Dow Jones 0.00 +0.00 4:26 am PST, January 31, 2007 NASDAQ 2448.64 +0.00 For info, visit access.smallcapnetwork.com S & P 500 0.00 +0.00 Change your subscription status here Russell 2000 797.97 +0.00 VOLUME 07: ISSUE 12 Challenger's Acquisition Opens New Doors  If you were an owner of Challenger Powerboats (OTCBB: CPWB) as of last Friday, you would probably agree giant gains can be made in an instant (contrary to what you may hear from most of Wall Street). Your shares were catapulted from 4.4 cents to yesterday's closing price of 7.3 cents...a 66% gain in just two days. And here's the incredible part - the big news wasn't even officially out yet. Who knows what kind of frenzy we could see once trading starts again today after the word has spread?  While it's fun to see these explosive moves, there's an equally important fact to remember, which is....we told you so. No, we're not saying it to gloat - at least not to gloat very much, anyway. But, we do want to remind you on January 11th, we were pounding the table pretty hard on Challenger, expecting great things to happen. These excerpts from that edition pretty much sum up our opinion at the time....      "...we think owning Challenger's stock could mean a very hefty return, with a very limited downside risk." "What makes Challenger an even better idea in our minds is knowing what's likely in store for the future." "...in our view, investors are going to be very happy with the results. You're probably not going to see a much better entry point than where we are now." Sure enough, things happened. So, we sincerely hope you were listening at the time. The opening price of 4.0 cents on the 12th would have led you to a current gain (so far) of 82%, with possibly even more on the way.  Are we clairvoyant geniuses? Nah - just very thorough. When we track a company, we watch it like a hawk, waiting for what we see as the perfect time to strike. If you scroll back through our blog and newsletter coverage of CPWB, we think you'll see what we mean...we didn't turn the heat up until the picture looked ideal.  In any case, enough horn-blowing. Let's get to the heart of the matter.    'The Big News' By way of an acquisition, Challenger Powerboats Inc. has rounded out its product line to include jet boats and ski tow boats. Already among the crème of the crop in the performance boat world, we think Challenger's purchase of IMAR Group - a manufacturer of jet powered boats, and a licensee of recreational tow boats - will open up a huge number of new revenue possibilities. See the press release below.  We'd describe it a case of 'the whole is greater than the sum of the parts.' Together, Challenger and IMAR are expected to achieve more than they would on their own...an idea we agree with.  You may recall Challenger already had some momentum of its own heading out of its 2006 rebuilding phase. With 2006 revenues being largely negated by a big merchandise return, we had to look back to 2005 to find a meaningful sales figure. In that year, Challenger ('Xtreme' at the time) posted revenues of $1.8 million. If that was indeed a good benchmark, then we'd say the roughly $1 million/seven boat sale to one dealer back in December should speak volumes. It just accents the notion we've been trying to convey for weeks now.....the new Challenger is nothing like the old Challenger. No word on what kind of sales Challenger is expecting in 2007, but in our opinion, it could be considerably better than 2005's sub-$2 million figure.  Now, chew on this for a while....in 2006, IMAR pulled in more than $12 million in revenue. Right off the bat the new Challenger's top line results should look better, and we suspect new efficiencies and the removal of redundancies will help the bottom line as well.  But you know what? We don't even think that's the big deal.  Remember a couple of months ago when Challenger was celebrating the addition of the new dealer (the same one that bought seven boats)? It was only a few days before that deal went down when Challenger entered into a distribution agreement with Nautique International - a major distributor with a network that reaches to Canada, Europe, Asia, and Australia. Two new partners were added in a span of about two weeks, and it was considered a major victory.  Now, if adding one dealer is good news, what would you say about adding more than 100 new dealers? That's right! The IMAR acquisition includes 'ins' with an enormous number of dealers in North America, Europe, Asia, and Australia. As far as we're concerned, this is probably a dream-come-true for Challenger - being able to position themselves side-by-side with the same brands (Gekko and Sugar Sands) IMAR already represents in front of a huge dealer audience.  We can summarize our thoughts in one word: cha-ching!   Trading CPWB We've said it before, and we'll probably say it again....it's news like this that reminds us sometimes a trader or investor has to stay in a promising position, even when the exact potential of the idea is a little unclear.  Back in the December 20th newsletter, then again in the January 11th edition, we made as strong of a case as we could for Challenger. In the former, we based the optimistic opinion on the success it appeared the company was going to have in attending boat shows. In the latter, we highlighted how Challenger's exclusive DDC hull technology set them apart from the competition. And since the middle of last year, we've been watching the company get the right staff, pare the right models, and turn into a marketing machine.  But no, we never knew the exact financial picture. We just knew the company was focusing on being able to build, market, and deliver a great product. We figured by taking care of those details, the stock would take care of itself.  Today's news is the fruit of the labor....or patience, in this case. The folks at Challenger managed to put themselves in a position to buy a company doing more revenue than they were doing themselves. We have little doubt that the combined company will continue to impress.  As for dealing with any CPWB position you may have, we know it's tempting to lock in some profits in the wake of the big gain. Though we'd understand if you did, we'd also encourage you to think long and hard about the decision. Challenger was turning into a strong company again, and IMAR seems to be doing just fine on its own as well. However, there's an industry synergy we really like here that may keep this stock moving even higher in the future. Challenger appears to have a red-hot product, and IMAR has what we'd consider a powerful industry network. Now both sides of the table have something valuable to offer the other.  We issued our most recent entry alert in the December 20th, 2006 edition when shares were trading at 3.8 cents, as mentioned above. The suggested target price we established was 20 cents. Maybe it seemed crazy at the time, but we don't feel it seems nearly as wild now - we're about a third of the way there already, up 66% so far (and trading hasn't even started yet today). That could ultimately translate into a +400% gain for the folks who believed in the idea as much as we did, when we did.  And if you didn't act on the 20th when we first brought the opportunity up? Well, don't dwell on it too much. We think there are always great trading ideas out there, from us as well as others. Plus, it's not like we're saying CPWB's potential is fully played out yet.  We'll just recommend you keep the last few days in mind the next time we highlight a similar opportunity. Of course, to give yourself a shot at making any money from them, decisive action may be needed. In any case, today's press release...    Challenger Acquires IMAR Group & Gekko Sports; Adds $12 Million To Annual Revenue Base  WASHINGTON, Mo., Jan. 31 / -- Challenger Powerboats, Inc. (OTC Bulletin Board: CPWB) today announced the acquisition of North Dakota- based IMAR Group (IMAR), manufacturer of Sugar Sand recreational jet boats and licensee of Gekko recreational tow boats. Challenger also acquired all of the assets and technology of Gekko Sports Corporation (Gekko). Unaudited consolidated 2006 revenue for IMAR was over $12 million. In consideration for cash, stock, and notes, the transaction was valued at approximately $7 million.  Challenger CEO Laurie Phillips stated, "We are absolutely thrilled to have achieved this significant a milestone for Challenger. The addition of the Sugar Sand and Gekko brands gives us a complete and world class product line from jet powered boats to ski tow boats, family sport cruisers and "go fast" high performance boats, ranging in size from 14 to 33 feet."  She added, "Just as important, we've inherited an immediate installed base of over 100 dealers throughout the U.S., Canada, Europe, Asia and Australia, from which to now channel our sales growth. Additionally, we now maintain floor plan financing with several major financial institutions from which to offer to our dealers. We believe we are now on our way to establishing Challenger as a significant player within our segment of the recreational boating market."  Outgoing IMAR Group CEO Brad Williams commented, "Having worked closely with Laurie and the Challenger management team throughout this process over the past several months, we firmly believe we are leaving the legacy of the Sugar Sand and Gekko brands in extremely capable hands. As new shareholders of Challenger, IMAR's investors look forward to the successes which can now be achieved through the convergence of these two organizations."  Gekko President Mark Overbye will join Challenger as its new Director of Marketing. Challenger will continue to manufacture boats at both facilities located in Washington, Missouri and Fargo, North Dakota.  About IMAR & Gekko  The IMAR (International Marine and Recreation) Group builds Sugar Sand jet boats and Gekko tow boats. Privately held by a group of local investors, IMAR's mission is to bring innovative products and services to the marine industry and deliver those products through a dedicated dealer network. Sugar Sand boats are sold exclusively through its dealer network in the United States, Canada, Mexico, Europe, Australia, the Middle East and Japan. In 2006, Gekko's GTR 22 was selected as an official tow boat for the Barefoot World Championships at Lake Silverado, near Olympia, Washington. Sugar Sand and Gekko are currently manufactured at IMAR's 80,000 sq ft. leased facility in Fargo, North Dakota. For further information about IMAR please visit www.sugarsand.com and www.gekkosports.com.  About Challenger Powerboats, Inc.  Challenger Powerboats, Inc., designs and manufactures "go fast" offshore high performance boats and family sport cruisers that target the recreational power boat market. The Company holds the exclusive rights to the Duo Delta- Conic "DDC" hull for boats up to 40 feet in length. The DDC hull is a patented revolutionary design by world-renowned marine designer Harry Schoell. Proven world-class technology is incorporated into the manufacturing of the boats at Challenger's 65,000 sq. ft. facility located on the Company's 12 acre complex in Washington, Missouri. For further information about Challenger you may visit www.challengerpowerboats.com or www.sec.gov to view the Company's public financial information and filings.  Forward-Looking Statements  This release contains forward-looking statements, including, without limitation, statements concerning our business and possible or assumed future results of operations. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons including: our ability to continue as a going concern, adverse economic changes affecting markets we serve; competition in our markets and industry segments; our timing and the profitability of entering new markets; greater than expected costs, customer acceptance of our products or difficulties related to our integration of the businesses we may acquire; and other risks and uncertainties as may be detailed from time to time in our public announcements and SEC filings. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.  Contact:  Michael Novielli  Chairman  Ph (845) 575-6770 x202  Source: Challenger Powerboats, Inc.   We Value Your Feedback   Got comments, questions or suggestions? Send 'em on over: Editor@smallcapnetwork.com If you wish to send a written request or inquiry, please send it to our physical address: TGR Group, LLC 4653 Carmel Mtn Rd Suite 308 #402 San Diego, CA 92130 Commerce Planet Hits Target - A 926% Gain From Original Pick Date We hope you were in since the beginning, but if not, we at least hope you got in at any point between March 22nd (2006) and now. During that time, we've seen Commerce Planet (OTCBB: CPNE) move from our original pick price of 19 cents to our target price of $1.95, hit yesterday. That's a 926% gain for those lucky folks who took action almost a year ago. Of course, most everybody should have done pretty well no matter when you got in.  So, are we letting loose of Commerce Planet? Maybe just long enough to let it cool off. If it looks like there could be more of the same upside in store, we'd have no problem looking at it again. Good traders frequently go back to the same well, if it makes sense to do so.    ByIndia.com's $5 Million Sweepstakes Has Started If the headline got your attention, then you can bet Web2 Corporation's (OTCBB: WBTO) latest traffic strategy will turn heads too, as they unveil a $5 million sweepstakes for users of their Indian search engine 'ByIndia.com'.  It's a big deal primarily because India's residents are currently the fourth largest group of Internet users in the world, and are on pace to be the largest group of Internet users by 2010. Point being, that's a lot of traffic....and when it comes to the web, traffic means dollars.  For the full details, click here.    Clearly Names New York Distributor True to their word, Clearly Canadian (OTCBB: CCBEF) recently announced the next of their new distributors ....this one being the New York distributor. Big Geyser, already one of the states biggest non-alcoholic distributors, will add Clearly Canadian's product line to the list of beverages currently offered to the distributor's 20,000 accounts.  Clearly Canadian announced a revised distribution strategy a few days ago, which we think is a good move for the novel beverage maker. So far, the two distributors named do indeed seem better equipped to handle Clearly's product line than the previous distributor may have been.  For the full release, click here.    Titan Global to Spin-Off PCB Business If you just happened to own a fast-growing company called titan Global Holdings (OTCBB: TTGL), which we pointed out to our readers on January 13th, well...you may be on the verge of owning two great companies. Late last week, Titan's Board of Directors authorized a plan to spin-off the printed circuit board ("Titan PCB") manufacturing businesses to its current shareholders.  Of course, you may be wondering 'how much' of the new spin-off company you'll be getting relative to any position you may currently own in Titan Global. We can't say for sure, but our educated guess tells us to look for about 1/5 of your TTGL to become shares in the new company, while your remaining Titan stake is offset by the same approximate amount. Those proportions are based on revenue from last fiscal year; the PCB business saw $20.5 million in sales, while the communications division posted revenue of $89 million in 2006. That's roughly a 20/80 split, give or take.  For more details, click here.   Web2 Corp's ByIndia.com Enters Its Next Growth Stage Four month's after going 'live' under Web2 Corporation's (OTCBB: WBTO) direction, ByIndia.com got something of a facelift last week. The site is using a new logo, and the interface is now better-geared for the philosophical Web 2.0 way of thinking.  On the surface you may not even notice these differences. Under the hood, though, the company is ready to rev its search engine (sorry, bad pun). In other words, now with a substantial user base is in place, the company can Web 2.0-ize the site. One of the big advances we see to that end is a single-registration for all of the ByIndia offers (like job search, auction sites, blogs, etc.).    Execute's Water Sports Sales Shoot Through The Roof We knew things were firming up for Execute Sports (OTCBB: EXCS)...their Q3 sales surged from $96,000 a year earlier more than $500,000, and last October, they reported (as of mid-fourth-quarter) that water sports equipment sales were ahead of the same quarter a year earlier by 800%.  Frankly though, last week's announcement is just stunning.....the grand total ended up being a 1125% increase in Q4 water sports gear sales. No details on the dollar amount - at least not yet. But, we estimate that since Celeste Berouty (formerly the Director of Sales for Body Glove's Wetsuit Division) has joined the Execute team, water sports sales have roughly been half of Execute's total sales.  As we mentioned a few times recently, this company and its stock may finally be getting some real traction. If you're interested in a high-potential speculative play, we'd say this is one well worth thinking about.  Here's the full press release. Subscribe Information is power and timely information is profitable. Become informed and profit from Small Cap Network Profiles and Trading Alerts by becoming a Preferred Member today. There is no cost associated with your email subscription. Add your email address below and make sure to check your email inbox and confirm your opt-in request to start receiving the Small Cap Network Email Newsletter on a regular basis. To ensure newsletter delivery, you can add any additional email addresses you may have to the Small Cap Network Member List. Receiving the Small Cap Network Newsletter in multiple locations is the best way of making sure you don't miss the next investing or trading opportunity! For web based email addresses, the Small Cap Network recommends @yahoo.com or @aol.com for timely and reliable email newsletter delivery. Subscribe Here Note: Your email address will be kept strictly confidential, and will not be shared with any other entity for any purpose at any time. If you no longer wish to receive the Small Cap Network Newsletter, simply follow the instructions located at the bottom of every Small Cap Network Newsletter Edition. Unsubscribe Here D I S C L A I M E R: The Small Cap Network, its website and email newsletter (hereafter, cumulatively referred to as "SCN") , is an independent electronic publication committed to providing its readers with factual information on select publicly traded companies. SCN is owned and operated by TGR Group, LLC ("TGR"). TGR is not a registered investment advisor or broker-dealer. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward maximizing the upside potential for investors while minimizing the downside risk, whenever possible.  Moreover, as detailed below, TGR accepts compensation from third party consultants and/or companies, which it features in the publication and circulation of SCN. To the degrees enumerated herein, SCN should not be regarded as an independent publication.  Click Here or go to http://access.smallcapnetwork.com/compensation_disclosure.html to view our compensation on every company we have ever covered, or visit the following web address: http://access.smallcapnetwork.com/profile_disclosure.html for our full profiles and http://access.smallcapnetwork.com/short_term_alerts.html for Trading Alerts.  TGR Group LLC has been paid a fee of $30,000 cash by Titan General for coverage of the company. In addition, TGR Group LLC has been pledged a fee of 100,000 warrants convertible at $1 into restricted shares by Trilogy Capital for coverage of the company.  TGR Group, LLC has been paid a fee of $25,000 cash and 75,000 shares of newly issued restricted stock by Web2 Corp. for coverage of the Company. TGR Group LLC has been paid a fee of $30,000 and 300,000 newly issued restricted shares by Execute Sports for coverage of the company. In addition, one of the prinicipals of TGR Group purchased 100,000 shares of Execute Sports at a cost of $.25 per share prior to the public offering. The shares are now eligible to be free trading.That individual may choose to sell the shares at any time. This should be viewed as a potential conflict of interest. TGR Group LLC has been paid a fee of $60,000 by Commerce Planet for coverage of the company. In addition, one of the principles of TGR Group LLC is also a principle of MarketByte LLC. In a separate contractual relationship in 2004, MarketByte LLC was paid a fee of $25,000 in cash and 750,000 newly issued, restricted shares by Commerce Planet for coverage of the company. The aforementioned shares are all currently eligible to be free trading. The term of MarketByte's obligation to Commerce Planet has expired. TGR Group LLC has been paid a fee of $30,000 and pledged 150,000 warrants with an exercise price of $2, currently convertible into restricted shares of Clearly Canadian, by Level III Research, for its coverage of Clearly Canadian. TGR Group LLC has been paid a fee of $25,000 cash and 500,000 shares of newly issued restricted stock directly by Challenger Powerboats for coverage. The aforementioned shares have become free trading under Rule 144. On March 7, 2006, TGR Group LLC entered into a contract extension whereby TGR could receive as much as $65,000 cash and 1 million, newly issued restricted shares over the next one year period from Challenger Powerboats for coverage of the company. To date, TGR has received an additional $35,000 and 500,000 newly issued restricted shares. From time to time TGR sells shares received as compensation for coverage of client companies. Shares received are sold in the open market. Since the shares are received as compensation for services as previously disclosed, and not for investment purposes, TGR does not view the sale of the shares as contradictory to any opinions delivered in the content. This should be viewed as a conflict of interest by shareholders or prospective shareholders of the client companies.  TGR, its Members and Members' families, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication unless specifically disclosed.  All statements and expressions are the sole opinions of TGR and are subject to change without notice. A profile, description, or other mention of a company within SCN is neither an offer nor solicitation to buy or sell any securities mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein.  THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN CONSENT OF TGR.  We encourage our readers to invest carefully and read the investor information available at the web sites of the Securities and Exchange Commission ("SEC") at http://www.sec.gov and/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com. We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at http://www.sec.gov/consumer/cyberfr.htm. Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.