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OTC Journal Members:
The investment community loves biotech
companies because the upside potential is enormous. Biotech companies may
spend years and hundreds of millions of dollars developing exciting new
drugs and therapies. Along the way, the market begins assigning a value
to the company as progress is made. As a biotech companies moves through
the various studies and clinical trials of a new drug, both positive and
negative results drive the stock up and down. Successful new drug introductions
can yield billions in profits over the long term.
Long before the company generates
revenues from a new drug the market has assigned a value. The market was
willing to drive the price of Immclone (NASDAQ: IMCL) up to $75
as early results from its new cancer drug Erbitux were promising.
Once the FDA determined early studies were flawed, the stock dropped below
10% of its previous high. Now, the stock is beginning to trade up again
as the company has submitted new trial plans, in partnership with Bristol
Myers, to the FDA.
Today's idea is tailored made for
the same investors who like the risk oriented upside of a biotech idea.
However, we love this one because it has the upside potential of a biotech
company without most of the downside risk. Over the next five years this
company could enjoy millions of dollars in profits off properties it is
developing right now without spending hundreds of millions of dollars to
get there. They are doing it with other people's money, and they have two
potential blockbuster products coming to a theater near you between now
and the end of this year, which is why you need to act today. Very few
investors know about this company, but that will change over the next three
months as millions of potential investors go to the theater and see their
For your review:
Family Room Entertainment (OTC BB: FMLY)
Family Room Entertainment
develops, produces and performs production related services for the entertainment
industry mainly through its wholly owned subsidiary Emmett/Furla
Films Productions Corporation. Primarily, it's a film production
company. Family Room also has a music and theater division.
After three years of proving themselves
to the movie industry, wholly owned subsidiary Emmet/Furla Productions
has its first two major theatrical releases coming to theaters between
now and the end of the year. Half
Past Dead, staring Steven Seagal and Nia Peeples,
and rapper JaRule, premiers on November 15th.
Their second movie, Narc,
starring Ray Liotta and Jason Patric, has been coproduced
by Tom Cruise. There is best actor Oscar buzz associated with Ray
Liotta on this film. It is scheduled to premier in theaters on December
Family Room has been producing
and coproducing movies for three years, and has finally made a successful
transition to the big time with these major films.
Today, just after the market closed,
Room announced the completion of the filming of their second Seagal
feature, Out For A Kill, and the signing of Val Kilmer to
play the lead role in the upcoming feature they will produce entitled
Horizon. Evidence is building of this company's potential as they continue
to fill their pipeline with properties.
Model- BioTech Upside Without the Risk
Millions of dollars are made in Hollywood
from successful movies. Hundreds of millions of dollars are made from successful
franchise movie series- i.e. Austin Powers, Star Wars, Harry Potter, etc.
The movie industry has two major
segments- Production and Distribution. Distribution requires enormous capital
expenditure, and is handled by the major names like Paramount, Warner Brothers,
MGM, and Sony.
The production process requires the
funding of the hard costs associated with making a film, which include
actors salaries, crew, location, etc. Emmett/Furla Productions,
the wholly owned subsidiary of Family Room, is an independent producer
which obtains financing for the hard costs of production, and then retains
anywhere from 10% to 50% of the profits throughout the life of a film.
Therefore, a successful movie can provide cash flow and profits for years
after the movie is released, with the first real moneys coming in about
15 months after hitting the box office.
Over the past three years, Emmett/Furla
developed a reputation for getting big name actors recruited, and delivering
a movie on budget and on time. Therefore, demand is increasing for their
services. In order to achieve this reputation, they spent three years producing
the following list of films, most of which went straight to content hungry
|Run For the Money
||Christian Slater, Val Kilmer,
||Johnathan Tayor Thomas, Tiffani
|Held For Ransom
|I'm Over Here Now
||Andrew "Dice" Clay
||Charlie Sheen, Denise Richards,
and Angie Harmon (Sheen and Richards met on this fill and got married)
||Billy Bob Thorton, Patricia Arquette
||Steven Seagal, Tom Sizemore
||Elijah Wood, Mandy Moore
||Ky-Mani Marley, Spragga Benz
With the exception of Speedway
Junky, Try 17, and Shottas all of these films went directly
to cable. These films allowed
Emmett/Furla to establish a reputation
for delivering films on time and on budget.
Speedway Junky, Held For Ransom,
and After Sex could begin to spin out residual revenues for Emmet/Furla
in 2003. Money will flow in with no cost associated. Amounts could range
from $250,000 to $2 million over the life of each film. This money will
be bio-tech like profits, as all the costs have already been defrayed.
However, these have minimal potential as compared to the two movies coming
out later this year.
Emmett/Furla has made the
transition to the big time with this year's upcoming releases and projects
in the pipeline. Here are quick overviews of the two due out this year:
Half Past Dead, starring Steven
Seagal and popular rapper JaRule, premiers in movie theaters
on November 15th. In this movie a criminal (Morris Chestnut) tries to sneak
into a high tech, futurist prison at Alcatraz. His intent- to find out
where death row inmate has hidden $200 million worth of gold. Just click
on the logo to visit the film's web site.
The plan is sabotaged by undercover
FBI agent Steven Seagal. This movie is already being heavily promoted
on billboards, buses, and TV nationwide. We first saw a TV ad during the
seventh game of the World Series.
Seagal's action films have
a long history of profitability. His 2001 film, entitled Exit Wounds,
featured rapper DMX, which expands the demographic target audience
significantly. The film cost $33 million to produce, and did $18.5 million
at the box office opening weekend. The film grossed $52 million before
going to DVD and subsequently to cable, where the real profits are made.
Seagal's action films have
a history of commercial success. Under Siege, which premiered in
1992, cost $12 million to produce. The film did $14.5 million opening weekend,
eventually grossed $73 million, and has since generated $154 million worldwide
and $37 million in rental fees.
starring Ray Liotta and Jason Patrick is scheduled to debut in theaters
on December 20th. According to the NY Post: "Ray Liotta gives his strongest
performance since "GoodFellas" as a dirty Detroit cop who recruits a disgraced
narcotics officer (Jason Patric) to hunt down his partner's killer. Joe
Carnahan's gritty indie makes the similar "Training Day" look like a Disney
flick by comparison." Just click on the logo to visit the film's web site.
Produced for a mere $7.5 million
budget, this movie promises to be one of the biggest box office successes
of 2002. Ray Liotta is being talked about for an Oscar nomination
for his performance.
This movie met with tremendous critical
acclaim at the Sundance Film Festival. Lion's Gate, which had acquired
the distribution rights when the film was in its infancy, sold part of
its rights to Paramount.
Emmett/Furla coproduced this
movie along with Tom Cruise's Cruise/Wagner productions. This movie
has the potential to be a box office blockbuster and huge money maker.
Valuation and Upside Potential
Family Room closed today at
$.40. With approximately 19 million shares issued and outstanding, the
market value of the entire company is only $7.6 million.
In mid 2001, the stock was hot for
a brief period, and traded to nearly $2 on the heels of announcements concerning
Volume has been picking up in the
stock recently as investors are starting to understand the potential magnitude
of the upcoming major theatrical releases for Family Room's future
bottom line. Today, the stock traded the highest volume it has this year,
posting 478,000 shares of volume. Fortunately for our subscribers, the
stock did not move up dramatically in price.
Like a biotech company, their products
are finally finding their way to the market. Unlike a biotech company,
they didn't have to spend $2 billion to get to this point.
This stock should now begin to trade
more efficiently as these movies become commercially successful. In the
meantime, Emmett/Furla productions is already on to other projects.
Today, just after the market closed,
Room announced they just completed the filming of another
Seagal movie slated for release in the Spring, and signed
play the starring role in upcoming thriller "Blind Horizon".
As more film properties get released,
Room's potential for windfall profits grows dramatically. Unlike other
independent production companies, Family Room's annual overhead
is minuscule. Cochairmen Randall Emmett and George Furla don't even take
salaries out of the company. They take income out of production budgets
which are financed with other people's money.
If one of their projects develops
into a franchise film series the company could enjoy hundreds of millions
in profits. Their relationship with Steven Seagal holds that promise, just
as the Chuck Norris character in the Missing in Action series, Sylvester
Stallone in Rocky and Rambo, and many others did in the past.
We can easily see this company with
a $25 million market cap this year as these new films hit
the box office. This would put the stock at $1.30. A more realistic
short term target would be $.80 to $.90 as investors catch
on to Family Room. Allow at least 30 days for this stock to pick
up steam. In the interim, a 20% stop loss would be prudent if the market
trades against us.
Go to the theaters and see their
upcoming films. Decide for yourself if you feel this company is on the
verge of a major break out.
Here is the complete text of today's
news release for your review:
|Press Release Source:
Family Room Finishes
Going ``Out for a Kill'' and Sees the ``Blind Horizon''
Friday November 1, 4:15
WIRE)--Nov. 1, 2002--Emmett/Furla Films, a wholly owned subsidiary of Family
Room Entertainment Corporation (OTCBB:FMLY - News) is pleased to announce
the completion of principal photography on "Out for a Kill" as well as
announcing that Val Kilmer has committed to the lead role in their forthcoming
production, "Blind Horizon."
"Out for a Kill," an
action picture set within the backdrop of the drug wars, is written by
Dennis Dimster-Denk. Michael Oblowitz is set to direct this picture. "Out
for a Kill", was originally announced on May 20, 2002, when "Daily Variety"
reported: "Actor-producer Steven Segal has launched a production and sales
company, Luminosity Media. He will produce and star in its first two projects
in conjunction with Millennium/Nu Image. The pictures are `Belly of the
Beast' and `Out for a Kill.'"
In the picture "Blind
Horizon", Val Kilmer has agreed to play "Frank," a gunshot amnesia victim
who warns a small town sheriff about an assassination plot against the
President during his campaign tour, and must uncover a conspiracy and his
role in the plot. The screenplay was written by F. Paul Benz and Steve
Tomlin. Newman/Tooley's Vincent Newman and Tucker Tooley as well as Emmett/Furla's
Randall Emmett and George Furla will produce the picture. Chris Bender
and J.C. Spink are also attached as co-executive producers. Michael Haussman
is set to direct.
Haussman, who hails from
the world of commercials and music videos, has garnered attention for his
spots for Levi's, Dockers, and Phillips, as well as his music videos, such
as Madonna's "Take a Bow." He is also attached to direct "Takedown" for
Jerry Bruckheimer Productions and Disney.
for "Blind Horizon" is scheduled to commence in December in New Mexico.
The picture is being funded in conjunction with New Mexico's Film Investment
Forward Looking Statement:
Safe Harbor: Statements
contained in this news release which are not historical facts are forward-looking
statements as defined in the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are subject to risks and uncertainties,
which could cause results to differ materially from those projected.
This news release contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "ACT"). In particular, when used in
the preceding discussion, the words "plan," "confident that," "believe,"
"expect," "intend to" and similar conditional expressions are intended
to identify forward- looking statements within the meaning of the ACT and
are subject to risks and uncertainties, and actual results could differ
materially from those expressed in any forward-looking statements. Such
risks and uncertainties include, but are not limited to, market conditions,
competitive factors, the ability to successfully complete additional financings
and other risks.
Emmett/Furla Films, Los Angeles
M. Dal Walton, III, 323/850-2868
Charts Provided Courtesy
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