ModelitecTM

Experiment Results5/7/2005 – 4/3/2006

Tested Product

■ Comprehensive, advanced and automated weekly stock picking strategies running on commercial platform□ Statistically analyzed and constantly optimized with current

data□ Over 10 years back-tested using Monte-Carlo simulation□ Strategy and stock diversification

■ Operating on systematically selected and constantly updated, high-volume US stocks group

■ Customizable market analysis strategy■ Advanced money management techniques■ Promotional web-based virtual portfolio manager

Tested Product (cont’d)

■ Single stock analysis:

■ Portfolio Simulation:

Tested Product (cont’d)

■ Web-based Tracking Portfolio:

Experiment Results

■ Experiment period: 5/7/05-4/3/06 (35 weeks)■ The experiment was conducted on a virtual

portfolio of $500,000■ The portfolio consisted of equity (selection from

350 stocks) and hedging, up to 5% of the portfolio value.

■ The portfolio was hedged using QQQQ put options (“at the money”)

■ Buy & Sell prices were derived from real-time trading

■ All stocks in the portfolio had average daily volume above $5 million.

Statistics

■ Portfolio Value: $578,860; Gain: 15.8%■ Equity Gain: 21.1%■ Options Gain: -4.8%■ Commissions: -0.5%■ Trades: 114, Winning: 67 (59%)■ Average Trade:

□ Winning: 11.7%□ Losing: -5%□ All: 4.8%

■ Sharpe Ratio (Weekly): 1.52

Comparison

■ Index Performance:

Index Gain (from 5/7) Gain (from 18/7)

NASDAQ 100 13.4% 7%

NASDAQ Composite 12.2% 7%

S&P 500 7.8% 4.8%

Russell 2000 14.8% 11.3%

Portfolio 15.8% 15.2%

Conclusions

■ The system requires 2-3 weeks “warm up” period■ The portfolio beat NASDAQ100 by 18%■ In the 33 weeks since 18/7/2005 the portfolio

bypassed NASDAQ100 by 117%■ In comparison with the computerized systems, 2-

3% of the Portfolio were lost due to slippage.■ The results match the expected range■ The system is scalable without major changes to

manage over $10 million.

Portfolio Value Line

Portfolio Value Line

$440,000

$460,000

$480,000

$500,000

$520,000

$540,000

$560,000

$580,000

$600,000

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Portfolio Value