Paulson Investment Co. Adds to Team

Paulson Investment Co., the subsidiary of Paulson Capital Corp., hired Brian Hagen as a Chief Compliance Officer and Chris Clark as a senior managing director. Clark has spent more than 20 years working in finance fields including banking and private placements.

PRESS RELEASE:

Paulson Investment Company Adds Two Key Employees

PORTLAND, Ore., July 5, 2012 — Paulson Investment
Company, Inc. (Paulson), a wholly owned subsidiary of Paulson Capital
Corp. (Nasdaq:PLCC), has recently hired Chris Clark Senior Managing
Director, and Bryan Hagen Chief Compliance Officer.

“Mr. Clark has over twenty three years of industry background in
investment banking, private placements, and as co-owner of several
broker-dealers and asset management firms. He joins us from a San
Francisco venture capital investment bank to help us expand our role in
the venture capital and private placement markets,” said Chet Paulson,
Chairman of Paulson Capital. “We look forward to leveraging Chris’s
institutional expertise to expand our funding options for our client
companies.”

“We are very fortunate to have Bryan Hagen as our new CCO,” added Trent
Davis, CEO of Paulson. “Bryan is very well respected and brings 20
years of combined industry experience, including positions as Senior
Compliance Examiner at the FINRA and Chief Compliance Officer with
FINRA-member firms. He is a great addition to our team.”

About Paulson Capital Corp

Paulson Capital Corporation is the parent company of Paulson Investment
Company, Inc. Headquartered in Portland, Ore., Paulson Investment
Company, Inc. is a boutique investment bank and a national leader in
public offerings of small and emerging growth companies with capital
needs of $5 million to $45 million. Founded by Chester “Chet” Paulson
in 1970, it has managed or underwritten over 170 securities offerings
and has generated more than $1.2 billion for client companies.

For more information on Paulson Investment Company, Inc. visit
www.paulsoninvestment.com.

This release may contain “forward-looking statements” based on current
expectations but involving known and unknown risks and uncertainties.
Actual results of achievements may be materially different from those
expressed or implied. The Company’s plan and objectives are based on
judgments with respect to future conditions in the securities markets
as well as general assumptions regarding the economy and competitive
environment in the securities industry, which can be volatile and out
of our control. In particular, we make assumptions about our ability to
complete corporate finance transactions and increase the volume and
size of our securities trading operations, which are difficult or
impossible to predict accurately and often beyond the control of the
Company. Therefore, there can be no assurance that any forward-looking
statement will prove to be accurate.