Threshold Capital Corp.Threshold Capital Corp.

January 21, 2011January 21, 2011

20092009

Conduct intense fundamental research on Conduct intense fundamental research on individual ideasindividual ideasStrive to invest in companies that are well Strive to invest in companies that are well managed with high insider ownership, track managed with high insider ownership, track record of internal growth, dominant in their niche record of internal growth, dominant in their niche marketmarket2008 – Worst performance in the U.S. indices 2008 – Worst performance in the U.S. indices since the Great Depression since the Great Depression March 2009 – Global markets would bottom and March 2009 – Global markets would bottom and rallyrallyDJIA DJIA +18.82%+18.82% S&P 500 S&P 500 +23.45%+23.45%NASDAQ NASDAQ +43.89%+43.89%Russell 2000 Russell 2000 +25.22%+25.22%

2010 Events2010 Events

January 2010January 2010

US Equity Indices Attempt To Find DirectionUS Equity Indices Attempt To Find Direction

Bernanke Confirmed for a 2Bernanke Confirmed for a 2ndnd Term Term

US Senate Raises the Debt Ceiling to $14.3 US Senate Raises the Debt Ceiling to $14.3 TrillionTrillion

February 2010February 2010

President Obama Unveils Budget - $2.5 President Obama Unveils Budget - $2.5 Trillion of Taxes and $3.8 Trillion of Trillion of Taxes and $3.8 Trillion of SpendingSpending

Greece Fiscal Problems Grab HeadlinesGreece Fiscal Problems Grab Headlines

China Raises Bank Reserve China Raises Bank Reserve RequirementsRequirements

US Equity Indices ImprovingUS Equity Indices Improving

March 2010March 2010

Federal Reserve Federal Reserve Announces the End of its the End of its $1.25 Trillion Purchase Program$1.25 Trillion Purchase Program

Healthcare Reform Passes – to Begin in Healthcare Reform Passes – to Begin in 2014 at a Cost of $875 Billion2014 at a Cost of $875 Billion

US Consumer Sentiment Improving Along US Consumer Sentiment Improving Along With Business ConfidenceWith Business Confidence

April 2010April 2010

SEC Sues Goldman Sachs Over Abacus SEC Sues Goldman Sachs Over Abacus CDOCDO

BP Rig Explodes in Gulf of MexicoBP Rig Explodes in Gulf of Mexico

Return of Mergers & Acquisitions ActivityReturn of Mergers & Acquisitions Activity

Greece Rescued by the European Union Greece Rescued by the European Union and International Monetary Fundand International Monetary Fund

May 2010May 2010

Flash CrashFlash Crash

European Union Unveils $1 Trillion Rescue European Union Unveils $1 Trillion Rescue PackagePackage

Worldwide Markets Rally, Then Fall by Mid-Worldwide Markets Rally, Then Fall by Mid-monthmonth

US Indices Close Down – All in the Red for US Indices Close Down – All in the Red for 20102010

June 2010June 2010

BP Well Still UncappedBP Well Still Uncapped

China’s Currency Becomes More FlexibleChina’s Currency Becomes More Flexible

Final Revision of the US Financial Reform Bill – Final Revision of the US Financial Reform Bill – FINREGFINREG

US Indices End 1US Indices End 1stst Half 2010 Down Half 2010 Down

DJIA DJIA –(6.27)%–(6.27)% S&P 500 S&P 500 –(7.57)%–(7.57)%

NASDAQ NASDAQ –(7.05)%–(7.05)% Russell Russell –(2.5)%–(2.5)%

US Final Q1 GDP is 2.7% Vs 3.2% EarlierUS Final Q1 GDP is 2.7% Vs 3.2% Earlier

What Are US Companies Doing? Is This A Real What Are US Companies Doing? Is This A Real Recovery?Recovery?

July 2010July 2010

Goldman Sachs Settles Civil Charges for Goldman Sachs Settles Civil Charges for $550 million$550 million

China Q2 GDP at 10.3% Vs 11.9% in Q1China Q2 GDP at 10.3% Vs 11.9% in Q1

BP – New CEO & Well CappedBP – New CEO & Well Capped

August 2010August 2010

Increased M&A ActivityIncreased M&A ActivityRank Group to Buy Pactiv for $4.6 BillionRank Group to Buy Pactiv for $4.6 BillionBHP Goes Hostile after POT for $40 BHP Goes Hostile after POT for $40

BillionBillionINTC to Buy McAfee for $7.68 BillionINTC to Buy McAfee for $7.68 BillionDell/HPQ Battle over 3Par for $2.35 BillionDell/HPQ Battle over 3Par for $2.35 Billion

Housing Still WeakHousing Still WeakDJIA Dips Below 10,000 againDJIA Dips Below 10,000 again

September 2010September 2010

Basel III MeetingBasel III MeetingGold Rises to a Record $1,250/oz. – Up Gold Rises to a Record $1,250/oz. – Up 14% for 201014% for 2010United Kingdom Inflation Hits 3.1%United Kingdom Inflation Hits 3.1%China Declares It Has the World’s 6China Declares It Has the World’s 6 thth Largest Gold ReservesLargest Gold ReservesNBER Declares The Recession Officially NBER Declares The Recession Officially OverOverBuffet & Munger Visit ChinaBuffet & Munger Visit ChinaFair Month for Equities – But 27% of All Fair Month for Equities – But 27% of All Mutual Funds Still Underperforming Mutual Funds Still Underperforming

October 2010October 2010

Bank of Japan Moves – 5 Trillion Yen Buying Bank of Japan Moves – 5 Trillion Yen Buying ProgramProgramChina Reports Holding $2.65 Trillion Foreign China Reports Holding $2.65 Trillion Foreign Currency ReservesCurrency ReservesForeclosure/Robo-Signing Scandal – BAC, Foreclosure/Robo-Signing Scandal – BAC, WFC, C, JPM Halt ForeclosuresWFC, C, JPM Halt ForeclosuresChina Raises Interest RatesChina Raises Interest RatesG20 Meeting in Korea – Agree to Move G20 Meeting in Korea – Agree to Move Toward Market Driven Exchange Rate Toward Market Driven Exchange Rate SystemSystem

November 2010November 2010

World Bank Raises China Growth ForecastWorld Bank Raises China Growth Forecast

US Elections – Republicans SweepUS Elections – Republicans Sweep

Fed Announces QE2 Plans – Additional Fed Announces QE2 Plans – Additional $600 Billion$600 Billion

US Indices Rally – DJIA reaches 11,400US Indices Rally – DJIA reaches 11,400

World Bank President Recommends the World Bank President Recommends the Inclusion of Gold in a Revamped Global Inclusion of Gold in a Revamped Global Monetary SystemMonetary System

Ireland is Rescued - $70 Billion Plus Ireland is Rescued - $70 Billion Plus AusterityAusterity

US Encouraging Holiday Retail SalesUS Encouraging Holiday Retail Sales

December 2010December 2010

Unveiling of US Deficit Reduction Plan - $4 Unveiling of US Deficit Reduction Plan - $4 TrillionTrillionWeak November Jobs Report – Weak November Jobs Report – Unemployment rises to 9.8%Unemployment rises to 9.8%Chairman Bernanke Interviewed on 60 Chairman Bernanke Interviewed on 60 MinutesMinutesUS Tax DealUS Tax DealUS Q3 Final GDP at 2.6%US Q3 Final GDP at 2.6%China Raises Interest RatesChina Raises Interest RatesEnd 2010 with Solid GainsEnd 2010 with Solid Gains

DJIA DJIA +11.02%+11.02% S&P 500 S&P 500 +12.78%+12.78%NASDAQ NASDAQ +16.91%+16.91%Russell Russell +25.31%+25.31%

Core Portfolio PositionsCore Portfolio Positions

General ElectricGeneral Electric

Makers of Jet engines, Locomotives, power Makers of Jet engines, Locomotives, power turbines, consumer productsturbines, consumer products

GE CapitalGE Capital

Strong Industrial Orders in InfrastructureStrong Industrial Orders in Infrastructure

GE Increasing Dividend – Yield 3.06%GE Increasing Dividend – Yield 3.06%

Philip Morris InternationalPhilip Morris International

World’s largest and most profitable publicly World’s largest and most profitable publicly traded cigarette manufacturertraded cigarette manufacturer

Growing Emerging MarketsGrowing Emerging Markets

For 2010, PMI will earn $3.90 - $3.95; Up 20% For 2010, PMI will earn $3.90 - $3.95; Up 20% from 2009from 2009

Since Spinoff in 2008, PMI has increased Since Spinoff in 2008, PMI has increased dividends by 39% - Yield 4.5%dividends by 39% - Yield 4.5%

Altria GroupAltria Group

Philip Morris USA, US Smokeless, John Philip Morris USA, US Smokeless, John Middleton, and 28.5% Stake in SAB MillerMiddleton, and 28.5% Stake in SAB Miller

For 2010, MO will earn $1.83 - $1.87For 2010, MO will earn $1.83 - $1.87

Yield 6.29%Yield 6.29%

Lorillard Inc.Lorillard Inc.

33rdrd Largest Tobacco Company in US Largest Tobacco Company in US

Newport Brand - #1 in Menthol segment with Newport Brand - #1 in Menthol segment with 12.9% overall US market share12.9% overall US market share

Successful launch of non-Menthol Newports in Successful launch of non-Menthol Newports in Q4Q4

Pays $1.25 dividend per Qtr – Yield 6.5%Pays $1.25 dividend per Qtr – Yield 6.5%

Still considered a takeover candidateStill considered a takeover candidate

Cost per pack in New York City - $12 (NJ $9-10 per pack)Cost per pack in New York City - $12 (NJ $9-10 per pack)Tax Breakdown:Tax Breakdown:

Federal - $1.01 per pack (up from $0.39 in 2009)Federal - $1.01 per pack (up from $0.39 in 2009)NY State - $4.35 per packNY State - $4.35 per packNYC - $1.50 per packNYC - $1.50 per pack

Just under 60% of purchase price goes to paying taxesJust under 60% of purchase price goes to paying taxes

Gold & Precious MetalsGold & Precious MetalsLarge Investor Appetite for Gold in 2010Large Investor Appetite for Gold in 2010

Gold prices have tripled since 2004Gold prices have tripled since 2004

As the US and EU continue to pump $$$ into As the US and EU continue to pump $$$ into their fragile financial systems, Gold will continue their fragile financial systems, Gold will continue to do wellto do well

Large buyers continue to be China, Russia, IndiaLarge buyers continue to be China, Russia, India

As a currency, Gold has no liabilities – Gold As a currency, Gold has no liabilities – Gold cannot Defaultcannot Default

Gold companies in Portfolio – AEM, AUY, GDX Gold companies in Portfolio – AEM, AUY, GDX & GDXJ& GDXJ

Brazil OpportunitiesBrazil Opportunities1010thth Largest Economy in the World – GDP Growth of 7% Largest Economy in the World – GDP Growth of 7% in 2010; higher 2011in 2010; higher 2011Self-sufficient in oil; leader in alternative energy sourcesSelf-sufficient in oil; leader in alternative energy sourcesWorld Cup in 2014 and Olympics in 2016World Cup in 2014 and Olympics in 2016Massive need of Infrastructure – over $100 BillionMassive need of Infrastructure – over $100 Billion

Ultrapar ParticipacoesUltrapar Participacoes– Fuel Distributor & Chemical giantFuel Distributor & Chemical giant– Brands Ipiranga (Fuel Stations), Oxiteno (Chemicals), Brands Ipiranga (Fuel Stations), Oxiteno (Chemicals),

Ultracargo (shipping/storage of bulk liquids)Ultracargo (shipping/storage of bulk liquids)– Earn $3.15 for 2010; $3.65 in 2011Earn $3.15 for 2010; $3.65 in 2011– Yield 2.4%Yield 2.4%

China OpportunitiesChina Opportunities

1.3 Billion People – 1/5 of the Globe’s 1.3 Billion People – 1/5 of the Globe’s PopulationPopulation

Still Growing GDP at rapid pace – 10.5% for Still Growing GDP at rapid pace – 10.5% for 2010 and Range of 9 – 10% for 20112010 and Range of 9 – 10% for 2011

New 12New 12thth Five Year Plan Five Year Plan

1980 – Deng Xiaoping – “To be rich is glorious”1980 – Deng Xiaoping – “To be rich is glorious”

Inflation becoming a concernInflation becoming a concern

China Yuchai International LtdChina Yuchai International Ltd

CYI is the largest independent diesel engine CYI is the largest independent diesel engine maker in Chinamaker in China

Undergoing a tremendous shift in product mix Undergoing a tremendous shift in product mix from light duty to medium duty and heavy duty from light duty to medium duty and heavy duty unitsunits

2011 Joint Ventures2011 Joint Ventures

Will earn over $3.00 in 2010 and estimating Will earn over $3.00 in 2010 and estimating $3.40 - $3.60 for 2011$3.40 - $3.60 for 2011

Duoyuan Global Water IncDuoyuan Global Water Inc

Leading China based domestic water treatment Leading China based domestic water treatment equipment supplierequipment supplier

Products for filtration, water softening, aeration, Products for filtration, water softening, aeration, disinfection, and reverse osmosisdisinfection, and reverse osmosis

Pollution has been a tragic consequence of Pollution has been a tragic consequence of China’s fast GDP growthChina’s fast GDP growth

DGW will be a great beneficiary of the new Five DGW will be a great beneficiary of the new Five Year PlanYear Plan

Earn $1.50 for 2010 and estimating $1.85 for Earn $1.50 for 2010 and estimating $1.85 for 20112011

SearchMedia HoldingsSearchMedia Holdings

One of the largest operators of integrated One of the largest operators of integrated outdoor billboard, transit, and in-elevator outdoor billboard, transit, and in-elevator advertising networks in Chinaadvertising networks in ChinaOver 1,500 billboards and 125,000 advertising Over 1,500 billboards and 125,000 advertising panels in 50 citiespanels in 50 citiesCommitted to building the SearchMedia brand, Committed to building the SearchMedia brand, do smart accretive deals to contribute to top and do smart accretive deals to contribute to top and bottom linesbottom linesGreat Executive Management & Board – Great Executive Management & Board – Owners of the business – 30% ownership stakeOwners of the business – 30% ownership stake

ChinaCast Education ChinaCast Education CorporationCorporation

IR Counsel – Scott Powell of HC IR Counsel – Scott Powell of HC InternationalInternational

US Economic EnvironmentUS Economic Environment

Unemployment still high – 9.4%Unemployment still high – 9.4%

Inflation is here in the USInflation is here in the US

The Fed has pushed our backs to the wallThe Fed has pushed our backs to the wall

US Interest Rates have begun to rise – 10yr at US Interest Rates have begun to rise – 10yr at 3.3% at end of 20103.3% at end of 2010

However – some encouraging newsHowever – some encouraging news

Performance SnapshotPerformance Snapshot

20102010 Since Inception Jan Since Inception Jan 20072007

Threshold (A)Threshold (A) +42.80%+42.80% +61.49%+61.49%Threshold (B)Threshold (B) +41.45%+41.45% +66.75%+66.75%

DJIADJIA +11.02%+11.02% -(7.11)%-(7.11)%S&P 500S&P 500 +12.78%+12.78% -(11.33)%-(11.33)%NASDAQNASDAQ +16.91%+16.91% +9.84%+9.84%Russell 2000Russell 2000 +25.31%+25.31% -(0.51)%-(0.51)%

Deliver Positive Returns Over a Long Term Horizon With the Deliver Positive Returns Over a Long Term Horizon With the Ultimate Goal of Outperforming the MarketsUltimate Goal of Outperforming the Markets

Superior Performance Through Stock pickingSuperior Performance Through Stock picking

Strategy for 2011Strategy for 2011

Continue with in-depth Fundamental Research – Continue with in-depth Fundamental Research – Buy the Brands and Special SituationsBuy the Brands and Special Situations

New Ideas – Currently focusing on BrazilNew Ideas – Currently focusing on Brazil

Cautious on Europe – will Sovereign Debt issues Cautious on Europe – will Sovereign Debt issues break apart European Union?break apart European Union?

Economists estimating S&P Profits of $90-95 for Economists estimating S&P Profits of $90-95 for 20112011

PE Range of 13.6 – 14.3PE Range of 13.6 – 14.3

Disclaimer – This presentation is for the Disclaimer – This presentation is for the exclusive use by Threshold Capital Corp. It exclusive use by Threshold Capital Corp. It expresses the opinions of Peter A Delgado II expresses the opinions of Peter A Delgado II and Threshold Capital Corp and in no way and Threshold Capital Corp and in no way constitutes a solicitation of business or constitutes a solicitation of business or investment advice. It is intended for investment advice. It is intended for informational purposes of the reader and the informational purposes of the reader and the author.author.