Paulson Capital and Variation Biotechnologies Enter Into Merger Agreement

Paulson Capital and Variation Biotechnologies Enter Into Merger Agreement

PORTLAND, Ore., May 9, 2014 (GLOBE NEWSWIRE) -- Paulson Capital (Delaware)
Corp., a publicly traded Delaware corporation (Nasdaq:PLCC) ("Paulson"), and
privately owned Variation Biotechnologies (US), Inc., a Delaware corporation
("VBI"), announced today that they have signed a definitive merger agreement.
Under the agreement, VBI will become the operating subsidiary of Paulson and
VBI's pre-merger stockholders will acquire shares of Paulson Common Stock that
will represent approximately 59% of the outstanding voting power of Paulson
capital stock upon consummation of the transactions contemplated by the merger
agreement, including a concurrent private placement of Paulson Common Stock
with gross proceeds of at least $11,000,000 to certain institutional
stockholders of VBI and an additional institutional investor that has been

Upon completion of the merger, Paulson will be renamed VBI Vaccines, Inc. and,
if NASDAQ approves VBI's initial listing application in connection with the
merger, Paulson Common Stock will continue to trade on The NASDAQ Capital
Marketafter the merger.

Upon the merger, Jeff Baxter, President and Chief Executive Officer of VBI,
will be appointed as the President and Chief Executive Officer of Paulson (to
be renamed VBI Vaccines, Inc.) and the company will be headquartered in
Cambridge, Massachusetts, with research and development facilities in Ontario,
Canada. "A merger with Paulson provides a strong financial foundation with
enhanced access to capital to further VBI's mission of innovative vaccine
formulation, development, and delivery of safe and effective prophylactic and
therapeutic vaccines," Mr. Baxter said. "This transaction represents an
excellent opportunity to progress our eVLP platform and lead CMV candidate
into clinical development and to meet our long-term growth objectives through
the acquisition of novel and innovative platforms and clinical assets."

Trent D. Davis, President of Paulson, said, "We are very pleased to announce
that we have reached an agreement to merge with VBI.VBI has world class
leadership and a scientific team with a proven track record developing
products that address critical unmet medical needs."

Mr. Davis added, "After we sold our brokerage business in May 2012, and in
view of the contemplated retirement of our founder and Chairman, Chester
Paulson, which became effective at the end of last year, our Board has been
exploring a variety of options including changes to our operating subsidiary's
ownership structure and its investment banking operations. As part of this new
strategy, our Board has decided to pursue a merger with VBI, which we believe
will create more value for our stockholders over the long term than Paulson
could otherwise achieve as an independent, stand-alone company. Upon
consummation of the merger, we intend to form an irrevocable liquidating trust
for the benefit of certain legacy shareholders who were holders of record of
our stock on October 11, 2013, as previously announced in our public filings.
The trust will hold the non-operating assets of our current operating
subsidiary, Paulson Investment Company, Inc., which will be liquidated and
distributed to the legacy shareholders over time."

The merger has been approved by the Boards of Directors of both companies and
by the requisite majority of VBI's stockholders and is subject to certain
conditions, including NASDAQ approval of an initial listing of the merged
entity's Common Stock on NASDAQ on a post-merger basis, the execution of
documentation whereby Paulson's ownership in Paulson Investment Company, Inc.
("PIC") will be diluted to 0.01%, FINRA approval of a change in the equity
control of PIC resulting from the merger and the restructuring of the
ownership of PIC, the closing of the $5.25 million investment in Paulson that
has been held in escrow since July 2013, approval of the merger by Paulson's
stockholders and other customary closing conditions. 

Holland & Knight LLP is serving as counsel to Paulson in the transaction, and
Richardson & Patel LLP is acting as counsel to VBI.

This communication is being made with respect to the proposed merger
transaction involving VBI and Paulson. Paulson will file with the SEC a
current report on Form 8-K, which includes the merger agreement and related
documents. In addition, Paulson will file a preliminary proxy statement with
the SEC in connection with the transaction and will mail the final proxy
statement to Paulson stockholders of record at the record date for the special
meeting of the stockholders to be held to provide requisite stockholder
approvals relating to the proposed transaction. The proxy statement contains
information about VBI, Paulson, the proposed merger, and related matters.
the proxy statement and proxy card by mail, Paulson stockholders will also be
able to obtain the proxy statement, as well as other filings containing
information about Paulson, without charge, from the SEC's Web site
( or, without charge, by contacting Kellie Davis at Paulson
at (503) 243-6000. This announcement is neither a solicitation of proxy, an
offer to purchase, nor a solicitation of an offer to sell shares of
Paulson.Paulson and its executive officers and directors may be deemed to be
participants in the solicitation of proxies from Paulson's stockholders with
respect to the matters relating to the proposed merger. VBI may also be deemed
a participant in such solicitation. Information about Paulson's executive
officers and directors is available in Paulson's Annual Report on Form 10-K
for the year ended December 31, 2013. Information regarding any interest that
VBI or any of the executive officers or directors of VBI may have in the
transaction with Paulson will be set forth in the proxy statement when it
becomes available.

About VBI

VBI is a privately held company dedicated to the innovative formulation,
development and delivery of safe and effective vaccines that expand and
enhance vaccine protection in both established and emerging markets.VBI's
innovative approach to vaccine development and its growing pipeline of vaccine
programs address significant market opportunities and are designed to answer
critical unmet medical needs. For more information on VBI, please visit its
Web site at

About Paulson

Paulson Capital (Delaware) Corp. is a holding company founded in 1970 whose
operating subsidiary, PIC, is a boutique investment banking firm through which
substantially all of Paulson's business has been conducted. PIC has served as
a regional, full-service investment bank, underwriter and placement agent for
small-cap and emerging growth issuers. PIC currently maintains offices in
Portland, San Francisco, and New York. Paulson's shares trade on The NASDAQ
Capital Market under the symbol PLCC. For more information on Paulson, please
visit its Web site at

Forward-Looking Statement Disclosure

This press release contains certain "forward-looking statements'' within the
meaning of the Private Securities Litigation Reform Act of 1995, as amended,
including statements regarding the efficacy of potential products, the
timelines for bringing such products to market, and the availability of
funding sources for continued development of such products. Forward-looking
statements are based on management's estimates, assumptions, and projections,
and are subject to uncertainties, many of which are beyond the control of
Paulsonand VBI. Actual results may differ materially from those anticipated
in any forward-looking statement. Factors that may cause such differences
include the risks that (a) there may be regulatory or litigation obstacles to
completing the merger, or stockholders of Paulson may not approve the merger,
(b) The NASDAQ Capital Market may not accept the shares of the merged company
for listing, (c) potential products that appear promising to VBI cannot be
shown to be efficacious or safe in subsequent preclinical or clinical trials,
(d) VBI will not obtain appropriate or necessary governmental approvals to
market these or other potential products, (e) VBI may not be able to obtain
anticipated funding for their development projects or other needed funding,
and (f) VBI may not be able to secure or enforce adequate legal protection,
including patent protection, for their products.

More detailed information about Paulson and risk factors that may affect the
realization of forward-looking statements, including the forward-looking
statements in this press release, is set forth in Paulson's filings with the
Securities and Exchange Commission. Paulsonurges investors and security
holders to read those documents free of charge at the Commission's Web site at Interested parties may also obtain those documents free of
charge from Paulson. Forward-looking statements speak only as to the date they
are made, and except for any obligation under the U.S. federal securities
laws, Paulson undertakes no obligation to publicly update any forward-looking
statement as a result of new information, future events or otherwise.

CONTACT: Paulson:
         Trent Davis, President - 503 243 6000
         Jeff Baxter, President and CEO - 617 830 3031 x125 or
         Egidio Nascimento, CFO - 613 749 4200 x123
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