Dow Jones 12509.37 +67.21 1:18 pm PST, January 11, 2007 NASDAQ 2484.85 +25.52 For info, visit access.smallcapnetwork.com S & P 500 1423.80 +8.95 Change your subscription status here Russell 2000 788.46 +9.59 VOLUME 07: ISSUE 4 2007's First Small Cap Idea Is On The Way  We'll get to today's edition immediately below. First, we wanted to give plenty of (ok, a little) notice before we send this year's newest small cap idea to you. The profile - barring any changes between now and then - will be coming out Saturday morning. And let me tell you, I think you're going to like it. What's the potential? Will it be like last year's suggestion on Clearly Canadian (OTCBB: CCBEF), which ended up at one point 78% higher than where it was when we began looking? Or maybe it will be more like CEL-SCI's (AMEX: CVM) move from 52 cents to $1.78...a 242% move. Could it even be comparable to our Commerce Planet (OTCBB: CPNE) idea, which is currently 805% above our suggested entry level, and still rising? We don't want to speculate in that way, but let's just say we feel you're going to be very impressed by what you read. In any case, on with the show.....    The Best-Built Boats You've Never Heard of, Until Now  You know, I find myself continually coming back to this trading idea. Maybe it was Tuesday's press release (below) that stirred the pot again - I don't know. I do know that I've been very impressed by what Challenger Powerboats (OTCBB: CPWB) has become over the course of the last few months. But you know what? That's not even the part that gets my blood pumping. What really stops me in my tracks is the potential I see for Challenger over the next three months, three years, and even the next couple of decades.  Like most small companies, Challenger doesn't have a whole lot of market share (yet), and is still a somewhat-unknown name (for now). Both of those challenges can be tackled though, and it looks like this boat manufacturer is serious about doing exactly that - more on that in a second. While revenues and reputation are important ingredients for success, there's a third one I think is also needed if a company wants to be tops in its industry. That third factor is....a second-to-none product. You can hire all the sales gurus and PR firms you want, but if what you're selling is sub-par, it's tough to even rise above mediocrity. I've seen tremendous progress from Challenger on the first two criteria. So for me, the question all boils down to one theme - does Challenger build some of the best performance boats available? In my opinion, that's a big, loud "Yes!" We'll cover the quality of these incredible boats below, as we briefly explain how I see Challenger meeting all three of these critical standards. And in case you haven't guessed yet, yeah, I think Challenger's stock is way undervalued.    Three For Three  No pomp and circumstance today - I just want to explain how I see Challenger meeting all three of my personal 'what makes a company great' criteria. Brand Awareness - Challenger is in the midst of a massive marketing campaign. This includes attendance at boat shows, as well as print ads. Do the boat shows make a difference? You bet! After working the Fort Lauderdale show last year, a new international distributor was signed. No word yet on what that's meant for sales, but we have to think an international distributor will want/need at least a few boats in 2007. Score one for Challenger, as almost each boat is priced in six figures. The strength of the marketing push, we think, should be more than adequate to get their good name out. More on that in a future edition.  Revenues - Just for some perspective, in 2004, Challenger's net revenue totaled up to $164,712. In all of 2005, the company saw $1.7 million in net sales. After attending the Fort Lauderdale boat show late last year, they sold seven boats to one dealer. Our estimate for the total transaction was around $1 million.....after just one show! The heavy season hasn't even started yet, and it was the second show they were at. Our conclusion...show attendees are the right audience. There's no reason for us to think we won't see comparable - or maybe even better - results from future boat shows. The next show is the Miami show in February. We can't wait.  Quality Product - Challenger's boats all utilize their patented DDC technology. In simple terms, the 'duo-delta' design makes these fast boats go even faster. If you want that performance edge, you have to go to Challenger to get it. And no, these boats aren't just some novelty. One of the major offshore racing teams - Team Gallagher - drives Challengers, and you'll frequently find them in the winner's circle. We're looking for the quality, 'go-fast' buzz to spread like wildfire once we get into the thick of boating season.  And frankly, this only scratches the surface. We know industry magazines have test-driven Challenger boats recently, and we expect to hear about their thoughts soon. When they do get published, these boats will be highlighted for a relatively large boat enthusiast crowd....the kind of credibility advertising you couldn't pay for if you tried. As a side benefit, the quality of their boat line will be reinforced for consumers too.    Entry Levels Can't Get Much Lower Than Here  You may already be aware we have an open trading alert on Challenger shares. So, this is more of a reiteration of our opinion. Of course, if you're new to us or not currently a CPWB owner, then perhaps today can serve as a fresh look at our previous editions. Either way, you don't have to read between the lines - we think owning Challenger's stock could mean a very hefty return, with a very limited downside risk. The current trading level of 4 cents (3.8 cents, to be exact) means the maximum drawdown is limited to only pennies. The suggested stop is 2 cents, and our target is 20 cents. Just to do the math for you, if the target is reached, it will be a 400% reward. Not bad, huh? Ladies and gents, one last thought...as we just mentioned, we still have an open trading alert on CPWB shares. We don't take that lightly, nor should you. When we present an idea to you, complete with a suggested target and stop, our credibility is on the line as well. Does that mean every idea we have works out for the best? Not at all, but more than enough of them do to keep our readers coming back for six consecutive years now. Point being, we believe in the opportunities we discuss. What makes Challenger an even better idea in our minds is knowing what's likely in store for the future. See, the boating market is huge, and Challenger presently has very little market share. Moreover, we're still in the slow season for the boat sales. As a result, interest, or even awareness of, boat manufacturer stocks is also at a lull. The busy season is just around the corner, beginning in March or so. When the heat starts to get turned up and consumers really start clamoring for the 2007 models, I just have a strong suspicion Challenger boats are going to turn more than a few heads...and open more than a few wallets. Heck, they already have! Plus, with the sheer 'cool' factor working in their favor, we'd say these boats are going to develop an even better reputation in a hurry.  Over the last few months we've seen just a small glimmer of the kind of market penetration Challenger could achieve; all we think they need to do is continue executing as they are. If they do that, 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. Anyway, enough of me. I'll let the press release speak for itself...    Challenger Announces 2007 Strategic Initiatives  WASHINGTON, Mo., Jan. 9th, 2007 -- Challenger Powerboats, Inc. (OTC Bulletin Board: CPWB) today summarized its key achievements for the past year and announced its strategic initiatives for 2007.  Challenger CEO Laurie Phillips stated, "2006 was a period of major transition and sweeping change at Challenger. In May, we commenced with a corporate restructuring, which included significant management changes, a fresh approach and a new direction for the organization. The close of the year saw us turn the corner as new partnerships were formed, valuable relationships evolved and we announced our first significant sales since emerging from our restructuring."  Key achievements of 2006 included;  strengthened our management team by filling critical new, senior executive positions with seasoned and accomplished boating industry veterans.  terminated contracts and agreements with non-performing outside distributors which were harmful to both our short-term and long-term growth.  ceased production of the Fire-Rescue and Patrol boats and sold off related assets to focus exclusively on the commercial production and marketing of our Challenger Powerboat lines.  reorganized our entire production line process and implemented tight cost control measures in order to eliminate inefficiencies, reduce the associated costs and significantly improve our margins.  launched an extensive, multifaceted marketing campaign in conjunction with the rollout of our new and redesigned 2007 models.  Challenger COO Jack Clark commented, "We believe 2007 will be a year of considerable growth for our organization. In October, we launched an aggressive marketing campaign, which included exhibitions at the Ft. Lauderdale and St Petersburg Boat Shows. We recently announced our scheduled attendance at the Miami International Boat Show in February and plan to soon announce appearances at several others. These shows are a critical component to one's marketing strategy as they serve as a platform to introduce new companies, models and concepts to the marketplace."  He added, "Additionally, our boats have recently been tested by independent third parties and we expect these results to be posted along with features and ads in upcoming editions of major national boating magazines. This will serve to further raise our profile as we establish the Challenger brand."  Strategic Initiatives for 2007 include;  expanding our distribution channels by aggressively adding new dealers and distributors throughout the U.S.  continue to expand our brand awareness through boat show appearances, ad campaigns, boat testing, and publications in national boating magazines.  continue to allocate a portion of our budget for capital expenditures required to add further efficiencies to our overall production process and increase our profit margins.  targeting a strategic acquisition that would both significantly accelerate our top line growth as well as add accretively to earnings.  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 http://www.challengerpowerboats.com or http://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  mnovielli@xtremecos.com    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 Float Info For Clearly Canadian You guys are quick on the draw! We only published on Clearly Canadian (OTCBB: CCBEF) yesterday, and we're already getting good questions. Here's one we can all benefit from hearing the answer to.....  "I am starting to see Clearly Canadian on convenience story shelves. How many shares are in the public float?"  This information was a little tougher than usual to find, but we dug and dug, and found this on the Clearly Canadian site....as of the end of Q3, 2006, the company had about 12,10,000 outstanding shares (in circulation). That may have changed between now and then, as they've been issuing stock semi-regularly to finance the operation. However, we'd expect to see something fairly close to the same when we get Q4's results.  There are also 2 million outstanding class B preferred shares which are convertible to common, and 17.5 million shares are issuable when and if certain options or warrants are exercised.  Just so you know, Clearly Canadian issued 5.3 million shares over the course of the first nine months of the fiscal year, raising about $7.5 million in cash, and using the rest of that stock to work down some debt.    Be a Truly Informed Investor With Free Annual Reports While there may not be a free lunch on Wall Street, free investing information isn't a bad alternative. And though the price is nice, the real benefit is how you might make more money by being able to study a potential investment with as much detail as you want. After all, knowledge is the name of the game when it comes to stocks.  The process here is simple......(1) determine the companies you'd like a complimentary annual report from, (2) complete the web-based request form, and (3) our affiliate will deliver the free reports you requested. Some are e-reports, while others are printed reports that will need to be mailed. All of them, however, include the complete overview usually desired by astute investors.  The free service provides reports on 1200 publicly traded companies, so the odds are good that you'll be able to get what you're looking for with ease. Oh, there's also no limit on the number of reports you can request, so indulge the investor inside of you as much as you'd like.  Ready to arm yourself with powerful information? Just click here.    Multicell Cancer Treatment Now Shown to Prevent Recurrence Although we're not covering the company anymore, we still wanted to follow up with a quick note here for any of our readers who are still following the story...  You may remember from a few weeks ago our blog entry regarding Multicell Technologies' (OTCBB: MCET) research on cancer treatment via immune system modulation. In lay-person's terms (which is us), the distinguishing characteristic of this drug was simply that it induced a patient's own immune system to destroy a tumor. Lab testing showed that morbidity and mortality was prevented in 60% of the samples.  Well, we got the second wave today. Not only is the experimental drug (a combination of a drug called MCT-465 and another patented antigen-presenting therapy) effective at killing cancerous tumors, it's also been shown effective at preventing recurrent cancer. In a press release issued this morning, Multicell announced that when they re-introduced a cancer into mice that had previously survived a cancer because of MCT-465, all of those mice were protected against the development of secondary cancers.  Here's a link to the press release, which describes the research in more detail. Subscribe Information is power and timely information is profitable. Become informed and profit from SmallCapDigest 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 SmallCapDigest Email Newsletter on a regular basis. To ensure newsletter delivery, you can add any additional email addresses you may have to the SmallCapDigest Member List. 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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 SCD. To the degrees enumerated herein, SCD 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://www.smallnetwork.net/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 $25,000 cash and 500,000 shares of newly issued restricted stock directly by Xtreme Companies 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 Xtreme for coverage of the company. To date, TGR has received an additional $20,000 and 250,000 newly issued restricted shares. TGR Group LLC has been paid a fee of $15,000 by MultiCell Technologies for coverage of the company. In addition, TGR Group LLC has been pledged 100,000 warrants with an exercise price of $.60, convertible into restricted shares of Multicell, and 100,000 warrants with an exercise price of $.40, convertible into free trading shares of Mutlicell by Trilogy Capital Partners for coverage of the company. 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 $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. 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