<HTML><HEAD><TITLE>Form S-8 prospectus September 2004</TITLE><!-- Licensed to: Naccarato & Associates--><!-- Document Created using EDGARIZER HTML --><!-- Copy Right 2003 EDGARfilings, Ltd., an IEC company.--><!-- All rights reserved EDGARfilings.com -->
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>As filed with the Securities and Exchange Commission on September 3, 2004 Reg. No. 33</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2><B>SECURITIES AND EXCHANGE COMMISSION</B></FONT></DIV></TD></TR>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2><B>Washington, D.C. 20549</B></FONT></DIV></TD></TR></TABLE>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2><B>_________________________________________</B></FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>FORM S-8</FONT></DIV></TD></TR>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>REGISTRATION STATEMENT</FONT></DIV></TD></TR>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>UNDER</FONT></DIV></TD></TR>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>THE SECURITIES ACT OF 1933</FONT></DIV></TD></TR></TABLE>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=3>FAMILY ROOM ENTERTAINMENT CORPORATION</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>(Exact name of registrant as specified in its charter) </FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>New Mexico</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>85-0206160</FONT></DIV></TD></TR>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>(State or other jurisdiction of</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>(I.R.S. Employer</FONT></DIV></TD></TR>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>incorporation or organization)</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left>&nbsp;</DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>identification No.)</FONT></DIV></TD></TR></TABLE>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>8530 Wilshire Blvd. Suite 420</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>Beverly Hills, California 90211 </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>(Address of principal executive offices)</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=3>________________________________________________</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>AMENDED 2004 CONSULTING AND LEGAL SERVICES PLAN</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>(Full title of plan)</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>________________________________</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>George Furla</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>President</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>8530 Wilshire Blvd. Suite 420</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>Beverly Hills, California 90211 </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>(Name and address of agent for service)</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>(310) 659-9411</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>(Telephone number, including area code of agent for service)</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>Copy to:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>Owen Naccarato, Esq.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>19600 Fairchild, Suite 260</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>Irvine, CA 92612</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>(949) 851-9261</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>CALCULATION OF REGISTRATION FEE</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Title of securities</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>to be registered</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Amount to be </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Registered</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Proposed maximum</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>offering price</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>per share</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Proposed maximum</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Aggregate offering</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Price</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Amount of </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Registration fee</FONT></DIV></TD></TR>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Common Stock</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>($.01 par value)</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>25,000,000</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>$0.065</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>$1,625,000</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1></FONT><FONT face="Times Roman" size=1>$205.89</FONT></DIV></TD></TR></TABLE>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Estimated solely for the purpose of determining the amount of registration fee and pursuant to Rules 457(c) and 457 (h) of the General Rules and Regulations under the Securities Act of 1993, based upon the average of the bid and asked prices per share of the registrant&#146;s common stock reported by the OTC Nasdaq Stock Market on September 1, 2004. </FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2><B>EXPLANATORY NOTE</B></FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>The Company is offering shares of its common stock to various individuals for consulting and legal services performed on the Company's behalf. This issuance of shares is being made pursuant to an Amendment to the Consulting and Legal Services Plan adopted by the Board of Directors on January 2, 2004. The Board has equated this number of shares to the value of the legal or consulting services provided or to be provided by these individuals. The shares issued hereunder to eligible participants who are not affiliates of the Company as defined in Rule 405 of the Securities Act will not be subject to any resale restrictions. The Plan is not qualified under ERISA.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>The Amendment to the plan contains shares that constitute "control securities" under General Instruction C to Form S-8. These control securities may be offered and sold on a continuous or delayed basis in the future under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act").</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>This registration statement contains two parts. The first part contains an "offer prospectus" prepared in accordance with Part I of Form S-3 (in accordance with Instruction C of Form S-8). The second part contains information required in the registration statement pursuant to Part II of Form S-8.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2><B>OFFER PROSPECTUS</B></FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=3>FAMILY ROOM ENTERTAINMENT CORPORATION</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>25,000,000 Shares of Common Stock</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>under the AMENDED </FONT><FONT face="Times Roman" size=2>2004 CONSULTING AND LEGAL SERVICES PLAN</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>of Family Room Entertainment Corporation </FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>The shares we are registering are either currently held by or will be issued to certain of our stockholders, employees and consultants upon the exercise of stock options or the issuance of shares granted under our Amended 2004 Consulting and Legal Services Plan. We will pay the expenses of registering the shares.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>Our common stock is quoted on the Over-The-Counter Bulletin Board under the symbol "FMLY." On September 1, 2004, the closing price of our common stock was $0.065 per share. </FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>You should carefully consider the "Risks Factors" section beginning on page 8 of this Offer Prospectus.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>These shares have not been approved by the Securities and Exchange Commission or any state securities commission nor have these organizations determined whether this Prospectus is complete or accurate. Any representation to the contrary is a criminal offense.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>The date of this Offer Prospectus is September 2, 2004.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>RISK FACTORS</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>PROCEEDS FROM SALE OF THE SHARES </FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>SELLING STOCKHOLDERS </FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>HOW THE SHARES MAY BE DISTRIBUTED</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>EXPERTS </FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>WHERE YOU CAN FIND MORE INFORMATION</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=3><B>SUMMARY</B></FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" color=#000000 size=3>Family Room Entertainment Corporation</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>Family Room Entertainment Corp. (&#147;FMLY&#148;) is engaged in key aspects of motion picture entertainment, including production, production services, finance and distribution. FMLY develops, produces and performs production-related services for the entertainment industry mainly through three wholly owned subsidiaries: Emmett/Furla Films Productions Corp. (EFFP), a motion picture development, production and production-related service entity that primarily develops, produces and provides production-related services for motion pictures intended for worldwide theatrical release; Emmett Furla Films Distribution LLC (EFFD), which was set up to oversee and arrange world wide distribution of FMLY's entertainment projects and properties, and E F F Independent, Inc.( EFFI)., which was setup primarily to develop and produce action adventure and family-oriented motion pictures for television and home video distribution, as well as episodic television and Internet programming. In addition, EFFP's subsidiary, Good Entertainment Service, Inc., is a production servicing company. </FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>Additionally, FMLY&#146;s subsidiaries Family Room Live Entertainment, Inc (FRLE) and Spotlight One LLC arrange for live performances and home entertainment for the film industry.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>EFFI has two wholly owned subsidiaries, Family Room Entertainment Music Publishing Corp., and Emmett/Furla Films Music Publishing Com., which oversee FMLY&#146;s, EFFI's, EFFP's and their subsidiaries' music publishing (ancillary rights associated with the creation of original music for motion pictures, live entertainment and home entertainment).</FONT><BR></DIV><BR>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>FMLY's feature film division, Emmett/Furla Films Productions Corp., develops and produces low- to medium-budget films. FMLY's low- to medium-budget films have had production budgets ranging from less than $1 million to $30 million, although FMLY, from time to time, may produce and release films having higher or much higher budgets. FMLY's low-budget films are primarily targeted for direct distribution to the television and home video markets and its medium-budget films are generally targeted for initial theatrical release. FMLY generally retains distribution rights, when available, through Emmett/Furla Films Distribution, LLC. FMLY's films generally are distributed by third-party licensees domestically and by third-party sales agents internationally. </FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>For the nine months ended March 31, 2004, we generated revenues in the amount of $676,202 and a net loss of $2,594,123. In addition, for the year ended June 30, 2003, we generated revenue in the amount of $1,005,441 and a net loss of $2,258,164. Our accumulated deficit for the year ended June 30, 2003 was ($13,062,554). </FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Our principal offices are located at 8530 Wilshire Boulevard, Suite 420, Beverly Hills, California 90211, and our telephone number is (310) 659-9411. We are a New Mexico corporation.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" color=#000000 size=2><B>Risk Factors</B></FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2><I>An investment in shares of FMLY&#146;s Common Stock involves a high degree of risk. You should carefully consider the following information which summarizes all material risks, together with the other information contained in this prospectus, before you decide to buy FMLY&#146;s common stock. If any of the following risks actually occur, FMLY&#146;s business would likely suffer. In these circumstances, the market price of FMLY&#146;s common stock could decline, and you may lose all or part of your investment.</I></FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2><B><U>Risks Relating to our Business:</B></U></FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2><B>Our success depends on the unpredictable commercial success of the films we produce</B></FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Operating in the feature film industry involves a substantial degree of risk. Each feature film is an individual artistic work, and unpredictable audience reactions primarily determine commercial success. The commercial success of feature film also depends upon the quality and acceptance of other competing programs or feature films released into the marketplace at or near the same time, critical reviews, the availability of alternative forms of entertainment and leisure activities, general economic conditions and other tangible and intangible factors, all of which are subject to change and cannot be predicted with certainty. Our success will depend on the experience and judgment of our management to select and develop new investment and production opportunities. </FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2><B>The production, completion and distribution of feature films require a significant amount of capital. </B></FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Although we intend to continue to reduce the risks of our financial involvement in the production costs of our productions through financial assistance from distributors there can be no assurance that we will continue to successfully implement such arrangements or that we would not be subject to substantial financial risks relating to the production, completion and release of future television programs and feature films. In addition, a significant amount</FONT><FONT face="Times Roman" color=#ff6600 size=2> </FONT><FONT face="Times Roman" size=2>of time may elapse between our expenditure of funds and the receipt of revenues from our television programs or feature films.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2><B>Budget Overruns May Adversely Affect Our Business</B></FONT><FONT face="Times Roman" size=2>. </FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Actual motion picture costs may exceed their budget, sometimes significantly. Risks such as labor disputes, death or disability of star performers, rapid high technology changes relating to special effects or other aspects of production, shortages of necessary equipment, damage to film negatives, master tapes and recordings or adverse weather conditions may cause cost overruns and delay or frustrate completion of a production. If a film incurs substantial budget overruns, we may have to seek additional financing from outside sources to complete production of a television program or motion picture. No assurance can be given as to the availability of such financing on terms acceptable to us. In addition, if a film incurs substantial budget overruns, there can be no assurance that such costs will be recouped, which could have a significant impact on our business, results of operations or financial condition.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2><B>Distributors' Failure to Promote Our Films May Adversely Affect Our Business. </B></FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Decisions regarding the timing of release and promotional support of our feature films are important in determining the success of a feature film. As with most production companies, for our product distributed by others we do not control the timing and manner in which our distributors distribute our feature films. Although our distributors have a financial interest in the success of any such feature film, any decision by our distributors not to distribute or promote one of our feature films or to promote competitors' feature films to a greater extent than it promotes ours could have a material adverse affect on our business, results of operations or financial condition.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2><B>Required estimates and assumptions in reporting our film operating results may differ from actual results. </B></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>We generate a majority of our future revenue from the development and production of feature films. Our future revenues will depend upon the timing and the level of market acceptance of our feature films, as well as upon the cost to produce, distribute and promote these feature films. The revenues derived from the production of a feature film depend primarily on the feature film's acceptance by the public, which cannot be predicted and do not necessarily bear a direct correlation to the production costs incurred. The commercial success of a feature film also depends upon promotion and marketing and certain other factors. Accordingly, our revenues are, and will continue to be, extremely difficult to forecast.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Our Operating Results May Fluctuate Significantly. We expect that our future operating results will fluctuate significantly as a result of, among other factors:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>- the timing of domestic and international releases of current and future feature films we produce;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>- the success of our feature films;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>- the timing of the release of related products into their respective markets;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>- the costs to distribute and promote the feature films;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>- the success of our distributors in marketing our feature films;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>- the timing of receipt of proceeds generated by the feature films from distributors;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>- the introduction of new feature films by our current and future competitors;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>- the timing and magnitude of operating expenses and capital expenditures;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>- the level of unreimbursed production costs in excess of budgeted maximum amounts;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>- the timing of the recognition of advertising costs for accounting purposes under SoP 00-2; and</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>- general economic conditions, including continued slowdown in advertiser spending.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>As a result, we believe that our results of operations may fluctuate significantly, and it is possible that our operating results could be below the expectations of equity research analysts and investors.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2><B>Revenues and Costs Recognized in Certain Periods May be Overstated or Understated Due to estimates inherent in the application of entertainment accounting policies.</B></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>In preparing our financial statements in accordance with Generally Accepted Accounting Principles, we follow the guidance issued by the American Institute of Certified Public Accountants for Accounting by Producers or Distributors of Films contained in Statement of Position 00-2 ("SoP 00-2"). Under SoP 00-2, we recognize revenue on films at the later of the following dates: when films are delivered, or access to the film is available to the customer; when the license period begins; and when the film is unconditionally available to the customers. In addition, the fee must be determinable and collection must be reasonably assured. As a result, our expected cash flows may not necessarily relate to the revenue recognized in a given period. We capitalize costs of producing and developing films and television programs. Capitalized costs include costs of film rights and screenplays, direct costs of production, interest and production overhead. We amortize those costs using the individual film-forecast method, which involves estimating ultimate revenues of each film. We revise our ultimate revenue estimates on a quarterly basis. The</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>cost of film prints is deferred and charged to expense on a straight-line basis over the period of theatrical release. We also estimate participation and residual costs each period, which may vary from the actual paid participation and residual costs. We assess the valuation of our films on a quarterly basis. When events or changes in circumstances indicate that the fair value of a film is less than its unamortized film costs, we write down the film to fair value. Fair value of a film is determined using the discounted cash flow approach based on our estimate of the most likely cash flows and an appropriate discount rate. As a result of uncertainties in these estimation processes, actual results may vary from the estimates.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2><B><U>Risks Relating to our Stock:</B></U></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2><B>FMLY&#146;s common stock is subject to the "Penny Stock" rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.</B></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2>FMLY&#146;s shares of Common Stock are &#147;penny stocks&#148; as defined in the Exchange Act, which are traded in the over-the-counter market on the OTC Bulletin Board. As a result, an investor may find it more difficult to dispose of or obtain accurate quotations as to the price of the shares of the Common Stock being registered hereby. In addition, the &#147;penny stock&#148; rules adopted by the Commission under the Exchange Act subject the sale of the shares of the Common Stock to certain regulations which impose sales practice requirements on broker-dealers. For example, broker-dealers selling such securities must, prior to effecting the transaction, provide their customers with a document that discloses the risks of investing in such securities. Included in this document are the following: </FONT></DIV>
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<DIV><FONT face="Times Roman" color=#000000 size=2>The bid and offer price quotes for the penny stock, and the number of shares to which the quoted prices apply.</FONT></DIV>
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<DIV><FONT face="Times Roman" color=#000000 size=2>The brokerage firm&#146;s compensation for the trade.</FONT></DIV>
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<DIV><FONT face="Times Roman" color=#000000 size=2>The compensation received by the brokerages firm&#146;s salesperson for the trade.</FONT></DIV></LI></UL>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" color=#000000 size=2>In addition, the brokerage firm must send the investor:</FONT></DIV>
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<DIV><FONT face="Times Roman" color=#000000 size=2>Monthly account statement that gives an estimate of the value of each penny stock in your account.</FONT></DIV>
<LI>
<DIV><FONT face="Times Roman" color=#000000 size=2>A written statement of your financial situation and investment goals.</FONT></DIV></LI></UL>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" color=#000000 size=2>Legal remedies which may be available to you are as follows:</FONT></DIV>
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<DIV><FONT face="Times Roman" color=#000000 size=2>If penny stocks are sold to you in violation of your rights listed above, or other federal or state securities laws, you may be able to cancel your purchase and get your money back. </FONT></DIV>
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<DIV><FONT face="Times Roman" color=#000000 size=2>If the stocks are sold in a fraudulent manner, you may be able to sue the persons and firms that caused the fraud for damages. </FONT></DIV>
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<DIV><FONT face="Times Roman" color=#000000 size=2>If you have signed an arbitration agreement, however, you may have to pursue your claim through arbitration. </FONT></DIV></LI></UL>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2>If the person purchasing the securities is someone other than an accredited investor or an established customer of the broker-dealer, the broker-dealer must also approve the potential customer&#146;s account by obtaining information concerning the customer&#146;s financial situation, investment experience and investment objectives. The broker-dealer must also make a determination whether the transaction is suitable for the customer and whether the customer has sufficient knowledge and experience in financial matters to be reasonably expected to be capable of evaluating the risk of transactions in such securities. Accordingly, the Commission&#146;s rules may limit the number of potential purchasers of the shares of the Common Stock.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2><B>Resale restrictions on transferring &#147;penny stocks&#148; are sometimes imposed by some states, which may make transactions in our stock cumbersome and may reduce the value of an investment in our stock.</B></FONT><FONT face="Times Roman" color=#000000 size=2> </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2>Various state securities laws impose restrictions on transferring &#147;penny stocks&#148; and as a result, investors in the Common Stock may have their ability to sell their shares of the Common Stock impaired. For example, the Utah Securities Commission prohibits brokers from soliciting buyers for &#147;penny stocks&#148;, which makes selling them more difficult.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2>FMLYs absence of dividends or the ability to pay them places a limitation on any investors return.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2>FMLY anticipates that for the foreseeable future, earnings will be retained for the development of its business. Accordingly, FMLY does not anticipate paying dividends on the common stock in the foreseeable future. The payment of future dividends will be at the sole discretion of FMLY's Board of Directors and will depend on FMLY's general business condition. </FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2><U>Information about forward-looking statements</U></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2>This Prospectus contains certain forward-looking statements, which involve substantial risks and uncertainties. These forward-looking statements can generally be identified because the context of the statement includes words such as "may," "will," "except," "anticipate," "intend," "estimate," "continue," "believe," or other similar words. Similarly, this prospectus also contains forward-looking statements about our future. Forward-looking statements include statements about our:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2>Plans, Objectives, Goals, Strategies, Expectations for the future, Future performance and events,</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2>Underlying assumptions for all of the above and other statements which are not statements of historical facts.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2>These forward-looking statements involve risks and uncertainties, which could cause our actual results to materially differ from our forward-looking statements. We make these forward-looking statements based on our analysis of internal and external historical trends, but there can be no assurance that we will achieve the results set forth in these forward-looking statements. Our forward-looking statements are expressed in good faith and we believe that there is a reasonable basis for us to make them.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2>In addition to other factors discussed in this prospectus, the following are important factors that could cause our actual results to materially differ from our forward-looking statements:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" color=#000000 size=2>- Our ability to respond to changes in the marketplace</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" color=#000000 size=2>- Competitive factors</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" color=#000000 size=2>- The availability of financing on terms and conditions acceptable to us</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" color=#000000 size=2>- The availability of personnel with the appropriate technical skills</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" color=#000000 size=2>We have no obligation to update or revise these forward-looking statements to reflect future events.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2><B><U>Use of proceeds</B></U></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" color=#000000 size=2></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>The selling stockholders are offering all of the shares of common stock in this Offer Prospectus. We will not receive any proceeds from the sale of the shares of common stock, and if all of the options are exercised we will not receive any proceeds in connection with the exercise of stock options relating to such shares of common stock.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2><B><FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;SELLING STOCKHOLDERS</B></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>The shares offered under our Offer Prospectus are being registered for Offers and Sales by selling stockholders who have or may in the future acquire their shares of our common stock by exercising options granted to them under our Amended 2003 Employee Compensation Plan. The selling stockholders named in the following table may resell all, a portion, or none of these shares of our common stock. There is no assurance that any of the selling stockholders will sell any or all of the shares of our common stock offered by them.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Participants under the Amended 2003 Employee Compensation Plan who are deemed to be "affiliates" of the Company who acquire shares of our common stock may be added to the selling stockholders listed below from time to time by use of a prospectus supplement filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended</FONT></DIV>
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<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>9</FONT></TD>
<TD align=right width="33%"><FONT size=1>&nbsp;</FONT></TD></TR>
<TR>
<TD colSpan=3><FONT size=1>
<HR style="PAGE-BREAK-AFTER: always" width="100%" noShade SIZE=1>
</FONT></TD></TR>
<TR>
<TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR></TABLE>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=1>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Selling</FONT><FONT face="Times Roman" size=1> Stockholder</FONT></DIV></TD>
<TD vAlign=top align=left width="25%" colSpan=2>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Shares Beneficially Owned Prior to the Offering (1)</FONT></DIV></TD>
<TD vAlign=top align=left width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Shares Offered </FONT><FONT face="Times Roman" size=1>For Sale </FONT></DIV></TD>
<TD vAlign=top align=left width="28%" colSpan=2>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Shares Beneficially Owned After Offering</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>If All Offered Shares Are Sold</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="25%" colSpan=2>
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="28%" colSpan=2>
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left>&nbsp;</DIV></TD>
<TD vAlign=top align=left width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Number of Shares</FONT></DIV></TD>
<TD vAlign=top align=left width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Percentage(3)</FONT></DIV></TD>
<TD vAlign=top align=left width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left>&nbsp;</DIV></TD>
<TD vAlign=top align=left width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Number of Shares</FONT></DIV></TD>
<TD vAlign=top align=left width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=1>Percentage (4)</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>George Furla (2)</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>8,066,667</FONT></DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>9.3</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>4,166,667</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>3,900,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>3.4</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Randall Emmett (2)</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>6,873,220</FONT></DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>7.9</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>4,166,667</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>2,706,553</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>2.4</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Mercer D Walton III (2)</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>1,600,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>1.8</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>1,600,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>M. Elaine Grant (2)</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>1,100,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>1.3</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>1,100,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Owen Naccarato (2)</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>1,100,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>1.3</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>1,100,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Frank Garbutt (2)</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>250,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0.3</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>250,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Rosie Charbonneau (2)</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>250,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0.3</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>250,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Jose Jamie (2)</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>200,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0.2</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>200,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Avi Lerner (2)</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>500,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0.6</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>500,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Danny Dimbort (2)</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>500,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0.6</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>500,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Jeff Rice (2)</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>1,000,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>1.1</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>1,000,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Misc. Other Consultants (2) (3)</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>10,166,666</FONT></DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>11.7</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>10,166,666</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>0</FONT></DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR>
<TR bgColor=#eeeeee>
<TD vAlign=top align=left width="17%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left>&nbsp;</DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center>&nbsp;</DIV></TD>
<TD vAlign=top align=middle width="11%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center>&nbsp;</DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=1>25,000,000</FONT></DIV></TD>
<TD vAlign=top align=middle width="14%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center>&nbsp;</DIV></TD>
<TD vAlign=top align=middle width="13%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center>&nbsp;</DIV></TD></TR>
<TR bgColor=#ffffff>
<TD vAlign=top width="17%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="11%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="14%">
<HR width="100%" noShade SIZE=2>
</TD>
<TD vAlign=top width="13%">
<HR width="100%" noShade SIZE=2>
</TD></TR></TABLE>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(1) A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from the date of the registration statement upon the exercise of options or warrants. Each beneficial owner's percentage ownership is determined by assuming that options or warrants that are held by such person and which are exercisable within 60 days of the date of this registration statement have been exercised. Unless otherwise indicated, we believe that all persons named in the table have voting and investment power with respect to all shares of common stock beneficially owned by them. </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(2) Includes all Shares issued to such named individuals upon the exercise of options and/or straight shares granted under the Amended 2004 Consultant and Legal Services Plan. </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(3) Percentages based on 87,037,254 shares outstanding as of August 31, 2004</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(3) Percentages based on 112,037,254 shares outstanding after the offering.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>HOW THE SHARES MAY BE DISTRIBUTED</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>The selling shareholder may, from time to time, sell any or all of its shares of common stock on any stock exchange, market, or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. There is no assurance that the selling shareholder will sell any or all of the common stock in this offering. The selling shareholder may use any one or more of the following methods when selling shares: </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>.</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Ordinary brokerage transactions and transactions in which the broker-</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>dealer solicits purchasers.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>.</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Block trades in which the broker-dealer will attempt to sell the</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>shares as agent but may position and resell a portion of the block as</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>principal to facilitate the transaction.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>.</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Purchases by a broker-dealer as principal and resale by the broker-</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>dealer for its own account.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV>
<TABLE id=PGBRK cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>10</FONT></TD>
<TD align=right width="34%"><FONT size=1>&nbsp;</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3><FONT size=1>
<HR style="PAGE-BREAK-AFTER: always" noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>.</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>An exchange distribution following the rules of the applicable</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>exchange</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>.</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Privately negotiated transactions</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>.</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Short sales or sales of shares not previously owned by the seller</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>.</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Broker-dealers may agree with the selling shareholder to sell a</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>specified number of such shares at a stipulated price per share</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>.</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>A combination of any such methods of sale any other lawful method</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>The selling shareholder may also engage in:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>.</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Short selling against the box, which is making a short sale when the</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>seller already owns the shares.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>.</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Other transactions in our securities or in derivatives of our</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>securities and the subsequent sale or delivery of shares by the</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>stockholder.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>.</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Pledging shares to their brokers under the margin provisions of</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>customer agreements. If a selling shareholder defaults on a margin</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>loan, the broker may, from time to time, offer to sell the pledged</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>shares.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>Broker-dealers engaged by the selling shareholder may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from selling shareholder in amounts to be negotiated. If any broker-dealer acts as agent for the purchaser of shares, the broker-dealer may receive commission from the purchaser in amounts to be negotiated. The selling shareholder does not expect these commissions and discounts to exceed what is customary in the types of transactions involved. </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>The selling shareholder and any broker-dealers or agents that are involved in selling the shares may be considered to be an "underwriter" within the meaning of the Securities Act for such sales. An underwriter is a person who has purchased shares from an issuer with a view towards distributing the shares to the public. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be considered to be underwriting commissions or discounts under the Securities Act. </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>Because the selling shareholder is deemed an "underwriter" within the meaning of Section 2(11) of the Securities Act, and will be subject to the prospectus delivery requirements: </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>We are required to pay all fees and expenses incident to the registration of the shares in this offering. However, we will not pay any commissions or any other fees in connection with the resale of the common stock in this offering. We have agreed to indemnify the selling shareholder and their officers, directors, employees and agents, and each person who controls any selling shareholder, in certain circumstances against certain liabilities, including liabilities arising under the Securities Act. The selling shareholder has agreed to indemnify us and our directors and officers in certain circumstances against certain liabilities, including liabilities arising under the Securities Act. </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT face="Times Roman" size=2>If the selling shareholder notifies us that they have a material arrangement with a broker-dealer for the resale of the common stock, then we would be required to amend the registration statement of which this prospectus is a part, and file a prospectus supplement to describe the agreements between the selling shareholder and the broker-dealer. </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV>
<TABLE id=PGBRK cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>11</FONT></TD>
<TD align=right width="34%"><FONT size=1>&nbsp;</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3><FONT size=1>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>LEGAL OPINION</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Owen Naccarato, Esq., has advised us with respect to the validity of the securities offered by this prospectus.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" color=#000000 size=2>Experts</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" color=#000000 size=2>The financial statements of Family Room Entertainment Corporation at June 30, 2003, appearing in this Prospectus and Registration Statement have been audited by Ham, Langston &amp; Brezina, L.L.P., independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>WHERE YOU CAN FIND MORE INFORMATION</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any report or document we file at the public reference facilities maintained by the Securities and Exchange Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the Securities and Exchange Commission's regional offices located at 233 Broadway, New York, New York 10279, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0880 for more information about the public reference rooms. Our Securities and Exchange Commission filings are also available from the Securities and Exchange Commission's website located at HTTP://WWW.SEC.GOV.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Quotations for the prices of our common stock appear on the Over-The-Counter Bulletin Board, and reports, proxy statements and other information about us can also be inspected at the offices of the National Association of Securities Dealers, Inc., and 1735 K STREET, N.W., WASHINGTON D.C. 20006.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>The Securities and Exchange Commission allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this Offer Prospectus, and later information that we file with the Securities and Exchange Commission will automatically update and supersede this information.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>We incorporate by reference the following filings and any future filings made with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>The following documents filed by Family Room Entertainment Corporation (the &#147;Company&#148;) with the Securities and Exchange Commission (the &#147;Commission&#148;) are incorporated by reference herein:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(a) the Company&#146;s annual report on Form 10-KSB for the fiscal year ended June 30, 2003 and 2002;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(b)the Company&#146;s quarterly report on Form 10-QSB for the quarters ended September 30, 2003, December 31, 2003 and March 31, 2004. </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(c) the Registrant&#146;s Form S-2 filed on April 3, 1987, pursuant to Section 12 of the Exchange Act, in which there is described the terms, rights and provisions applicable to the Registrant&#146;s outstanding Common Stock;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(d) any document filed by the Company with the Commission pursuant to Sections 13(a), 13( c), 14 or 15(d) of the Exchange Act subsequent to the date hereof, but prior to the filing of a post-effective amendment to this Registration Statement which Indicates that all shares of Common Stock registered hereunder have been sold or that deregisters all such shares of common Stock then remaining unsold, such documents being deemed to be incorporated by reference herein and to be part hereof from the date of filing of such documents.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>This Offer Prospectus, which is a part of the registration statement, does not contain all the information set forth in, or annexed as exhibits to, the registration statement, as permitted by the SEC's rules and regulations. For further information with respect to us and the common stock offered under this Offer Prospectus, please refer to the registration statement, including the exhibits, copies of which may be obtained from the locations described above. Statements concerning any document filed as an exhibit are not necessarily complete and, in each instance, we refer you to the copy of the document filed as an exhibit to the registration statement.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>You may request, at no cost, a copy of any or all of the information incorporated by reference by writing or</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>telephoning us at: Family Room Entertainment Corporation, </FONT><FONT face="Times Roman" size=1>8530 Wilshire Blvd., Beverly Hills, California 90211, (310) 659-9411. </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>You should only rely on the information incorporated by reference or provided in this Offer Prospectus or any supplement. We have not authorized anyone else to provide you with different information. Our common stock is not being offered in any state where the offer is not permitted. You should not assume that the information in this Offer Prospectus or any supplement is accurate as of any date other than the date on the front of those documents.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" color=#000000 size=2><B>Indemnification of Directors and Officer</B></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Section 53-12-2E of the New Mexico Statutes Annotated 1978 provides in general that a company&#146;s articles of incorporation may provide that a director shall not be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director unless:&nbsp; </FONT><BR><FONT face="Times Roman" size=2>(1) the director has breached or failed to perform the duties of the director's office in compliance with Subsection B of Section 53-11-35 NMSA 1978; and&nbsp;(2) the breach or failure to perform constitutes:&nbsp; </FONT><BR><FONT face="Times Roman" size=2>(a) negligence, willful misconduct or recklessness in the case of a director who has either an ownership interest in the corporation or receives in his capacity as a director or as an employee of the corporation compensation of more than two thousand dollars ($2,000) from the corporation in any calendar year; or&nbsp; </FONT><BR><FONT face="Times Roman" size=2>(b) willful misconduct or recklessness in the case of a director who does not have an ownership interest in the corporation and does not receive in his capacity as director or as an employee of the corporation compensation of more than two thousand dollars ($2,000) from the corporation in any calendar year.&nbsp; </FONT><BR><FONT face="Times Roman" size=2>Such a provision in the articles of incorporation shall, however, only eliminate the liability of a director for action taken as a director or any failure to take action as a director at meetings of the board of directors or of a committee of the board of directors or by virtue of action of the directors without a meeting pursuant to Section 53-11-43 NMSA 1978, on or after the date when such provision in the articles of incorporation becomes effective.&nbsp;</FONT><BR></DIV><BR>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Article XVI of the Company&#146;s Article of Incorporation provide that the Company shall indemnify each director and each officer, his heirs, executors and administrators, against expenses reasonably incurred or liability incurred by him in connection with any action, suite or proceeding to which ha may be made a party by reason of his being or having been a Director or officer of the corporation, except in relation (i) to matters as to which he shall be finally adjudged in such action, suit or proceeding to be liable for fraud or misconduct, and (ii) to liabilities under the Securities Act of 19333, as amended, or other applicable securities laws. In the event of a settlement before or after action or suite, indemnification shall be provided only in connection with such matters covered by the settlement as to which the corporation is advised by counsel that the person to be indemnified was not guilty of such fraud or misconduct. The foregoing right of indemnification shall not exclude other rights to which he may be entitled. </FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Commission Policy</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers or persons controlling the Company, FMLY has been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=3><B>PART II</B></FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=2>INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Item 3. Incorporation of Documents by Reference</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>The following documents filed by Family Room Entertainment Corporation (the &#147;Company&#148;) with the Securities and Exchange Commission (the &#147;Commission&#148;) are incorporated by reference herein:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(a) the Company&#146;s annual report on Form 10-KSB for the fiscal year ended June 30, 2003 and 2002;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(b)the Company&#146;s quarterly report on Form 10-QSB for the quarter ended September 30, 2003, December 31, 2003 and March 31, 2004. </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(c) the Registrant&#146;s Form S-2 filed on April 3, 1987, pursuant to Section 12 of the Exchange Act, in which there is described the terms, rights and provisions applicable to the Registrant&#146;s outstanding Common Stock;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(d) any document filed by the Company with the Commission pursuant to Sections 13(a), 13( c), 14 or 15(d) of the Exchange Act subsequent to the date hereof, but prior to the filing of a post-effective amendment to this Registration Statement which Indicates that all shares of Common Stock registered hereunder have been sold or that deregisters all such shares of common Stock then remaining unsold, such documents being deemed to be incorporated by reference herein and to be part hereof from the date of filing of such documents.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Item 4. Description of Securities</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Not applicable.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Item 5. Interests of Named Experts and Counsel</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>The legality of the shares of Common Stock offered hereby has been passed upon for the Company by Naccarato &amp; Associates. A portion of the shares being registered herein are being issued to Family Room entertaiment&#146;s attorney in such law firm for services provided to FMLY.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Item 6. Indemnification of Directors and Officers</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Section 53-12-2E of the New Mexico Statutes Annotated 1978 provides in general that a company&#146;s articles of incorporation may provide that a director shall not be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director unless:&nbsp; </FONT><BR><FONT face="Times Roman" size=2>(1) the director has breached or failed to perform the duties of the director's office in compliance with Subsection B of Section 53-11-35 NMSA 1978; and&nbsp; (2) the breach or failure to perform constitutes:&nbsp; </FONT><BR><FONT face="Times Roman" size=2>(a) negligence, willful misconduct or recklessness in the case of a director who has either an ownership interest in the corporation or receives in his capacity as a director or as an employee of the corporation compensation of more than two thousand dollars ($2,000) from the corporation in any calendar year; or&nbsp; </FONT><BR><FONT face="Times Roman" size=2>(b) willful misconduct or recklessness in the case of a director who does not have an ownership interest in the corporation and does not receive in his capacity as director or as an employee of the corporation compensation of more than two thousand dollars ($2,000) from the corporation in any calendar year.&nbsp; </FONT><BR><FONT face="Times Roman" size=2>Such a provision in the articles of incorporation shall, however, only eliminate the liability of a director for action taken as a director or any failure to take action as a director at meetings of the board of directors or of a committee of the board of directors or by virtue of action of the directors without a meeting pursuant to Section 53-11-43 NMSA 1978, on or after the date when such provision in the articles of incorporation becomes effective.&nbsp;</FONT><BR></DIV>
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<DIV>&nbsp;</DIV><BR>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Article XVI of the Company&#146;s Article of Incorporation provide that the Company shall indemnify each director and each officer, his heirs, executors and administrators, against expenses reasonably incurred or liability incurred by him in connection with any action, suite or proceeding to which ha may be made a party by reason of his being or having been a Director or officer of the corporation, except in relation (i) to matters as to which he shall be finally adjudged in such action, suit or proceeding to be liable for fraud or misconduct, and (ii) to liabilities under the Securities Act of 19333, as amended, or other applicable securities laws. In the event of a settlement before or after action or suite, indemnification shall be provided only in connection with such matters covered by the settlement as to which the corporation is advised by counsel that the person to be indemnified was not guilty of such fraud or misconduct. The foregoing right of indemnification shall not exclude other rights to which he may be entitled. </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Commission Policy</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers or persons controlling the Company, the Company has been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable. </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Experts</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>The consolidated financial statements of the company appearing in the Company&#146;s Annual Report (Form 10-KSB) for the year ended June 30, 2003 have been audited by Ham, Langston &amp; Brezina, L.L.P, independent public accounts, as set forth in their report thereon included therein and incorporated herein by reference. Such financial statements are incorporated herein in reliance upon the reports of Ham, Langston &amp; Brezena, L.L.P, pertaining to such financial statements (to the extent filed with the Commission) given upon the authority of such firm as experts in giving such reports.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Item 7. Exemption from Registration Claimed</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Not applicable.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Item 8.</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Exhibits</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>The Exhibits to this registration statement are listed in the index to Exhibits on page 19.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Item 9. Undertakings</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(a)</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>The undersigned registrant hereby undertakes:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(1)</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>To file during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>(i)</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>To include any prospectus required by Section 10(a)(3) of the securities Act 1933:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT face="Times Roman" size=2>To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>(iii)</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that paragraph (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraph is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15 (d) of the Exchange Act that are incorporated by reference in this Registration Statement.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV>
<TABLE id=PGBRK cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>16</FONT></TD>
<TD align=right width="34%"><FONT size=1>&nbsp;</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3><FONT size=1>
<HR style="PAGE-BREAK-AFTER: always" noShade SIZE=1>
</FONT></TD></TR>
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<TD width="100%" colSpan=3>&nbsp;</TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(2)</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>That for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendments shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(3)</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>To remove from registration by mean of a post-effective amendment any of the securities being registered hereunder that remain unsold at the termination of the offering.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(b)</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>The undersigned Company hereby undertakes that for purposes of determining any liability under the Securities Act of 1933, each filing of the company&#146;s annual report pursuant to Section 13 (a) or Section 15 (d) of the Securities and Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan&#146;s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>(c)</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company pursuant to the above-described provisions or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and</FONT><FONT face="Times Roman" size=2> </FONT><FONT face="Times Roman" size=2>will be governed by the final adjudication of such issue.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<TABLE id=PGBRK width="100%" border=0>
<TR>
<TD vAlign=top width="100%" colSpan=3>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center></DIV></TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>17</FONT></TD>
<TD align=right width="33%"><FONT size=1>&nbsp;</FONT></TD></TR>
<TR>
<TD colSpan=3><FONT size=1>
<HR style="PAGE-BREAK-AFTER: always" width="100%" noShade SIZE=1>
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<TD vAlign=top width="100%" colSpan=3></TD></TR></TABLE><BR>
<DIV></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT face="Times Roman" size=3><B>SIGNATURES</B></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing a form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Beverly Hills, State of California on September 3, 2004.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 180pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=3><U>By /s/ George Furla</U></FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT> <FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT> <FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>George Furla, President, Chief Executive Officer, Chief Accounting Officer and Director</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT></FONT><FONT face="Times Roman" size=3><U>By /s/ Randall Emmett</U></FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT> <FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT> <FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Randall Emmett, Chief Operating Officer, </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>And Director</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=3><U>Signature</U></FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT> <FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT> <FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=3><U>Title</U></FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT> <FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT> <FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT> <FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT> <FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=3><U>Date </U></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2><U>/s/George Furla</U></FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT face="Times Roman" size=2>Chairman of the Board of Directors</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>September 3, 2004</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>George Furla&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT face="Times Roman" size=2>President and Chief Executive&nbsp;</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="Times Roman" size=2>Officer and Director </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2><U>/s/ Randall Emmett</U></FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; </FONT><FONT face="Times Roman" size=2>Chief Operating Officer and</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT> <FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>September 3, 2004</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>Randall Emmett</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT> <FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Director</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV>
<TABLE id=PGBRK cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>18</FONT></TD>
<TD align=right width="34%"><FONT size=1>&nbsp;</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3><FONT size=1>
<HR style="PAGE-BREAK-AFTER: always" noShade SIZE=1>
</FONT></TD></TR>
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<TD width="100%" colSpan=3>&nbsp;</TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=3><B>INDEX TO EXHIBITS</B></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR>
<TD vAlign=top align=left width="22%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=3><B>Exhibit</B></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=3><B>NO.</B></FONT></DIV></TD>
<TD vAlign=top align=left width="22%">
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=3><B>Description</B></FONT></DIV></TD>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>5.1</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Opinion of Counsel, regarding the legality of the securities registered hereunder.</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=3>10.45&nbsp;&nbsp;&nbsp; 2004 AMENDED CONSULTING AND LEGAL SERVICES PLAN</FONT></DIV>
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<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT face="Times Roman" size=2>23.1</FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT face="Times Roman" size=2>Consent of Ham, Langston &amp; Brezena, L.L.P </FONT></DIV>
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[{"type": "S-8", "sequence": "1", "filename": "body.htm", "description": "FORM S-8 PROSPECTUS SEPTEMBER 2004", "secsgml_size_bytes": 164369}]
{"company-data": {"conformed-name": "FAMILY ROOM ENTERTAINMENT CORP", "cik": "0000049444", "assigned-sic": "7812", "irs-number": "850206160", "state-of-incorporation": "NM", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-118788", "film-number": "041015818"}, "business-address": {"street1": "8530 WILSHIRE BLVD.", "street2": "SUITE 420", "city": "BEVERLY HILLS", "state": "CA", "zip": "90211", "phone": "3238502800"}, "mail-address": {"street1": "8530 WILSHIRE BLVD.", "street2": "SUITE 420", "city": "BEVERLY HILLS", "state": "CA", "zip": "90211"}, "former-company": [{"former-conformed-name": "COBB RESOURCES CORP", "date-changed": "19920703"}, {"former-conformed-name": "COBB NUCLEAR CORP", "date-changed": "19810310"}, {"former-conformed-name": "HYDRO NUCLEAR CORP", "date-changed": "19781015"}]}
Form S-8 prospectus September 2004
As filed with the Securities and Exchange Commission on September 3, 2004 Reg. No. 33
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________________________
FAMILY ROOM ENTERTAINMENT CORPORATION
(Exact name of registrant as specified in its charter)
New Mexico
85-0206160
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
identification No.)
8530 Wilshire Blvd. Suite 420
Beverly Hills, California 90211
(Address of principal executive offices)
________________________________________________
AMENDED 2004 CONSULTING AND LEGAL SERVICES PLAN
(Full title of plan)
________________________________
George Furla
President
8530 Wilshire Blvd. Suite 420
Beverly Hills, California 90211
(Name and address of agent for service)
(310) 659-9411
(Telephone number, including area code of agent for service)
Copy to:
Owen Naccarato, Esq.
19600 Fairchild, Suite 260
Irvine, CA 92612
(949) 851-9261
CALCULATION OF REGISTRATION FEE
Title of securities
to be registered
Amount to be
Registered
Proposed maximum
offering price
per share
Proposed maximum
Aggregate offering
Price
Amount of
Registration fee
Common Stock
($.01 par value)
25,000,000
$0.065
$1,625,000
$205.89
Estimated solely for the purpose of determining the amount of registration fee and pursuant to Rules 457(c) and 457 (h) of the General Rules and Regulations under the Securities Act of 1993, based upon the average of the bid and asked prices per share of the registrant's common stock reported by the OTC Nasdaq Stock Market on September 1, 2004.
1
EXPLANATORY NOTE
The Company is offering shares of its common stock to various individuals for consulting and legal services performed on the Company's behalf. This issuance of shares is being made pursuant to an Amendment to the Consulting and Legal Services Plan adopted by the Board of Directors on January 2, 2004. The Board has equated this number of shares to the value of the legal or consulting services provided or to be provided by these individuals. The shares issued hereunder to eligible participants who are not affiliates of the Company as defined in Rule 405 of the Securities Act will not be subject to any resale restrictions. The Plan is not qualified under ERISA.
The Amendment to the plan contains shares that constitute "control securities" under General Instruction C to Form S-8. These control securities may be offered and sold on a continuous or delayed basis in the future under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act").
This registration statement contains two parts. The first part contains an "offer prospectus" prepared in accordance with Part I of Form S-3 (in accordance with Instruction C of Form S-8). The second part contains information required in the registration statement pursuant to Part II of Form S-8.
2
OFFER PROSPECTUS
FAMILY ROOM ENTERTAINMENT CORPORATION
25,000,000 Shares of Common Stock
under the AMENDED
2004 CONSULTING AND LEGAL SERVICES PLAN
of Family Room Entertainment Corporation
The shares we are registering are either currently held by or will be issued to certain of our stockholders, employees and consultants upon the exercise of stock options or the issuance of shares granted under our Amended 2004 Consulting and Legal Services Plan. We will pay the expenses of registering the shares.
Our common stock is quoted on the Over-The-Counter Bulletin Board under the symbol "FMLY." On September 1, 2004, the closing price of our common stock was $0.065 per share.
You should carefully consider the "Risks Factors" section beginning on page 8 of this Offer Prospectus.
These shares have not been approved by the Securities and Exchange Commission or any state securities commission nor have these organizations determined whether this Prospectus is complete or accurate. Any representation to the contrary is a criminal offense.
The date of this Offer Prospectus is September 2, 2004.
3
TABLE OF CONTENTS
SUMMARY
5
RISK FACTORS
6
PROCEEDS FROM SALE OF THE SHARES
9
SELLING STOCKHOLDERS
9
HOW THE SHARES MAY BE DISTRIBUTED
10
LEGAL
12
EXPERTS
12
WHERE YOU CAN FIND MORE INFORMATION
12
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
12
INDEMNIFICATION OF DIRECTORS AND DIRECTORS
13
4
SUMMARY
Family Room Entertainment Corporation
Family Room Entertainment Corp. ("FMLY") is engaged in key aspects of motion picture entertainment, including production, production services, finance and distribution. FMLY develops, produces and performs production-related services for the entertainment industry mainly through three wholly owned subsidiaries: Emmett/Furla Films Productions Corp. (EFFP), a motion picture development, production and production-related service entity that primarily develops, produces and provides production-related services for motion pictures intended for worldwide theatrical release; Emmett Furla Films Distribution LLC (EFFD), which was set up to oversee and arrange world wide distribution of FMLY's entertainment projects and properties, and E F F Independent, Inc.( EFFI)., which was setup primarily to develop and produce action adventure and family-oriented motion pictures for television and home video distribution, as well as episodic television and Internet programming. In addition, EFFP's subsidiary, Good Entertainment Service, Inc., is a production servicing company.
Additionally, FMLY's subsidiaries Family Room Live Entertainment, Inc (FRLE) and Spotlight One LLC arrange for live performances and home entertainment for the film industry.
EFFI has two wholly owned subsidiaries, Family Room Entertainment Music Publishing Corp., and Emmett/Furla Films Music Publishing Com., which oversee FMLY's, EFFI's, EFFP's and their subsidiaries' music publishing (ancillary rights associated with the creation of original music for motion pictures, live entertainment and home entertainment).
FMLY's feature film division, Emmett/Furla Films Productions Corp., develops and produces low- to medium-budget films. FMLY's low- to medium-budget films have had production budgets ranging from less than $1 million to $30 million, although FMLY, from time to time, may produce and release films having higher or much higher budgets. FMLY's low-budget films are primarily targeted for direct distribution to the television and home video markets and its medium-budget films are generally targeted for initial theatrical release. FMLY generally retains distribution rights, when available, through Emmett/Furla Films Distribution, LLC. FMLY's films generally are distributed by third-party licensees domestically and by third-party sales agents internationally.
For the nine months ended March 31, 2004, we generated revenues in the amount of $676,202 and a net loss of $2,594,123. In addition, for the year ended June 30, 2003, we generated revenue in the amount of $1,005,441 and a net loss of $2,258,164. Our accumulated deficit for the year ended June 30, 2003 was ($13,062,554).
Our principal offices are located at 8530 Wilshire Boulevard, Suite 420, Beverly Hills, California 90211, and our telephone number is (310) 659-9411. We are a New Mexico corporation.
5
Risk Factors
An investment in shares of FMLY's Common Stock involves a high degree of risk. You should carefully consider the following information which summarizes all material risks, together with the other information contained in this prospectus, before you decide to buy FMLY's common stock. If any of the following risks actually occur, FMLY's business would likely suffer. In these circumstances, the market price of FMLY's common stock could decline, and you may lose all or part of your investment.
Risks Relating to our Business:
Our success depends on the unpredictable commercial success of the films we produce
Operating in the feature film industry involves a substantial degree of risk. Each feature film is an individual artistic work, and unpredictable audience reactions primarily determine commercial success. The commercial success of feature film also depends upon the quality and acceptance of other competing programs or feature films released into the marketplace at or near the same time, critical reviews, the availability of alternative forms of entertainment and leisure activities, general economic conditions and other tangible and intangible factors, all of which are subject to change and cannot be predicted with certainty. Our success will depend on the experience and judgment of our management to select and develop new investment and production opportunities.
The production, completion and distribution of feature films require a significant amount of capital.
Although we intend to continue to reduce the risks of our financial involvement in the production costs of our productions through financial assistance from distributors there can be no assurance that we will continue to successfully implement such arrangements or that we would not be subject to substantial financial risks relating to the production, completion and release of future television programs and feature films. In addition, a significant amount
of time may elapse between our expenditure of funds and the receipt of revenues from our television programs or feature films.
Budget Overruns May Adversely Affect Our Business
.
Actual motion picture costs may exceed their budget, sometimes significantly. Risks such as labor disputes, death or disability of star performers, rapid high technology changes relating to special effects or other aspects of production, shortages of necessary equipment, damage to film negatives, master tapes and recordings or adverse weather conditions may cause cost overruns and delay or frustrate completion of a production. If a film incurs substantial budget overruns, we may have to seek additional financing from outside sources to complete production of a television program or motion picture. No assurance can be given as to the availability of such financing on terms acceptable to us. In addition, if a film incurs substantial budget overruns, there can be no assurance that such costs will be recouped, which could have a significant impact on our business, results of operations or financial condition.
Distributors' Failure to Promote Our Films May Adversely Affect Our Business.
Decisions regarding the timing of release and promotional support of our feature films are important in determining the success of a feature film. As with most production companies, for our product distributed by others we do not control the timing and manner in which our distributors distribute our feature films. Although our distributors have a financial interest in the success of any such feature film, any decision by our distributors not to distribute or promote one of our feature films or to promote competitors' feature films to a greater extent than it promotes ours could have a material adverse affect on our business, results of operations or financial condition.
6
Required estimates and assumptions in reporting our film operating results may differ from actual results.
We generate a majority of our future revenue from the development and production of feature films. Our future revenues will depend upon the timing and the level of market acceptance of our feature films, as well as upon the cost to produce, distribute and promote these feature films. The revenues derived from the production of a feature film depend primarily on the feature film's acceptance by the public, which cannot be predicted and do not necessarily bear a direct correlation to the production costs incurred. The commercial success of a feature film also depends upon promotion and marketing and certain other factors. Accordingly, our revenues are, and will continue to be, extremely difficult to forecast.
Our Operating Results May Fluctuate Significantly. We expect that our future operating results will fluctuate significantly as a result of, among other factors:
- the timing of domestic and international releases of current and future feature films we produce;
- the success of our feature films;
- the timing of the release of related products into their respective markets;
- the costs to distribute and promote the feature films;
- the success of our distributors in marketing our feature films;
- the timing of receipt of proceeds generated by the feature films from distributors;
- the introduction of new feature films by our current and future competitors;
- the timing and magnitude of operating expenses and capital expenditures;
- the level of unreimbursed production costs in excess of budgeted maximum amounts;
- the timing of the recognition of advertising costs for accounting purposes under SoP 00-2; and
- general economic conditions, including continued slowdown in advertiser spending.
As a result, we believe that our results of operations may fluctuate significantly, and it is possible that our operating results could be below the expectations of equity research analysts and investors.
Revenues and Costs Recognized in Certain Periods May be Overstated or Understated Due to estimates inherent in the application of entertainment accounting policies.
In preparing our financial statements in accordance with Generally Accepted Accounting Principles, we follow the guidance issued by the American Institute of Certified Public Accountants for Accounting by Producers or Distributors of Films contained in Statement of Position 00-2 ("SoP 00-2"). Under SoP 00-2, we recognize revenue on films at the later of the following dates: when films are delivered, or access to the film is available to the customer; when the license period begins; and when the film is unconditionally available to the customers. In addition, the fee must be determinable and collection must be reasonably assured. As a result, our expected cash flows may not necessarily relate to the revenue recognized in a given period. We capitalize costs of producing and developing films and television programs. Capitalized costs include costs of film rights and screenplays, direct costs of production, interest and production overhead. We amortize those costs using the individual film-forecast method, which involves estimating ultimate revenues of each film. We revise our ultimate revenue estimates on a quarterly basis. The
cost of film prints is deferred and charged to expense on a straight-line basis over the period of theatrical release. We also estimate participation and residual costs each period, which may vary from the actual paid participation and residual costs. We assess the valuation of our films on a quarterly basis. When events or changes in circumstances indicate that the fair value of a film is less than its unamortized film costs, we write down the film to fair value. Fair value of a film is determined using the discounted cash flow approach based on our estimate of the most likely cash flows and an appropriate discount rate. As a result of uncertainties in these estimation processes, actual results may vary from the estimates.
7
Risks Relating to our Stock:
FMLY's common stock is subject to the "Penny Stock" rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.
FMLY's shares of Common Stock are "penny stocks" as defined in the Exchange Act, which are traded in the over-the-counter market on the OTC Bulletin Board. As a result, an investor may find it more difficult to dispose of or obtain accurate quotations as to the price of the shares of the Common Stock being registered hereby. In addition, the "penny stock" rules adopted by the Commission under the Exchange Act subject the sale of the shares of the Common Stock to certain regulations which impose sales practice requirements on broker-dealers. For example, broker-dealers selling such securities must, prior to effecting the transaction, provide their customers with a document that discloses the risks of investing in such securities. Included in this document are the following:
The bid and offer price quotes for the penny stock, and the number of shares to which the quoted prices apply.
The brokerage firm's compensation for the trade.
The compensation received by the brokerages firm's salesperson for the trade.
In addition, the brokerage firm must send the investor:
Monthly account statement that gives an estimate of the value of each penny stock in your account.
A written statement of your financial situation and investment goals.
Legal remedies which may be available to you are as follows:
If penny stocks are sold to you in violation of your rights listed above, or other federal or state securities laws, you may be able to cancel your purchase and get your money back.
If the stocks are sold in a fraudulent manner, you may be able to sue the persons and firms that caused the fraud for damages.
If you have signed an arbitration agreement, however, you may have to pursue your claim through arbitration.
If the person purchasing the securities is someone other than an accredited investor or an established customer of the broker-dealer, the broker-dealer must also approve the potential customer's account by obtaining information concerning the customer's financial situation, investment experience and investment objectives. The broker-dealer must also make a determination whether the transaction is suitable for the customer and whether the customer has sufficient knowledge and experience in financial matters to be reasonably expected to be capable of evaluating the risk of transactions in such securities. Accordingly, the Commission's rules may limit the number of potential purchasers of the shares of the Common Stock.
Resale restrictions on transferring "penny stocks" are sometimes imposed by some states, which may make transactions in our stock cumbersome and may reduce the value of an investment in our stock.
Various state securities laws impose restrictions on transferring "penny stocks" and as a result, investors in the Common Stock may have their ability to sell their shares of the Common Stock impaired. For example, the Utah Securities Commission prohibits brokers from soliciting buyers for "penny stocks", which makes selling them more difficult.
8
FMLYs absence of dividends or the ability to pay them places a limitation on any investors return.
FMLY anticipates that for the foreseeable future, earnings will be retained for the development of its business. Accordingly, FMLY does not anticipate paying dividends on the common stock in the foreseeable future. The payment of future dividends will be at the sole discretion of FMLY's Board of Directors and will depend on FMLY's general business condition.
Information about forward-looking statements
This Prospectus contains certain forward-looking statements, which involve substantial risks and uncertainties. These forward-looking statements can generally be identified because the context of the statement includes words such as "may," "will," "except," "anticipate," "intend," "estimate," "continue," "believe," or other similar words. Similarly, this prospectus also contains forward-looking statements about our future. Forward-looking statements include statements about our:
Plans, Objectives, Goals, Strategies, Expectations for the future, Future performance and events,
Underlying assumptions for all of the above and other statements which are not statements of historical facts.
These forward-looking statements involve risks and uncertainties, which could cause our actual results to materially differ from our forward-looking statements. We make these forward-looking statements based on our analysis of internal and external historical trends, but there can be no assurance that we will achieve the results set forth in these forward-looking statements. Our forward-looking statements are expressed in good faith and we believe that there is a reasonable basis for us to make them.
In addition to other factors discussed in this prospectus, the following are important factors that could cause our actual results to materially differ from our forward-looking statements:
- Our ability to respond to changes in the marketplace
- Competitive factors
- The availability of financing on terms and conditions acceptable to us
- The availability of personnel with the appropriate technical skills
We have no obligation to update or revise these forward-looking statements to reflect future events.
Use of proceeds
The selling stockholders are offering all of the shares of common stock in this Offer Prospectus. We will not receive any proceeds from the sale of the shares of common stock, and if all of the options are exercised we will not receive any proceeds in connection with the exercise of stock options relating to such shares of common stock.
SELLING STOCKHOLDERS
The shares offered under our Offer Prospectus are being registered for Offers and Sales by selling stockholders who have or may in the future acquire their shares of our common stock by exercising options granted to them under our Amended 2003 Employee Compensation Plan. The selling stockholders named in the following table may resell all, a portion, or none of these shares of our common stock. There is no assurance that any of the selling stockholders will sell any or all of the shares of our common stock offered by them.
Participants under the Amended 2003 Employee Compensation Plan who are deemed to be "affiliates" of the Company who acquire shares of our common stock may be added to the selling stockholders listed below from time to time by use of a prospectus supplement filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended
9
Selling
Stockholder
Shares Beneficially Owned Prior to the Offering (1)
Shares Offered
For Sale
Shares Beneficially Owned After Offering
If All Offered Shares Are Sold
Number of Shares
Percentage(3)
Number of Shares
Percentage (4)
George Furla (2)
8,066,667
9.3
4,166,667
3,900,000
3.4
Randall Emmett (2)
6,873,220
7.9
4,166,667
2,706,553
2.4
Mercer D Walton III (2)
1,600,000
1.8
1,600,000
0
0
M. Elaine Grant (2)
1,100,000
1.3
1,100,000
0
0
Owen Naccarato (2)
1,100,000
1.3
1,100,000
0
0
Frank Garbutt (2)
250,000
0.3
250,000
0
0
Rosie Charbonneau (2)
250,000
0.3
250,000
0
0
Jose Jamie (2)
200,000
0.2
200,000
0
0
Avi Lerner (2)
500,000
0.6
500,000
0
0
Danny Dimbort (2)
500,000
0.6
500,000
0
0
Jeff Rice (2)
1,000,000
1.1
1,000,000
0
0
Misc. Other Consultants (2) (3)
10,166,666
11.7
10,166,666
0
0
25,000,000
(1) A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from the date of the registration statement upon the exercise of options or warrants. Each beneficial owner's percentage ownership is determined by assuming that options or warrants that are held by such person and which are exercisable within 60 days of the date of this registration statement have been exercised. Unless otherwise indicated, we believe that all persons named in the table have voting and investment power with respect to all shares of common stock beneficially owned by them.
(2) Includes all Shares issued to such named individuals upon the exercise of options and/or straight shares granted under the Amended 2004 Consultant and Legal Services Plan.
(3) Percentages based on 87,037,254 shares outstanding as of August 31, 2004
(3) Percentages based on 112,037,254 shares outstanding after the offering.
HOW THE SHARES MAY BE DISTRIBUTED
The selling shareholder may, from time to time, sell any or all of its shares of common stock on any stock exchange, market, or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. There is no assurance that the selling shareholder will sell any or all of the common stock in this offering. The selling shareholder may use any one or more of the following methods when selling shares:
.
Ordinary brokerage transactions and transactions in which the broker-
dealer solicits purchasers.
.
Block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction.
.
Purchases by a broker-dealer as principal and resale by the broker-
dealer for its own account.
10
.
An exchange distribution following the rules of the applicable
exchange
.
Privately negotiated transactions
.
Short sales or sales of shares not previously owned by the seller
.
Broker-dealers may agree with the selling shareholder to sell a
specified number of such shares at a stipulated price per share
.
A combination of any such methods of sale any other lawful method
The selling shareholder may also engage in:
.
Short selling against the box, which is making a short sale when the
seller already owns the shares.
.
Other transactions in our securities or in derivatives of our
securities and the subsequent sale or delivery of shares by the
stockholder.
.
Pledging shares to their brokers under the margin provisions of
customer agreements. If a selling shareholder defaults on a margin
loan, the broker may, from time to time, offer to sell the pledged
shares.
Broker-dealers engaged by the selling shareholder may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from selling shareholder in amounts to be negotiated. If any broker-dealer acts as agent for the purchaser of shares, the broker-dealer may receive commission from the purchaser in amounts to be negotiated. The selling shareholder does not expect these commissions and discounts to exceed what is customary in the types of transactions involved.
The selling shareholder and any broker-dealers or agents that are involved in selling the shares may be considered to be an "underwriter" within the meaning of the Securities Act for such sales. An underwriter is a person who has purchased shares from an issuer with a view towards distributing the shares to the public. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be considered to be underwriting commissions or discounts under the Securities Act.
Because the selling shareholder is deemed an "underwriter" within the meaning of Section 2(11) of the Securities Act, and will be subject to the prospectus delivery requirements:
We are required to pay all fees and expenses incident to the registration of the shares in this offering. However, we will not pay any commissions or any other fees in connection with the resale of the common stock in this offering. We have agreed to indemnify the selling shareholder and their officers, directors, employees and agents, and each person who controls any selling shareholder, in certain circumstances against certain liabilities, including liabilities arising under the Securities Act. The selling shareholder has agreed to indemnify us and our directors and officers in certain circumstances against certain liabilities, including liabilities arising under the Securities Act.
If the selling shareholder notifies us that they have a material arrangement with a broker-dealer for the resale of the common stock, then we would be required to amend the registration statement of which this prospectus is a part, and file a prospectus supplement to describe the agreements between the selling shareholder and the broker-dealer.
11
LEGAL OPINION
Owen Naccarato, Esq., has advised us with respect to the validity of the securities offered by this prospectus.
Experts
The financial statements of Family Room Entertainment Corporation at June 30, 2003, appearing in this Prospectus and Registration Statement have been audited by Ham, Langston & Brezina, L.L.P., independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any report or document we file at the public reference facilities maintained by the Securities and Exchange Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the Securities and Exchange Commission's regional offices located at 233 Broadway, New York, New York 10279, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0880 for more information about the public reference rooms. Our Securities and Exchange Commission filings are also available from the Securities and Exchange Commission's website located at HTTP://WWW.SEC.GOV.
Quotations for the prices of our common stock appear on the Over-The-Counter Bulletin Board, and reports, proxy statements and other information about us can also be inspected at the offices of the National Association of Securities Dealers, Inc., and 1735 K STREET, N.W., WASHINGTON D.C. 20006.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this Offer Prospectus, and later information that we file with the Securities and Exchange Commission will automatically update and supersede this information.
We incorporate by reference the following filings and any future filings made with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
The following documents filed by Family Room Entertainment Corporation (the "Company") with the Securities and Exchange Commission (the "Commission") are incorporated by reference herein:
(a) the Company's annual report on Form 10-KSB for the fiscal year ended June 30, 2003 and 2002;
(b)the Company's quarterly report on Form 10-QSB for the quarters ended September 30, 2003, December 31, 2003 and March 31, 2004.
(c) the Registrant's Form S-2 filed on April 3, 1987, pursuant to Section 12 of the Exchange Act, in which there is described the terms, rights and provisions applicable to the Registrant's outstanding Common Stock;
(d) any document filed by the Company with the Commission pursuant to Sections 13(a), 13( c), 14 or 15(d) of the Exchange Act subsequent to the date hereof, but prior to the filing of a post-effective amendment to this Registration Statement which Indicates that all shares of Common Stock registered hereunder have been sold or that deregisters all such shares of common Stock then remaining unsold, such documents being deemed to be incorporated by reference herein and to be part hereof from the date of filing of such documents.
12
This Offer Prospectus, which is a part of the registration statement, does not contain all the information set forth in, or annexed as exhibits to, the registration statement, as permitted by the SEC's rules and regulations. For further information with respect to us and the common stock offered under this Offer Prospectus, please refer to the registration statement, including the exhibits, copies of which may be obtained from the locations described above. Statements concerning any document filed as an exhibit are not necessarily complete and, in each instance, we refer you to the copy of the document filed as an exhibit to the registration statement.
You may request, at no cost, a copy of any or all of the information incorporated by reference by writing or
telephoning us at: Family Room Entertainment Corporation,
8530 Wilshire Blvd., Beverly Hills, California 90211, (310) 659-9411.
You should only rely on the information incorporated by reference or provided in this Offer Prospectus or any supplement. We have not authorized anyone else to provide you with different information. Our common stock is not being offered in any state where the offer is not permitted. You should not assume that the information in this Offer Prospectus or any supplement is accurate as of any date other than the date on the front of those documents.
Indemnification of Directors and Officer
Section 53-12-2E of the New Mexico Statutes Annotated 1978 provides in general that a company's articles of incorporation may provide that a director shall not be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director unless:
(1) the director has breached or failed to perform the duties of the director's office in compliance with Subsection B of Section 53-11-35 NMSA 1978; and (2) the breach or failure to perform constitutes:
(a) negligence, willful misconduct or recklessness in the case of a director who has either an ownership interest in the corporation or receives in his capacity as a director or as an employee of the corporation compensation of more than two thousand dollars ($2,000) from the corporation in any calendar year; or
(b) willful misconduct or recklessness in the case of a director who does not have an ownership interest in the corporation and does not receive in his capacity as director or as an employee of the corporation compensation of more than two thousand dollars ($2,000) from the corporation in any calendar year.
Such a provision in the articles of incorporation shall, however, only eliminate the liability of a director for action taken as a director or any failure to take action as a director at meetings of the board of directors or of a committee of the board of directors or by virtue of action of the directors without a meeting pursuant to Section 53-11-43 NMSA 1978, on or after the date when such provision in the articles of incorporation becomes effective.
Article XVI of the Company's Article of Incorporation provide that the Company shall indemnify each director and each officer, his heirs, executors and administrators, against expenses reasonably incurred or liability incurred by him in connection with any action, suite or proceeding to which ha may be made a party by reason of his being or having been a Director or officer of the corporation, except in relation (i) to matters as to which he shall be finally adjudged in such action, suit or proceeding to be liable for fraud or misconduct, and (ii) to liabilities under the Securities Act of 19333, as amended, or other applicable securities laws. In the event of a settlement before or after action or suite, indemnification shall be provided only in connection with such matters covered by the settlement as to which the corporation is advised by counsel that the person to be indemnified was not guilty of such fraud or misconduct. The foregoing right of indemnification shall not exclude other rights to which he may be entitled.
13
Commission Policy
Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers or persons controlling the Company, FMLY has been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable
14
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by Family Room Entertainment Corporation (the "Company") with the Securities and Exchange Commission (the "Commission") are incorporated by reference herein:
(a) the Company's annual report on Form 10-KSB for the fiscal year ended June 30, 2003 and 2002;
(b)the Company's quarterly report on Form 10-QSB for the quarter ended September 30, 2003, December 31, 2003 and March 31, 2004.
(c) the Registrant's Form S-2 filed on April 3, 1987, pursuant to Section 12 of the Exchange Act, in which there is described the terms, rights and provisions applicable to the Registrant's outstanding Common Stock;
(d) any document filed by the Company with the Commission pursuant to Sections 13(a), 13( c), 14 or 15(d) of the Exchange Act subsequent to the date hereof, but prior to the filing of a post-effective amendment to this Registration Statement which Indicates that all shares of Common Stock registered hereunder have been sold or that deregisters all such shares of common Stock then remaining unsold, such documents being deemed to be incorporated by reference herein and to be part hereof from the date of filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
The legality of the shares of Common Stock offered hereby has been passed upon for the Company by Naccarato & Associates. A portion of the shares being registered herein are being issued to Family Room entertaiment's attorney in such law firm for services provided to FMLY.
Item 6. Indemnification of Directors and Officers
Section 53-12-2E of the New Mexico Statutes Annotated 1978 provides in general that a company's articles of incorporation may provide that a director shall not be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director unless:
(1) the director has breached or failed to perform the duties of the director's office in compliance with Subsection B of Section 53-11-35 NMSA 1978; and  (2) the breach or failure to perform constitutes:
(a) negligence, willful misconduct or recklessness in the case of a director who has either an ownership interest in the corporation or receives in his capacity as a director or as an employee of the corporation compensation of more than two thousand dollars ($2,000) from the corporation in any calendar year; or
(b) willful misconduct or recklessness in the case of a director who does not have an ownership interest in the corporation and does not receive in his capacity as director or as an employee of the corporation compensation of more than two thousand dollars ($2,000) from the corporation in any calendar year.
Such a provision in the articles of incorporation shall, however, only eliminate the liability of a director for action taken as a director or any failure to take action as a director at meetings of the board of directors or of a committee of the board of directors or by virtue of action of the directors without a meeting pursuant to Section 53-11-43 NMSA 1978, on or after the date when such provision in the articles of incorporation becomes effective.
15
Article XVI of the Company's Article of Incorporation provide that the Company shall indemnify each director and each officer, his heirs, executors and administrators, against expenses reasonably incurred or liability incurred by him in connection with any action, suite or proceeding to which ha may be made a party by reason of his being or having been a Director or officer of the corporation, except in relation (i) to matters as to which he shall be finally adjudged in such action, suit or proceeding to be liable for fraud or misconduct, and (ii) to liabilities under the Securities Act of 19333, as amended, or other applicable securities laws. In the event of a settlement before or after action or suite, indemnification shall be provided only in connection with such matters covered by the settlement as to which the corporation is advised by counsel that the person to be indemnified was not guilty of such fraud or misconduct. The foregoing right of indemnification shall not exclude other rights to which he may be entitled.
Commission Policy
Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers or persons controlling the Company, the Company has been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
Experts
The consolidated financial statements of the company appearing in the Company's Annual Report (Form 10-KSB) for the year ended June 30, 2003 have been audited by Ham, Langston & Brezina, L.L.P, independent public accounts, as set forth in their report thereon included therein and incorporated herein by reference. Such financial statements are incorporated herein in reliance upon the reports of Ham, Langston & Brezena, L.L.P, pertaining to such financial statements (to the extent filed with the Commission) given upon the authority of such firm as experts in giving such reports.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8.
Exhibits
The Exhibits to this registration statement are listed in the index to Exhibits on page 19.
Item 9. Undertakings
(a)
The undersigned registrant hereby undertakes:
(1)
To file during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i)
To include any prospectus required by Section 10(a)(3) of the securities Act 1933:
(ii)
To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement:
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that paragraph (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraph is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15 (d) of the Exchange Act that are incorporated by reference in this Registration Statement.
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(2)
That for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendments shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by mean of a post-effective amendment any of the securities being registered hereunder that remain unsold at the termination of the offering.
(b)
The undersigned Company hereby undertakes that for purposes of determining any liability under the Securities Act of 1933, each filing of the company's annual report pursuant to Section 13 (a) or Section 15 (d) of the Securities and Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company pursuant to the above-described provisions or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and
will be governed by the final adjudication of such issue.
17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing a form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Beverly Hills, State of California on September 3, 2004.
By /s/ George Furla
George Furla, President, Chief Executive Officer, Chief Accounting Officer and Director
By /s/ Randall Emmett
Randall Emmett, Chief Operating Officer,
And Director
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/George Furla
Chairman of the Board of Directors
September 3, 2004
George Furla
President and Chief Executive
Officer and Director
/s/ Randall Emmett
Chief Operating Officer and
September 3, 2004
Randall Emmett
Director
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INDEX TO EXHIBITS
Exhibit
NO.
Description
Sequentially
Numbered Pages
5.1
Opinion of Counsel, regarding the legality of the securities registered hereunder.
10.45    2004 AMENDED CONSULTING AND LEGAL SERVICES PLAN
23.1
Consent of Ham, Langston & Brezena, L.L.P
23.2
Consent of Counsel (included as part of Exhibit 5.1)
19