To OTC Journal Members:
 

Family Room (OTC BB: FMLY)- 2004 Looking To Be Big

Family Room Entertainment, has admittedly, been one of my weaker ideas in 2003. Earlier in the year I published several editions suggesting the stock was poised to attain the $.25 level during the year. I was wrong. The highest level we saw during the year was about $.17, and $.10 has proven to be support for the stock.

2004 is setting up to be what 2003 could have been. Family Room will go into production on at least three major motion pictures in the first half of 2004, and could potentially turn profitable for the first time in corporate history.

In addition, the company's revenue stream will improve dramatically in 2004. As the business is setting up right now, in the first half of calendar 2004, Family Room could achieve 70% more in revenues than the company achieved in all of fiscal 2003. In short, I still believe I am going to be right on my $.25 price target. I was simply wrong on the timing.

The company recently completely a $700,000 financing. The shares underlying the financing coupled with the already issued and outstanding shares puts the number I&O into the 40 million share range. This appears to be the last financing the company will require. There is a good possibility they will turn cash flow positive in the first half of calendar 2004 (2nd half of their fiscal year).

Assuming we end up at 40 million I&O, the market is saying the company is only worth $4 million right now, leaving plenty of room for the stock to move up. Based on projects which will develop in 2004, I can easily see this stock trading into the $10 to $15 million market valuation area- which equates to $.25 to $.40 for the stock price.

Here are the projects which are slated for the first half of 2004:

• The movie Edison goes into production on February 27, 2004 in Vancouver, Canada. Edison is a story involved corrupt cops, and two reporters. The movie will star Kevin Spacey, Morgan Freeman, and LL Cool J. The story was written by David Burke who currently writes the NBC drama Law & Order SUV. The film will generate about $.3 million in producer fees. If the film achieves more that $30 million at the box office, Family Room could collect substantial profit sharing fees. Click here to read the press release.
• Today, just prior to the open, Family Room made an announcement concerning the Amityville Remake. MGM and Dimension Films have purchased the rights to remake the film from Family Room on a "Pay or Play" basis. As such, Family Room is guaranteed a payment from MGM no later than October 31st. Variety recently reported that MGM is planning to begin filming Amityville in April, at which time Family Room will simply receive a check, probably in the neighborhood of $.5 million as a straight fee for providing the property. If the film is commercially successful, Family Room has the rights to two more sequel films based on the Amityville story. Click here to read the press release.
• Family Room also recently announced it has begun to collect some residual fees from older properties. The company announced it recently received a check for about $80,000 for residual payments on Speedway Junky, a movie that went straight to cable. More residuals payments are expected to flow in from Good Advice, a cable movie starring Charlie Sheen and Denise Richards. The two met while making the movie, and have since married.
• Control, starring Willem Dafoe and Ray Liotta is expected to hit the box offices in March. If the film is a hit, Family Room could enjoy considerable profit participation in that property.

If this company ever lands in box office hit, watch out. With only 40 million shares I&O, a $1 price target could easily line up in the cross hairs.

I know it's Christmas week, and few people will pay attention. Their preoccupation could be your opportunity. Microcaps are drifting down and selling off as individual investors lock in profits to hold against past losses for the first time in three years. 

In my opinion, Family Room is destined for greater things in 2004. Be on board.

Here is the complete text of today's news release for your review:
 

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. In December 2003, Family Room extended its contract with MarketByte LLC through 2004 for an additional 2 million shares of newly issued, restricted common stock.

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