the government has been too slow to respond because of race or the victims financial status should be well advised to remember that our nation has launched an outpouring of aide similar to that of 9-11. We can all be proud of the efforts and emotional commitment of our nation’s citizens for those less fortunate. Truly, in this author’s humble opinion, we are united.

“Not all who wander are lost”

In the month of September a great man who fought for justice and inspired thousands of truth seekers across the world passed away. Simon Wiesenthal, 1908-2005, a concentration camp survivor, dedicated his life subsequent to being liberated to hunting down and capturing hundreds of Nazi war criminals from his small and cramped offices in Vienna. Wiesenthal is best known for being chiefly responsible for capturing Adolph Eichmann, the SS officer entrusted with implementing Hitler’s “final solution”. Upon surviving concentration camp and being, as he stated, “barely alive”, he reunited with his wife only to find out that 88 members of their respective families had not survived the German atrocity. For the past 60 years he has been a guiding light to the world, bringing justice to victims of these criminals of the world's grievous holocaust. A great man has been lost, may his memory and deeds shine as a burning example of truth in our time.

“When we come to the other world and meet the millions of Jews who died in the camps and they ask us, ‘What have you done?’ there will be many answers. You will say, ‘I became a jeweler.’ Another will say, ‘I smuggled coffee and American cigarettes.’ Still another will say, ‘I built houses,’ but I will say, ‘I did not forget you.’”

- Simon Wiesenthal

The Venture Capital landscape has been going through a period of “White Boarding”- the industry term for seeking out new fields of potential investments. Over the past decade, VCs leaned very heavily on various areas of technology, telecom and bio-tech. With a need for large turns for the funds deployed, VCs are now looking at manufacturers, established consumer good companies and security entities as well as the aforementioned and of course the bellwether of the industry, hot new software. While life sciences and software are still getting their share of first round fundraising, other areas such as industrial and energy companies, nutrition, health and beauty-aid products have received substantial fundraising as well (according to the National Venture Capital Association). Some older, more established businesses are also finding Venture Capital appeal. As an example, the WineryExchange a six year old private label winery with $40M in sales recently received $2.5M from investors which included such a notable technology VC as Venrock Associates. Perhaps this is reason for cheer!

“You adapt, evolve, compete or die”

- Paul Tudor Jonesl

The stock Market is filled with nervous investors that are watching the usual bull market killers: rising interest and inflation rates, slower corporate earnings growth and of course higher energy costs. In particular, consumers will pay one hundred billion dollars more in energy costs this year and that will severely shrink general discretionary spending which will also stagnate economic growth. Many professional money managers are recommending diversified stocks with stable earnings and attractive dividends yields.

Everybody in the financial sector is acutely aware of the evolving landscape of oil prices. In the past four years oil prices have gone from $18.00 to $65.00 a barrel, yet it appears that consumers have not changed their spending or travel habits. Car owners who are complaining about gas station oil gouging are actually incorrect. The retail market, “gas station owners”, are not like the wholesale market “oil refiners and providers”, such as Chevron and Valero that have prior, large accumulated inventories of low price gas. While big oil may be raking in all-time profits, the energy and oil market is a gigantic business and many intermediaries such as traders, refineries and suppliers are benefiting from the perceived oil shortage as well. Some estimates even put the figure as high as $20 per barrel as a byproduct of the speculation by hedge funds and traders. While it is true that oil, unlike water is not a renewable resource and thus we are dissipating our known reserves, the real question is how much unknown oil is still out there to be found. Are we able to eventually meet the increasing demand from the available supply especially with China and India becoming larger consumers. Exploration is expensive and many of the larger untapped resources are difficult to find, places such as the Gulf of Mexico, Russia, and the usual volatile suspects, the Middle East, East Africa and Venezuela. There are other perhaps invaluable oil alternatives around the corner such as ethanol and/or the Canadian oil sands where soon enough we will be able to produce competitively priced oil. Finally, the US Government has intervened in some regard to try to squelch the hysteria by releasing crude from the Strategic Petroleum Reserve and several states have gone so far as to limit the price of gas. Unfortunately, as the US continues to import 60% of its reserves, if demand remains at its current high level and a proliferation of natural disasters continues to occur, prices may remain high for the foreseeable future and our economy remained strained.

“Most of my contemporaries at school entered the World of Business, the logical destiny of bores.”

This past quarter was spent mostly on working with our core portfolio clients in particular China Biopharmaceuticals Holding, Inc. We are pleased to welcome to Wellfleet Partners, Inc. list of corporate consulting and/or banking clientele the following Company’s: Performance Health Care (Boulder, CO); Energy Conservation Service Corp. (Melville, NY); 360 Global Wines, Inc., Symbol “TGWC” (Napa Valley, CA), National Payment Card Inc., ( Boca Raton FL), m-Wise, Inc., Symbol “MWIS” (Herzeliya, Israel) and SecureCARE Technologies, Inc., (Austin, TX).

May the falls beautiful colors be a source of Thanksgiving to all of us and our families.

WELLFLEET PARTNERS

Note: This report was produced by Wellfleet Partners, Inc. (“WPs”) from various public research sources, for the sole purpose of general information. WP makes no warranties to its factual content and is not a brokerage firm, registered Investment Advisor nor securities dealer; therefore, nothing contained in this report shall constitute an offer to sell, solicit or buy any securities or investment advice. Investment in these securities mentioned here involves risk and should not be considered without first reading the target Company’s most recent financial statements, 10Q and 10K, its Private Placement, Offering Memorandum or Business Plan, if applicable, and discussing the investment with your registered representative or professional financial advisor. Venture capital and investment in the market is inherently extremely risky. Mr. Lev, the author of this newsletter as well as other members of WPs and SR, are registered representatives of WestPark Capital, Inc. an NASD member broker-dealer headquartered in Los Angeles, California.