Newsletter

April 2, 2003

Volume VI, Issue 31

Email : info@otcjournal.com
URL : http://www.otcjournal.com

To OTC Journal Members:

Family Room (OTC BB: FMLY)- Microcap Stock Goes MicroNuts For MicroNauts

As we stated in this past weekend's edition, we felt Family Room Entertainment was the most undervalued of the six microcaps we cover.

Investors were disappointed by the poor showing at both the box office and the Academy Awards for NARC. Given the pre-release hype from all corners of the entertainment world, and the high investor expectation that Family Room had its first major home run in the bag, a little disappointment was warranted.

However, as the market is often want to do, shares of Family Room have been pounded down to absurdly low levels as investors tend to sell now and ask questions later in the current environment. This market's emotional roller coaster had shares of American Airlines (NYSE: AMR) at $1.30 on Monday morning- currently trading at $4.22 as the market recognized the reports of American's death had been greatly exaggerated.

Bargain hunters should be accumulating Family Room right now. Family Room has many irons in the fire, and one hot project could propel their shares back to the pre December levels of $.40 when NARC looked like it would be a big hit.

Today, just after the market closed, Family Room announced a development partnership for what could be the next opportunity for a major home run for shareholders:

Family Room Announces Codevelopment Agreement on MicroNauts

In concert with the popular 80's revival theme, Family Room's Emmett/Furla films has entered into a joint development agreement with Hollywood legend Gale Anne Hurd and Los Angeles based licensing company Character Vision to revive the best selling Micronauts comic book series.

Micronauts was one of the most successful lines of action heroes in history. During the 80s when the Micronauts were popular, $300 million of licensed merchandise was sold, second only to merchandising sales from Star Wars.

Family Room will be part of a cooperative agreement to revive the brand through development of merchandise and/or a potential TV show and feature length movie.

Family Room is in great company by partnering with Hollywood legend Gale Anne Hurd on this project. Gale Anne Hurd was one of the original producers of 1980s blockbuster Terminator. She also produced Armageddon, and is currently the producer and writer of the upcoming release of Terminator 3 and The Hulk.

The following article appeared in a recent edition of Variety:

Hurd, EFF ready Micro economics
Duo pump prospects for '70s toy line

By DANA HARRIS

HOLLYWOOD -- "The Hulk" producer Gale Anne Hurd and Emmett/Furla Films have teamed to revive the Micronauts toy and comic line for feature and television development.

Originally produced and still sold in Japan by Takara, Mego Toys' Micronauts were a series of interchangeable space toys. In the late 1970s and early 1980s, Mego sold more than $300 million in product, second only to the line of "Star Wars" merchandise. It was then adapted as a long-running Marvel Comics series.

Also in the Micronauts partnership are the line's owner, Abrams/Gentile Entertainment, and third-party licensing company Character Vision, which oversaw a limited release of Micronaut toys and comics last year.

EFF roster

Randall Emmett and George Furla's EFF brought the Micronauts property to Hurd. EFF co-executive produced Paramount Picture's "Narc" and is in pre-production on "Belly of the Beast" starring Steven Seagal. Now in post is "Wonderland," which EFF executive produced for Lions Gate.

Abrams/Gentile is a Gotham-based entertainment, design and production company that includes toy and video game design, animation and prime-television development. The shingle is wrapping production on animated holiday special "Little Light" featuring Jane Seymour.

Character Vision clients include Morgan Creek, nationally syndicated comic strip "The Boondocks" and Extreme Demolition Derby.

As stated in this past weekend's edition, Family Room is moving on to many new and exciting projects. Owning the stock at $.10 is like owning an option that never expires. One big hit and it could be off to the races.

With only 20 million shares issued and outstanding, the current market valuation of $2 million is laughable with this kind of potential upside. Click Here to read the complete text of today's press release.

Members' Forum- SHEP Technologies (OTC BB: STLOF) In the Spotlight

Jay C. wrote in the following question:

I'm intrigued by your description of the SHEP system, and by the potential of the company.

I have a question : I believe that several Japanese companies are manufacturing hybrid vehicles [ eg the Toyota ' Prius ' ] which can re-capture braking energy. Do you happen to know what type of technology they use, and whether or not it would compete with the SHEP technology ?

Thanks for the question Jay, it's a good one.

OTC Journal Answer:

The automotive industry at large has now recognized that the most efficient method to reduce exhaust pollution and fuel consumption is to recover Kinetic Energy from the moving vehicle as it brakes to a stop. To become commercially viable the percentage of braking energy recovered has to be high. The current SHEP design has been tested and proven to recover up to 85% of braking energy, which is far higher than any other known method available today. The Ford tests using SHEP components resulted in a 38% reduction in fuel consumption with heavy city driving.

The Toyota Prius uses electrical regenerative braking. Reports predict that Toyota is going to discontinue the production of electrical vehicles because they could not see a future for the technology. There has also been a number of quoted cases where the Prius has run out of power leaving the car stranded and it was also quoted that they had to lease the vehicles to selected customers only, because "Lead Foots" were not welcome.

SHEP power can supply higher levels of accelerating torque over the zero to 20 mph range with minimal fuel consumption, which is the performance that the SUV driver is looking for. A small engine SHEP vehicle can perform better than a bigger engine nonstop version of the same vehicle.

The Diesel Electric hybrid concept allows the diesel engine to recharge the batteries as they run down. However for a vehicle operating continuously in a city, it will very quickly drain power from the batteries and as such will spend most of the day operating on diesel power while endeavoring to recharge the batteries. This increases further the city pollution and does very little for overall reduction in fuel consumption and running costs because these batteries have a short life and are somewhat expensive to replace. The life of a SHEP system can equal the vehicle life and requires very little maintenance during this period.

Battery technology has not advanced very far over the last decade and as such they are not capable of rapidly absorbing high levels of energy over a 2 to 5 second braking mode, whereas SHEP can. The heavier the vehicle the more viable SHEP is because it can recover high levels of braking energy over very short 2 to 5 second periods.

All auto companies are experimenting with different types of Regenerative Braking systems but eventual success will go to the system that can show the highest levels of fuel and pollution reduction at the lowest cost. SHEP is currently well ahead on all counts, and hopefully will continue to extend its lead in the near future.

Please send any questions or comments for the Members' Forum to info@otcjournal.com.

Charts Provided Courtesy Of TradePortal.com

Disclaimer

The OTCjournal.com Newsletter is an independent electronic publication committed to providing our readers with factual information on selected publicly traded companies. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward maximizing the upside potential for investors while minimizing the downside risk, whenever possible. Moreover, as detailed below, this publication accepts compensation from certain of the companies which it features. Likewise, this newsletter is owned by MarketByte, LLC. To the degrees enumerated herein, this newsletter should not be regarded as an independent publication.

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. MarketByte LLC has been paid of fee of $75,000 directly by Shep Technologies, Inc. for coverage for a period of six months. An additional fee of 100,000 free trading shares has been paid by a third party. Please review our policy on selling shares found in the Mission Statement on our home page.

All statements and expressions are the sole opinions of the editors and are subject to change without notice. A profile, description, or other mention of a company in the newsletter is neither an offer nor solicitation to buy or sell any securities mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein.

The editor, members of the editor's family, and/or entities with which they are affiliated, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication unless specifically disclosed in the newsletter.

The profiles, critiques, and other editorial content of the OTCjournal.com may contain forward-looking statements relating to the expected capabilities of the companies mentioned herein.

THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN CONSENT OF THE EDITORS OF OTCjournal.com.

We encourage our readers to invest carefully and read the investor information available at the web sites of the Securities and Exchange Commission ("SEC") at http://www.sec.govand/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com. We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at http://www.sec.gov/consumer/cyberfr.htm. Disclaimer ID:$subst('Recip.userid') Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.

You can unsubscribe from this list at any time by Clicking Here and HITTING SEND. If you are having difficulty removing yourself or wish to change your address please go to http://listserv.otcjournal.com/opt.cgi?.