CATALYST EQUITY RESEARCH REPORT ™

Weekly Research Highlighting Activist Investments

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HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT™

HIGHLIGHTING ACTIVIST INVESTMENTS

Week Ending March 20, 2009

SYMBOL COMPANY INVESTOR

AVCA

Advocat Inc. Bristol Investment Fund

BBI

Blockbuster Inc. Mark Wattles

BBW

Build-A-Bear Workshop Crescendo Capital

CHIC

Charlotte Russe Holding KarpReilly

FMMH.OB

Fremont Michigan Insuracorp Harry Long

HWK

Hawk Corp GAMCO Investors

NTN

NTN Buzztime Trinad Capital

PNNW

Pennichuck Corp GAMCO Investors

PPCO

Penwest Pharmaceuticals Tang Capital/Perceptive Life

PXD

Pioneer Natural Resources Southeastern Asset Management

SLRY

Salary.com Raging Capital Management

SSE

Southern Connecticut Bancorp Lawrence Seidman

TDS

Telephone & Data Systems GAMCO Investors

TGT

Target Corp Pershing Square Capital

TMI

TM Entertainment & Media Bulldog Investors

VSNT

Versant Corp Discovery Capital

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HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT™

Advocat Inc (AVCA)

Activist Investor:

Bristol Investment Fund

Investor Info Catalyst Info

Shares 389,850% Outstanding 6.87%Cost Basis Not Avail

Company Info

Share Price 2.50Revenue 289MMarket Cap 14MEnterprise Value 39MNet Cash -24MEBITDA 17M52 wk. range 1.55 – 12.44EV/EBITDA 2.2

Catalyst:

On March 17 Bristol nominated two individuals for election to the Board at the next annual meeting.

Comment:

We previously covered AVCA in numerous Catalyst Research Reports (most recently on February 13),highlighting Bristol’s offer to buy the Company in July 2006 for $16.80/share. On February 4 2008 Bristolsent a letter to AVCA requesting (i) the full board be elected annually (ii) the appointment of two institutionalshareholders to the board (iii) AVCA present a binding resolution to shareholders to vote on whether to redeemthe poison pill (iv) the company decline to renew any and all golden parachutes, (v) the company revise thecurrent Board's compensation and (vi) the company hire a credible investment bank to review alternatives,including an immediate stock buyback and the elimination of acquisitions. On April 2 2008 Bristol nominated two directors and on May 6 withdrew their nominees

due to the fact that AVCA agreed to include their shareholder proposals in the Company’s definitive proxy

On February 13 2009 Bristol disclosed they’ve beenincreasing their ownership (by 83,186 shares; equivalent to 1.54% of AVCA shares outstanding) and reserved their right to call a special meeting or nominate directors for election at the next annual meeting.

Blockbuster Inc. (BBI)

Activist Investor:

Mark Wattles

Investor Info Catalyst Info

Shares 6,841,937% Outstanding 5.7%Cost Basis Not Avail

Company Info

Share Price 0.82Revenue 5.5BMarket Cap 158MEnterprise Value 1.1BNet Cash -759MEBITDA 294M52 wk. range 0.13 – 3.68EV/EBITDA 3.6

Catalyst:

Mark Wattles (who tried to merge BBI with Circuit City last year) has increased his ownership in BBI bypurchasing 3,256,937 Class A shares since February 26. In a SEC filing Wattles stated, “given the operatingfundamentals of BBI combined with the short term of its real estate leases (typically five years) and theaggressive and proactive manner in which BBI has managed its store base (including relocations, store closings,reductions in store size and subleases), Mr. Wattles does not believe that BBI has a motive to reorganize underChapter 11. In addition, regardless of the likelihood of obtaining a “going concern” qualification from itsauditors, Mr. Wattles believes BBI will be successful in refinancing its revolving bank line of credit, or if itcannot, that it will be able to use cash flow from operations to meet its August repayment obligations and 2009liquidity needs.”

Comment:

We previously covered BBI in numerous Catalyst Research Reports highlighting that Carl Icahn, who is adirector of BBI, owns approximately 16% of the Class A shares 8.71% of the Class B shares.

Build-A-Bear Workshop Inc. (BBW)

Activist Investor:

Crescendo Partners

Investor Info Catalyst Info

Shares 1,159,200% Outstanding 6.0%Cost Basis 3.72

Company Info