Steven H. Rouhandeh, Chairman of SmallCaps stated, "We are extremely pleased with the results of our recommendations over the past three months. We believe that our unique strategy of distributing our research on micro-cap biotech and high-tech companies over the internet is proving successful. Since more than seven million individuals are currently investing online, we believe the future of investment banking and research lies in reaching this underserved market."

Jeffrey B. Davis, President of SmallCaps concurred: "The positive response we have received on our research and the corresponding appreciation in the stock prices have encouraged us to accelerate the pace at which we are initiating coverage of companies. We are expecting to have 10-15 companies under coverage by the end of 1999. Investors should visit our website frequently for research updates."

ACTV, Inc. (Nasdaq: IATV): Since launching coverage on ACTV on December 15, 1998 at $3.72, the stock has risen 34%, closing at $5.00 on January 14, 1999. ACTV is both developing innovative, proprietary software technology, and managing relationships with leading programming and distribution entities, that the SmallCaps analysts feel position ACTV to capitalize on the opportunities arising from the convergence of the Internet and digital cable TV ­ the broadband cable infrastructure. According to the SmallCaps basic research report, "ACTV is developing innovative, patented technologies it calls Individualized Television and HyperTV that create state-of-the-art programming for the emerging digital TV and Internet platforms. The first application of Individualized Television is the sports entertainment market, and the first application of HyperTV is the on-line education market. As the cable operators deploy the next generation of digital cable boxes throughout their networks, the Internet and broadband cable infrastructures will converge, as will the potential applications of ACTV's technologies. We believe the potential applications for Individualized Television and HyperTV are very broad, and include interactive advertising, electronic commerce and a host of enhanced, interactive entertainment programming."

Access Pharmaceuticals, (OTC BB: AXCS): SmallCaps initiated coverage of Access Pharmaceuticals on October 27, 1998 with a BUY recommendation at a price of $2.09. The stock closed at $3.19 on January 14, 1999, up 53% over the time period. AXCS is an emerging pharmaceutical company developing a portfolio of drugs and advanced drug delivery systems. SmallCaps characterizes AXCS as an emerging pharmaceutical company, rather than a traditional biotech company, as they believe its business model has components that are less risky than the typical one-compound, or one-technology-platform, biotech company. AXCS recently announced that it has acquired worldwide rights (ex Japan) to the mucositis indication for amlexanox from Block Drug Company. The SmallCaps analysts believe this could be quite a large market opportunity for AXCS. According to a recent report, the analysts "continue to believe that AXCS is a technology-rich company with significant potential. With one approved product, two in Phase II development, two products expected to enter Phase II trials in the next 6 months and one product expected to enter Phase I within 12 months, AXCS has depth rarely seen in an emerging pharmaceutical company. The company maintains a low cash burn rate, and plans to maintain this through lucrative partnering and licensing agreements, which should continue into the coming years."

AMBI Inc. (Nasdaq: AMBI): Coverage was initiated with a BUY recommendation on October 14, 1998 at a price of $0.81. On January 14, 1999, the stock closed at $1.49, having hit a high of $2.00 during the three-month period, up 84%. According to the SmallCaps report, "AMBI is executing an innovative and profitable growth strategy: developing and commercializing nutritional products for cardiovascular, diabetic and other medical conditions. Its products are proprietary and are put through pharmaceutical-like clinical trials to demonstrate efficacy and safety. AMBI has a strategic alliance with American Home Products that SmallCaps feels validates AMBI's strategy, provides the Company with national retail distribution for its products, strengthens the balance sheet, and positions AMBI for future growth." Since the initial opinion, AMBI announced impressive fiscal first quarter results and cleaned up its Series C and D floating convertible preferred stock. The SmallCaps analysts recently reiterated their BUY recommendation based on indications from AMBI management of a strong fiscal second quarter and the possibility of additional product acquisitions and/or alliances. SmallCaps believes that AMBI's strategic and financial turnaround is completed and the company is poised for growth.

Cypress Bioscience, Inc. (Nasdaq: CYPB) SmallCaps also initiated coverage of Cypress Bioscience on October 14, 1998, at a price of $2.53. On January 14, 1999, CYPB stock closed at $3.28, up 30% for the three months. CYPB develops, manufactures and markets medical devices and therapeutics for certain types of immune diseases and is engaged in the development of a novel blood platelet substitute. On October 29, 1998, an FDA Advisory Panel recommended that the FDA approve CYPB's Prosorba( column to treat moderate to severe Rheumatoid Arthritis. The SmallCaps analysts reiterated their BUY recommendation at that time based on their belief that there are several key milestones over the next several months that could positively affect CYPB's share price, including the final approval of the Prosorba column and the announcement of a marketing partner. In addition, SmallCaps believes that investors are not currently valuing CYPB's Cyplex technology and the potential for other technology acquisitions.