Maverick Motorsports “Cutting Edge Technology, Vintage Style”

“Cutting Edge Technology, Vintage Style”

Overview Sports Car Club of America (SCCA) Solo II Racing Market Growing Solo II demographic: 51% of all interest in SCCA lies in the Solo Classes Good future investment plan to focus on this growing demographic (SCCA Membership Demographic Profile. Compiled March 2006)

Market Demographic Approximately 55,000 Members Median Age: 45 60% in the age group 58% are in professional or managerial positions 38% of SCCA members are primarily interested in Solo Class Racing 78% of SCCA members participate in racing events (SCCA Membership Demographic Profile. Compiled March 2006)

SCCA Buying Influence Earnings: 89% earn $50,000 or more annually Average household income is above $128,000 annually Purchasing Habits Mean average SCCA member owns 1 competition car 64% purchased a car over the past 2 years 32% plan to purchase a car in the next 12 months 83% purchase automotive accessories and equipment over the internet (SCCA Membership Demographic Profile. Compiled March 2006)

Objective Maverick Motorsports meeting the demand Designed with customer desired features and capabilities Ready for production

Performance and Profit Chassis Lightweight 1020 DOM Space frame 600 RR Engine Common production engine with high availability rate and great customer support Suspension Easily tunable to different track layouts Drivetrain Improved design allowing for more power to the track

Customer Purchasing Options E-85 or Gasoline tuned engine option upon customer request Tailored ergonomics to customers measurement Spool or Differential option upon customer request

Quality Assurance & Control Standardized Assurance System Failure Mode and Effect Analysis (FMEA) How Serious How Often How easily they can be detected

“Just in Time” System Encourage employees to take an active role in quality control Utilizing employee ideas and opinions in production processes Participate in “Kaizen” events Kaizen – Daily process that humanizes the workplace, eliminates overly hard work (both mental and physical, and teaches how to spot and eliminate waste in the business environment)

Plant Layout 14,500 ft² Fabrication Equipment  4 TIG Welders  1 CNC Mill  1 CNC Lathe  1 Band Saw  1 Tubing Bender  1 Sheet Metal Brake Plant Manning  4 Welders  2 Machinists  12 Labor Workers

Investment Profile Requires $15,492,182

Administration & Engineering$212,000 Equipment Purchase$83,067 Annual Expenses$133,645 Workforce Training$12,000 Equipment Maintenance and Upkeep$22,000

Administration and Engineering Human Resources 1 Human Resources Specialist - $37,000 Engineering & Tech Support 1 Mechanical Engineer - $50,000 1 Manufacturing Engineer - $46,000 Marketing 1 Marketing Specialist - $32,000 Finance & Accounting 1 Accountant - $34,000 Facilities 1 Janitor - $13,000 (Annual averages in Mankato, MN compiled by Total = $212,000

Equipment Purchase CNC Vertical Mill - $43,995 CNC Lathe - $23,995 4 Tig Welders - $ 9,344 Band Saw - $3958 Tubing Bender - $1,045 Sheet Metal Brake - $730 Total = $83,067

Annual Expenses Facility Rental = $ 78,445 Utilities = $23,200 Equipment Updates = $22,000 Workforce Training = $12,000 Total = $133,645

Manufacturing Cost Summary Area Totals Sub-TotalsLaborJig TimeTotal Brake System$ 1,245.20$ 69.90$ -$ 1, Engine & Drivetrain4, $ 5, Frame & Body1, $ 1, Instruments & Wiring1, $ 1, Misc. Fit & Finish $ Steering System $ Suspension & Shocks3, $ 3, Wheels & Tires1, $ 1, Vehicle Total $ 14,699.73$ $ 63.80$ 15,029.47

Vehicle Production ItemAmount Vehicle Material and Labor $15, % Markup Retail (profit) $2, Total Retail Price$17,283.89

Interest rate=14% YearInflowOutflowCash Flow Inflation Rate Discount FactorPresent ValueNPV ABC 0 $15,492,182-$15,492,1822.6% $15,492,182 1$17,283,890$0$17,283,8902.6%0.8560$14,795,009-$697,173 2$17,733,271$15,894,979$1,838,2922.6%0.7328$1,347,100$649,927 3$18,194,336$16,308,248$1,886,0882.6%0.6273$1,183,143$1,833,070 4$18,667,389$16,732,263$1,935,1262.6%0.5369$1,038,969$2,872,039 5$19,152,741$17,167,302$1,985,4392.6%0.4596$912,508$3,784,547 6$19,650,712$17,613,652$2,037,0602.6%0.3935$801,583$4,586,130 7$20,161,631$18,071,607$2,090,0242.6%0.3368$703,920$5,290,050

An initial investment of $15,490,000 will return a profit by the end of year two!

Questions?