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The Newbridge Nanotechnology Index (NYSEArca: NNIX) has been constructed to track the stock market performance of companies that are currently active in nanotechnology. We believe that this science, which involves the precise assembly and manipulation of matter at the atomic or molecular level, will serve as the basis for myriad innovations in a wide range of industrial sectors in coming years. For a more extensive treatment of this subject, please request our TrendFocus: Nanotechnology report from June 3, 2004. The original Index included 21 companies at inception, and is weighted by market capitalization. The base date for the Index is June 30, 2004, at which time the base value for the index was set at 1000. We reconstitute and rebalance the index every fiscal quarter.

As of ourAugust 17, 2007 quarterly rebalance, the index includes 23 companies. There were no NNIX constituent additions or deletions for Q307, keeping the total number of companies at 23 in the NNIX. Constituents subject to the 10% index weight cap remained the same except for Flamel Technologies (ADR-NasdaqGM: FLML), which, because of a substantial drop in its stock price of approximately 56%, was excluded from the index weight cap group. For the quarter ended August 16, 2007 the NNIX closed at 713.56, down 11.1% from its last rebalance, May 17, 2007 closing at 802.67.

Significant events in the quarter included the split off of Combimatrix (NasdaqCM: CBMX) from Acacia Research Corp. and the acquisition of Cambridge Display Technology (NasdaqGM: OLED) by Sumitomo Chemical Company of Japan. The redemption of Acacia Research-CombiMatrix common stock for common stock of CombiMatrix Corp., at a ratio of 10-1, reduced CombiMatrix’s NNIX index weight from 0.65% to 0.41%, a decline of 36.9%. Sumitomo Chemical’s acquisition of Cambridge Display, which is expected to be completed during the third or fourth quarter of 2007, offers Cambridge Display shareholders $12 per share in cash. The announcement, which was made last month, boosted Cambridge Display shares 89%. With the stock closing on Aug. 16 at $11.65 and virtually no change in OLED shares outstanding from Q207, the company’s NNIX index weight increased from 2.02% to 4.83%.

Cambridge Display Technology Inc. (NasdaqGM: OLED) (CDT) and Sumitomo Chemical Company (Sumitomo Chemical) jointly announced on September 19, 2007 that Sumitomo Chemical has completed its $285 million acquisition of CDT, by means of a merger between CDT and a wholly owned subsidiary of Sumitomo Chemical. Cambridge Display Technology Inc. (NasdaqGM: OLED), as of September 20, 2007 was removed as a constituent of the Newbridge Nanotechnology Index (NNIX) which now includes 22 constituents.

Inclusion Parameters
The Newbridge Nanotechnology Index is comprised of companies whose operations, based on our assessment of publicly available information about products, intellectual property, research initiatives and partnerships, include a significant focus on nanotechnology. Companies whose market capitalizations are very large relative to their nanotechnology operations are not included in the Index. Only companies with common stock or ADR’s trading on a national market in the U.S. are eligible. Companies are included in the Index at our sole discretion. A company’s inclusion in the Index does not imply an investment recommendation. Except for those companies on which Newbridge Institutional Research has published a report including an investment recommendation, Newbridge Institutional Research has not performed a comprehensive fundamental analysis of the constituent companies.

Method of Calculation
The Newbridge Nanotechnology Index is calculated using Laspeyres’s formula and is weighted by full market capitalization, subject to a maximum of 10% on the weighting of any single constituent. The value of the Index on a given date represents the total market capitalization of all constituent companies relative to the base value. The weight of each constituent company reflects its current market capitalization relative to the aggregate market capitalization of all companies in the Index. Normal dividends are disregarded in the calculation of the index.

Reconstitution & Rebalancing
The Newbridge Nanotechnology Index will be reconstituted and rebalanced quarterly, with changes taking effect on or about the third Friday of February, May, August, and November of each year.