To OTC Journal Members:
 

Family Room Entertainment (OTC BB: FMLY)- Fifth Major Project Announced

Despite the quiet activity in the stock which is trading a mere 2 cents above its all time low, activity at the company is anything but quiet. In fact, as we learned from an article in Variety Magazine, Family Room, through its wholly owned subsidiary Emmet/Furla Productions, has a fifth feature length movie in development. Here is the article which appeared in Variety:
 

In an interview with George Furla, co chairman of Family Room, we learned that the feature film SnakeSkin is in the casting process right now, and they hope to begin production by the end of the summer. Furla told us they were optimistic Snakeskin could become a franchise type movie with potential sequels in the genre of the Wesley Snipes thriller Blade. Millennium acts as the financing arm in the production.

Director Dario Piana has recently received significant critical acclaim for his work in commercials for Ferrari, Mercedes, and several music videos. Hollywood studios are constantly seeking new talent with commercial potential, so eyes with deep pockets will be interested in the outcome of this project.

Family Room now has a total of six major projects in various stages of development. This is an inordinate amount of activity for a company trading near its all time low. 
 

Family Room's Current Projects

Here's a list of the projects being managed by Family Room Entertainment, and their current status. 

• Blind Horizon- This feature length thriller starring Val Kilmer, Neve Campbell, and Sam Shepard is in post production. Major studios are showing the film to test audiences. Family Room anticipates the film will be released some time in the Fall. If it becomes a theatrical release, it has the potential to make significant profits for the company, as Family Room retains 25% of the producer profits. 
• Out For a Kill- This Steven Segal thriller is also in post production right now. Studios will be reviewing the film soon, and it is expected to go to major theatrical release. Family Room has 10% of the producer profits on this film.
• Belly of the Beast- This is the third Steven Segal thriller produced by Family Room, and is being filmed in Thailand right now. This film is also expected to go to major theatrical release. Family Room also has 10% of the producer profits on this film.
• Micronauts- Two weeks ago we covered this project. Family Room has acquired the rights to Micronauts, a very popular comic book and TV series from the late 70's and early 80's. In partnership with Hollywood heavy weight Gale Anne Hurd, Family Room intends to develop a feature length film, a TV show, and merchandise the brand. Hurd is the highly acclaimed producer of Terminator, Armageddon, and the Hulk. She is considered one of the most successful producers in the comic book/fantasy genre. Family Room and Hurd are now "pitching" the projects to the major Hollywood studios for partnerships and financing.
• Red Skelton Direct Marketing Project- As previously announced, Family Room is entering the direct marketing business. The company is producing commercials to market episodes of the Red Skelton show on VHS and DVD over cable networks. Commercials should start running in about two months.

Conclusion

As you can see from the chart, Family Room cratered in the 1st quarter when their highly anticipated feature film NARC failed to get an Academy Award nomination. 

We believe the current value of the stock is absurd when one considers the number of projects in Family Room's pipeline. At $.10 per share, the company's entire market value is only $2 million.

Family Room has access to financing of up to $150 million for films. The company collects producer fees as a film is made, which covers the ongoing overhead. They run a lean machine, with annual corporate expenses only running about $750,000. Salaries are garnered out of individual project budgets.

They also keep a percentage of the profits on every film they produce. Percentages vary depending on their level of involvement and the amount allocated for the actors and director.

If one of their movies hits over $30 million at the box office, the company will see millions in profits. For the huge home run, you will have to wait for one of their movies to hit it big.

The lows have been made and the stock is on the rebound. New projects should take the stock back into the $.15 to $.25 range. The company has six potentially profitable projects in various stages of development. 

Investors buy options for the leverage of big gains for little money. Family Room, at $.10, is like an option. A $2 million market value could be replaced with a $50 million market value with the right project. However, unlike an option, the ownership of shares of Family Room will not expire. You can hold on until they hit it big.

Click Here to view our compensation on every company we have ever covered, or visit the following web address:  http://www.otcjournal.com/disclaimer.html for our full profiles and http://www.otcjournal.com/trading-alerts/disclaimer.html for Trading Alerts. MarketByte LLC has been paid a fee of $25,000 by Family Room Entertainment for coverage through January 31, 2003. An additional 150,000 free trading shares have been paid by a third party. On February 1, 2003, Family Room extended its contract with MarketByte LLC for coverage through the remainder of 2003 for a fee of $30,000 in cash and 300,000 shares of restricted stock.

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