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THE INFORMATION HEREIN IS ONLY FOR ACCREDITED INVESTORS AS DEFINED IN RULE 501 OF REGULATION D UNDER THE SECURITIES ACT OF 1933 OR INSTITUTIONAL INVESTORS.

July 22, 2013

Michael Pachter

(213) 688-4474 Michael.Pachter@wedbush.com

Sanjit Singh

(212) 938-9922 Sanjit.Singh@wedbush.com

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PRISM … Progress Report for Internet and Social Media

In This Issue: FireEye, Braintree

FireEye

Cyber-security company founded in 2004. Specializes in protection against advanced persistent threats (APTs).

Experienced rapid revenue growth; 55,413% from 2007 through 2011.

Over $100 million in total venture funding; expected to go public later this year.

We estimate FireEye’s total value to be approximately $2.25 billion.

Braintree

Online payment processing software developer founded in 2007.

Has seen rapid expansion thanks to adoption by fast-growing Web 2.0 merchants.

Self-funded until 2011; now has $69 million in total venture funding.

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FireEye FireEye, a cyber security company founded in 2004, plans an initial public offering this year at a total valuation estimated at $1.25 billion (according to an article by Business Insider). The firm has experienced rapid growth since its founding by Ashar Aziz in Milpitas CA. In 2012 Deloitte named it the fourth fastest growing technology company in the United States. From 2007 through 2011 the firm grew revenues by 55,413%, with a compound annual growth rate of 187%. Press releases from the company indicate that customer count rose from 500 in August of 2012, to 800 in November of 2012, to 1,000 in January of this year. Security Threats

FireEye’s technology is designed to protect large computer networks from malicious software, commonly known as “malware.” Specifically, FireEye targets a new breed of sophisticated programs known as “advanced persistent threats,” or APTs. Such malware has become higher profile in recent months as several large U.S, companies have come under cyber-attacks, the U.S. and Chinese governments have accused one another of state-sponsored hacking. Many of these attacks have come in the form of APTs. Security professionals have differing definitions of advanced persistent threats; in general, they are malware that is designed to circumvent traditional Internet security measures, and remain inside a system for long periods of time without detection. Typically they are coordinated efforts by teams of hackers targeting a specific organization or system, as opposed to a single opportunistic individual who comes across a weak system and quickly exploits it. Once the malware embeds itself in the system, it searches for valuable information and transmits it to the hacker. Among this information will be user credentials, with which the group will be able to access the system if the malware is ever discovered and eliminated. This is one reason why APTs are so dangerous: the threat “persists” even after the malicious software is gone. The other hazardous element is the fact that the APT is usually customized for the particular system it is attacking. This is how it circumvents traditional security software, which relies on a “blacklist” of known malware, and blocks anything that matches the list from entering the system. Because APTs are customized, they will not appear on any blacklist. These are often referred to as “zero-day threats,” because security firms have zero days to prepare for them.

Often, offenders will target individuals as a means of accessing a system. They may stalk an employee of a corporation using social networks, gathering information that may be used to eventually gain access to the targeted network. For example, Symantec found that in 2011, a number

of chemical companies were infiltrated by malicious emails that were sent to employees posing as meeting invitations from well-known suppliers. The messages installed Trojan Horse software that enabled the hackers to take valuable intellectual property. The increasing number of employees using their personal electronics on company networks appears to be increasing the potential for security breaches.

Technology FireEye designs appliances that run virtual duplicates of a system within them. Whenever software is sent to the system, the appliance intercepts it and runs the program inside the virtual system. FireEye’s software observes the program, watching for suspicious behavior. If the software acts like an APT, it is quarantined before it ever reaches the real system, with the process taking fractions of a second. The company offers different machines for different types of protection (web, email, file sharing), as well as all-in-one systems. Clients can also subscribe to Dynamic Threat Intelligence, which culls reports on detected threats from participating appliances and distributes them automatically to other subscribers.

Leadership FireEye is the second company founded by Ashar Aziz, who received an undergraduate degree in Electrical Engineering and Computer Science from MIT, and a Master’s degree in Computer Science from UC Berkeley. He started his first company, Terrasping, in 1999 after working for Sun Microsystems for 12 years as an engineer in network security. After three years and $54.5 million in funding (according to the San Francisco Business Times), Terraspring was acquired by Sun, and Aziz became a Chief Technology Officer. He remained in this role until 2004 when he left Sun to create FireEye. He has received over 20 patents in the area of networking and cryptography. In November of 2012, the role of CEO was handed to Dave DeWalt, who had been Chairman of the Board since June of that year. DeWalt had previously been CEO of the antivirus software company McAfee since 2007. DeWalt took McAfee, which had been investigated for fraud and delisted from the NYSE (according to Business Insider) and rebuilt it, later selling it to Intel for $7.8 billion in February of 2011. He has also held executive positions at Oracle, EMC and Documentum and was named to President Obama’s

Source: Symantec

http://www.businessinsider.com/fireeye-fundraising-2013-1http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/TMT_us_tmt/us_tmt_fast500_rankings_020713.pdfhttp://www.symantec.com/content/en/us/enterprise/other_resources/b-istr_main_report_2011_21239364.en-us.pdf?om_ext_cid=biz_socmed_twitter_facebook_marketwire_linkedin_2012Apr_worldwide_ISTR17http://www.bizjournals.com/sanfrancisco/stories/2002/11/11/daily85.htmlhttp://www.businessinsider.com/dave-dewalt-fireye-40-job-offers-2013-1

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National Security Telecommunications Advisory Council in May of 2011. He confirmed in the Business Insider interview that he had turned down 40 CEO job offers before choosing to lead FireEye.

Business Model FireEye charges flat prices for its appliances. According to company representatives, FireEye previously charged customers additional per-seat fees for each individual user, but that is not always the case now. Currently, pricing is more dependent on the customers’ size and security requirements. Payment for the appliances is received upfront, via cash or financing. The units come in various sizes and prices, depending on the application, but they typically start at approximately $54,000 (via FireEye.com). The company also takes in revenue from subscriptions to its Dynamic Intelligence Solutions service; pricing for this service is also dependent on the client and its needs.

Market

A survey by the Ponemon Institute found that each of the large companies it studied experienced about two successful attacks per week (via InfoSecIsland). A security report by Imperva indicated that, among a group of observed web applications, each one was attacked 71 times per hour from just one type of attack (known as a SQL injection). The attacks occasionally peaked up to 1,300 attempts per hour. A recent article by The Verge revealed that the University of Wisconsin gets 90,000 to 100,000 break-in attempts each day. Not all of these attacks are advanced persistent threats, but studies show that APTs are becoming more frequent and are broadening their target base. The number of monthly APTs increased by 542% over the course of 2011, and half of the attacks were directed at organizations with fewer than 2,500 employees (according to Symantec, see charts below). FireEye CEO DeWalt has indicated that he believes the company’s market is $25 billion in size annually (via PandoDaily). This agrees with figures produced by Gartner (see chart above), which estimates the Enterprise Security Market to be $24.6 billion for 2013, with a projected annual growth rate of approximately 8% through 2017.

Source: Symantec

$21.2 $22.6$24.6

$26.7$28.7

$30.7$32.7

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Enterprise Security Market Ex-Services$23bn Market Growing at ~8%

Source: Gartner

http://www.fireeye.com/news-events/press-releases/read/fireeye-releases-file-malware-protection-systemhttp://www.infosecisland.com/blogview/23249-New-Training-Model-for-Advanced-Persistent-Threat-Detection-and-Mitigation.htmlhttp://blog.imperva.com/2011/09/sql-injection-by-the-numbers.htmlhttp://www.theverge.com/2013/7/17/4531380/colleges-universities-hackers-china-securityhttp://www.symantec.com/content/en/us/enterprise/other_resources/b-istr_main_report_2011_21239364.en-us.pdf?om_ext_cid=biz_socmed_twitter_facebook_marketwire_linkedin_2012Apr_worldwide_ISTR17http://pandodaily.com/2013/01/10/hitting-the-gas-fireeye-raises-50-million-and-builds-out-senior-team/

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Cisco, 21.0%

Check Point Software

Technologies, 15.7%

Juniper Networks, 8.3%

Fortinet, 5.9% Palo Alto

Networks, 5.1%

McAfee1, 4.7%

SonicWALL, 3.1%

HP, 2.6%

IBM, 2.5%

WatchGuard Technologies,

2.2%

Others, 28.8%

Enterprise Network Security Q1 of 2013 Market Share $1.65bn Total Size in FQ1 of 2013

While FireEye’s technology is at the leading edge of the sector, it may not become a dominant force within the security services industry due to the scope of its services, as its product offerings are more focused relative to other large players in the space. Although advanced persistent threats are a dangerous and growing portion of Internet attacks, they are still only a fraction of the total threats for which security services are needed. Large competitors, such as Cisco (CSCO), typically deliver a wider range of services (e.g., firewalls and gateways) in order to offer complete systems to clients. However, one of the key strengths of FireEye’s offerings is that they protect against multiple threat vectors, including web, email and files. Other vendors, such as Proofpoint, have advanced solutions based on a single specific threat, such as email only. We believe that FireEye has the most comprehensive APT solution on the market.

An open question is the size of the advanced malware protection market, which FireEye addresses with its technology. Our industry contacts have indicated that the market is in high demand, with rapid associated growth rates; however, many in the industry are unclear whether IT budgets for these newer products is sourced from the Secure Email Gateway market, the Intrusion Prevention market, the Next-Generation Firewall market or whether this category represents a new IT budget item altogether. Regardless of budget classification, we think APT products will generally be complementary rather than substitutive to existing security solutions. Most of FireEye’s competitors are publicly held companies. These include Cisco, Juniper Networks (JNPR) and Palo Alto Networks (PANW). Palo Alto went public in July 2012, raising $264 million in the IPO. Previously the firm had been funded by $64.6 million in venture capital (according to CrunchBase). It was founded in 2005 and specializes in firewalls and fraud protection. Privately owned

competitors include Guardian Analytics, an eight-year old firm which specializes in banking security, and Mandiant, where David DeWalt remains as Chairman of the Board.

Financial

Funding According to an article by PandoDaily, FireEye has raised $101 million in venture funding over the course of five rounds. Investors in

the most recent round include Sequoia Capital, Norwest Venture Partners, Goldman Sachs, Juniper Networks and Silicon Valley Bank. In-Q-Tel, the investing branch of the Central Intelligence Agency, has also previously invested in FireEye, and VentureBeat speculates that In-Q-Tel may have played a supporting role in this round as well. The Series D round, completed in January 2013, totaled $50 million, and placed a $1.25 billion valuation on the company (via Business Insider).

Media outlets have anticipated an initial public offering since DeWalt was named CEO. In an interview with Bloomberg immediately after his appointment in November 2012, DeWalt said that an IPO was his top priority, even specifying: “the company is ready.” However, after the Series D funding in January 2013, DeWalt stated to VentureBeat that the company had not yet filed paperwork to go public. According to the interview, FireEye is establishing executive roles and readying new products in preparation for an IPO later in the year.

Valuation The company does not disclose exact revenues; however, it announced in a January 2013 press release that bookings for 2012 reached over $100 million. That said, bookings growth has been substantial, and is expected to continue at an accelerated pace. The $100 million in bookings for 2012 doubled the number from 2011, and bookings are expected to double again in 2013 (via Business Insider). By taking these growth projections and approximate revenue numbers, we can compare FireEye to public companies in the same space and arrive at an approximate valuation.

Source: Wedbush, Company Data

http://www.crunchbase.com/company/palo-alto-networkshttp://pandodaily.com/2013/01/10/hitting-the-gas-fireeye-raises-50-million-and-builds-out-senior-team/http://pandodaily.com/2013/01/10/hitting-the-gas-fireeye-raises-50-million-and-builds-out-senior-team/http://venturebeat.com/2013/01/10/fireeye-funding/http://www.businessinsider.com/fireeye-fundraising-2013-1http://go.bloomberg.com/tech-deals/2012-11-28-former-mcafee-chief-dewalt-named-fireeye-ceo-aims-for-2013-ipo/http://www.businessinsider.com/fireeye-fundraising-2013-1http://www.businessinsider.com/fireeye-fundraising-2013-1

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By running a simple regression based on the forward EV/sales multiples and projected revenue growth rates of 11 comparable companies, and applying the regression formula to FireEye’s expected sales of sales of $200 million and approximate growth rate of 100%, we arrive at an enterprise value of $2.25 billion.

Source: Wedbush, Company Data

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FireEye

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Braintree Braintree provides electronic payment services out of offices in Chicago IL and Menlo Park CA. Specifically it has developed a software platform that serves as a method of taking and verifying credit card payment information for merchants operating online. It has become more recognizable over the past year as several of its clients have gained a higher profile. These customers include Uber Technologies, Fab.com, LivingSocial, Airbnb and Rovio. As an international company, Braintree has been able to take advantage of the global expansion of these firms, and likely will continue to do so as they penetrate new markets. Founder Bryan Johnson sold payment processing services to companies while a student at BYU. He began working on the Braintree payments service software while earning his MBA at the University of Chicago and was able to pull away several of his former clients to give his fledgling company a customer base. His first big customer was the online reservation service OpenTable, which motivated him to focus on high-growth, web-based companies. Spotting a technology lag in payment gateways – the services that encrypt payment information for processing – he expanded the company to fill this need, making the firm’s software appealing to a new generation of emerging Internet companies.

Technology The firm operates at the beginning of the payment process channel. It provides software that can be built into a merchant’s website or application, to take (and store) buyers’ credit card information. Additionally, Braintree’s software acts as a “gateway” service that verifies the authenticity of the payment method and the availability of funds. The company has been able to adapt its products particularly well to mobile applications; Braintree can authorize a credit card not only based on traditional security methods, but also based on behavior. Uber’s payment procedure provides a good example: when a consumer uses Uber’s smartphone app to hail a car, Braintree uses the proximity of the customer’s phone to the driver’s phone to confirm that the customer being charged is, in fact, present at the transaction point. Additionally, Braintree’s mobile portal is able to initiate payments directly from within the app, without the need to make additional connection with a browser-based portal, as many competitors do. This cuts down on the number of steps involved in the payment process, and makes the transaction quick and painless. This is appealing to merchants who do a great deal of mobile transactions (such as Uber or Rovio, the producer of Angry Birds), as transactions typically take place on small screens with relatively slow data connections. As a result, 20% of Braintree’s processing volume comes from mobile payments.

Business Model Braintree charges merchants 2.9% of each of transaction made through their system, as well as a flat fee of $0.30 per transaction. The 2.9% charge is approximately equal to the percentage take by other companies operating in the space. Although it previously charged a fee to developers for use of the platform, the company no longer does this. Also eliminated was a membership fee that was previously charged to merchants. The company stresses that there are no additional fees for transactions involving unique credit cards, international transactions, etc. Braintree attempts to differentiate itself through cutting-edge technology, developer-friendly software and customer service. It claims that its services can be integrated into a website in just 20 minutes (according to an article by Forbes).

Leadership Chief Executive Officer Bryan Ready came onto Braintree’s board from Accel Partners, which invested in the firm in June of 2011. In October of that year, founder Mr. Johnson announced that he would move to Chairman of the Board and allowed Mr. Ready to take the role of CEO. After working as an engineer at several payment companies, Mr. Ready earned an MBA at Harvard, then moved on to become President at iPay Technologies. After iPay was sold to Jack Henry Associates, Mr. Ready became an executive in residence at Accel Partners. Juan Benitez is Braintree’s Chief Technology Officer. Mr. Benitez spent nine years with Yahoo (YHOO), achieving the role of Vice President of Engineering in the Advertising Products Group. Previously he served as a manager at SEVEN Networks and Healtheon/WebMD (WBMD). He has undergraduate and Master’s degrees in Electrical and Computer Engineering from Carnegie Mellon University.

Market

The e-commerce market in the U.S. is in a period of substantial growth, despite the slow progress of the U.S. economy overall. According to ComScore, year-over-year growth of e-commerce sales has ranged between 13% and 15% for each of the four quarters from Q1 2012 through Q1 2013, while U.S. commerce in general grew at only 1% to 2% year-over-year during the same period. Online sales for the first quarter of 2013 amounted to $50.2 billion, with year-over-year increases in the number of buyers, frequency of purchases per buyer and number of dollars spent per purchase. The main driver of this growth is mobile commerce. ComScore data show that retail website usage on smartphones has increased in the U.S. by 385% between February 2010 and February 2013, while usage on desktops is up just 17% during the same period. Retail site usage on smartphones comprised 37% of the total time spent on retail sites in February 2013, while tablets made up 14%; this means that approximately 51% of retail website usage occurs on a mobile device. Purchases made on such devices comprised 11% of all e-commerce spending in the first quarter of 2013, with 31% growth in total dollars spent from the first quarter of 2012 (see chart below). According to a study by Juniper Networks, the volume of global mobile payments (including commerce and money transfers) will grow to $670 billion by 2015, 2.7 times the market size of 2011.

http://www.forbes.com/sites/petercohan/2012/07/24/braintree-wants-to-make-mobile-payments-history/http://www.juniperresearch.com/viewpressrelease.php?pr=250

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A high-growth market such as this is bound to attract competition; over the past several years, multiple payment solution firms have entered the arena. PayPal, a subsidiary of eBay (EBAY), is the most popular online merchant solution, currently projected to process $178 billion of consumer-to-business and consumer-to-consumer payments in 2013, with net revenues of $6.7 billion. PayPal’s net revenue represents about 3.8% of its total processing. This is significantly higher than Braintree’s 0.33% take from the payments that it processes. This is because PayPal is more involved in other steps of the payment process; a large portion of the fees collected by Braintree are redirected to other service providers in the payment processing chain. The most notable private enterprise in this market is Square, the company founded by Jim McKelvey and Jack Dorsey (a co-founder of Twitter). As of May 2013, Square was processing $15 billion in payments, up from $10 billion six months prior (according to FierceMobileContent). Thus far, the company has focused its mobile efforts mostly on in-store payments; for example, in October 2012, it struck a deal with Starbucks (SBUX) to accept credit card payments at Starbucks store fronts. Square has also ventured into mobile wallet services and point-of-sale hardware. It recently announced that it will introduce an online marketplace to contend with eBay and Etsy. Three-year-old Stripe is similar to Braintree in that it provides developer-friendly payment solutions, however its international reach is currently limited to a beta program in the United Kingdom. Other start-ups in the space include Recurly and LevelUp.

Financial

Funding Because founder Bryan Johnson was able to quickly acquire several quality clients, Braintree has been self-funded for much of its existence. In June of 2011, the company accepted a $34 million investment from Accel Partners, in order to build out a sales and marketing force and increase engineering headcount (according to TechCrunch). In October of 2012, Accel invested further into the company along with New Enterprise Associates (via TechCrunch). The $35 million round allowed the firm to continue its expansion

after it spent $26.2 million to acquire Venmo, a start-up that had developed a mobile app for quick person-to-person payments. This technology allowed Braintree to provide one-touch payments for Uber. Venmo had been growing their processing volume by approximately 30% each month, according to an article by The New York Times.

Revenue Inc.com has included Braintree in its Inc 5000 list for several years, so many of the company’s revenue figures are available. According to the publication, Braintree’s net revenue for 2011 and 2010 were $9.9 million and $4.6 million, respectively. The firm’s growth over the three years ending 2011 was 895%, and over 4,000% for the three years ending 2010 (according to Inc.com). With these revenue figures and growth rates, we can calculate the revenue numbers for 2008 and 2007 of $991,000 and $113,000 respectively. Profitability figures are not given, although an article by TechCrunch claims that Braintree is profitable. Braintree also announces its processing volumes occasionally via press release, disclosing the data as an annualized run rate. Usually these figures are released about the midpoint of the calendar year, typically July or August. By establishing a relationship between the run rates and the revenue figures for the year end, we can apply the relationship to the current run rate figure and derive revenue estimates for 2012 and 2013. In 2010, $4.6 million in revenue accounted for 0.46% of the $1 billion annualized processing volume announced earlier that year. The following year, $9.9 million in revenue comprised 0.33% of the $3 billion processing run rate. Taking this percentage forward, based on the $4.5 billion processing run rate disclosed in 2012 and the $10 billion processing run rate disclosed in 2012, we estimate revenues of $14.85 million for 2012 and $33 million for 2013 (see chart below).

Source: ComScore

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http://www.fiercemobilecontent.com/story/squares-annual-payment-volume-eclipses-15b-led-ipad-transactions/2013-05-15http://techcrunch.com/2011/06/29/accel-puts-34-million-in-online-payments-platform-braintree/http://techcrunch.com/2012/10/17/payments-platform-braintree-raises-35m-from-nea-accel-to-take-on-paypal-and-square/http://bits.blogs.nytimes.com/2012/08/16/payments-start-up-braintree-buys-venmo-for-26-2-million/http://www.inc.com/profile/braintreehttp://techcrunch.com/2011/06/29/accel-puts-34-million-in-online-payments-platform-braintree/

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Source: Wedbush, Company Data

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Last Week’s News Cloudera has made its first acquisition, purchasing a London-based company called Myrrix. Myrrix develops software for

“machine learning,” the types of programs that create recommendations for future purchases based on what a user has previously purchased, much like one would see on Amazon or Netflix. The acquisition will help build out applications that Cloudera can offer to its customers. (According to GigaOm)

Path (FB) - According to an article by TechCrunch, social network Path is in the process of securing $50 million in new

funding. This would give the company, founded by Dave Morin, a valuation of $500 million. The most recent round of funding came in April of this year in the form of $30 million, implying a total value of $250 million. According to the article, the Series C round is oversubscribed and includes a strategic Asian investor.

Foursquare (FB) has begun rolling out advertisements within it mobile app. The ads are full-screen spreads that pop up after

the user has checked in at a store or point of interest. They are targeted, so the ad is a relevant suggestion or coupon related to the person’s location. Foursquare is combining this effort with sponsored updates to further monetize its 35 million users. (According to TheVerge)

Uber has announced that it is adding a fare-splitting feature to its mobile app that will allow users to share the cost of a ride.

The car-hailing service has begun to see new-comers (like Lyft and SideCar) crowd its space, and it must now ensure price-competitiveness. This feature is seen as a way of making rides more affordable without cutting into margins. (According to The New York Times)

Bloom Energy has entered into a joint venture with Japanese technology conglomerate Softbank. Each firm has agreed to

invest $10 million to create a company that will sell fuel cell-generated electricity to Japanese corporations. Electricity prices have been rising in Japan, especially since the nation has turned away from nuclear power after the Fukushima incident in 2011. Bloom Energy has secured over $1 billion in venture funding throughout its existence. (According to The New York Times)

On-Ramp Wireless has secured a $15 million investment from energy company Enbridge, bringing its total C round funding to

$31 million. The San Diego-based company has created an alternative cellular network that allows for unique communication between companies and their field equipment. Most of On-Ramp’s clients are utilities and oil companies. The company has now raised over $75 million. (According to VentureBeat)

Optoro has received $23.5 million in a Series B round led by Revolution Growth Fund. Optoro develops software-as-a-service

systems that help online retailers manage returns, spoilage and excess inventory. The company has landed several big-name customers including Amazon, eBay, Buy.com and Best Buy. Optoro has now raised a total of $33 million and employs approximately 90 people. (According to VentureBeat).

Xamarin, a development platform that programmers can use to create apps for iOS and Android systems, has raised $16

million in a Series B round headed by Lead Edge Capital. This brings the firm’s total venture capital to $28 million, including the $12 million it raised in July of 2012. That Series A funding came from Charles Rivers Ventures, Ignition Partners and Floodgate. CEO Nat Friedman said the capital will be used to further develop the platform, specifically to enable customers to build apps faster. (According to TechCrunch).

Ayasdi has secured a funding round in the amount of $30.6 million from IVP, Citi Ventures, GE Ventures Floodgate and

Khosla Ventures. This brings the company’s total venture capital to $40.6 million just six months after the firm launched its product. Ayasdi develops software that mines medical data to uncover opportunities for targeted treatments. The machine-learning technology was originally created at Stanford University. (According to VentureBeat)

WhatsApp - Popular mobile messaging application WhatsApp has changed its business model for iOS devices. The

company originally charged $0.99 for the app itself, but will now charge $0.99 per year for the service, after the user has been signed up for 12 months. The firm was already using this model for its Android , Blackberry and Windows Phone versions. The service is dominant in Europe, and has 200 million active daily users globally. (According to TechCrunch).

EdgeCast, an online content delivery network that counts Twitter, Yahoo (YHOO) and Hulu among its clients, has received

$54 million investment. The Los Angeles-based company has now landed a total of $74 million in total funding since its founding in 2006. The company claims it has been profitable for four years, with monthly revenues currently approximating $8 million. (According to TheVerge)

http://gigaom.com/2013/07/16/cloudera-buys-machine-learning-startup-myrrix/http://techcrunch.com/2013/07/16/path-is-raising-50m-at-a-500m-valuation/http://www.theverge.com/2013/7/16/4528762/foursquare-rolls-out-first-true-ads-post-check-inhttp://bits.blogs.nytimes.com/2013/07/15/uber-maker-of-summon-a-car-app-adds-fare-splitting/?smid=tw-sharehttp://www.nytimes.com/2013/07/18/business/global/softbank-forms-fuel-cell-venture-with-silicon-valley-start-up.html?_r=2&http://www.nytimes.com/2013/07/18/business/global/softbank-forms-fuel-cell-venture-with-silicon-valley-start-up.html?_r=2&http://venturebeat.com/2013/07/17/on-ramp-wireless-series-c/http://venturebeat.com/2013/07/17/revolution-growth-fund-invests-23-5m-in-optoro-to-find-unwanted-goods-a-home/http://techcrunch.com/2013/07/17/xamarin-raises-16m-series-b-round-led-by-lead-edge-capital-passes-20000-paid-developer-seats/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29http://venturebeat.com/2013/07/16/ayasdis-30m-round-proves-investors-are-still-rooting-for-big-data/http://techcrunch.com/2013/07/16/whatsapp-free/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29http://venturebeat.com/2013/07/18/edgecast/

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About The Wedbush Private Company Strategies Group

The Private Company Strategies Group of Wedbush Securities is a leader in providing research and trading to the rapidly growing industry of privately traded securities, with an emphasis on companies in the social media space. We assist companies in raising growth capital through traditional private placements and provide liquidity options for existing and former employees through tailored selling programs. We also work with venture capital, private equity and hedge fund investors to help them adjust their holdings in some of the most dynamic companies. We endeavor to understand the underlying industries of the private companies we trade, in order to help our clients make informed decisions about their investments. We provide discreet customized solutions for our institutional and accredited private clients through a team of professionals located in New York, Los Angeles and San Francisco.

Contact Wedbush Securities Private Company Strategies Group: Michael Pachter

Managing Director, Equity Research Head of Research, Private Company Strategies Group (213) 688-4474 | michael.pachter@wedbush.com Twitter: @michaelpachter

@WedbushPSG

https://twitter.com/WedbushPSG

About Wedbush Securities

Founded in 1955, Wedbush Securities is a leading investment firm that provides brokerage, clearing, investment banking, equity research, public finance, fixed income sales and trading, and asset management to individual, institutional and issuing clients. Wedbush currently ranks as a top liquidity provider for the NASDAQ, and was ranked as the #1 stock picker for 2010, 2011, and again for the 1

st

half of 2012 by Barron’s. Headquartered in Los Angeles, with over 100 offices nationwide, Wedbush focuses on relentless service, client financial safety, continuity, and advanced technology. (www.wedbush.com)

Kevin Cohen

Director of Trading, Private Company Strategies Group (213) 688-8089 | kevin.cohen@wedbush.com Wedbush PSG

http://linkd.in/RxlmjN

https://twitter.com/WedbushPSGhttp://www.wedbush.com/http://linkd.in/RxlmjN

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Covered Companies Mentioned in this Report (priced intra-day July 22, 2013)

COMPANY TICKER RATING PRICE PRICE TARGET

Juniper eBay

JNPR EBAY

Neutral Outperform

$21.16 $52.84

$18.00 $64.00

Cisco CSCO Outperform $25.64 $26.00 Facebook FB Outperform $26.07 $35.00 Best Buy BBY Underperform $28.76 $9.00 Imperva IMPV Neutral $48.15 $37.00 Netflix NFLX Underperform $265.06 $65.00

Important Disclosures The information contained herein is intended for accredited investors as defined in Rule 501 of Regulation D under the Securities Act of 1933 or institutional investors. Wedbush Securities Wedbush does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. The analysts responsible for preparing research reports do not receive compensation based on specific investment banking activity. The analysts receive compensation that is based upon various factors including WS’ total revenues, a portion of which are generated by WS’ investment banking activities. Analyst Certification I, Michael Pachter, certify that the views expressed in this report accurately reflect my personal opinion and that I have not and will not, directly or indirectly, receive compensation or other payments in connection with my specific recommendations or views contained in this report. Disclosure information regarding historical ratings and price targets is available at http://www.wedbush.com/ResearchDisclosure/DisclosureQ213.pdf Investment Rating System: Outperform: Expect the total return of the stock to outperform relative to the median total return of the analyst’s (or the analyst’s team) coverage universe over the next 6-12 months. Neutral: Expect the total return of the stock to perform in-line with the median total return of the analyst’s (or the analyst’s team) coverage universe over the next 6-12 months. Underperform: Expect the total return of the stock to underperform relative to the median total return of the analyst’s (or the analyst’s team) coverage universe over the next 6-12 months.

The Investment Ratings are based on the expected performance of a stock (based on anticipated total return to price target) relative to the other stocks in the analyst’s coverage universe (or the analyst’s team coverage).*

Rating Distribution (as of June 30, 2013)

Investment Banking Relationships (as of June 30, 2013)

Outperform:54% Neutral: 41% Underperform: 5%

Outperform:15% Neutral: 1% Underperform: 0%

The Distribution of Ratings is required by FINRA rules; however, WS’ stock ratings of Outperform, Neutral, and Underperform most closely conform to Buy, Hold, and Sell, respectively. Please note, however, the definitions are not the same as WS’ stock ratings are on a relative basis. The analysts responsible for preparing research reports do not receive compensation based on specific investment banking activity. The analysts receive compensation that is based upon various factors including WS’ total revenues, a portion of which are generated by WS’ investment banking activities. Wedbush Equity Research Disclosures as of July 22, 2013

http://www.wedbush.com/ResearchDisclosure/DisclosureQ213.pdf

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Company Disclosure

Juniper eBay Cisco Facebook Best Buy Imperva Netflix

1 1 1 1 1 1 1

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Research Disclosure Legend

1. WS makes a market in the securities of the subject company. 2. WS managed a public offering of securities within the last 12 months. 3. WS co-managed a public offering of securities within the last 12 months. 4. WS has received compensation for investment banking services within the last 12 months. 5. WS provided investment banking services within the last 12 months. 6. WS is acting as financial advisor. 7. WS expects to receive compensation for investment banking services within the next 3 months. 8. WS provided non-investment banking securities-related services within the past 12 months. 9. WS has received compensation for products and services other than investment banking services within the past 12 months. 10. The research analyst, a member of the research analyst’s household, any associate of the research analyst, or any individual

directly involved in the preparation of this report has a long position in the common stocks. 11. WS or one of its affiliates beneficially own 1% or more of the common equity securities. 12. The analyst maintains Contingent Value Rights that enables him/her to receive payments of cash upon the company’s meeting

certain clinical and regulatory milestones.

Private securities may involve a high degree of risk and are intended for sophisticated investors who are capable of understanding and assuming the risks involved. Private securities may have a high level of volatility. High volatility investments may experience sudden and large drop in their value causing losses that may equal your original investment.

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Private securities are illiquid and may not be readily realizable and it may be difficult to sell or realize those investments, similarly it may prove difficult for you to obtain reliable information about the value, or risks, to which such an investment is exposed. Investors should obtain advice from their own financial advisor and only make investment decisions on the basis of the investor’s own objectives, experience, risk tolerance, and resources. The information herein is based on sources that we consider reliable, but its accuracy is not guaranteed. The information contained herein is not a representation by this corporation, nor is any recommendation made herein based on any privileged information. This information is not intended to be or should it be relied upon as a complete record or analysis; neither is it an offer nor a solicitation of an offer to sell or buy any security mentioned herein. This firm, Wedbush Securities, its affiliates, officers, employees, members of their families, or any one or more of them, and its discretionary and advisory accounts, may have a position in any security discussed herein or in related securities and may make, from time to time, purchases or sales thereof in the open market or otherwise. The information and expressions of opinion contained herein are subject to change without further notice. The herein mentioned securities may be sold to or bought from customers on a principal basis by this firm. Any reference to past performance is not a guarantee of future results. Supporting documentation will be furnished upon request for any claims, comparisons, recommendation, statistics or other technical data. Additional information with respect to the information contained herein may be obtained upon request. Applicable disclosure information is also available upon request by contacting the Business Conduct Department at (213) 688-8090. You may also submit a written request to the following: Business Conduct Department, 1000 Wilshire Blvd., Los Angeles, CA 90017. RESEARCH DEPT. • (213) 688-4505 • www.wedbush.com EQUITY TRADING Los Angeles (213) 688-4470 / (800) 421-0178 * EQUITY SALES Los Angeles (800) 444-8076 CORPORATE HEADQUARTERS (213) 688-8000