MARKETING STRATEGY

The following is an outline of our international distribution strategy and information regarding our activity in the global marketplace.

I. PRELIMINARY PREPARATIONS

A. Prepare publicity materials and artwork:

1. Catalog/flyer

2. Information sheet/synopsis

3. Posters

4. Media kits

B. Prepare demonstration viewing cassette:

1. Trailer (if necessary)

2. Compile one or two best episodes

II. INTRODUCTORY MARKETING EFFORTS

A. Send Mailer:

1. Fax and send catalog/flyer, synopsis and letter introducing series to all clients, about 4,150, advising them of the new releases.

2. Send above as well as demonstration viewing cassette to approximately 300 of the most prominent worldwide buyers targeted for the specific program.

B. Trade Magazines:

1. Publish articles/PR releases introducing series

2. Place advertisements

3. Place inserts in registration bags given to all participants, buyers and attendees - MIPCOM, MIPTV (approximately 12,000 per show).

III. EXHIBITION - CONVENTIONS / TRADE SHOWS:

A. Send mailer to all clients via fax and mail (including flyers)prior to each major convention.

B. Place catalogs in all buyers' mail drop boxes, hotel rooms, or stands.

C. Advertise in trade/convention magazines as well as market directories/listings.

D. Exhibit and attend at least a half dozen of the following conventions (with an exhibitor's stand):

IV. BASIC FACTS ABOUT POWERSPORTS

A. Client list - Approximately 4,150

B. Country base - Over 113 territorie

C. Duration of international distribution experience - 12 years.

D. Personal relationships with several hundred buyers of the world's leading multimedia, television, cable and video distribution firms/networks.

E. Rights distributed - Television, cable, pay television satellite, closed circuit television, home video, public video, laser disc, airline exhibition, hotels, military networks, sponsorship, CDV, CDI, CD-ROM, syndication, satellite.

F. Revenue and Net Operating Profit have both increased consistently in the past five years - Both have more than doubled in the last three.

BRIEF HISTORY

Founded in 1983, Powersports Millennium International was established as a video distributor in three key markets; the United States, Canada and Japan, for the predominantly niche video markets of motorsports videos. At the time, its product line consisted of over 120 annual releases of different racing circuits from around the world such as; Motorcycle Grand Prix, Superbikes, Trials, World Sports Car, Motorcross, Rally and Formula I. In addition, the line included many annual and special events such as; Paris - Dakar, Trans Amazon Race, Camel Trophy, Baja 1000 and LeMans.

In Japan, Powersports Video Japan, became the first sell-through video label to price cassettes at viable sell-through prices and established a distribution network which included convenience stores, auto part chains, gas stations and many other nontraditional outlets for the first time in the Japanese market.

In North America, the line was distributed through the normal video channels as well as by forming long term alliances and cross-promotions with major motorcycle /automotive part manufactures and distributors. In addition, Powersports programming was sold via revenue-sharing programs with targeted magazines and specialty mail order catalogs - it was one of the first lines to do so in the United States.

After establishing itself as a leader in the motorsports video market, Powersports began its international distribution network and a broader video line for domestic distribution. The new line consisted of general release titles which included documentary programs, sports, specials, cartoon and children's programming, special interest video and feature films. These were distributed domestically via all major video distributors, outlets, retail chains and mass market department stores.

As the domestic market began a down turn due to saturation, Powersports Millennium International again found itself adapting to meet a changing environment and increased its involvement in the international arena. At that time, the line was also altered to appeal to a broader audience and the variety in tastes of the international marketplace - while still distributing sports programs, the catalog was expanded to include more documentaries dealing with cultural, historical, ethnological, natural or political issues and programs of different genres. The change also ensured a long Product Life Cycle (or shelf life) of the programs distributed. In another shift at the same time, more of the programs were targeted towards the growth markets of television stations and cable carriers which sprung across the globe over the past decade while maintaining their appeal to the video, LD and CD consumers.

As its international activity grew, Powersports Millennium International ceased limiting distribution of its programs or those which it acquired and commenced the distribution of external producers' programs/series as well as began its involvement in co-productions projects- Some of which are the following (in chronological order):

THE NATURAL WONDERS OF EUROPE (12x52 min.) - A Warner Brothers co-production, this 12-part series was the first major continuity documentary series we distributed. Produced at close to $4 million, this series was placed in over 80 territories; a 3-part re-edited video set was acquired by Reader's Digest for worldwide home video rights.

ADVENTURE (42x48 min.) - An extreme sports series filmed in over fifty countries and six continents, ADVENTURE cost over $10 million to produce and has already been sold to seventy countries - it is still one of our best selling series.

THE CULTURAL CITIES OF CHINA (13x52 min. + 90 min. pilot) - Initiated by the Chinese government and Ministry of Cultural Affairs, THE CULTURAL CITIES OF CHINA was produced under the State Television station at Hubei Province (population - 100 million) and involved the cooperation of 27 provincial stations across China - It is hailed as the world's most comprehensive series ever produced about the world's most populous nation. Among its many licensees is Betafilm/Taurus Film (Kirch Gruppe) who has licensed the series for a 15-year period to all of German-speaking Europe and Scandinavia ( Finland, Denmark, Sweden and Norway). Besides being one of Europe's largest entertainment conglomerates, Betafilm has controlled most of Viacom's and Paramount's libraries for 12-15 years on a Pan-European basis (including the three Star Trek series, Baywatch etc.).

THE THREE LITTLE PIGS (70 min.) - The first ever full length feature on this timeless tale, THE THREE LITTLE PIGS, completed March 6, 1994, sold over 120,000 units through Polygram in its first two weeks of release in France alone. Polygram Video has released it in over 25 of the world's leading markets including the United Kingdom, Australia, Italy, Spain and Germany. In addition, Alliance Releasing has acquired the Canadian rights for the THREE LILLE PIGS.

DESTINATIONS (26x52 min. ;Still in production) - This 26- part cultural, heritage and travel series co-produced by Warner Brothers and La Cinquieme of France has already been sold in 30 markets worldwide. The French-speaking European home video rights are held by Warner Brothers and the German - Speaking European home video rights have been licensed by Bertlesmann (the world's largest mail order company and owner of BMG- one of the world's top five biggest music companies).

THE MYSTERIES OF JERUSALEM (3x52 min.)- The combined effort of a dozen national networks and three private production companies, THE MYSTERIES OF JERUSALEM explores three mystifying ancient mysteries. Filmed by the award-winning filmmaker who produced MYSTERIES OF THE DEAD SEA SCROLLS, this 3-part series has already generated an immense interest by approximately 200 of the world's most prominent television networks, video distributors and cable stations.

THE PEOPLE & PLACES OF AFRICA (13 X 26 min.)- An epic series of discovery, THE PEOPLE & PLACES OF AFRICA is an ethnological/cultural journey exploring the indigenous peoples and marvels of nature of this intriguing continent. It was produced by Nova-T S.P.A.of Italy in conjunction with Powersports.

ACTION ADVENTURE AFRICA (13 X 26 min.; Still in production)- Produced by a South African outfit, ACTION ADVENTURE AFRICA is a captivating sports/travel adventure series capturing the excitement and unique experiences only Africa can offer.

FAVORITE CITIES OF THE NEXT MILLENNIUM (6 X 52 min.) - Produced by the same people who shot THE NATURAL WONDERS OF EUROPE, this series depicts the six European cities that have had the largest increase in tourism over the past decade and are hailed as the future centers of travel in Europe. FAVORITE CITIES OF THE NEXT MILLENNIUM has already been licensed in over 45 countries; Among its licensees are Reader's Digest who is selling the series in France and Betafilm/Taurus Film (Kirch Gruppe) who has just acquired it for German-speaking Europe.

FRIEND OR FOE (60 min.; aka NEIGHBOR OR FOE)- Filmed over a period of eleven years, the award-winning FRIEND OR FOE, is a reality documentary about the hardship of co-existence between Arabs and Jews in the Old City Of Jerusalem. The program has been placed at over 30 national and commercial networks including the following: WDR (Germany), NHK (Japan), Canal Plus (Spain), Sveriges Tv (Sweden), Poltel (Poland), Danmarks Radio (Denmark), NOS (Netherlands), ORF (Austria) and France 2(France).

In addition to the above listed co-productions, Powersports also internationally distributes programs from independent producers. About 40-50% of the programs featured in our catalog originates from such external sources.

We also own a constantly increasing slate of original programming which represents approximately one-third of the programs we distribute. Usually our productions are specials or unique productions which never compete with the other titles we distribute. Powersports has produced 20-30 annual hours for several years - This number of programming hours will probably remain static, however, their budgets (as they have been in recent years) will increase.

Today, the source of most of our revenues is international licensing. Our domestic distribution, (besides sub-licensing), consists of three main genres: Extreme Sports, New Age and Documentaries. We have maintained client relationships that have been formed since our establishment. Beyond that, we have built new alliances and long-term distribution agreements with major and specialty distributors to target the best venues for each property individually. In addition, we heavily distribute our videos domestically via direct marketing through television and magazine advertisements (some of our programs sold over 300,000 units to date and are still selling) and mail-order catalogs.

Over the past few years, Powersports has grown to become a prominent player in international distribution - our client base consists of 4,100 clients and spans 110 territories. We offer the flexibility of an independent producer and distributor, while keeping the standards and servicing of a major. For that reason, we have been successful in working with firms as varied as our product line- From the largest entertainment conglomerates to the smallest distributors. We have also been pioneers in the world's opening markets and developing technology. Our organization and flexibility have allowed us to continuously adapt our marketing strategy and place ourselves according to the dynamics and changing demands of the international marketplace. Our Revenue and New Operating Profit have both increased consistently in the past five years - Both have more than doubled in the last three.