X0202 4 2006-09-18 0 0001114908 Challenger Powerboats, Inc. CPWB 0001373202 Dutchess Capital Management 50 COMMONWEALTH AVENUE SUITE 2 BOSTON MA 02116 0 0 1 0 Common Stock 2006-09-18 4 J 0 250000 0 A 23177071 I See footnote Common Stock 2006-09-29 4 J 0 300000 0 A 23477071 I See footnote Common Stock 2006-09-29 4 J 0 300000 0 A 23777071 I See footnote Common Stock 2006-10-12 4 J 0 250000 0 A 24027071 I See footnote Common Stock 2006-10-25 4 J 0 250000 0 A 24277071 I See footnote Common Stock 2006-11-10 4 J 0 250000 0 A 24527071 I See footnote Convertible Debenture 0 2006-09-26 4 J 0 336500 280000 A 2006-09-26 2011-09-26 common 336500 8311280 I See footnote Convertible Debenture 0 2006-09-26 4 J 0 446400 372000 A 2006-09-26 2011-09-26 common 446400 8757680 I See footnote Convertible Debenture 0 2006-10-11 4 J 0 255600 213000 A 2006-10-11 2011-10-11 common 255600 9013280 I See footnote Convertible Debenture 0 2006-10-24 4 J 0 195600 163000 A 2006-10-24 2011-10-24 common 195600 9208880 I See footnote Convertible Debenture 0 2006-11-10 4 J 0 243600 203000 A 2006-11-10 2011-11-10 common 243600 9452480 I See footnote The shares were issued as an inducement for an investment. The shares are owned indirectly through Dutchess Private Equities Fund II, L.P. Dutchess Capital Management, LLC is General Partner to Dutchess Private Equities Fund II, L.P. The shares are owned indirectly through Dutchess Private Equities Fund, L.P. Dutchess Capital Management, LLC is General Partner to Dutchess Private Equities Fund, L.P. The Holder is entitled to convert the face amount of the debentures plus accrued interest into the Company's common stock at the lesser of (i) 75% of the lowest closing bid price during the fifteen trading days prior to the Conversion Date or (ii) at a Fixed Conversion Price of $0.03. Purchase of Convertible Debentures The debentures are owned indirectly through Dutchess Private Equities Fund L.P. Dutchess Capital Management, LLC is General Partner to Dutchess Private Equities Fund, L.P. The debentures are owned indirectly through Dutchess Private Equities Fund II, L.P. Dutchess Capital Management, LLC is General Partner to Dutchess Private Equities Fund II, L.P. /s/Douglas Leighton 2006-11-22