US-Canadian Cross-Border Offerings Now Within Reach of Mid-Sized Companies: Capstone Plays Key Role in The Largest Canadian IPO of 2007

Business Wire, June 4, 2007

HOUSTON -- Houston-based Capstone Associated announced today the exercise of an over-allotment option in what was already 2007's largest initial public offering in Canada. Northstar Healthcare (TSX: NHC) today is issuing an additional 1.8 million additional shares with a market value of almost $25 million. The over-allotment option was built into the initial public offering and is exercised only in the case of strong market demand.

Stewart A. Feldman, Chairman and Chief Executive Officer of Houston-based financial services boutique, Capstone (www.CapstoneAssociated.com), who led this cross-border transaction for the last two years, noted that the price of the Northstar stock has risen more than 11% since its debut only ten trading days ago. Northstar involved the acquisition of controlling interests in the two largest independent ambulatory surgery centers in Houston, and their simultaneous mid-May sale in a cross-border IPO by a Feldman-lead group. Feldman explained: "With the underwriters' exercise of their overallotment option, our financial role in Northstar comes to a very favorable close. Capstone is proud of our having designed, co-financed and lead this groundbreaking cross-border financing. And we are confident in having turned management over to CEO and co-founder Don Kramer that Northstar will continue on its strong growth curve." Feldman had served as Chairman and CEO of Health Ventures, Ltd., which sponsored the surgery center roll-up and financing over the last two years.

Feldman's partner in Northstar transaction, Donald Kramer, M.D., is Northstar's new CEO. Kramer founded Northstar member The Palladium for Surgery in 2003 and grew it to become one of the largest independent surgery centers in Houston. "Don Kramer's sophisticated marketing strategies have been the critical element in Palladium's high growth curve. The additional share sale evidences the Canadian market's confidence in Kramer and his Northstar team," commented Capstone's Harry Fleming, himself a Canadian.

Kramer challenged Feldman more than two years ago to develop a financial strategy for the Palladium center. After surveying various alternatives and even though Northstar has no Canadian operations, Feldman concluded "The Toronto Stock Exchange enabled us to achieve the greatest valuation possible. Although Capstone and all of Northstar's operations are located in Houston, given the size and structure of the transaction, the Canadian capital markets offered the best alternative. Initially structured as an income trust, the surprising and sudden change in Canadian tax law in late October by Canada's Conservative government necessitated a change for the Northstar transaction resulting in this innovative result. In retrospect, we were fortunate to have been challenged to develop the successor cross border strategy to the income trust and within two months the Northstar structure was the improved result."

Serving as chief architects of the Northstar transaction, Feldman's Capstone led a team of investment bankers, lawyers, and accountants from Vancouver, Toronto, New York, Philadelphia, Houston and San Francisco in completing this groundbreaking deal. Capstone and its affiliates employ 40 lawyers, financial professionals and support staff handling sophisticated financial transactions. Capstone serves in a merchant banking role as principals and advisors in complex multi-year transactions.

Capstone's Harry Fleming further commented: "The Northstar financial structure applies to all types of U.S. businesses which are considering a cross border financing. Especially with the 7% appreciation of the Canadian dollar so far this year, the Canadian market increasingly presents financing opportunities for U.S. businesses. Our Capstone team is currently in discussions with several other potential cross-border IPO candidates in the energy and healthcare sectors that can benefit from this highly tax efficient, cross border structure."

More about Capstone

Capstone was founded in 1998 by Feldman, and, together with its affiliates, provides specialized financial services to owners of closely held businesses. In addition to cross-border financings, Capstone's financial engineering is more generally directed towards enhancing the enterprise value of its clients' businesses. Capstone is one of the largest and most prominent providers of turnkey services for closely-held insurance companies, having grown since 1998 to managing fifty insurance companies with several hundred million dollars in assets. See www.CapstoneAssociated.com. Related divisions operate domestic international sales corporations (www.ExportAssurance.com), with another division providing specialized factoring services for long-term financial receivables (www.RapidSettlements.com). All of Capstone's operations draw upon the resources of The Feldman Law Firm LLP of Houston, Texas (www.feldlaw.com).