Dow Jones 10805.54 -107.08 1:09 pm PST, March 9, 2005  NASDAQ 2061.29 -12.26 For info, visit access.smallcapnetwork.com S & P 500 1207.03 -12.40 Change your subscription status here Russell 2000 632.78 -5.20 VOLUME 05: ISSUE 18  Feature: Xtreme - Takes on all Challengers. If you needed any convincing that the recreational boat market is extremely buoyant, read our profile of MarineMax (NYSE: HZO) that we published on April 30th, 2003. The stock was $11 then, $33-plus now. And the growth of the personal boat/yacht sector shows no signs of slowing down anytime soon. Next, perhaps? To participate in that growth, state of the art watercraft concern Xtreme Companies (OTCBB: XTME) announced Wednesday, (release below) that it has entered into an exclusive marketing and distribution agreement with Challenger Offshore; a high quality manufacturer of several models of fishing, cruising and performance watercraft. As well as diversifying Xtreme's product offerings, this line of superior boats and yachts has a brand and pedigree that, along with the company's experience in the sector, should well take its revenues to the next level and beyond. Challenger generated revenues of $2 million for 2004. We believe that that number will rise significantly as a result of this relationship. We believe that the risk/reward for accumulation of Xtreme shares is very compelling at these levels. For those who own Xtreme shares at slightly higher prices, these levels may well represent a good point to average down. While Extreme isn't a short-term play, today's announcement and, we believe future news to come will blip the shares onto more investors' radar screens. Technically, the shares could see some resistance at 28 cents with the next two levels at 38 and 54 cents respectively. Although the shares are low priced, if a stop loss gives comfort, perhaps one at 10 cents would be prudent if that fits your risk parameters.  Expanding the Brand. Xtreme intends to expand the already impressive Challenger brand and ramp up sales and distribution both directly to the end user as well as through dealerships. The established reputation for quality of Challenger's products should serve to easily enhance that initiative. Challenger makes boats from 24-94 feet in length and covers the waterfront with leisure, performance and fishing craft. This venture is a classic case of quality meets management. With Xtreme's experience in the watercraft sector, the addition of Challenger's boats should be rewarding for both the companies and ultimately XTME shareholders. Given the developmental stage of the company and the extra revenue opportunities afforded by Challenger as it is expanded, accumulation for risk-oriented investors seems logical. More products, more prospects. While the benefits for Challenger are obvious, the relationship expands and diversifies Xtreme's product line from state of the art fire/rescue craft marketed to governments and first-responders to the mainstream retail sector. As the demographic ages, personal watercraft becomes a more sought after commodity with boomers demanding both quality and service. We believe this deal gives them both. As more dealerships are added and marketing of an already established brand is expanded, the potential for early-in shareholders to realize decent returns appears extremely realistic. We will follow the developments of Xtreme both here and on the SCBLOG. We feel that the prospects for Xtreme should be of interest to risk oriented investors who want early stage exposure to the leisure market and an ever expanding customer base that will no doubt appear as boomers (and younger folk) look for quality products to augment both their retirements and leisure pursuits.   Press Release Xtreme Companies Announces Multi-Million Dollar Distribution Agreement With Challenger Offshore Stanton, CA -- Mar 9/ PR Newswire / Xtreme Companies, Inc. (OTC Bulletin Board: XTME - News) announced that it has acquired the exclusive marketing and distribution rights from Marine Holdings, Inc. (MHI) d/b/a Challenger Offshore, for their semi-custom "CHALLENGER" line of fiberglass boats. MHI offers a model range of 19' to 97' in length, which includes leisure, performance and fishing boats as well as motor yachts. In exchange for the exclusive rights, Xtreme paid MHI shareholders 557,275 restricted shares of Xtreme common stock. Furthermore, Xtreme retains the right to acquire 100% of the outstanding shares of MHI in 12 months in exchange for an additional 20% of the outstanding shares of Xtreme at that time.  MHI generated un-audited revenue in 2004 of approximately $ 2 million. Together with MHI's primary bank lender, Xtreme will assist in financing the production of Challenger boat sales and MHI's operations.  Xtreme Chairman Michael Novielli stated, "This agreement with MHI is a tremendous milestone for Xtreme. With the "CHALLENGER" line, we have added a potent and diverse product offering to our current lines of Fire Rescue and Patrol marine vehicles. We believe that this transaction dramatically changes the scope of our Company." Xtreme CEO Kevin Ryan stated, "The "CHALLENGER" line of boats enjoys a stellar reputation within the industry. We are genuinely excited about the opportunities now available to Xtreme as a result of this deal. We have acquired the marketing and distribution rights to a valuable franchise which I believe will yield a significant return to our shareholders and investors." MHI President Ron DiBartolo commented, "I am truly delighted about this partnership. Our plan is to continue with our core competencies in our vertical markets, but we also plan a horizontal push to develop other considerable opportunities. We are aggressively pursuing the establishment of a significant dealer network domestically as well as internationally." He added, "I believe we are a perfect complement to Xtreme and look forward to marked achievements resulting from the convergence of resources from both our organizations." Xtreme Companies also announced the relocation of its operations from Stanton, CA to MHI's 65,000 square foot, 12 acre manufacturing facility located in Washington, MO approximately 50 miles west of St. Louis.   About Marine Holdings, Inc. Marine Holdings, Inc. d/b/a Challenger Offshore manufactures semi-custom fiberglass boats of 19' to 97' in length, which include family, performance, fishing and motor yachts.  Buyers of the "CHALLENGER" product line are generally 3rd, 4th and 5th time buyers who are knowledgeable purchasers of quality marine products. The Company is best known for their products that compete directly with the industry's largest boat producers. Internationally known race driver and designer Don Aronow, credited as being the architect of the performance boat industry, designed and created some of the hull technologies today used by Challenger Offshore. Mr. Aronow has also been credited with creating companies such as Cigarette, Donzi, Formula, Apache and Magnum.  For more information you may visit www.challengeroffshore.com About Xtreme Companies, Inc. Xtreme Companies, Inc. is engaged in manufacturing and marketing of mission-specific fire and rescue boats used in emergency, surveillance and defense deployments. The boats have been marketed and sold directly to fire and police departments, the U.S. Military and coastal port authorities throughout the United States. For additional information about Xtreme Companies, Inc. please visit www.xtremecos.com. The Company's public financial information and filings can be viewed at www.sec.gov.   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 phone: (845)575-6770 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 3525 Del Mar Heights Rd #334 San Diego, CA 92130   Unsubscribe Here D I S C L A I M E R: The SmallCap Digest is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. SmallCap Digest is not a licensed investment professional 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, this publication accepts compensation from third party consultants and/or companies which it features for the publication and circulation of the SmallCap Digest or representation on SmallCapNetwork.net.  Likewise, this newsletter is owned by TGR, LLC.  To the degrees enumerated herein,  this newsletter should not be regarded as an independent publication. Visit Here to view our compensation on every company we have ever covered, or visit the following web address:  http://access.smallcapnetwork.com/compensation_disclosure.html for our full compensation disclosure and http://access.smallcapnetwork.com/short_term_alerts.html for Trading Alerts compensation and disclosure. 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. Additionally, Some of the companies featured in the SmallCap Digest Newsletter pay an ESP (Electronic Service Provider) fee to an affiliated Technology Company for electronic delivery of this newsletter and other web related technology services. Fees range from $3,000 to $5,000 per month. All statements and expressions are the sole  opinions of the editors and are subject to change without notice. A profile, description, or other mention of a company in the newsletter 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. From time to time TGR Group LLC sells shares in the open market it receives as compensation for coverage of client companies. Since the shares are received as compensation for services as previously disclosed, and not for investment purposes, the editors do not view the sale of the shares as contradictory to any advice delivered in the content. This should be viewed as a conflict of interest by shareholders or prospective shareholders of the client companies. The editor, members of the editor's family, and/or entities with  which the editor is affiliated aside from TGR Group LLC itself, 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 in the newsletter. The profiles, critiques, and other editorial content of the SmallCap Digest and SmallCapNetwork.net may contain statements that appear forward as it relates to the expected capabilities of the companies mentioned 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 THE EDITORS OF SMALLCAPNETWORK.NET. 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.