To OTC Journal Members:
 

Market Comment

This past week was very disappointing for the Bulls. CPI numbers came out mid-week and they were highly favorable for the market. Once again they provided further evidence that the economy is cooling off which should allow the FED to stop raising interest. The next major market event is the FED's Open Market Committee meeting next week after which they will announce any further interest rate increases.

Most analysts feel the FED should now have enough evidence to believe the economy is cooling off, and will either raise interest rates 1/4 point or do nothing at all. Bonds have been rising the last few days, again suggesting that interest rates are finally headed down.

This all leads us back to an ideal environment for growth stocks, but the market doesn't seem ready to confirm. None of the institutional money that has been piling up on the sidelines over the last month was buying.

Here are some of the adjectives we have heard in the last week to describe current market conditions:

• Range- Bound
• Choppy
• Listless
• Direction less
• Stuck in the Mud
• Lost in Space

Right now patience and faith are your strongest allies. This is the type of market that will rocket up just when every investor is finally convinced that no stock will ever go up again.

The summer rally we are hoping for is questionable at this time. If the FED does not raise interest rates next week and the market stays range bound look for a quiet summer. However, we still feel the upside potential is far greater than the downside risk at this point.

In the meantime our friends at eGoose managed to chop some decent returns out of a tough market this week. If you didn't read our Wednesday edition with our June MVP Award you should do so if you like short term trading opportunities.  These guys have been calling the market perfectly. Click Here to read the edition.

Allow a few seconds for their sign up page to load. The response to this MVP Award was so overwhelming that we strangled their server during the mid week surge in interest.
 

iQROM Communications, Inc (OTC BB: IQCO) Update

Back on June 2nd we released our profile on iQROM. If you missed it, click here to read the original profile. At the time the stock was trading at $10.0625 and has since seen a high of $10.625 and is now holding steadily in the $10.50 range. We consider this short term performance to be acceptable in a very tough market environment for small and micro cap stocks.

After the management at iQROM reviewed our original profile they were kind enough to point out some inaccurate statements we published. None of these inaccuracies are substantive or change our optimistic view of the future of this company, but it is very important that you get accurate facts in order to make an informed investment decision. 

We stated that the credit card sized CD Rom was capable of playing 40 minutes of video. That is inaccurate. The medium is capable of providing a 40 minute presentation, but it cannot all be video.

When we described the Soft CD technology on these cards we noted that you simply clicked an Update button to pull the latest information off the Internet. The new generation product is better than this. The card automatically updates the most current information off the Internet, and there is no manual click on an update button required.

Diskxpress, the manufacturer of the card which is marketed by iQROM, was spelled incorrectly. We spelled it Diskexpress. The correct spelling is Diskxpress. In our original profile we stated that Diskxpress can currently manufacture 25 million units per month. That was incorrect. Diskxpress can currently manufacture 25 million units annually. Furthermore, we stated that they plan to ramp up capacity to 56 million units monthly by July of 2002. This was also inaccurate. They are hoping to ramp up their production capacity to 38 million monthly by the end of 2000.

When we discussed their patent on the technology which centers the CD Rom in your drive, we stated that the patent was both US and International. This was also incorrect. The patent in only US. Therefore, any potential violations of the patent would be in the US only.

In our original publication we noted that 10 million business sized CD Roms had been produced in the US in 1999. This number was also inaccurate. There were actually 18 million produced. Industry experts project that 90 million will be produced in 2000, which would make the projected annual growth rate 500%.

We reported that the company had distributed 1.2 million CD Roms in April. The actual number that the company distributed was 1 million. When we said that they planned on introducing a DVD version of the card by August, please do not hold them to that. They will introduce a DVD version in the future, but August might not be the exact introduction time.

Now, before getting on to the good news that was released on the company earlier this week, we need to clarify one statement we made in our original profile. Here is the exact text taken directly out of the original profile:
 

We need to clarify this statement in order for iQROM to remain within SEC regulatory guidelines. The company did not, and has not provided us with any forward looking projections. The information was provided to us by a shareholder that was in possession of the pro formas.

In order to evaluate the potential of these types of companies on behalf of our members we need some idea of what they feel they can accomplish over the coming months and years. However, at the same time we need to be sure that we don't cross over the very murky line between information and insider information. 

We are never in a position to act on insider information because our management, employees, and affiliates are forbidden to trade in any of the stocks that we cover. Never the less, it is important that our readers recognize that iQROM provided us with no forward looking statements. We obtained the information from other sources. Management's concern over this issue suggests that they intend to run a tight ship and only enhances our belief that this company will be successful.

On Wednesday of this past week iQROM issued a press release which is the first step in confirming our hypothesis in the original profile. We stated that in our opinion corporate America would embrace this technology as a powerful marketing tool. Wednesday's press release was what we hope will be the first in a series of contracts which confirms our belief in this company.

The press release covered two new contracts recently signed by the company. They signed contracts with both Programmer's Paradise and Bacardi Maritini. The Bacardi contract is important because it clearly demonstrates how the digital technology can be used in the corporate sales environment. The Bacardi CD will be used by the company's sales team and allow salesmen to present the most current point of sale materials and TV commercials to their customers.

Programmer's Paradise, a well known software provider, will also use the business card sized CD Rom as a sales and marketing tool. You can learn more about this company by visiting www.programmersparadise.com.

Click Here to read the complete text of the company's news release.

We are the very first newsletter or brokerage firm to establish any type of coverage on iQROM. This company has the type of technology which lends itself to high profile contracts with companies that have large audiences. If the company is successful in obtaining future contracts with high profile customers it will spill over into the performance of iQROM shares.

With a bottom on this stock firmly established at $10, there is significant upside with very little downside from these levels. The only question is how much you will own when the stock makes its first big run, and how long that will take for it to happen.
 

Envoy Communications (NASDAQ: ECGI)

Mid week Envoy announced another major acquisition, and the stock made a valiant attempt to make its way through $7 with no luck. In a different market environment we believe that this stock would probably be on its way through $8 now and looking for $10.

Mid week Envoy shares were upgraded to a strong buy at Toronto Based Yorkton Securities. Analyst John McElveen placed a $12.50 (CDN) price target on the stock, which translates to about $9 in the US on the NASDAQ market if he is right.

Choppy market conditions are holding this one back, but we fell that the next Bull will take this stock much higher. Please have patience and add to your position on any weakness if your risk tolerance and capital allow you to do so.
 

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.gov and/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.   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.