THE STEWART REPORT HOTLINE SUMMARY

Scheduled Saturday, November 12, 2005; Delivered on Monday, November 14
Follow-Up Edition To Be Recorded Wednesday, November 23, 2005

Next Regular HotLine Planned for Monday, December 19, 2005

Overview:
The Devil is in the details. It's always been that way – and always will be. That's for certain. But there are times – rarified occasions, really – when dealing with those details can be an absolute pleasure. This is one of those occasions. We’ll jump into the thick of the situation in just a moment. Before we do, however, the smart move would be to take one minute and two or three hundred steps backward – or however far back a man would have to stand – to appreciate the enormity of a Big Picture.

The Big Picture I’m talking about is the current global concern regarding the “Bird Flu.”

With “Bird Flu,” we could, as human beings, be looking at the greatest planetary health crisis of our generation. As Americans, we’re likely to be safer than most in this crisis, though we’re far from being immune. But, as long-time investors in Amarillo Biosciences and Emergency Filtration Products, we do find ourselves holding a pair of aces in a high-stakes game where the other players don’t even have cards.

Coming late to the table and likely more scared than prepared, most people hold little more than a pie-in-the-sky hope that a handful of large drug makers like Roche Pharmaceuticals will produce enough vaccine to inoculate the world. There’s fat chance of that – as evidenced by last year’s inability of drug companies to meet the demand for standard flu vaccine. There’s fatter chance still that present vaccines will never need to be re-invented – a slim-to-none scenario given that scientists see the “Bird Flu” virus, officially known as H5N1, changing itself into new and varying forms as rapidly as a teenager changes clothes before a first date. Finally, the fattest chance of all is that two-thirds of the world population will be able to afford double-doses of a $6.50-per-dose vaccine when its average wage is a mere $2.00 a day.

My point is, it’s time to get real – and it’s also time to make money.

This shouldn’t be difficult now that international concern about the disease has captured center-stage – and, tragically, is staying there. After reading the papers and watching TV news, even the horror show that was hurricane Katrina seems like a memory relative to the daily coverage Avian Influenza now commands. Clearly, this story is not going away. Quite the opposite, it’s actually gathering momentum.

Media coverage and money go hand in hand. Both are commodities. Both are pure power. Once married, they become power cubed. Now that mass media have embraced the pandemic, the market profits cannot be far behind.

Let’s be clear. I’m not talking about the mere double EMFP just enjoyed, nor the modest surge AMAR stockholders witnessed last week. No, what I’m saying, in straight-forward words, is that we’re staring at a spectacular, come-from-behind profit – a couple of King Hell stock wins that you’ll not likely forget.

Is it “Blood Money”? I suppose it would be if we were fueling the disease with greed or pandering to the pandemic for a mere profit motive. But we’re not. Instead, we are capitalizing a couple of entrepreneurial companies – special companies that find themselves both uniquely and strangely positioned to help mankind cope with, or perhaps even prevent, a one-of-a-kind pandemic.

So, good for us.

The Stewart Report and its subscriber members have exercised years of investment patience, which is a nice way of saying full-on perseverance. Now, we are positioned to fully capitalize on our research and appreciation for a pandemic situation we correctly identified in April – a full six months ahead of the U.S. Presidency, every national television network, the leading newspapers and all other financial newsletters. Ahead of just about everyone, really, except for the World Health Organization’s published papers. Fortuitously, this is where Amarillo’s Dr. Joe Cummins suggested we place our focus, and our money. Which we did.

Now, others are beginning to appreciate the financial implications. But they still don’t get it … not really. In simplest terms, last week the U.S. government got out its biggest, baddest checkbook and targeted more money toward prevention of this particular, highly peculiar pandemic than toward any other single health threat in the history of this country (which is another way of saying, “in the history of the world”). This time, the sum on the “Pay To” line was $1 billion – and the hope is that 80 million will be vaccinated as a result.

Nationally, that represents fewer than one-third of all American citizens. On a global level, we’re talking less than 1 percent of the population. The other 99 percent will be forced to seek alternative methods of prevention and treatment.

Masks will be one obvious choice for prevention – and EMFP has the most perfect commercial product available. Period.

On the drug front, AMAR has oral interferon – the only affordable avian-related anti-viral on earth.
Period.

Interferon is an anti-viral. It was discovered almost by accident because it was found to “interfere” with influenza in bird eggs. The connection is simple – and pure. Oral interferon is a preventative alternative that can be stored and stockpiled rapidly, without refrigeration; it’s a preventative alternative that can be swallowed instead of injected; a preventative backed by the full power, faith and resources of Hayashibara, one of Japan’s largest bio-pharmaceutical companies, one of the world’s largest privately held companies, and also Amarillo Biosciences’ largest shareholder, which it has been from almost Day One, 11 years ago, when AMAR went public. Finally, it’s a preventative that could cost a mere 40 cents per person.

Consider all of this, then tell me we’re not on to Something Big.

As long-time subscriber/members know, I’ve always more or less favored Andrew Carnegie’s investment precept – the one that says “put all your eggs in one basket, then closely watch the basket.” Today, I’m not so sure … for all we know, any basket of eggs could well become infected.

Aside from adjustments to my investment style, the severity of the “Bird Flu” situation has even forced me to re-think some of my shopping habits. As but one example, I told the girl who does my weekly “grocery store thing” to switch from free-range eggs to the less expensive, more pedestrian white ones. Why? Because regular laying chickens are caged in covered hen houses, where they’re less likely to come into contact with birds of the wild – and thus less likely to come in contact with the virus.

Even The Colonel knows our spending habits will change as fears soon rise. Last week, Kentucky Fried Chicken announced that it is formulating an ad campaign to ward off anticipated sales declines.

These are mere slivers of the economic fallout you can expect – and profit from – in the weeks and months to come. Sectors damaged by the pandemic will range from fast food restaurants and grocery suppliers – for reasons just mentioned – all the way to hotel chains, rental-car companies and airlines (especially the international carriers) as everyone weighs the risks of traveling through atmospheres of disease.

The latter thought is not entirely my own – or so I’m told. My editor said that Ted Koppel was on Dave Letterman’s show Friday night and projected that, for Americans, the “Bird Flu” issue will likely be focused more on economic loss than the loss of life, starting with financial declines in the industries just mentioned because of “geographic polarization.” Likewise, American communities where avian infections initially appear could face economic isolation – cut off by tourists, business travelers, delivery services and even transport companies carrying foodstuffs and other needed supplies.

The next night, Saturday, the Discovery Channel aired an hour-long show titled “Killer Flu,” which reiterated what Koppel said, but on its own terms. Obviously, the Discovery Channel’s format is not as light-hearted as the Letterman show. It advantaged its documentary format by expanding the H5N1 discussion to include social, as well as economic ramifications. Among these were predictions that parents will second-guess sending their kids to school. Commuters will purposely avoid utilizing mass transit systems. Absolutely no one will want to place themselves in crowded and therefore potentially infectious arenas of the everyday world.

That was yesterday.

Tonight, “Killer Flu” airs at 10 p.m., and then again at 2 a.m. However, this information is of no value since it’s10 p.m. – and I’m still writing. Be assured, though, this is serious enough it will run again. Watch for it. Better yet, visit Amarillo Biosciences’ website at amarbio.com. Click on the “Most Recent Bird FLU Reports ” link. You’ll see the upcoming program times. Check as well for the National Geographic program, “Microkillers: The New Super Flu.” I’d also suggest that you mine the AMAR site for other links; they offer a wealth of additional insight into the problem – and the opportunity.

All of which brings me – roundtrip – back to my earlier ideas about baskets and eggs and disease and diversification. But mostly diversification …

The Stewart Report’s small basket of equally small stocks consists of three companies in which all subscribers should own shares. There are three stocks for a reason. Believe me, it’s all very intentional.

The first two – Amarillo Biosciences, Inc. (Nasdaq/BB: AMAR – 42 cents), and Emergency Filtration Products, Inc. (Nasdaq/BB: EMFP – $0.79) – are now brightly colored. As early as year-end, it’s possible that one or both could shine with all the patina and prestige of a Fabregé.

Conversely, ostensibly, the third one – International Card Establishment, Inc. (Nasdaq/BB: ICRD – $0.24) – sports the same fabulous flair and artistic imagination of an Easter egg painted white.

But that’s okay. Warren Buffett made billions off straight-up-the-middle deals similar to ICRD. In other words, “Boring Is Beautiful.” At least, it’s beautiful IF the outward appearance belies the brilliance underneath … IF the stockholders at large are bored, while the major stockholders are enamored with The Board… IF, across the board, the Company continually surpasses virtually every revenue expectation – especially when the Company was actually started for the sole purpose of being sold, with the eventual sale price predicated on achieving specific revenue goals.

Quarter after quarter, the Company sets goals. Quarter after quarter, the Company meets them. And then, each time, they seem to exceed their own expectations. How many times can a Company do this before we make a profit on the stock?

Conclusion:
It’s as much my style to use gambling analogies in Stewart Reports as it is for me to buy a Lotto ticket, which is another way of saying I almost never do either. But this time is different. Sure, we have two aces showing. EMFP is an obvious BUY. Amarillo is a screaming BUY. But ICRD is our hole card … for a reason.

Just as with EMFP last month and AMAR this month, the ICRD bet will pay off. Trust me on this. Management has the magnetic excellence, industry connections and financial understanding needed to turn the weird workings of the peculiar, but highly profitable bankcard sector into a big, big long-term win. If you don’t own this stock, BUY it too. You want to own all three Stewart stocks.

As I said at the outset of this HotLine, the Devil is in the details – and I had planned to give you a lot more about all three companies. But, after taking about 15 minutes to consider those details, I said to myself, “What the hell! I wanted to paint the Big Picture – and that’s what I’ve done! If I step down to specific company data at this point, it will take too much away from my overall emphasis on Bird Flu – so why not just stop?”

I floated the idea by my editor, Larry D. Spears, who heartily agreed. So, the specifics I’d planned to give you tonight – along with several new items promised by AMAR’s Dr. Joe Cummins and EMFP CEO Doug Beplate over the coming few days – will follow in another HotLine. It will be recorded in exactly 10 days – at precisely 11:03 a.m. on Wednesday, Nov. 23. (The specific time zone has yet to be determined … some place to my advantage … I’m thinking Malaysia … oh, man, Malaysia won’t work … they’re way the hell ahead of us … perhaps … yeah, let’s think in terms of Honolulu … that time zone works more to my favor … I can live with that.) E-mail delivery will follow an hour or so later.

Until then, thanks for listening – and for subscribing.

J. David Stewart
Analyst and Publisher, The Stewart Report

Note: David’s HotLines are also available by dialing (949) 583-6057, and entering
your subscriber-protected, 2-digit Pass Code at the prompt.

Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Any opinions expressed herein are statements of our judgment on this date and are subject to change without notice. Acting as an investor, and also as a consultant to the Company, David Stewart purchased 100,000 shares of Amarillo Biosciences, restricted under Rule 144. J. David Stewart currently owns 100,000 shares of ICRD common stock. At present, J. David Stewart’s secretary is out of town, but he’s pretty sure he owns shares of Emergency Filtration Products, too. Affiliates of The Stewart Report may also have additional long or short positions in these and other securities discussed herein, including warrants and/or options, and may buy or sell same at their own discretion. This report contains or may contain forward-looking statements within the meaning of the "safe-harbor" provisions of the US Private Securities Litigation Reform Act of 1995. This report is intended for informational purposes only and does not have regard for or take into consideration the reader's investment objective, financial situation or suitability for this security. Consult with your financial advisor and perform your own due diligence. Copyright © The Stewart Report, 2005.