AVP Pro Beach Volleyball Tour Announces 2004 Year-End Results

AVP Pro Beach Volleyball Tour Announces 2004 Year-End Results

LOS ANGELES, April 12 /PRNewswire-FirstCall/ -- AVP, Inc. (BULLETIN BOARD: AVPN) today announced financial results for the year-ended December 31, 2004 for its wholly owned subsidiary Pro Beach Volleyball Tour, Inc. ("AVP"), a lifestyle sports entertainment company focused on professional beach volleyball events. For the full year 2004, AVP reported a 69% increase in revenues to $12.3 million as compared to full year 2003 revenues of $7.3 million. Net loss was $(2.9) million, compared to $(3.7) million for the prior year.

Financial Highlights: * 2004 revenues increased 69% to $12.3 million compared to revenues of $7.3 million in 2003 * 2004 sponsorship revenue increased 59% to $9.9 million * Net loss narrowed to $(2.9) million in 2004 from $(3.7) million in 2003, a 22% improvement * Number of events increased to 12 in 2004 from 10 events in 2003 * Broadcasting hours reached a record 50.5 hours in 2004 * Average same broadcast ratings increased in 2004 compared to 2003; for example, Belmar event ratings were up 27%, Las Vegas ratings were up 18% * Total event attendance increased to 808,000 in 2004 from 565,000 in 2003, a 43% increase

"We are pleased with AVP's improved operating performance in 2004," said Leonard Armato, Chief Executive Officer of AVP. "We achieved significant growth in nearly every aspect of our business including number of events, attendance, and television/media exposure. Furthermore, we generated strong sponsorship and advertising support as a result of integrating branded content into AVP competition and lifestyle programming through AVP's proprietary Exclusive Brand Integration ("EBI") System(TM). Given our new status as a public company, we feel that we are well-positioned to leverage our growth in 2004 to further expand our business. We are continuing to successfully build our platform through new sponsorships and extending the reach of our events to the benefit of our shareholders and fan base."

Subsequent to the end of year, AVP completed a private placement and a merger with AVP, Inc. (formerly Othnet, Inc.). As a result of this merger, AVP has become a public company, trading on the OTC bulletin board under the symbol "AVPN.OB."

Summary Results for the Year-Ended December 31, 2004

Sponsorship revenues grew to $9.9 million in 2004, an increase of 59% over 2003 sponsorship revenues. National sponsors receive extensive television exposure and significant on-site promotional opportunities along with the right to affiliate themselves with the AVP Pro Beach Volleyball Tour. The increase in sponsorship revenues was due primarily to new agreements with several blue-chip partners. AVP's sponsorship base includes internationally recognized brands such as Nissan, Anheuser-Busch, Pepsi, Gatorade, McDonald's, Wilson and Microsoft. Other revenues include revenues from such activities as event ticket sales and corporate hospitality packages, merchandising, concession rights, licensing, activation services and sanctioning fees. Other revenue grew to $2.4 million in 2004 from $1.1 million in 2003, representing a year-over-year growth of 123%.

Cost of revenues totaled $9.1 million in 2004 related primarily to event production costs for the Company's 12 events. Cost of revenues in 2003 was $6.5 million for 10 events. Marketing and administrative expenses were $5.9 million for 2004, compared to $4.2 million in 2003, reflecting increased advertising and promotion and professional costs associated with growth in the number of events and other business opportunities.

Operating loss for the full year decreased to $(2.7) million in 2004 from $(3.4) million for the full year 2003. With other income/expense of $(178,685) in 2004, net loss narrowed to $(2.9) million in 2004, an improvement from $(3.7) million in 2003. The Company continues to work diligently towards profitability.

Giving effect to the Company's successful private placement completed in February 2005, the Company has approximately $680,000 in long-term debt and $4.8 million in cash and short-term investments available as of March 31, 2005.

"Our focus on integrated sponsorship sales and other previously unexploited revenue sources has allowed us to significantly increase revenues," said Andy Reif, AVP's Chief Operating Officer and Chief Financial Officer. "We expect to continue to see improvements in our business if we successfully execute on our strategy in the coming year to increase our sponsorship base, our media platform and the number of AVP events."

About AVP Pro Beach Volleyball Tour, Inc.

AVP Pro Beach Volleyball Tour, Inc. ("AVP"), the wholly owned subsidiary of AVP, Inc. (BULLETIN BOARD: AVPN) , is a leading lifestyle sports entertainment company focused on the production of U.S. professional beach volleyball events and marketing and distributing them worldwide. AVP operates the industry's most prominent national touring series, the AVP Pro Beach Volleyball Tour, which was organized in 1983. Featuring more than 150 of the top American men and women competitors in the sport, AVP will stage 14 events throughout the United States in 2005. All tournaments will be televised live (or same day) on Fox Sports Net, NBC Sports or OLN. Professional beach volleyball is one of the most exciting and fastest growing sports in the United States today. In 2004, AVP athletes successfully represented the United States during the Olympics in Athens, Greece, winning gold and bronze medals, the first medals won by U.S. women in professional beach volleyball. For more information, please visit www.avp.com.

Forward Looking Statements

This news release contains forward-looking statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties. Forward-looking statements relate to expectations concerning matters that are not historical facts. Words such as "projects," "believes," "anticipates," "plans," "expects," "intends" and similar words and expressions are intended to identify forward-looking statements. The Company believes that the expectations reflected in the forward-looking statements are reasonable, but cannot assure you that those expectations will prove to be correct. Important factors that could cause the Company's actual results to differ materially from those expectations that are disclosed in this press release include, without limitation, risks and uncertainties associated with the conditions of the markets for live events, broadcast television, cable television, Internet, entertainment, professional sports, and licensed merchandise; acceptance of the Company's brands, media and merchandise within those markets; uncertainties relating to litigation; risks associated with producing live events both domestically and internationally; uncertainties associated with international markets; risks relating to maintaining and renewing key agreements, including television distribution agreements; and other risks and factors set forth from time to time in Company filings with the Securities and Exchange Commission. Actual results could differ materially from those currently expected or anticipated. The Company does not undertake any obligation to update any forward-looking statements.

All above mentioned trademarks are the property of their respective owners.

AVP PRO BEACH VOLLEYBALL TOUR, INC. (formerly Association of Volleyball Professionals, Inc.) Statement of Operations

Year Ended December 31, 2004 2003

REVENUE Sponsorships $9,918,117 $6,222,371 Other 2,390,888 1,071,757 TOTAL REVENUE 12,309,005 7,294,128

EVENT COSTS 9,125,829 6,506,613 Gross Profit 3,183,176 787,515

OPERATING EXPENSES Marketing 2,435,124 2,024,572 Administrative 3,442,479 2,184,557 TOTAL OPERATING EXPENSE 5,877,603 4,209,129

OPERATING LOSS (2,694,427) (3,421,614)

OTHER INCOME (EXPENSE) Interest expense (245,870) (182,396) Interest income 67,185 87,751 Joint venture loss -- (184,712) TOTAL OTHER EXPENSE (178,685) (279,357)

LOSS BEFORE INCOME TAXES (2,873,112) (3,700,971)

INCOME TAXES -- --

NET LOSS $(2,873,112) $(3,700,971)

AVP PRO BEACH VOLLEYBALL TOUR, INC. (formerly Association of Volleyball Professionals, Inc.) Balance Sheet

December 31, 2004 ASSETS CURRENT ASSETS Cash $631,933 Accounts receivable, net of allowance for doubtful accounts of $10,000 649,137 Prepaid expenses 26,606 Deferred commission-related party 253,339 TOTAL CURRENT ASSETS 1,561,015

PROPERTY AND EQUIPMENT, net 201,703

OTHER ASSETS Investment in sales-type lease 628,323 Other assets 42,738 TOTAL OTHER ASSETS 671,061

TOTAL ASSETS $2,433,779

LIABILITIES AND STOCKHOLDERS' DEFICIENCY CURRENT LIABILITIES Notes payable - related party $2,000,000 Current portion of long-term debt 1,633,333 Accounts payable 57,157 Accrued expenses 790,368 Accrued interest 316,630 Accrued officer compensation 43,208 Deferred revenue 325,050 TOTAL CURRENT LIABILITIES 5,165,746

OTHER LIABILITIES Deferred revenue 225,000 Long-term debt - less current portion 1,100,071 TOTAL OTHER LIABILITIES 1,325,071

TOTAL LIABILITIES 6,490,817

REDEEMABLE SERIES A PREFERRED STOCK 3,657,600

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY Preferred stock $.0001 par value, 4,950,000 shares authorized, no shares issued and outstanding --

Common stock $.0001 par value, 22,110,000 shares authorized, 4,443,944 shares issued and outstanding 444

Additional paid-in capital 998,868

ACCUMULATED DEFICIT (8,713,950)

TOTAL STOCKHOLDERS' DEFICIENCY (7,714,638)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $2,433,779

AVP PRO BEACH VOLLEYBALL TOUR, INC. (formerly Association of Volleyball Professionals, Inc.) Statement of Cash Flows

Year Ended December 31, 2004 2003

CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(2,873,112) $(3,700,971) Adjustments to reconcile net loss to net cash flows from operating activities: Depreciation and amortization of property and equipment 57,561 14,529 Other amortization 6,033 8,043 Amortization of deferred commissions 294,904 609,256 Allowance for doubtful accounts 10,000 -- Amortization of deferred costs 1,352,100 387,500 Compensation from issuance of stock options -- 3,809 Decrease (increase) in operating assets: Accounts receivables (169,442) (451,483) Investment in and due from joint venture 291,084 (291,084) Prepaid expenses (26,606) 58,994 Other assets (1,305) (15,466) Increase (decrease) in operating liabilities: Accounts payable (625,052) 35,046 Accrued expenses 211,950 305,932 Accrued officer compensation (167,625) 210,833 Accrued interest 245,871 -- Deferred revenue 275,050 (112,500)

NET CASH FLOWS FROM OPERATING ACTIVITIES (1,118,589) (2,937,562)

CASH FLOWS FROM INVESTING ACTIVITIES Investment in property and equipment (228,416) (25,722) Investment in sales-type lease 91,215 42,344 Cash received in acquisition -- 769,450

NET CASH FLOWS FROM INVESTING ACTIVITIES (137,201) 786,072

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term debt 2,000,000 1,217,238 Repayment of long-term debt (183,333) (80,000) Decrease in payable to DMC and other related party debt -- (65,995) Issuance of preferred stock -- 910,000

NET CASH FLOWS FROM FINANCING ACTIVITIES 1,816,667 1,981,243

NET INCREASE (DECREASE) IN CASH 560,877 (170,247)

CASH, BEGINNING OF YEAR 71,056 241,303

CASH, END OF YEAR $631,933 $71,056

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the period for: Interest $48,939 $-- Income taxes -- --

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING INFORMATION Note payable incurred in connection with stock redemption $-- $550,000

Note payable incurred in connection with the acquisition of commission rights -- 1,157,499

Conversion of intercompany payable and loan payable to officer and stockholder into common stock -- 1,991,819

Issuance of preferred stock for deferred costs -- 1,739,600

Source: AVP Pro Beach Volleyball Tour, Inc.

CONTACT: Andrew Reif, Chief Operating Officer and Chief Financial Officer of AVP Pro Beach Volleyball Tour, Inc., +1-310-426-8000, areif@avp.com; or General Information and Investor Inquiries, Amy Cozamanis of Financial Relations Board, +1-310-854-8314, acozamanis@financialrelationsboard.com, for AVP Pro Beach Volleyball Tour, Inc.

Web site: http://www.avp.com/

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