APBA Offshore Racing, LLC had a 99yr license for Offshore Racing from the APBA parent organization. KHAMAN Holding, Inc. owned ORL - Offshore Racing League. LLC Founders...

1. CONFIDENTIAL
CORPORATE OVERVIEW
Prepared: September 2003
By Michael D. Allweiss
Chairman/CEO
OffshoreRacingLeague
100 2d Ave. N.E. Ste. 704S
727-821-APBA (2722)
Mallweiss@aol.com
__________________________________
This document and its contents are confidential and the property of KHAMAN HOLDINGS, INC.. No reproduction of all or any part of this plan
or any redistribution thereof is permissible without the prior written consent of KHAMAN HOLDINGS, INC.
This business plan is intended to convey information only, and shall not constitute or be construed as an offer to sell or the solicitation of an offer
to buy securities.

2. Table of Contents
Table of Contents..........................................................................................................................2
.....................................................................................................................................................................3
Executive Summary..........................................................................................................................................4
HISTORY............................................................................................................................................................4
THE BUSINESS.............................................................................................................................................................6
APBA OFFSHORE RACING LEAGUE...........................................................................................................................7
THE NEW COMPANY.................................................................................................................................................12
THE OPPORTUNITY........................................................................................................................................ 13
The Offshore Racing League (ORL)...........................................................................................................16
THE PRODUCT .....................................................................................................................................................16
THE SPEC RACING PROGRAM ..................................................................................................................................18
Super Cat (Numbers Only) - ...............................................................................................................21
Super Cat Light (Numbers Only) -...................................................................................................... 24
Super V (Numbers Only) - ...................................................................................................................25
Super V Light (Numbers Only) -...........................................................................................................26
Factory I and II -..................................................................................................................................27
Outlaw.................................................................................................................................................. 29
STADIUM STYLE RACING - ...................................................................................................................................... 31
The Offshore Powerboat Racing Circuits .......................................................................................... 33
Overview – ....................................................................................................................................33
...................................................................................................................................................... 33
The ORL National Circuit – GMC Pro Grade Championship Series............................................35
The Season – .................................................................................................................35
Site Selection Criteria – ................................................................................................36
Venues – ........................................................................................................................37
National Race Format – ................................................................................................38
Pro Series Championships ............................................................................................ 40
The ORL Divisional Circuits – .....................................................................................................41
Overview .......................................................................................................................41
Purpose ..........................................................................................................................41
The Divisional Circuits and Management ................................................................... 42
Divisional Circuit Sponsor Opportunities......................................................................43
ORL MANAGEMENT ................................................................................................................................................44
ORL DIVISIONS AND AFFILIATES.......................................................................................................................49
OBJECTIVES – IN GENERAL......................................................................................................................................52
ECONOMICS OF ORL........................................................................................................................................... 54
Overview...............................................................................................................................................54
Revenues...............................................................................................................................................58
Series Sponsorships.......................................................................................................................58
Competitor Contingency Sponsorships......................................................................................... 59
National Television Advertising....................................................................................................60
Sanction Fees.................................................................................................................................60
2

3. Entry Fees......................................................................................................................................61
Boat Registration Fees...................................................................................................................61
Membership Fees...........................................................................................................................61
Licensing........................................................................................................................................63
Apparel...........................................................................................................................63
Merchandise...................................................................................................................63
Racing Related Products and Services...........................................................................64
Expenses...............................................................................................................................................64
Event Related Expenses.................................................................................................................66
National Staff.................................................................................................................66
Prize Money and Insurance...........................................................................................66
Television Production.................................................................................................... 67
General Overhead.......................................................................................................................... 70
Administrative............................................................................................................................... 70
PROMOTION AND PUBLIC RELATIONS...................................................................................................................... 72
INTERNET..................................................................................................................................................................73
THE MARKET............................................................................................................................................................74
THE COMPETITION....................................................................................................................................................76
NEWCO.........................................................................................................................................................77
5.8 COMPANY VISION AND GOALS..........................................................................................................................79
5.9 MARKET ANALYSIS...........................................................................................................................................81
5.10.5 Membership Marketing ..................................................................................................... 81
7.2.3 THE FAMILY ORIENTED ENTERTAINMENT FESTIVALS....................................................................................81
Injecting Professionalism into the Sport.........................................................................................................90
Strong Business Model...................................................................................................................................96
5.10 MARKETING PLAN...........................................................................................................................................98
5.10.1 Overview...........................................................................................................................98
5.10.3 TELEVISION MARKETING..............................................................................................................................99
5.10.4 Local Television, Radio, and Print Marketing/Advertising...............................99
3

4. Executive Summary
History
The American Powerboat Association (“APBA”) is a New York not-for-
profit corporation founded in 1903 that, among other things, had historically acted
as the primary organizational and sanctioning body for offshore powerboat racing
and related special events throughout the United States and North America. APBA
also is the national governing authority in the United States for the Union
Internationale de Motonautique (“UIM”), which is the worldwide governing body
for all forms of powerboat racing. Historically, APBA had conducted its offshore
racing operations through an unincorporated division known as the Offshore
Category (the “Category”). The functions of the Category included oversight and
management of racing competition, including technical rule making, event rules
enforcement, and event production and television production of those events at
both the national and divisional/divisional levels. APBA transferred all of these
functions in April 2000 through an exclusive license agreement, to APBA Offshore
Powerboat Racing, LLC (“LLC”) a Florida for-profit limited liability company,
which had been formed by a group of then Category members (the “LLC
Founders”).
4

5. In March of 2003, a dispute arose between the LLC and APBA over fee
payments and corporate governance issues, which led certain APBA officials to
purportedly terminate the license. The LLC initiated litigation against these
officials in Florida shortly thereafter claiming that they acted without legal
authority thus damaging the LLC. The APBA officials then filed an action in New
York seeking a declaration from the state supreme court that they had that
authority. In July of 2003 the New York court ruled against these officials. As a
consequence all parties, including the LLC and the LLC Founders, recently
reached a global settlement of all outstanding issues. The settlement produced a
new license (the “License”) between the LLC Founders and their newly formed
Florida corporation, KHAMAN Holdings, Inc. (hereinafter “KHAMAN”) and the
APBA. The License becomes effective November 1, 2003.
The License grants KHAMAN full right, power and authority to exercise all
aspects of the sport of offshore power boat racing (and related activities and special
events) under the APBA name and sanctioning authority and, correspondingly,
provides that APBA will not, itself or through any other party or in any manner,
conduct any such activities. Under the new License KHAMAN assumes all
responsibility and authority relating to, and conducting the foregoing business
activities of the former Category and other business activities relating to the sport
including but not being limited to membership marketing and sales, licensing and
5

6. merchandising, poker run event sanctioning and production, endurance run
sanctioning and production, speed record run sanctioning and production, marine
manufacturer show production, television production and promotion of such
events, product development and sales, and sponsorship sales. The new license
also permits KHAMAN to opt out of the arrangement within five years or sooner if
management believes that there is no longer any value in the APBA relationship.
The Business
Over the past 5 years, APBA Offshore management has revolutionized the
sport by: 1) developing and executing a NASCAR (National Association of Stock
Car Automobile Racing) style rules model which emphasizes close, exciting
competition for fans, sponsors and competitors, and 2) creating a new stadium
style racing format which brings the action close to fixed shore locations such as
downtown waterfronts and parks, where admission can be charged, VIP and
corporate entertainment and hospitality venues can be established, marketed and
sold, and where concessions, merchandise, apparel, product expositions and vendor
booths can be marketed and sold as well.
The result is a fabulously exciting motorsports entertainment business
capable of generating huge event crowds and significant television audiences with
a very broad demographic that appeals to a wide variety of potential sponsors and
6

7. business partners. For the first time in the history of the sport, offshore power boat
racing has become a legitimate, credible motorsport that thrills audiences both at
the race site and on television with speed, high flying and colorful racing craft,
passing, come from behind victories and photo finishes. To capitalize on the
opportunity presented by the successful development of the racing product and the
new License, KHAMAN shall create two separate and distinct but related
businesses, one to operate the sanctioning body business and the other to operate
the event promotion business.
The first business is the Offshore Racing League, Inc. (“ORL”) a newly
formed Florida corporation ___% owned by KHAMAN that shall operate and
manage the sanctioning body business. In other words, the ORL will be to offshore
boat racing what NASCAR is to stock car racing. The second business, a yet to be
formed Florida corporation, shall be a private motorsports entertainment and
promotional company that serves as the exclusive promoter/producer of all ORL
events (“Newco”).
APBA Offshore Racing League
The ORL will be the organization that performs the traditional functions of
the sanctioning body, to wit: technical and competition rules making and
enforcement; competition and competitor management; national series sponsorship
7

8. sales and marketing; national contingency sponsorship sales; prize purse
development and payout, national and divisional points tracking and
championships, membership sales, marketing and fulfillment, licensing of team
and ORL merchandise and apparel; securing national television networks for
distribution of the TV product; production of national series television; racing and
non-racing membership programs; National Medical, Safety and Rescue programs;
Marine mammal protection programs; event production and management of race
related activities such as medical, safety and rescue, race course management, dry,
wet, and hot pit management, etc. In short, ORL shall be responsible for the
development and management of the actual boat racing product and related aspects
of the business.
The principal revenue centers of the ORL are as follows:
1. Series Sponsorships
2. Competitor Contingency Sponsorships
3. National Television Advertising
4. Sanction Fees
5. Entry Fees
6. Boat Registration Fees
7. Membership Fees
8. Licensing
8

9. a. Apparel
b. Merchandise
c. Racing Related Products and Services
The principal expense areas of the ORL are as follows:
1. Administrative
2. Payroll
3. Marketing
4. Advertising
5. Event Related Travel
6. Television Production
7. Television Time Buys
8. Equipment
9. Legal
10. Insurance
11. Prize and Contingency Purses
APBA ORL is uniquely positioned for rapid growth and to become the next
successful motorsports entertainment property in large part due to the following:
1. ORL has an exclusive 5year license agreement with the APBA thus
creating a very strong barrier to entry to a start-up organization;
9

10. 2. The ORL has secured General Motors and GMC as the Title Sponsor of
its national racing circuit for the 2004-2005 seasons. This flagship
sponsorship parallels NASCAR landing its first major sponsor, Winston,
in 1971;
3. ORL faces virtually no competition in its niche market – high
performance professional powerboat racing events and entertainment;
4. ORL racing offers a unique, exciting, and rich television product that
combines extreme competition, beautiful destinations and an upscale
lifestyle in fast paced 60minute programs;
5. ORL boasts a very experienced and diverse management/operations team
that over the past several years has created an effective and profitable
sanctioning body with an incredibly fresh and exciting motorsports
entertainment product;
6. The new license also will yield as much as $200,000.00 - $300,000.00 in
additional revenue to the core sanctioning body business, thus enabling it
to commence operations immediately without a significant infusion of
new capital.
Offshore powerboat racing, moreover, is the last frontier of motorsports both in
terms of entertainment value and as a business opportunity. The U.S. is saturated
with various forms of automobile racing many of which have become
10

11. indistinguishable to the general consumer and thus of questionable value to new
sponsors. NASCAR, which is the dominant force in U.S. automobile racing today,
moreover, has become too expensive for many companies to participate in any
meaningful way.
Further, traditional powerboat racing in general has not had any commercial
success due mainly to the amateur nature of the governing associations such as
APBA, and most event organizers. The demand for entertaining outdoor events
remains high, however, among consumers as well as companies that recognize
event marketing as an effective sales and marketing tool. ORL racing, with the
speed, excitement, pageantry, professionalism and affordability it offers, thus
presents a unique motorsports entertainment opportunity for consumers and a
related event marketing opportunity for these companies.
All of the above factors, efforts and resulting successes have created an
opportunity for a new and separate company dedicated to the potentially far more
profitable event promotion and related ancillary entertainment aspects of the
business (concerts, event sponsorships and media, event planning, and production,
festivals, etc.). Through the successful development of a new company dedicated
to the sale, marketing, promotion and production of Offshore’s events, the sport
and thus the overall business will grow faster and become far more profitable over
11

12. the next 5-10 years. This new company is the second business to which the
following discussion is addressed.
The New Company
Newco will be similar in concept to International Speedway Corporation
http://www.iscmotorsports.com/ (“ISC”), which is the publicly held entity dedicated to
the acquisition and development of the speedways which host NASCAR events. 1
The function of Newco shall be to develop and implement the following businesses
related to ORL and its core sanctioning body business: 1) Owner, operator,
promoter, producer of all of ORL’s race venues; 2) Develop new venues in major
markets; 3) Develop a national radio/internet broadcast network similar to MRN
which is owned and operated by ISC; 4) Develop event related catering services,
food and beverage concessions, and merchandise sales businesses for its event
venues; 5) Develop ORL’s interactive rights business such as its official website
and those related to its events; 6) Develop a national sponsorship sales, marketing
and promotions company which can generate event related sponsorship sales as
well as national sponsorship sales for ORL – for which it would receive
commissions – and fulfill those sponsorships with limited outside assistance.
1
List the other businesses of ISC
12

13. KHAMAN or its designee shall seek to raise approximately $1,000,000.00 -
$1,500,000.00 from outside investors for Newco in order to begin the development
and implementation of the foregoing six businesses. KHAMAN shall seek funding
primarily from three sources: 1) Current race team owners and participants; 2)
Performance boating enthusiasts who currently participate in poker runs, attend
ORL events and serve as volunteers for these events; and 3) individuals and
entities that are located in currently successful ORL event venues. The goal is to
create this entity and hire the appropriate staff and management to commence
operations no later than January 1, 2004.
The Opportunity
The demand for such events and the corresponding opportunities for both
consumers and corporate America are what create the business opportunity for
Newco, and thus the investment opportunity for potential shareholders. Here is
how: First, from an event production standpoint, ORL events do not require
massive infrastructure like a speedway, road course or a downtown street race
where expenditures for construction, maintenance, repairs and facilities
management can reach well into the multi-millions of dollars. On the contrary, to
create an ORL “racetrack” Newco needs only a large body of water like a lake,
13

14. ocean, bay or river, within close proximity to a fixed viewing location such as a
beach or public park, and 6-10 “turnbouys”, which cost approximately $100 each.
Second, the actual costs to produce the event are low relative to other
motorsport events. For example, most of the physical labor necessary to execute
the on-land and on-water event plan can be satisfied through volunteers. So labor
costs are minimal. Indeed, most of the related labor costs for the events arise from
sales and marketing personnel whose job it is to generate revenue. The facilities
required for the event are minimal as well since the viewing venues, whether a
beach or park, already exist. While there may be some costs such as leasing a park,
securing grandstands, and city services such as police, fire, medical personnel,
security, port-o-lets and waste management, these expenses rarely exceed 5 figures
for an entire event weekend. The bottomline is that a high quality turnkey ORL
event can be produced for roughly $250,000.00 including sanction fees.2
These events on the other hand can be extremely profitable for Newco. For
example, a properly marketed and advertised event can generate on-site crowds of
10,000 – 20,000 or more. Ticket sales alone thus could cover 50% or more of the
event production costs. Apparel and merchandise sales are yet another source of
potentially $50,000 - $75,000 in revenue per event. An ORL event also offers a
unique corporate hospitality and entertainment opportunity capable of generating
another $50,000 - $100,000 in VIP sales at each event. Then of course, there are
2
financials for event company
14

15. local and divisional sponsorship opportunities which should generate another
$250,000 - $500,000 in event revenue. Thus, the events each should generate
$100,000 - $250,000 in net profit. With a minimum of ten national events per year
Newco should be able ultimately to generate $1,000,000 - $2,500,000 in net profits
from its core event production business alone.
15

16. The Offshore Racing League (ORL)
Newco will produce a significant return on investment for its shareholders
because the ORL, free to concentrate exclusively on its racing product, shall
achieve its primary strategic goal and objective: to become a nationally recognized,
highly respected, top tier professional sports entertainment property. In short, the
ORL will create an exciting motorsports entertainment product that the public
demands and that city, county, state and national leaders compete to secure for
their communities. Newco then will market and sell the ORL events and the related
apparel and merchandise, licensing, concessions, tickets, local, divisional and
national sponsorships, and ORL interactive rights.
The Product
Traditional offshore racing events were participant oriented endurance runs
covering vast distances mostly on ocean courses well out of sight of land and
obviously, spectators, and thus of limited commercial value to any sponsor. The
racing was boring. There was very little passing, few winners over the course of a
season; a high rate of attrition and few close finishes. The rules were controlled by
16

17. the team owners and thus were convoluted and poorly enforced. This led to
checkbook racing where the teams with the most money won. Often there were
more classes than there were boats so participants could almost guarantee
themselves a checkered flag, which further eroded the credibility of the racing
product. This also led to a very high rate of turnover in participants and thus an
inconsistency in the “product” that made it nearly impossible to develop a
dedicated fan base. Certainly fans had no idea what was happening on the water as
organizers often placed 50 or more boats from 20 or so different classes in a race at
the same time. In short, there was no racing product and therefore, no event
product for anyone but the participants.
Today, ORL has moved in shore and become a consumer based, spectator
friendly motorsport that places a premium on competition as entertainment and
connecting the consumer with the corporate sponsor. While racers remain one of
the core groups of customers, the racing, race boats and the race teams form the
foundation of the ORL product. This fundamental shift in philosophy was
necessary to transform the sport from a participant based club/hobby not-for-profit
business to a for-profit consumer based professional motorsport entertainment
business capable of attracting significant outside investment. The primary
ingredients to future successful growth of the ORL product are: 1) The Spec
17

18. Racing Program for the boats, engines and propulsion systems, and 2) the Stadium
Style Racing format for the events.
The Spec Racing Program
The first key component to the continued growth and development of the
ORL product is a stable fleet of race boats and teams that remains so regardless of
the state of the economy, and close, exciting competition for spectators and
television viewers. In short, the racing related entertainment, excitement and fun
generate fan interest, which in turn generates sponsor interest. ORL management
thus places a premium on creating a close competitive racing “show” for the event
and for television. After years of research and analysis ORL management
determined that to create such a show it must develop, implement and strictly
enforce a very tight, yet stable technical and competition rules program (“Spec
Racing Program”) that produces a fast, agile, yet tough racing fleet with reliable
propulsion systems across all 6 of its featured racing classes. The boats also must
be audio-visually stimulating to the average fan/spectator/viewer.
As opposed to the technology based rules model that dominated offshore
racing for so many years, the goals and objectives of the ORL Spec Racing
Program are as follows:
• Relatively low cost, affordable, “level playing field” racing for competitors
and participating marine industry manufacturers;
18

19. • Participation of the marine industry from a competition and financial
perspective;
• Closer more exciting competitive racing through correspondingly tight yet
stable competition based technical rules management and enforcement;
• Multiple winners throughout the season;
• Close finishes;
• Close, dramatic national championship battles designed to be settled at the
last event of the year;
• The racers are the “stars”;
• Winners and champions decided by skill, courage and preparation NOT by
who has the biggest checkbook;
The Spec Racing Program thus has four essential components: 1) tight length,
weight, height, beam and manufacturer production based rules and restrictions for
the boats; 2) engines produced by one to two CRE approved suppliers that also
must be sealed, certified and matched by CRE prior to competition; 3) approved
sterndrive systems produced by one to two CRE approved suppliers, with limited
permitted modifications; and 4) Strict requirements on commercial availability as
well as limitations on development of propellers. Accordingly, ORL has entered
into a management agreement with an independent Florida company, Certified
Racing Equipment, Inc. (“CRE”) to develop and manage the rules and the
19

20. technical inspection process, and conduct the research and development programs
that are integral to the Spec Racing Program.
Over time, the Spec Racing Program has produced and will continue to produce
more competitors, less participant turnover, better professional competition and
thus an exciting, entertaining experience for consumers. The stability and
consistency of the Spec Racing Program also produces a stable cost environment
for the racing teams relative to their equipment purchase, repair and maintenance
programs, and thus will yield a far better return on investment once their
sponsorship and prize revenues increase. Similarly, the costs of the ORL technical
and competition rules development and enforcement program will remain
relatively constant as well thus producing increasing margins as revenues grow.
Indeed, despite the economic downturn since 2001, the Spec Racing Program
has produced 70-80 boat racing fleets at national events whereas in the past such
downturns generally led to severe reductions and fleets in the 30-40 boat range.
Management thus believes that the Spec Racing Program will produce fleets of 100
boats or more per event simply with a turnaround in the economy. 3 More
importantly, the Spec Racing Program combined with the consolidation of classes
from 12 in 1999 to 6 today, means more boats in the premier classes. This, in turn
will lead not only to better more exciting racing, but more events and thus more
opportunities for Newco as the classes can be separated and run at different venues
3
100 boats average in 2000 with the introduction of the spec racing program
20

21. and times. More boats, more competitors and more events also leads to more
revenue and with the stable costs associated with the Spec Racing Program, more
profits for ORL and the race teams.
Super Cat (Numbers Only) -
20 Boats Nationally
38’ to 40'
38’
Catamaran
9500lbs
1600 Total
Horsepower
140mph Top Speed
Super Cat is the premier ORL class. In 2004, ORL will continue with its
single approved sterndrive, the Mercury Racing SSM #6, which has proven to be a
tough, resilient, safe and cost effective system for the teams especially with the
long duty cycle and limited repair and maintenance required, and its fixed hull
rules. ORL will, however, commence the transition from a multi-approved builder
varying spec engine program to a single approved builder fixed spec engine
program. This same basic system (GM and Mercury Racing supplied engines,
Mercury and Imco supplied drives) has been utilized by Offshore for years in the
Factory, Super V, Super V Light and Super Cat Light classes with great success.
The sole ORL/CRE approved engine provider, Sterling Performance, is the
21

22. unquestioned leader in marine propulsion systems over 600 horsepower and has
actually designed and built the engines for every national champion and the last 3
world champion Super Cats. In addition, the contract requires Sterling to pay ORL
a $150,000.00 guaranteed sponsorship fee plus royalties, which helps pay for
television and other costs associated with the class.
The goals of the spec engine program are to: 1) increase competitive balance
throughout the fleet; 2) develop a “5 race engine”; 3) reduce maintenance and
operating costs for the majority of the teams during an entire season; 4) increase
reliability and durability; 5) increase performance and acceleration so the Super
Cats can negotiate the tighter multi-turn ORL courses more effectively and safely;
and 6) increase the number of teams that can afford to field competitive Super Cat
entries.
To accomplish these goals, the ORL has developed a transition plan that
minimizes the financial impact on the teams and should at the very least maintain
the size of the current Super Cat fleet. First, Sterling will retrofit every currently
existing engine regardless of the builder, to a specific specification. The retrofit
cost shall not exceed $15,000/engine, which is the approximate cost of a normal
rebuild today. Second, each engine will be matched on a dyno then sealed and
certified to ensure each competitor has the same amount of horsepower and torque,
22

23. but cannot perform their own upgrades to gain an advantage over their
competition.
Third a newly designed engine shall also be made available at an initial cost
of approximately $45,000.00ea. which is low relative to other motorsports and
certainly to the old-style huge horsepower engines formerly used in APBA. Fourth,
the new and retrofitted engines will be designed to operate with minimal
maintenance over 5 races, which will lead to drastically lower operating costs for
the teams. Indeed, teams will be required to use the same engines a minimum of
two to three times before changing and the maintenance and rebuild fees will be
fixed for everyone.
Fifth, while the engines ultimately will be assigned to the teams at random to
ensure the integrity of the program, during the interim period when there are
retrofitted engines in the mix, a commercially reasonable engine-claiming rule will
be established. With a stable, relatively low cost engine program that guarantees
each competitor matched engines the national Super Cat fleet should grow to a
consistent 10-15 competitive boats at each event. This should also increase
competitive balance throughout the fleet, thus furthering the goals of the program.
Finally with more boats ORL receives more revenue from entry fees, registration
fees, and royalties from the Sterling contract, and Newco receives more quality
opportunities with an improved and consistent show to promote at each event.
23

24. Super Cat Light (Numbers Only) -
The Boats: Slightly smaller versions of the Super Cats, these boats are 8000lb
twin engine racing catamarans (canopies only) ranging from 35’-38’. Top Speeds
are approximately 120mph. Manufacturers include Marine Technologies, Skater,
Eliminator, Motion and Specter.
The Engines and Drives: The engines are stock Mercury Racing 502cid HP500
EFI’s, and new for the 2003 season include the Mercury Racing HP525 EFI and
the GM Vortec HP3 8100. All engines are dyno tested, sealed and certified to be
within a certain specification by Offshore through CRE, to ensure competitive
balance. CRE is negotiating with Mercury to transfer the inspection, tech, repair,
sealing and certification, and rebuild programs to them for Mercury engines and to
Innovation Marine for the GM engines. The Mercury Bravo One, Sportmaster, XZ,
XR, and Imco, and Mercury #6SSM drives may be used.
24

25. Super V (Numbers Only) -
15 Boats Nationally
Up to 40' V-Bottom
1100 Total
Horsepower
110mph Top Speed
The Boats: Super V’s are the biggest and fastest of Offshore’s V-Bottom classes.
Super V’s are 8000lb twin engine racing v-bottoms (canopies only) ranging from
38’- 40’. Top Speeds are approximately 110mph. Manufacturers include Fountain,
Extreme, Cigarette, Donzi, Outer Limits, Skater and Wellcraft.
The Engines and Drives: The primary engine is the GM Vortec HP3 – 8100
496cid. Mercury Racing HP525 EFI engines currently existing in registered boats
are also approved for competition, however, beginning in 2004, no new engines
other than the Vortec shall be permitted. The engines are CRE dyno tested, sealed
and certified for competition. Innovation Marine is the sub-contractor to CRE that
performs these services. CRE personnel, however, oversee the program and
25

26. conduct random spot checks through the season to ensure compliance with the
rules. The Mercury Bravo XR, XZ and Sportmaster drives are approved as are the
standard and 4x4 Imco drives. The Mercury Racing SSM #6 drive is also approved
with a weight penalty.
Super V Light (Numbers Only) -
10 Boats Nationally
Up to 40' V-Bottom
550 Total
Horsepower
90mph Top Speed
The Boats: Slightly smaller versions of the Super V’s, these boats are 5000lb
single engine racing v-bottoms (canopies only) ranging from 28’-32’. Top Speeds
are approximately 95mph. Manufacturers include Extreme, Phantom, Activator,
Warlock and Eliminator.
The Engines and Drives: Same as Super V.
26

27. Factory I and II -
35 Boats Nationally
Up to 30’ V-Bottom
30’
500 Total Horsepower
80mph Top Speed
35 Boats Nationally
Up to 39’ V-Bottom
39’
1000 Total
Horsepower
90mph Top Speed
Factory 2 (designated by F2)
The Boats: These boats are stock 35' to 39' twin-engine production based v-
bottoms with a fixed weight of 8300lbs. These boats appear virtually identical to
the pleasure performance v-bottoms that can be purchased from a local new boat
dealer. Minimum production number and dealer network requirements ensure that
the boats are not dedicated race boats produced by non-mainstream builders. Top
27

28. speeds are approximately 85 mph. Manufacturers include Donzi, Baja, Fountain,
Cigarette, Formula, Hustler, Warlock and Eliminator.
The Engines and Drives: Beginning in 2004, CRE will produce a single 475hp
engine from the GM Vortec 8100, 496cid platform. Innovation and GM Powertrain
will assist in the design and production of the engine. A lease program in the
$6000-$7000/season range will be available as will an engine purchase program
that will cost substantially less than the Mercury Racing HP 525 that was used in
2003 as the standard Factory Class engine. The engines are CRE dyno tested,
sealed and certified for competition by Innovation. CRE oversees the program and
will conduct random spot checks through the season to ensure compliance with the
rules. Full on-site parts and service will be available as part of the program. CRE
also will be offering a trade-in program for used HP500 and HP525 engines that
will be designed to produce at a minimum a zero cost transition to the new spec for
participating teams. The Mercury Bravo XR, XZ and Sportmaster, and standard
Imco drives are approved for competition.
Factory 1 (designated by F1)
The Boats: Slightly smaller versions of the Factory 2 boats, these boats are stock
26' to 30' single engine production based v-bottoms with a fixed weight of 4750lbs.
28

29. These boats appear virtually identical to the pleasure performance v-bottoms that
can be purchased from a local new boat dealer. Minimum production number and
dealer network requirements ensure that the boats are not dedicated race boats
produced by non-mainstream builders. Top speeds are approximately 80 mph.
Manufacturers include Baja, Fountain, Formula, Hustler, Extreme, Activator,
Kryptonite, Warlock and Eliminator.
The Engines and Drives: The engines and drives are the same as the Factory 2
boats.
Outlaw
100 boats
nationally
24-40’
24-40’
400hp-4000hp,
Gas, Diesel,
Turbine
60-200mph
This is Offshore’s grass roots divisional racing series and caters to the high
performance offshore sports boat market. The purpose of the series is to develop
new racers for the Pro Series classes. One of the most exciting aspects of offshore
performance power boating is the great diversity of engine and boat products
offered to consumers. The Outlaw Series shall be promoted as an exciting yet cost
29

30. effective way to showcase these products while complimenting the featured racing
offered by the Factory and Super Series boats.
Reindl Powerboats V-24 Series
The Boats: Exclusively 24’ Ocke Mannerfelt Design V-24’s manufactured and
sold by Reindl Powerboats. Known as the “Bat Boats”.
The Engines and Drives: Currently the Volvo Penta 315hp small block and DPX
stern drive.
Outlaw Performance Series
o PX – 110mph+ - Any boat and engine combination
o P1 – 100-110mph - Any boat and engine combination
o P2 – 90-100mph - Any boat and engine combination
o P3 – 80-90mph - Any boat and engine combination
o P4 – 70-80mph - Any boat and engine combination
o P5 – 60-70mph - Any boat and engine combination, provided,
however, that twin engine boats over 28’ capable of speeds in this range
must compete in P4.
30

31. Stadium Style Racing -
THE PIER
“The Stadium”
BEACHES DOWNTOWN BRIDGES
ORL races will be conducted using the “Stadium Style Racing” format
where the race boats compete on a relatively short (4-5miles) multi-directional
“roadcourse” style track situated immediately adjacent to fixed facilities such as
major downtown piers, bridges, or beaches. The key elements to the ORL Stadium
Style Racing program are as follows:
• Spectator Excitement – Spectators can view the entire course from land
based primary viewing areas mere yards away from the racing action where
they can literally feel the spray of the boats and the roar of the engines.
31

32. • Sponsor to Consumer Contact – Event venues are selected based on the
close proximity of the “racetrack”, dry pits, sponsor and vendor exposition
areas, and primary viewing areas to ensure corporate sponsors, close, easy
access to the contact the fan/consumer throughout the event.
• “Apocalypse Now Effect” - With up to 15 TV and rescue helicopters flying
directly overhead less than 50 feet off of the water and on the decks of the
race boats as they scream through the “stadium”, the visual senses of the
fans are stimulated beyond anything ever experienced at a typical
motorsports event;
• Safety – These stadium courses, although more challenging and potentially
more dangerous, ORL commits greater rescue and safety assets to the teams
than ever before. Indeed, the Air/Sea Rescue program is entertainment in
and of itself as rescue divers deploy from helicopters from 20-50 feet above
accident scene mere yards from the spectators.
• Short Courses - With multiple right and left hand turns to create more
thrilling, faster racing the 4-5 mile ORL courses create a super speedway
effect that often produces “trading paint” between competitors;
• Low Production Costs – The “Stadium” costs approximately $700 in course
buoys. All other on-water production elements involve volunteers using their
32

33. own boats and equipment, and they love being part of the organization and
often times many will travel from event to event at their own expense.
The Offshore Powerboat Racing Circuits
Overview –
Since entering into the License Offshore has sanctioned a national racing
circuit consisting of 8-10 events per year, including a year-end World
Championship. Today the national circuit is sponsored by General Motors under a
4-year contract and is known as “The GMC Pro Grade Championship Series.
Under the License ORL also holds the exclusive sanctioning rights to the four-
divisional/divisional series, which collectively consist of another 15-20 races.
These series are commonly known as: the Pacific Offshore Series for the Western
Division; the Great Lakes Silver Cup Series for the Central Division; and the
Northeast and Southeast Divisional series for these sections of the country,
respectively. Offshore has sanctioned both national and divisional races in
California, Florida, Maryland, Canada, Texas, Michigan, New York, Georgia,
Massachusetts, North Carolina, Ohio, Arizona, New Jersey, and the Bahamas.
By necessity Offshore has focused most of its resources on the development
of the Spec Racing Program and national circuit and thus left the divisional series
33

34. and events to be managed primarily by volunteer members of APBA affiliated
clubs. As a result there has been virtually no joint planning or coordination
between Offshore and the clubs, which has led to scheduling conflicts and other
issues including a lack of development of these series, and significant missed
revenue opportunities for Offshore. In 2003, moreover, Offshore sanctioned AND
produced all of its 9 National Pro Series events thus enabling it to control all sales
and marketing, licensing, promotion, production rights, concessions and all other
event related revenue/profit centers. Unfortunately, Offshore did not have the
appropriate human and financial resources to adequately develop these profit
centers, which resulted in a further loss of revenue.
Under the new license these problems will be corrected through the
development of a comprehensive national and supporting divisional series racing
and related event business. The primary objective will be to organize and centralize
the planning and coordination process of the various series within the ORL much
like how NASCAR manages its national and divisional series (Winston Cup,
Busch Series, Craftsman Truck, Winston West, etc.). While the ultimate goal will
be to create a minimum of two major national professional circuits (15-20 total
events) and four complimentary divisional circuits (15-20 additional events) for
which Newco would serve as the exclusive producer and promoter. This in turn
will produce more revenue for the sanctioning body business of the ORL. More
34

35. importantly, the Divisional racing circuits need more professional management and
given the even lower production costs associated with these events, this need
presents an additional business opportunity for Newco.
The ORL National Circuit – GMC Pro Grade Championship Series
2
The Season –
Initially the ORL National Circuit, currently known as the GMC Pro Grade
Championship Series, will consist of a minimum of 9-10 separate events, starting
in April and culminating in a World Championships to be held annually in
November.4 The goal again will be to produce 15-20 national events each season
starting as early as February or March, in the South to take advantage of the
warmer weather, and ending in late November or early December for the same
reason. Additionally, a late November/early December season finale also should
help ORL to secure a broadcast network contract to televise its World
Championships live, given that all other motorsports have concluded their seasons
by then yet the demand for such content remains high among fans.
4
Attach tentative 2004 schedule
35

36. Site Selection Criteria –
Ultimately, Newco and the ORL will work together to determine the best venues
for the national circuit using the following site selection criteria:
• Body of water sufficient to stage a 4-5 mile racecourse located adjacent to a
fixed facility such as a public park, downtown waterfront, pier, or beach that
can be gated for purposes of charging admission to a minimum of 10,000
spectators.
• The facility should be sufficient to stage the “ORL Experience” consisting
of race boat staging (Dry Pits), spectator viewing including main
grandstands, VIP, Corporate Hospitality, sponsor display, vendors,
concessions, and product exposition areas, so that fans can watch the races,
interact with the teams, view the boats and other sponsor displays and
products, buy the official foods and beverages, and purchase licensed ORL
and Newco apparel and merchandise.
• The facility should be capable of staging a concert and related festival in the
same area.
• Adequate parking within walking distance of the race viewing facility. The
need for shuttles or remote parking should be avoided in order to provide
fans an easy experience.
36

37. • Close proximity to a resort hotel preferably within walking distance and
certainly no more than 10-15 minutes away by automobile.
• Close proximity to a major metropolitan area, preferably a top 20 TV
market, major airport, and active business community.
• Close proximity to sufficient support facilities such as marinas, crane and
fueling areas, boat ramps, grocery stores, and service stations.
Venues –
There are a number of venues within North America that satisfy most if not all of
these criteria.
• Milwaukee, WI
• Detroit, MI
• St. Petersburg, FL
• Tampa, FL
• San Diego, CA,
• Toronto, Canada
• Orange Beach, AL
• New York, NY
• Cleveland, OH
37

38. • Long Beach, CA
• Savannah, GA
• Charleston, SC
• Hilton Head, SC
• Chicago, IL
• Ft. Lauderdale, FL
• Miami, FL
• Corpus Christi, TX
• Sarasota, FL
• Fort Myers, FL
• Key West, FL
• Seattle, WA
National Race Format –
These events will generally include 2 days of weekend competition. This
competition schedule is designed to permit the public to arrive early, experience
the boats and teams, secure their merchandise and apparel, food and beverage,
view the racing, repeat the process between events, and once Happy Hour
38

39. concludes on Saturday, proceed to the ORL Experience area for the evening
entertainment.
Race Boats - Super Series, Factory Series and Outlaw Series boats are
eligible to compete at the event. At this type of event the Outlaw Series boats will
compete on Saturday with the Super and Factory Series boats competing on
Sunday in separate races. The Sunday boats will also participate in an organized
testing session called “Happy Hour” at the conclusion of the last race on Saturday.
The boats will be required to test on the established racecourse to enhance the
entertainment experience for the fans. The personnel and equipment costs to ORL
are essentially fixed regardless of the venue.
Course and Race Length – The courses will be not more than 5 miles and
not less than 3 miles.
• Saturday - There shall be 1-2 races on Saturday with each lasting
approximately 45minutes and no more than 45 minutes in between races for
refueling of the TV and Rescue helicopters. Happy Hour shall commence
within 15 minutes of conclusion of last race. Racing will start at 12pm and
all competition and testing should be complete by no later than 4:30pm
followed immediately by the Winner’s Circle ceremony.
39

40. • Sunday - On Sunday there shall be two races. The early race shall consist of
the Super V classes and the second race shall consist of the Super Cat
classes. The racing shall begin at 1pm with the second race at 3pm. Each
race should last approximately 1 hour with no more than 1 hour between
race #1 and race #2. The racing should conclude by no later than 4:30pm
followed immediately by the Winner’s Circle ceremony.
Pro Series Championships
Pro Series National Championship Points will be awarded at every Pro
Series event to each boat competing in the event. The boat accumulating the most
points through the entire season in its respective class will be awarded the Pro
Series National Championship for that class.
Pro Series Sponsorship Opportunities
ORL sponsorship opportunities are set forth in the attached PowerPoint
presentation. Based on the performance of management over the past 4 years, ORL
will generate a minimum of $1,000,000.00 in annual series related sponsorship
revenues.
40

41. The ORL Divisional Circuits –
Overview
APBA currently sanctions Divisional races in four divisions throughout
North America: West, Central, Northeast and Southeast. These events have been
smaller in size and scope typically than the national events occurring mostly in
smaller communities and catering to divisionally based racing teams and fans. The
West, through POPRA, and the Central Division, through the Great Lakes Silver
Cup Series (“GLSCS”) generally produce 6-8 races annually which also are
televised on the Outdoor Network. A large group of racers from POPRA and
GLSCS also typically attend the annual World Championships. Due to the
independent Offshore Performance Association’s (“OPA”) presence in the
Northeast and the number of national events in the Southeast, moreover, there has
been very little Divisional racing in these divisions of the country.
Purpose
Notwithstanding the foregoing, however, ORL management believes that
Divisional racing can form a solid backbone for the business. Specifically,
Divisional Racing offers more opportunities to expand the ORL membership ranks
through relatively inexpensive grass roots racing programs. Divisional Racing
41

42. further offers more opportunities for Newco to add quality profitable events to its
portfolio and thus more sales opportunities, both incremental and value-adds, for
new and existing corporate series, divisional and local sponsors. Divisional Racing
also broadens the reach of ORL and Newco, the sport and, therefore, the benefits to
more people.
The Divisional Circuits and Management
Commencing with the 2004 season, the ORL shall sanction Divisional
events in four distinct divisional racing circuits in the West, Central, Northeast and
Southeast divisions of the United States and Canada. POPRA and GLSCS will
manage the West and Central Division divisional circuits, respectively. The ORL
intends to secure a mutually beneficial working relationship with OPA to manage
the Northeast divisional circuit and will directly manage the Southeast divisional
circuit from the central office. These individual organizations shall each be
referred to as a Divisional Management Organization or “DMO”. ORL also will
appoint an eleven member volunteer advisory council consisting of one
representative from each division as well as one from each of the six primary
racing classes, and a chairman to assist with the management of the Divisional
Racing Program. This new body will be known as the Offshore Advisory Council
(“OAC”).
42

43. Initially, management will encourage the OAC and each DMO to limit the
number of races in each division to 5-6 including Pro Series events. This would
enable the organizations to coordinate the Divisional and Pro Series schedules,
thus making it easier on and creating more options for the racers. This should also
make it easier for the ORL and Newco to oversee and assist the DMO’s with their
businesses and thus improve those businesses. The Company’s goal is for these
divisional events, although initially smaller in scope, to nevertheless use the same
basic Stadium Style Racing format as Pro Series events. In short, these events will
offer the same classes competing under the same format, and where possible will
be produced by Newco or at the very least overseen by Newco. These events also
should be held in locations strategically selected as potential Pro Tour sites.
Divisional Circuit Sponsor Opportunities
ORL and Newco also will offer series sponsorship opportunities for each
Division. The opportunities are set forth in the attached PowerPoint Presentation.
Again with the organization and centralization of the Divisional Racing Program
within ORL, sales of Divisional series related sponsorships, both incremental and
value adds to existing sponsors should increase.
43

44. ORL Management
Michael Allweiss – Chairman, CEO & President
Mr. Allweiss, 40, manages every facet of the ORL’s day-to-day activities and is
responsible for the formulation and implementation of the company’s strategic
plan. He became Chairman of the Category in 1999 and then succeeded to his
current position when the LLC was formed in 2000. He has served as a member of
the Category governing board and legal counsel for the Category. He has also
served on APBA’s national legal committee and on APBA’s national board of
directors. He is an accomplished racer as well achieving boat racing’s highest
honor in 1998 when he was inducted into the APBA Hall of Champions. In
addition to being a top competitor, Mr. Allweiss has produced several major
APBA Offshore events including 2 World Championships, a National
Championships, and 3 national races including the inaugural Savannah Offshore
Grand Prix and World Speed Runs.
44

45. Allen Allweiss – General Counsel
Mr. Allweiss, 68, manages ORL legal affairs. He is a Former Executive V.P for
Subsidiary Operations and General Counsel for the Home Shopping Network. He
has been a practicing attorney for over 40 years and has served as legal counsel for
the Category. He also is a former member of the Category governing board and a
successful former racing competitor as well, winning a national championship and
establishing a world speed record for his class in 1975.
Gordon Kraft – Executive Director of New Business Development
(FILL IN)
Mark Nemschoff — National Sponsorship Sales
Owner/CEO of Nemschoff Chairs, Inc., a large Wisconsin based family owned
company, which is the leading healthcare furniture specialist, as well as several
other manufacturing related businesses. (FILL IN)
Nigel Hook – National Sponsorship Sales
(FILL IN)
45

46. Steve Miklos – Executive Director of Competition
Mr. Miklos also serves as the General Manager for CRE. He is responsible for the
formulation of technical and competition rules and policy as well as the products
and services for CRE. He was largely responsible for the creation of the Factory
Series and current Super Series technical and competition rule platforms. As a
racer Mr. Miklos is a National and World Champion, and 4 time world speed
record holder. He still competes on a regular basis to stay connected to the sport.
He also is the Chairman/CEO of Suncoast Toner Cartridge, Inc. a leading supplier
of remanufactured toner cartridges, as well as several successful small businesses.
(FILL IN)
Jim Poplin – Vice President of National Race Operations
Mr. Poplin also serves as the Chief Medical, Safety and Rescue Officer for ORL.
He is responsible for the design, implementation and management of the race
operations plan at all Pro Series events, including but not being limited to the
medical, safety and rescue, and risk management programs. Mr. Poplin is a retired
firefighting paramedic and works outside of boat racing as the Chief of the
Hamilton County, Tennessee Special Tactics & Rescue Services, a special
operations tactical team on which many Offshore rescue team members also share
membership.
46

47. Theodore “Ted” Zoli – Executive Director of Special Projects
Mr. Zoli, 61, briefly served as the President and Chief Operating Officer for
Offshore before assuming his current post. He was originally retained in July of
2002 after a very successful and varied business career including Torington
Industries for which he served as President for the past 30 years. Mr.Zoli assists
each aspect of the business as an advisor and consultant, including but not being
limited to national race operations, and marine industry and race team
communications. He is a successful former racer and team owner as well.
National Staff Chiefs
Other key members of the ORL team include:
Randy Hegwood – Mr. Hegwood is the National Race Operations Director. His
duties include general race logistics management and implementation functions for
Offshore at Pro Series events.
Deanna Richardson – Ms. Richardson serves as the Executive Assistant to the
CEO. She also implements and manages the implementation of the Pro Series
sponsorship fulfillment program; and acts as the liason between executive
47

48. management and executive staff and related support staff/personnel, Offshore and
Pro Series sponsors, the television division, other divisions and affiliates.
John Potts & Robby Brooks – Mr. Potts and Mr. Brooks are Co-Executive
Producers of ORL Television. Each has over 20 years experience in the television
production industry. They are responsible for the production, assembly and
management of the television production crews, television production logistics,
distribution, sales and marketing, content and creative for the shows and
sponsorship television benefits fulfillment. (FILL IN)
Mike Tomlinson – Mr. Tomlinson serves as the Chief Referee for ORL and has
done so for the last 10 years. As such he manages the rulebook and rule
enforcement process. (FILL IN)
Paul Abreu – Mr. Abreu serves as the Chief Technical Inspector for ORL and has
done so since 2000. Prior to that he served for 20 seasons as an assistant inspector,
and assistant referee, as well as the chief inspector for POPRA. He manages the
technical inspection process at Pro Series Events. (FILL IN)
48

49. Dee Kimes – Ms. Kimes serves as the Chief Scorer for ORL and has done so for
the past 15 years. She manages the timing and scoring process at all Pro Series
events. (FILL IN)
Andrew Corn – Website Director
(FILL IN)
NOTE: The complete APBA ORL Organizational Chart is attached hereto as
Exhibit “A”
ORL Divisions and Affiliates
ORL Events
Produces and manages several different ORL controlled events, and manages
independently produced ORL sanctioned events, such as ORL powerboat races,
ORL personal watercraft races, boat shows, poker runs, speed record runs,
endurance runs, and ORL fishing tournaments.
ORL Television
Produces the television programs of ORL sanctioned or produced events and
manages ORL’s programming, broadcast and distribution rights and properties.
49

50. ORL Internet
Produces and maintains Offshore’s website and related video and audio broadcasts
of Offshore sanctioned/produced events including the delivery of relevant up to
date information to current and potential members, sponsors, and consumers, and
online sales of memberships and merchandise.
ORL Sales and Marketing
Develops, implements and manages all Sales/Marketing, Public Relations,
Publicity, Celebrity Participation and general promotion of the business and its
activities on the national series level.
ORL Membership Products and Services
Develops, implements and manages Offshore’s racing and non-racing membership
programs, including racer and consumer programs, products and services.
ORL Licensing
Develops implements and manages all licensing relationships for Offshore
including merchandising and apparel but excluding racing and marine performance
related products and services.
50

51. Certified Racing Equipment
Administers the technical rulemaking and enforcement programs for Offshore’s
racing activities, and also administers the sales and licensing of “APBA Offshore
Proven” marine related products and services to race teams, and outside third party
vendors of boats and marine related products and services. This is a separate
Florida corporation that holds a license from Offshore to perform its functions.
51

52. Objectives – In General
1. Continue to develop a competition based rules model for its racing
operations that emphasizes:
a. Competitive balance for all participants;
b. Affordable racing for all participants;
c. Close, exciting competition for everyone - multiple winners
2. Continue to develop a professional staff that effectively develops,
implements and manages the rules making and enforcement process with fairness
and integrity.
3. Continue to develop a professional staff that effectively manages the
offshore racing specific logistics and operations at the events.
4. Develop a strong, stable national racing series schedule with events in
major metropolitan areas or destination locations.
5. Develop a strong national sponsorship and racer contingency sales
program.
6. Develop a strong prize money program for the race teams.
7. Produce first class, high quality, exciting television entertainment.
8. Produce an exciting, interactive, informative and entertaining Internet
presence.
52

53. 9. Produce high quality product licensing, merchandising and apparel
programs.
10. Produce effective and informative public relations and media programs.
11. Produce consumer oriented affinity membership programs.
Conduct business in a manner that enhances and promotes the ORL brand and the
sport of offshore powerboat racing for the benefit of all of our business partners.
53

54. Economics of ORL
Overview
The sanctioning body business has experienced tremendous growth since
1998 when the Category still operated under the control of APBA. Specifically, in
1998 total revenues were less than $350,000. The average fleet count at national
races was less than 50 boats and the World Championships that year yielded only
68 boats. In 1998 APBA had two primary competitors in the offshore powerboat
racing sanctioning body business: US Offshore (USO) and SBI. Both organizations
achieved similar results that year.
In 1999, which was the first year under current Chairman Michael D.
Allweiss and the last year the Category operated under APBA control, series
sponsorship sales increased to approximately $350,000 and total revenues
exceeded $1million. The average fleet count increased to over 65 boats per event
and the World Championships had over 100 boats in attendance. In 2000,
Offshore’s first year of operations, sponsorship sales exceeded $750,000 and total
revenues were slightly less than $2million. Offshore had a tax loss of only
$187,000. The average fleet count increased to over 90 boats per race and 146
teams attended the World Championships.
54

55. In 2001 Offshore’s sponsorship revenues grew to over $1,000,000.00 despite
the severe downturn in the U.S. and World economies. Total revenues exceeded
$2million for the first time in APBA history. The financial bottom-line for
Offshore improved substantially over the previous year due to Management’s
decision to drop its TNN television package in favor of increased coverage on
Speedvision while maintaining its full compliment of sponsors. The loss from
operations was approximately $100,000. The total Pro Series boat count was down
slightly in 2001 due primarily to class consolidation and the economy.
In 2002 sponsorship sales declined approximately 20% due to a number of
factors including the continued economic recession, the severe decline in the
sponsorship and advertising markets overall, the virtual depression experienced by
Offshore’s primary sponsorship market, the high performance marine industry, and
Offshore producing its own national events. Overall revenues also decreased due to
a further reduction in the number of teams able to participate due to the continuing
economic recession.
In 2003, the number of participants increased by about 10% over the
previous year. Unfortunately, Offshore experienced four significant yet
unforeseeable negative events that impacted the business financially. First, certain
members of APBA unlawfully attempted to terminate the original License. Second,
these same members unlawfully attempted to rescind a properly approved
55

56. corporate restructuring of APBA that provided substantial financial benefits to
Offshore and protected its long term interests and investment in the sport.
Third, Mercury Racing management, angered by what it perceived as GM’s
encroachment on its market, unlawfully terminated its sponsorship agreement with
Offshore and refused to pay the remaining $100,000 balance due. Mercury Racing,
though one of its top executives, Fred Hauenstein, also assisted the efforts of the
above referenced APBA members, and publicly yet falsely accused Offshore of
failing to perform its contractual obligations and questioned its future under the
License. Fourth, the LLC finance member reneged on his obligations to fund
company operations through the balance of the year after causing the company to
incur costs it otherwise would not have incurred, including on sales and marketing
personnel who failed to produce any offsetting revenue.
These led to expensive and time-consuming litigation; uncertainty among
sponsors, racers, fans, potential sponsors and event sites, a loss of focus on the core
business and a refocusing of human and financial resources on expensive non-
revenue producing activities, which led to a substantial loss of income.
Nevertheless, management prevailed in all related litigation and secured a
favorable settlement, which included a new and improved License arrangement
with APBA. The settlement also enabled management to lawfully reconstitute their
ownership group by eliminating certain members, and restructure the business, in
56

57. the form of KHAMAN and the ORL. Most of the past obligations have been
satisfied through loans from the remaining LLC members and drastic reductions in
overhead during the past 90 days. By virtue of these aggressive moves by
management, the expected annual cash infusion from 2004 memberships, boat
registrations and World Championships entry fees, will enable the ORL segment of
the business to commence the 2004 season in a relatively stable financial
condition, thus paving the way for the implementation of the new business plan
including the creation and capitalization of Newco.
Overall, the economics of the ORL are favorable for future growth and
profitability, thus increasing the value of the enterprise to third party investors or
purchasers. Specifically, with the successful development and implementation of
Newco, the ORL fixed costs will remain very stable over the next 3 years even
while revenues grow at a faster rate. In other words, while revenues grow fixed
expenses will not, thus increasing ORL profitability. The reasons are three fold: 1)
the core sanctioning body business relies primarily on volunteer labor for the
execution of its event production responsibilities; 2) national series sponsorship
sales primarily are executed and managed by ORL shareholders who are
compensated through commissions, with some outside commission sales
assistance; and 3) ORL derives revenues primarily from sources which do not
require additional personnel as those revenues increase. Most of the benefits
57

58. contained in series sponsorship packages for example are self-executing, such as
those related to television, or are fulfilled on site by dedicated volunteers such as
signage placement and VIP hospitality.
Revenues
The 2004 revenue projections for ORL are attached hereto as Exhibit _.
ORL is profitable upon start-up assuming a slight increase in national series
sponsorship revenue; provided that Newco assumes the event production business
and corresponding expenses, and pays ORL a $50,000.00 sanction fee for each Pro
Series event. In the first year, however, the profit shall be applied against the
remaining past due expenses and the debt owed to the LLC members, which ORL
assumed from the LLC. In the first 5 years, the profit shall be further limited by
ORL’s agreement to limit sanction fee increases in order to assist the growth and
development of Newco’s business. By the end of this initial 5year period, however,
Newco should be profitable and thus able to pay fair market value sanction fees to
ORL.
Series Sponsorships
Series sponsorships typically consist of a package of benefits that includes
television commercials, in-focus exposure, in-show brand features, on site display
opportunities, VIP opportunities, and on-site signage. Management has
consistently generated $500,000 - $750,000 in national series sponsorship income
58

59. over the past four years. The GM contract runs through 2005 and pays ORL
$400,000.00 annually. The Sterling contract runs through 2006 and pays a
minimum of $150,000 annually thus yielding a guaranteed $550,000 each of the
next two years. ORL also has secured an additional $155,000 in verbal
commitments for next season and projects another $290,000 in sales over the next
5-6 months based on current discussions with interested potential sponsors.
The ORL has secured these sponsorships and commitments primarily
through the efforts of its ownership group. Michael Allweiss, Mr. Nemschoff and
Mr. Hook will continue those efforts on a commission only basis, and they project
annual sales to grow to $1,500,000 by 2006. With the formation of Newco and its
corresponding assumption of the event production business, and formation of its
own national sales staff, ORL Management does not expect to add new sales
personnel for at least the next 3 years. Series sponsorships represent approximately
38% of ORL gross revenues. Due to its relatively fixed overhead and event
production costs, however, ORL profit margins will grow corresponding with the
projected increase in ORL generated sales.
Competitor Contingency Sponsorships
These sponsorships generally come from marine related product suppliers.
Teams receive product and/or money for using the product and finishing usually in
the top three at an event and/or for the season high points race. ORL must develop
59

60. such a program to attract more competitors and lengthen the commitment of
current racers. ORL will receive only a very small percentage of any such
sponsorship to administer the program. Management will spend the 2004 season to
research and develop a workable program for implementation in 2005. The
financials do not reflect any income from this source for the first three seasons.
National Television Advertising
For the next three seasons ORL shall continue marketing and selling its
television inventory as part of bundled series sponsorship packages. Thus,
management does not anticipate any revenue derived from sales of strictly
commercial inventory or in-show graphics and features.
Sanction Fees
Sanction fees are monies paid to the sanctioning body for the right to
produce an ORL sanctioned event. The Pro Series sanction fee provides the
producer with a guaranteed event date on the Pro Series calendar at which the top
Pro Series boats will compete for national championship points. In 2004-
2005Newco will pay ORL a set sanction fee of $50,000 for each Pro Series event.
Beginning in 2006 the sanction fee shall increase 15% annually through 2008 at
which time management will re-evaluate the fee structure along with Newco
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61. management. This fee arrangement will allow Newco to become profitable sooner
but still return a slight profit to the ORL. The sanction fees represent
approximately 20% of ORL gross revenues.
Entry Fees
ORL charges entry fees to competitors to enter Pro Series events in
accordance with a published fee schedule. The fees are set on a class-by-class
basis. Historically the conducting club retains entry fees for divisional events.
Going forward, however, ORL will standardize the fee structure for Newco
produced events and the fees will be split according to an agreed upon schedule.
This arrangement will yield more revenue for both ORL and Newco. Currently,
Pro Series entry fees account for approximately 22% of ORL gross revenues.
Boat Registration Fees
ORL also charges a one time annual equipment registration fee for each
individual raceboat that competes in any ORL sanctioned event. These fees should
be increased on an annual basis to keep pace with inflation. Currently, these fees
account for approximately 6% of ORL gross revenues.
Membership Fees
ORL shall produce a comprehensive, valuable, consumer oriented affinity
membership. The current total membership of ORL, consisting of racers, race
officials and non-racers, is approximately 1500. The purpose of the plan is to
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62. increase ORL annual membership revenue and significantly grow the customer
base in order to efficiently and cost effectively serve its licensing and
merchandising program and thus increase its overall net earnings. Other
sanctioning bodies such as NHRA (85,000 members), SCCA (55,000 members),
and the AMA (250,000 members), have done this with great success.
Once Newco is created and properly capitalized, ORL shall engage in a
concerted membership campaign to grow its non-racing membership. This plan
will have several key components:
• First, ORL will develop several levels of membership from a low cost base
package to a high-end premium package that will be offered on a limited and
semi-exclusive basis. Direct mail, Internet, television, event and voice relay
shall be used to market and advertise the membership program;
• Second, ORL will leverage its relationships with its marine industry
sponsors to include these packages as an added value to the products sold to
the sponsors' customers. For example, as a method of further promoting
Formula products and its relationship with ORL, Formula will include
APBA ORL membership displays in its dealerships and/or include the
memberships as part of each boat sold. This way a sponsor can get the word
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63. to its customers about its relationship with ORL and drive these customers to
ORL events where it can continue to develop the customer relationship;
• ORL shall expand its current relationship with MBNA as part of the base
membership marketing program;
• ORL shall include an insurance component as part of its base membership
package in much the same way SCCA and NHRA do in their respective
programs;
Membership fees currently account for approximately 10% of ORL gross revenues.
Licensing
Apparel
Merchandise
(FILL IN WITH LEROY BUSH INFORMATION)
ORL currently has no licensing plan with respect to merchandise and apparel
however, management is working on such a plan. Historically, sanctioning bodies
make very little revenue marketing and selling merchandise and apparel that
exclusively feature its logos. The key to a profitable program is to market and sell
the stars of the sport and team merchandise and apparel bearing the ORL logo.
ORL charges a license fee for use of the logo either in the form of a flat fee or a
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64. percentage of sales. The most cost effective way for ORL to generate license fee
revenue is to grant third parties the right to market and sell the merchandise and
apparel, thus eliminating any costs associated with that and with fulfillment.
Racing Related Products and Services
CRE handles this part of the ORL business and while it currently accounts
for less than 1% of ORL gross revenues it has the greatest potential to generate
significant financial returns in the future. For example, CRE was responsible for
validating the GM Vortec 8100 HP3 engine now in use in the Super V and Super
Cat Light classes, and thus the GMC title sponsorship. CRE has also developed
solid business relationships with Sterling, Herring Propellers, Hydromotive
Propellers, Imco Sterndrives, and Innovation Marine, the largest re-power center in
the United States. Together, these entities control a huge segment of the very
profitable high performance marine propulsion market. Going forward, CRE will
design and implement a business strategy to strengthen, tighten and take further
advantage of these alliances to produce additional revenue for itself and ORL.
Expenses
The 2004 expense projections for ORL are attached hereto as Exhibit _. The
traditional sanctioning body business has long been profitable. Indeed,
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65. Management has been acutely focused on developing the racing product over the
past several years. Unfortunately, the lack of professional promoters willing to
develop the event side of the business left management to handle this critical task.
Management, however, had neither the human nor financial resources to
adequately address the need for a comprehensive event production and promotion
program. When combined with the APBA and Mercury Racing related problems in
2003, this event issue became more acute particularly from a financial perspective.
This also led to management’s decision to restructure the business and create
Newco. Provided that Newco assumes the event production business and
corresponding expenses, and pays ORL a $50,000.00 sanction fee for each Pro
Series event, ORL can focus on the traditional sanctioning body business. This in
turn, will lead to a much-improved product for Newco to market and sell, and long
term profitability for the entire business. The 2 primary categories of expense are
Event Related and General Overhead.
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66. Event Related Expenses
Event related costs constitute the largest category of ORL expenses,
accounting for roughly 65% of the total. These expenses can be classified as: 1)
staff related such as compensation, expense reimbursements and travel/lodging; 2)
hard costs that are primarily comprised of prize money and event insurance; and 3)
television, which will be handled separately below.
National Staff
Management anticipates adding very few additional staff over the next three
years so those costs should remain relatively stable. This is primarily due to the
Spec Racing Program, which requires far less personnel to manage and enforce
effectively even if the number of competitors and registered race boats increase
significantly over that period. In addition, much of the on-site personnel is made up
of local volunteers who are managed by the national staff. As Newco and ORL
solidify a consistent national schedule, the amount of time necessary to manage
these volunteers also decreases thus enabling ORL to tightly control the growth of
its event related staff even more.
Prize Money and Insurance
Insurance costs may rise 10-15% over the next three seasons, but the
additional revenue generated by the small increases in sanction fees will cover
these increases. Prize money on the other hand is a fixed expense that will rise only
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67. with a commensurate increase in revenues. Nevertheless, one of management’s
chief goals is to double the prize payouts at the Pro Series events by the 2006
season from $50,000 to $100,000. Management anticipates being able to do this by
taking advantage of the increased margins created by increasing series sponsorship
revenue over the relatively fixed expenses associated with the Spec Racing
Program. Increased prize purses are important to the overall success of both ORL
and Newco in that it helps to professionalize and stabilize a larger more consistent
base of national and divisional competitors as demonstrated historically in other
sports.
Television Production
Television is a critical component to the future growth and success of the
ORL and Newco. The leaders of the two most widely recognized motorsports in
the world, NASCAR and Formula One, recognized this early on and designed their
respective businesses around an aggressive television product and distribution
plan. However, NASCAR did not secure its current groundbreaking television
package until its member racetrack owners ceded their authority to negotiate
individual network contracts to the sanctioning body. ORL already has exclusive
authority to negotiate the television deals for all of the National and Divisional
racing events. With Newco and ORL closely aligned, however, management for
both organizations shall work together during any future network negotiations to
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68. secure the best deal for the overall business. In 2003, television accounted for
approximately 30% of ORL gross expenses.
Program Distribution Plan
For the 2003 season Offshore had contracted for a minimum of 20 hours of
programming on the Fox Speed Channel (“Speed”). The contract required Offshore
to buy this time for $150,000. To date, Offshore has produced the requisite number
of programs but has not paid any of the time buy. Discussions between
management and Speed are ongoing and it appears that the network will continue
to take the programming for the time being.
Speed has indicated, however, that it is not inclined to enter into talks about
2004 and beyond without a commitment from Offshore to pay the time buy for
2003. ORL thus may have to assume that obligation in order to secure a new deal.
Another potential option is for GMC and ORL to approach Speed together on
restructuring the relationship. Speed has indicated it might consider a plan that
eliminates the past and any future time buys if GMC increases its advertising
spending with the network. Management has had very limited discussions with
GMC on this subject but plans to aggressively pursue this option in the offseason.
In the short term, Speed remains the best option for the ORL television
product. The Outdoor Life Network (“OLN”), with similar distribution, is another
option as is the much smaller Outdoor Network. In the long term, ORL should
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69. secure a broadcast network contract to televise at least one of its World
Championships races live. Ultimately, the distribution plan should include a
package with Speed for most national and divisional events, and a broadcast
network for tape delay broadcasts of designated “major” events, and at least one
live broadcast of the World Championships on an annual basis.
Program Content Plan
For the short term the content plan for the GMC Pro Grade Series events is
as follows:
• ORL Television shall produce a one-hour season preview show featuring the
top teams from each of the 6 primary classes, with particular emphasis,
however, on the Super Cats and Super V’s.
• ORL Television shall produce two separate and distinct one-hour shows for
each of the regular Pro Series season events. One show will be dedicated to
the v-bottom classes featuring Super V while the other show will be
dedicated to the catamaran classes, featuring Super Cat.
• ORL Television shall produce a one-hour mid-season review show.
• ORL Television shall produce a one-hour Worlds Preview Show.
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70. • ORL Television shall produce three additional worlds programs, one
featuring the mid-week races and the other two featuring the weekend
“finals”.
• ORL Television shall produce a one-hour season in review show.
General Overhead
This category includes the general expenses necessary to operate the ORL
on a day-to-day basis and accounts for roughly 35% of the total expense budget.
This figure includes the annual license fee that ORL must pay to APBA under the
new License.
Administrative
The Administrative expenses to operate the ORL, including rent, utilities,
salaries, commissions, travel and general office account for approximately 30% of
the total expense budget. Over the next three years the ORL will not need to
expand either its office space or the number of paid full time employees because
the operation is fully automated. The official ORL website offers a host of online
services including event registration, annual equipment registration and
membership application and processing. The Spec Racing Program also
significantly reduces the volume of participant inquiries so from a customer service
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71. standpoint the ORL is adequately staffed even assuming significant growth in
membership.
The Spec Racing Program also requires only minor maintenance from a
rules review and amendment standpoint, thus obviating the need for any additional
personnel dedicated to that task. The same applies to the enforcement aspects of
the Program at the events. The technical inspection team is adequately staffed and
compensated for the next three years even assuming a 30% increase in the fleet.
Moreover, even if the need for additional personnel arose, these would be part-time
modestly paid sub-contractors who would render services on an event-by-event
basis.
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72. Promotion and Public Relations
(FILL IN)
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73. Internet
Drew Corn manages the website. He is currently redesigning the site for the
upcoming season. Adding a “Store” is his top priority and he is working with Tim
Green on this project. The site will be used for news, information on upcoming
events, event results, and company generated press releases relating to events and
the overall business.
(FILL IN)
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74. The Market
The relevant market of potential consumers of the ORL and Newco products
is the recreational boating industry. In 2001 nearly 70,000,000 people participated
in recreational boating activities in the United States. Consumers, moreover, spent
more than $25,000,000,000.00 at retail in 2001 for new and used boats, motors and
engines, trailers, accessories and other associated costs.
In addition, there are now over 15 million registered powerboat owners in
the US alone and that number is growing annually. These numbers should grow as
the US economy continues its recovery.
ORL is uniquely positioned to capitalize on this growing market for three main
reasons: First, the primary and nearly exclusive event sales and marketing tool for
the marine industry today is the boatshow. These exhibitions are generally static
displays of available boats, engines and marine accessories but offer little to no
entertainment value to the consumer. ORL events offer the same display
opportunities, plus a unique entertainment, VIP and corporate hospitality
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75. environment sponsors. In addition, ORL events offer perfect opportunities for
poker runs that benefit the high performance boat builders and dealers, and
excursion/getaway opportunities for cruiser and yacht makers and their dealers.
ORL events also offer a very different interactive experience for consumers from
the high-pressure environment of the typical boat show.
Second, since GM provides nearly all of the engines for the inboard marine
industry, ORL offers GM a unique opportunity to communicate its “under the
hatch under the hood” message directly to its target truck and SUV customers (i.e.
non-GM vehicle owners who do own GM powered boats) without the usual
competition from other automakers. In short, GM values the ORL relationship
because it produces incremental truck and SUV sales in a cost effective manner.
Third, GM is the exclusive supplier of inboard engines to Brunswick owned
Mercury Marine, which in turn is the largest supplier of marine power to the multi-
billion dollar portfolio of Brunswick owned boat companies. Since Mercury
historically has been the dominant force in offshore racing engine and propulsion
systems, it has a similar opportunity to communicate directly with its target
customers at every level of its product offerings without interference from its
competition. The synergies of all three companies create a very compelling
business case for a joint sales, marketing and promotional effort around the ORL
events and television product.
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