c

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-QSB/A1**

 

**ý****QUARTERLY REPORT UNDERSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For thequarterly period ended May 31, 2004**

 

**o****TRANSITION REPORT UNDERSECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934**

 

**For thetransition period from          to          **

 

**0-29901**

**(Commission File No.)**

 

**PUBLIC MEDIA WORKS, INC**.

(Exact name of registrantas specified in its charter)

 
| **Delaware**                                              |   | **98-0220849**                           |
|-----------------------------------------------------------|--------|------------------------------------------|
| (State or jurisdiction  or incorporation or organization) |   | (I.R.S. Employer  Identification Number) |

 

**14759 Oxnard Street**

**Van Nuys, California 91411**

(Address and telephonenumber of principal executive offices)

 

**818-904-9029**

(Issuer’s telephonenumber)

 

**BurnamManagement, Inc.**

**9175 MainwaringRoad**

**Sidney,British Columbia**

**V8L 1J9Canada**

(Former name and address,if changed since last report)

 

Check whether the issuer (1) filed all reports required to be filedSection 13 or 15(d) of the Exchange Act during the past 12 months (or forsuch shorter period for which the registrant was required to file reports), and(2) has been subject to such filing requirements for the past 90 days.  oYes  ýNo

 

State the number of shares outstanding of each of the issuer’s classesof common equity, as of the latest practicable date:  25,512,500 shares of common stock issued and outstanding as ofJuly 5, 2004.

 

Transitional Small Business Disclosure Format (Check one):   Yes o   No ý

 

 

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Explanatory Note

 

This quarterly report on Form 10-QSB has been amended for clarificationand administrative error only.  Nofinancial statements included herein have been revised or amended.

 

**PART I**

 

**Item 1.Financial Statements.**

 

PUBLIC MEDIA WORKS, INC.AND SUBSIDIARY

(A Development StageCompany)

(Formerly Burnam Management,Inc.)

 

CONSOLIDATED FINANCIALSTATEMENTS

 

FOR THE THREE MONTHSENDED MAY 31, 2004

 

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PUBLIC MEDIA WORKS, INC.AND SUBSIDIARY

(A Development StageCompany)

(Formerly BurnamManagement, Inc.)

 

TABLE OF CONTENTS

 
| Financial Statements:                      |   |
|--------------------------------------------|--------|
|                                       |   |
| Consolidated Balance Sheets                |   |
|                                       |   |
| Consolidated Statements of Operations      |   |
|                                       |   |
| Consolidated Statements of Cash Flows      |   |
|                                       |   |
| Notes to Consolidated Financial Statements |   |

 

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PUBLIC MEDIA WORKS, INC.AND SUBSIDIARY

(A Development StageCompany)

(Formerly BurnamManagement, Inc.)

 

CONSOLIDATED BALANCE SHEETS

 
|                                                                                                             |   | **May 31,  2004** |    | **February 29,  2004** |   |
|------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|-----------------------------|--------|
| Assets                                                                                                           |   |              |    |                        |   |
|                                                                                                             |   |              |    |                        |   |
| Current Assets:                                                                                                  |   |              |    |                        |   |
| Cash                                                                                                             |   | $                 | 14,189  |                        | $      | 12,200 |   |
| Note receivable,  related party                                                                                  |   | 125,000           |    | 125,000                     |   |
| Prepaid expenses                                                                                                 |   | 540               |    | 1,154                       |   |
| Interest  receivable                                                                                             |   | 2,236             |    | 986                         |   |
| Stock  subscriptions receivable                                                                                  |   | —            |    | 155,000                     |   |
| Receivable,  officers and directors                                                                              |   | —            |    | 65,000                      |   |
|                                                                                                             |   |              |    |                        |   |
| Total current  assets                                                                                            |   | 141,965           |    | 359,340                     |   |
|                                                                                                             |   |              |    |                        |   |
| Property and  Equipment:                                                                                         |   |              |    |                        |   |
| Furniture and  leasehold improvements                                                                            |   | 20,649            |    | 20,649                      |   |
| Computers and  office equipment                                                                                  |   | 54,836            |    | 54,443                      |   |
|                                                                                                             |   | 75,485            |    | 75,092                      |   |
| Less:  accumulated depreciation                                                                                  |   | 41,846            |    | 38,846                      |   |
|                                                                                                             |   | 33,639            |    | 36,246                      |   |
| Other Assets:                                                                                                    |   |              |    |                        |   |
| Film development  costs                                                                                          |   | 8,000             |    | 5,500                       |   |
|                                                                                                             |   |              |    |                        |   |
| Total Assets                                                                                                     |   | $                 | 183,604 |                        | $      | 401,086 |   |
|                                                                                                             |   |              |    |                        |   |
| Liabilities and  Stockholders’ Equity                                                                       |   |              |    |                        |   |
|                                                                                                             |   |              |    |                        |   |
| Current Liabilities:                                                                                             |   |              |    |                        |   |
| Accounts payable  and accrued expenses                                                                           |   | $                 | 102,653 |                        | $      | 65,719 |   |
| Accrued  interest, stockholders                                                                                  |   | 102,099           |    | 95,299                      |   |
| Notes payable,  stockholders                                                                                     |   | 427,176           |    | 427,176                     |   |
|                                                                                                             |   |              |    |                        |   |
| Total current  liabilities                                                                                       |   | 631,928           |    | 588,194                     |   |
|                                                                                                             |   |              |    |                        |   |
| Stockholders’  Equity:                                                                                      |   |              |    |                        |   |
| Common stock,  $.0001 par value 100,000,000 shares authorized, 25,512,500 and 25,512,500  issued and outstanding |   | 2,551             |    | 2,551                       |   |
| Additional  paid-in capital                                                                                      |   | 1,654,854         |    | 1,654,854                   |   |
| Deficit  accumulated during the development stage                                                                |   | (2,105,729        | )       | (1,844,513                  | )      |
|                                                                                                             |   |              |    |                        |   |
| Total  Stockholders’ Equity                                                                                 |   | (448,324          | )       | (187,108                    | )      |
|                                                                                                             |   |              |    |                        |   |
| Total  Liabilities and Stockholders’ Equity                                                                 |   | $                 | 183,604 |                        | $      | 401,086 |   |

 

The accompanying notesare an integral part of the financial statements.

 

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PUBLIC MEDIA WORKS, INC.AND SUBSIDIARY

(A Development StageCompany)

(Formerly BurnamManagement, Inc.)

 

CONSOLIDATED STATEMENTSOF OPERATIONS

 
|                              |   | **For the  Three Months  Ended  May 31,  2004** |     | **For the  Three Months  Ended  May 31,  2003** | ** ** | **For the  period  March 3, 2000  (Inception)  Through  May 31,  2004** | ** ** |
|-----------------------------------|--------|-------------------------------------------------|----------|-------------------------------------------------|------------|------------------------------------------------------------------------------|------------|
|                              |   |                                            |     |                                            |       |                                                                         |       |
| Revenues, script  fees            |   | $                                               | 50,000   |                                            | $          | —                                                                       |       | $ | 50,000 |   |
|                              |   |                                            |     |                                            |       |                                                                         |       |
| Operating  Expenses:              |   |                                            |     |                                            |       |                                                                         |       |
| Advertising and  promotion        |   | 3,294                                           |     | 217                                             |       | 20,449                                                                       |       |
| Auto expenses                     |   | 6,050                                           |     | —                                          |       | 45,047                                                                       |       |
| Insurance                         |   | —                                          |     | —                                          |       | 10,561                                                                       |       |
| Professional  fees                |   | 41,946                                          |     | 9,283                                           |       | 112,169                                                                      |       |
| Office expenses                   |   | 2,603                                           |     | 2,128                                           |       | 72,459                                                                       |       |
| Rent                              |   | 2,954                                           |     | 2,700                                           |       | 31,324                                                                       |       |
| Salaries                          |   | 170,012                                         |     | 75,000                                          |       | 895,491                                                                      |       |
| Payroll taxes                     |   | 14,112                                          |     | 6,641                                           |       | 43,217                                                                       |       |
| Telephone and  utilities          |   | 4,165                                           |     | 112                                             |       | 30,834                                                                       |       |
| Consulting costs                  |   | 18,700                                          |     | 6,500                                           |       | 225,184                                                                      |       |
| Web site  development costs       |   | —                                          |     | —                                          |       | 236,744                                                                      |       |
| Depreciation                      |   | 3,000                                           |     | 3,000                                           |       | 45,510                                                                       |       |
| Travel and  entertainment         |   | 32,085                                          |     | 6,009                                           |       | 209,236                                                                      |       |
| Other                             |   | 5,045                                           |     | 2,138                                           |       | 63,810                                                                       |       |
|                              |   |                                            |     |                                            |       |                                                                         |       |
| Total operating  expenses         |   | 303,966                                         |     | 113,728                                         |       | 2,042,035                                                                    |       |
|                              |   |                                            |     |                                            |       |                                                                         |       |
| Operating loss                    |   | (253,966                                        | )        | (113,728                                        | )          | (1,992,035                                                                   | )          |
|                              |   |                                            |     |                                            |       |                                                                         |       |
| Other income  (expense):          |   |                                            |     |                                            |       |                                                                         |       |
| Loss on disposal  of fixed assets |   | —                                          |     | —                                          |       | (6,901                                                                       | )          |
| Interest income                   |   | 1,250                                           |     | —                                          |       | 2,885                                                                        |       |
| Interest expense                  |   | (6,800                                          | )        | (6,800                                          | )          | (103,978                                                                     | )          |
|                              |   |                                            |     |                                            |       |                                                                         |       |
| Total other  income (expense)     |   | (5,550                                          | )        | (120,528                                        | )          | (107,994                                                                     | )          |
|                              |   |                                            |     |                                            |       |                                                                         |       |
| Loss before  income taxes         |   | (259,516                                        | )        | (120,528                                        | )          | (2,100,029                                                                   | )          |
|                              |   |                                            |     |                                            |       |                                                                         |       |
| Provision for  income taxes       |   | 1,700                                           |     | 800                                             |       | 5,700                                                                        |       |
|                              |   |                                            |     |                                            |       |                                                                         |       |
| Net loss                          |   | $                                               | (261,216 | )                                               | $          | (121,328                                                                     | )          | $ | (2,105,729 | ) |
|                              |   |                                            |     |                                            |       |                                                                         |       |
| Net loss per  share               |   | $                                               | (.01     | )                                               | $          | (.02                                                                         | )          | $ | (.25 | ) |

 

The accompanying notesare an integral part of the financial statements.

 

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PUBLIC MEDIA WORKS, INC.AND SUBSIDIARY

(A Development StageCompany)

(Formerly BurnamManagement, Inc.)

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 
|                                                                         |   | **For the  Three Months  Ended  May 31,  2004** |     | **For the  Three Months  Ended  May 31,  2003** |   | **For the  period  March 3, 2000  (Inception)  Through  May 31,  2004** |   |
|------------------------------------------------------------------------------|--------|-------------------------------------------------|----------|-------------------------------------------------|--------|------------------------------------------------------------------------------|--------|
| Cash flows from  operating activities:                                       |   |                                            |     |                                            |   |                                                                         |   |
| Net loss                                                                     |   | $                                               | (261,216 | )                                               | $      | (121,328                                                                     | )      | $ | (2,105,729 | ) |
|                                                                         |   |                                            |     |                                            |   |                                                                         |   |
| Adjustments to  reconcile net loss to cash provided by operating activities: |   |                                            |     |                                            |   |                                                                         |   |
| Expenses paid  directly by related party creditors                           |   | —                                          |     | —                                          |   | 84,040                                                                       |   |
| Loss on disposal  of fixed assets                                            |   | —                                          |     | —                                          |   | 6,901                                                                        |   |
| Depreciation                                                                 |   | 3,000                                           |     | 3,000                                           |   | 45,510                                                                       |   |
| Contributions  from stockholders                                             |   | —                                          |     | 9,793                                           |   | 55,515                                                                       |   |
| Common stock  issued for services                                            |   | —                                          |     | —                                          |   | 318,000                                                                      |   |
| Decrease in  shareholder receivable                                          |   | 65,000                                          |     | —                                          |   | —                                                                       |   |
| Increase in  prepaid expenses and interest receivable                        |   | (636                                            | )        | —                                          |   | (2,776                                                                       | )      |
| Increase  (decrease) in accounts payable and accrued expenses                |   | 43,734                                          |     | 4,311                                           |   | 204,752                                                                      |   |
|                                                                         |   |                                            |     |                                            |   |                                                                         |   |
| Net cash used by  operating activities:                                      |   | (150,118                                        | )        | (104,224                                        | )      | (1,393,787                                                                   | )      |
|                                                                         |   |                                            |     |                                            |   |                                                                         |   |
| Cash flows from  investing activities:                                       |   |                                            |     |                                            |   |                                                                         |   |
| Cash loaned to  related party                                                |   | —                                          |     | —                                          |   | (125,000                                                                     | )      |
| Purchase of  property and equipment                                          |   | (393                                            | )        | (7,445                                          | )      | (86,051                                                                      | )      |
| Film development  costs capitalized                                          |   | (2,500                                          | )        | —                                          |   | (8,000                                                                       | )      |
|                                                                         |   |                                            |     |                                            |   |                                                                         |   |
| Net cash used by  investing activities                                       |   | $                                               | (2,893   | )                                               | $      | (7,445                                                                       | )      | $ | (219,051 | ) |

 

The accompanying notesare an integral part of the financial statements.

 

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|                                       |   | **For the  Three Months  Ended  May 31,  2004** |    | **For the  Three Months  Ended  May 31,  2003** |   | **For the  period  March 3, 2000  (Inception)  Through  May 31,  2004** |   |
|--------------------------------------------|--------|-------------------------------------------------|---------|-------------------------------------------------|--------|------------------------------------------------------------------------------|--------|
|                                       |   |                                            |    |                                            |   |                                                                         |   |
| Cash flows from  financing activities:     |   |                                            |    |                                            |   |                                                                         |   |
| Issuance of  common stock                  |   | $                                               | 155,000 |                                            | $      | 330,000                                                                      |   | $ | 1,166,500 |   |
| Cash contributed  by stockholders          |   | —                                          |    | 4,700                                           |   | 117,390                                                                      |   |
| Proceeds from  related party borrowings    |   | —                                          |    | —                                          |   | 393,137                                                                      |   |
| Repayment of  related party borrowings     |   | —                                          |    | (25,000                                         | )      | (50,000                                                                      | )      |
|                                       |   |                                            |    |                                            |   |                                                                         |   |
| Net cash  provided by financing activities |   | 155,000                                         |    | 309,700                                         |   | 1,627,027                                                                    |   |
|                                       |   |                                            |    |                                            |   |                                                                         |   |
| Net increase  (decrease) in cash           |   | 1,989                                           |    | 198,031                                         |   | 14,189                                                                       |   |
|                                       |   |                                            |    |                                            |   |                                                                         |   |
| Cash, beginning  of period                 |   | 12,200                                          |    | —                                          |   | —                                                                       |   |
|                                       |   |                                            |    |                                            |   |                                                                         |   |
| Cash, end of  period                       |   | $                                               | 14,189  |                                            | $      | 198,031                                                                      |   | $ | 14,189 |   |
|                                       |   |                                            |    |                                            |   |                                                                         |   |
| Interest paid                              |   | $                                               | —  |                                            | $      | —                                                                       |   | $ | 1,879 |   |
|                                       |   |                                            |    |                                            |   |                                                                         |   |
| Income taxes  paid                         |   | $                                               | 4,100   |                                            | $      | —                                                                       |   | $ | 5,700 |   |

 

The accompanying notesare an integral part of the financial statements.

 

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PUBLIC MEDIA WORKS, INC.AND SUBSIDIARY

(A Development StageCompany)

(Formerly BurnamManagement, Inc.)

 

NOTES TO CONSOLIDATEDFINANCIAL STATEMENTS

 

1.                   Summary of Business andSignificant Accounting Policies

 

a.             Summary ofBusiness

 

Burnam Management, Inc. was incorporated under thelaws of the State of Delaware on March 3, 2000. The Company was formed toseek business opportunities. On August 30, 2003, the Company entered intoa share exchange agreement with Public Media Works, Inc., a private companyformed to pursue opportunities in the film/TV and entertainment industry. TheCompany plans to utilize the concept of interactive marketing. Interactivemarketing is a new method to market, promote and produce films. The newmarketing method will presell product placement in films to help fundproduction costs in the initial stages. The share exchange agreement is essentiallya reverse merger with Public Media Works, Inc., the surviving company. TheCompany’s name has been changed to Public Media Works, Inc.

 

The Company has not commenced principal operations andis considered a “Development Stage Company” as defined by the FinancialAccounting Standards Board Statement No. 7.

 

b.             Principles ofConsolidation

 

The consolidated financial statements contain theaccounts of the company and its wholly-owned subsidiary. All significantintercompany balances and transactions have been eliminated.

 

c.             Cash Flows

 

For purposes of the statement of cash flows, thecompany considers all highly liquid investments purchased with a maturity ofthree months or less to be cash or cash equivalents.

 

d.             Property andEquipment

 

Property and equipment are stated at cost lessaccumulated depreciation. Depreciation is provided using straight-line methodsbased on estimated useful lives of five to seven years.

 

e.             Net Loss Per Share

 

The net loss per share calculation is based on theweighted average number of shares outstanding during the period.

 

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f.              Use of Estimates

 

The preparation of financial statements in conformitywith generally accepted accounting principles requires management to make estimatesand assumptions that affect certain reported amounts and disclosures.Accordingly, actual results could differ from those estimates.

 

2.                   Note Receivable, Related Party

 

On December 19, 2003, the Company loaned $125,000to Old Tucson Corporation, a company owned by a stockholder of Public MediaWorks, Inc. The note receivable matures on June 20, 2004 and bearsinterest at 4%. The note is secured by the stockholder’s stock in Public MediaWorks, Inc. Interest income related to the note was $1,250 and $986 for thethree months ended May 31, 2004 and year ended February 29, 2004,respectively.

 

3.                   Film Development Costs

 

At May 31, 2004 and February 29, 2004, theCompany has capitalized $8,000 and $5,500, respectively, for the purchase oftwo original screenplays. The Company intends to develop the screenplays intofeature films within the next three years.

 

4.                   Notes Payable, Stockholders

 

The Company has notes payable with two stockholders.The balance at May 31, 2004 and February 29, 2004 was $427,176. The notesare unsecured and due on demand. Interest is being charged at 8% on $340,000.The remaining amount is non-interest bearing.

 

5.                   Issuance of Common Stock

 

The Company is authorized to issue 100,000,000 sharesof common stock at $.0001 par value.

 

On March 3, 2000, 5,000,000 shares of commonstock were issued for services rendered with an aggregate consideration of$210.

 

On August 30, 2003, 20,000,000 shares of commonstock were issued in a share exchange agreement with a private company, Public MediaWorks, Inc. (PMW). PMW is a wholly-owned subsidiary of the Company and isconsidered the survivor. Burnam Management, Inc. has no assets, liabilities oroperations at the time of the merger; therefore, a pro forma statement ofoperations is not provided.

 

In September 2003 through February 2004, theCompany issued 512,500 shares of its common stock at $.40 per share for a totalamount of $205,000.

 

6

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6.                   Stock Options and Warrants

 

No options or warrants are outstanding to acquire theCompany’s common stock.

 

7.                   Income Taxes

 

The Company has had no taxable income under Federal orState tax laws. A state minimum tax of $1,700 and $800 has been reported in thestatement of operations for the periods ended May 31, 2004 and 2003,respectively. The Company has loss carryforwards totaling $1,309,049 that maybe offset against future federal income taxes. If not used, the carryforwardswill expire between 2020 and 2023. Due to the Company being in the developmentstage and incurring net operating losses, a valuation allowance has beenprovided to reduce the deferred tax assets from the net operating losses tozero. Therefore, there are no tax benefits recognized in the accompanyingstatement of operations.

 

8.                   Development Stage and OperatingDeficits

 

As shown in the accompanying financial statements, theCompany incurred a net loss of $261,216 during the three months ended May 31,2004 and accumulated losses of $2,105,729 since opening for business in 2000.The Company’s current liabilities exceed its current assets by $489,963 at May31, 2004. These factors create an uncertainty as to the Company’s ability tocontinue as a going concern. The ability of the Company to continue as a goingconcern is dependent upon the success of raising additional capital through theissuance of common stock and the ability to generate operating revenue. Thefinancial statements do not include any adjustments that might be necessaryshould the Company be unable to continue as a going concern.

 

7

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**Item 2.Management’s Discussion and Plan of Operation.**

 

*Thefollowing discussion and analysis of the Company’s plan of operation should beread in conjunction with its financial statements and the related notes.  This discussion contains forward-lookingstatements based upon current expectations that involve risks anduncertainties, such as the Company’s plans, objectives, expectations andintentions. The Company’s actual results and the timing of certain events coulddiffer materially from those anticipated in these forward-looking statements asa result of certain factors, including those set forth herein.*

 

***Plan of Operation***

 

Public Media Works, Inc. was a privately-held company untilAugust 30, 2003.  In order tomaintain clarity, references to Public Media Works prior to the reverse mergereffected August 30, 2003 will be indicated as “PMW.”  References to “Public Media Works, Inc.,”“Public Media,” “the Company,” etc. collectively refer to the Companyimmediately following the merger and currently.

 

Costs and Expenses

 

From PMW’s inception on May 15, 2000 through the end of the fiscalquarter ended May 31, 2004, the Company has funded the development of itsproducts, including the development of its virtual studio and its main website,through the issuance of common stock in exchange for cash and services, as wellas through unsecured notes payable to stockholders.  As of May 31, 2004, the Company had 25,512,500 shares of commonstock issued and outstanding, 15,000,000 shares of which were issued inexchange for services by its management team. The Company also entered into an unsecured promissory note with GeorgeMainas, a shareholder, on August 30, 2000 for $340,000, bearing interestat 8% and is payable on demand.  As ofJune 15, 2004, the Company had an outstanding balance of $443,232,including accrued interest.  Theproceeds of this note were used for general working capital.  Mr. Mainas has also agreed to pay various,unclassified business expenses from time to time on behalf of the Company, andthe Company agreed to reimburse him for these expenditures as soon aspracticable.  On December 31, 2003,this agreement was memorialized, including terms indicating that any expensesso paid would bear no interest, and would be payable on demand to Mr.Mainas.  The outstanding balance as ofJune 15, 2004 was $70,461.  TheCompany has also entered into a third unwritten, unsecured promissory note withDenis Schusterman, a shareholder, in May 2002 in exchange for payment ofapproximately $16,000 in general and administrative expenses.  This note is payable upon demand and bearsno interest.  As of June 15, 2004,the outstanding balance was $16,715.

 

On June 1, 2004, the Company entered into a note with Mike Wittlin, anunaffiliated third party, for $225,000, bearing interest at 6%, and payable ondemand.  The proceeds of this note wereused for general working capital.

 

The Company had a net loss of $261,216 the fiscal quarter ended May 31,2004, and from March 3, 2000 (inception of Burnam) through May 31, 2004,the Company reported a cumulative net loss of $2,105,729.

 

The development of the Company’s main website and virtual studio wasconducted in conjunction with two companies: New Media Dimensions, Inc. and MMTSolutions.  On August 25, 2000, theCompany

 

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entered into an agreement with MMT Solutions to begin the basicdevelopment of the virtual studio based upon the Company’s internally developedarchitecture, in exchange for two payments of $115,000, the first of which wasmade on September 6, 2000.  Thedevelopment was not completed according to the terms of the agreement, and theCompany terminated the agreement in November 2000, with no further paymentto MMT.  The Company executed a letterof termination and release on June 2, 2003, and no further claims orobligations exist on the part of either party. On August 8, 2003, the Company entered into an agreement with NewMedia Dimensions to complete the development of its virtual studio and mainwebsite, and to act as host and server for the Company’s virtual studio andwebsite.  The development of the virtualstudio and main website, as well as software development, was completedJanuary 1, 2004, for which New Media Dimensions received $70,000.  New Media Dimensions also received anadditional $7,732 for the purchase of two Pentium-based server hosts andhardware.

 

The Company maintains an ongoing, month-to-month agreement with NewMedia Dimensions to maintain the Company’s virtual studio and main website andto act as host and server to the Company’s sites.  The terms of these ongoing services are described in theCompany’s agreement with New Media dated August 8, 2003.  The Company pays $150 per month for NewMedia to serve as host, and an additional fee for enhancements, modificationsand further development as needed. These additional costs may range from $0 to $5,000 per month, dependingon the Company’s requirements for each period. This agreement may be terminated by either party upon receipt of 15days’ notice.

 

On September 22, 2003, the Company entered into an agreement withCharles Sherman Public Relations to engage and manage public relations and theCompany’s publicity needs.  The Companyhas retained this firm on a monthly basis, for a fee of $2,000 per month.  This agreement may be terminated by eitherparty upon 30-day notice.

 

The Company’s general monthly expenses include rental and maintenancefor its offices are approximately $4,000 per month. The Company’s operatingexpenses, including salaries and travel reimbursement, are approximately$36,000 per month, with total monthly costs of $40,000.  The Company notes that its previousexpenditures did not reflect this estimation as a result of the one-timeexpense of its web development costs. However, the Company and its management believe this estimation isappropriate on a going-forward basis.

 

Revenue

 

The following projects are in progress, and expect to be the Company’sprimary sources of revenue of the next twelve months.  To the extent that the Company has estimated budgeting andproduction dates, the timing and amounts indicated may be subject to change.

 

On February 27, 2004, the Company entered into an agreement withBehind the Hedge Productions, Inc., an unaffiliated production company, todevelop a budgeted script and treatment for a feature-length film in exchangefor $50,000.  $25,000 of this fee wasreceived on March 1, 2004, as an advance payment for the Company’s scriptdevelopment.  The Company’s budgetedscript and treatment to Behind the Hedge Productions was accepted on May 24,2004, and the remaining $25,000 was received on that same date.  The script was developed internally, withoutadditional fee to an independent screenwriter. As the Company has prepared this script development under contract, theCompany currently does not have any ownership position in the script or in anyrevenue generated by the produced film. However, upon acceptance by Behind the Hedge Productions of theCompany’s script development, it anticipates entering into a productionagreement with Over the Hedge by August 30, 2004.  The Company expects the terms of thisagreement to have a budget of approximately $450,000, and will grant the Companysome degree of equity ownership in exchange for a reduction of the Company’sproduction fee.  If the Company entersinto this agreement, it intends to use an outsourced production studio, andanticipates realizing revenue

 

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from the Company’s producers’ fee upon commencing production.  If the Company gains some level of equityownership in the project, it would realize any additional revenue in an amountand at a time which will be subject to any distribution agreement in effectwith respect to this film.  The Companydoes not need any additional financing with respect to this project, as it doesnot owe any additional funds to complete the script development, and any costspaid with respect to the production of the film will be financed by Behind theHedge Productions.

 

On October 10, 2003, the Company entered into aco-production agreement with Stone-Stanley Productions to develop and sell theCompany’s television production “The Ultimate 18.”  The Company and Stone-Stanley are currently approaching actors,golf celebrities and sponsors for involvement in the show.  Stone-Stanley is in the process of meetingwith interested networks in order to sell the show for broadcast.  As creators of the show, the Company owns100% of the concept for this show. However, in order to develop and produce this show, the Company hasgranted 100% of its ownership to Stone-Stanley for a period of six months,which expired in April 2004 and was extended until November 2004.  Should Stone-Stanley execute a productionagreement with a network to produce and broadcast the show before the ownershipgrant expires, the Company will receive 50% ownership of the revenue generatedby the produced and broadcast show. Both the Company and Stone-Stanley are currently corresponding withvarious targeted celebrities in order to determine interest andscheduling.  Messrs. Szabo, Bernsen andEdwardes will be executive producers for “The Ultimate 18,” although none willreceive additional compensation for this work. The Company and Stone-Stanley anticipate completion of casting andbeginning production by September 30, 2004, at which point the Companywill receive 50% of the revenue paid by the purchasing network, withStone-Stanley receiving the other 50%. As television networks are billed in advance of production, the Companydoes not anticipate additional financing requirements for this project.  Once the Company enters into an agreementwith a network, it estimates that production will conclude approximately 90days following the date of such agreement.

 

As of May 31, 2004, the Company has completed the script and attachedactors under formal letters of intent for the film “3 Day Test.”  The Company anticipates enteringpre-production for film “3 Day Test” in the third quarter of 2004, andanticipates beginning filming in December 2004.  “3 Day Test” is wholly owned by the Company, and will require $1million of additional financing in the fourth quarter of 2004, and $1.5 millionof additional financing in the first quarter of 2005.  The Company intends to finance this project through the followingmethods, in order of priority:  (1)corporate sponsorship and product placement in the film, (2) pre-sales of thefilm through the virtual studio and foreign sales, (3) debt or equity financingin the film itself, and (4) debt or equity financing in the Company.  The Company does not have any agreementsregarding sources for this financing, and will not proceed with this projectuntil the additional financing has been secured.  The Company holds 100% ownership of this film, and, once funded,anticipates generating revenue through its producers’ fee, as well as itsportion of box-office sales, retail sales, and sponsorship via the virtualstudio.

 

On February 5, 2004, the Company entered into a five-yearagreement with the American Basketball Association (ABA) to develop all filmedand digital entertainment products.  This includes movies, video games andtelevision shows, among other things. The first of these projects will be the film “The Action,” which wastentatively titled “The Shock” at the time of the agreement.  The Company contracted a

 

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screenwriter to draft the script for $4,000,and received the first full draft in April 2004.  The Company has begun developing the project by casting actors,identifying locations and commencing the budgeting and scheduling process.  The Company has obtained a letter of intentwith Dennis Rodman, and is in the process of securing additional talent for thefilm.  The Company anticipatescommencing production in the second quarter of 2005.

 

On June 11, 2004, the Company submittedits proposed budget to the ABA based upon a total budget of $9.9 million, whichthe Company anticipates will be fully funded by the ABA or its affiliatedparties by September 30, 2004. Once the ABA approves the Company’s budget, both the Company and the ABAwill jointly form a limited liability company for the purpose of funding and producingthis film, the ownership of which will held by Public Media (90%) and the ABA(10%). The project will then be funded by a group of investors, which has notbeen identified as of the date of filing this report.  Upon receipt of funding, the investing group will receive 50% ofthe equity interest in the limited liability company, the ABA will retain their10%, and the Company will retain the remaining 40% interest in the limitedliability company.  The Company intendsto use an outsourced production studio, and holds 100% ownership in thisfilm.  The Company may present the filmto Regent Entertainment under the terms of its distribution agreement,described herein, or may seek distribution through a major studio.

 

On February 9, 2004, the Company entered into a distributionagreement with Regent Entertainment to distribute three of its films totheaters and/or in retail form (such as DVD or VHS videocassette) worldwide,each of which must have a production budget over $1 million.  For each proposed film that is accepted fordistribution, Regent must secure pre-sold revenues in varying amounts fromvarious European territories. For each film distributed in this manner, theCompany agrees to pay a fee equal to 25% of its gross revenues for each film, aswell as marketing expenses up to $100,000 per film.  This agreement expires in December 31, 2005. Although theCompany has not yet formally presented any films for distribution, the Companyanticipates presenting one or more films for distribution in the next ninemonths.

 

On February 20, 2004, the Company entered into a distributionagreement with OBN Holdings, which conducts television distribution via itssubsidiary, Omni Broadcasting.  OBN is anational television network with one owned station and 115 independentbroadcast and cable affiliates throughout the United States.  OBN airs both created and licensedcontent.  The agreement provides thatOBN will provide free airtime in exchange for 50% of the revenue generated bysponsors advertising on the Company’s broadcast shows.  The Company has agreed to provide sixfeature-length films, one hour-long dramatic series and one half-hour situationcomedy.  The Company has also grantedOBN a limited “first look” provision. Pursuant to this provision, the Company may present projects to OBNwhich it believes are suitable for distribution on their network.  Once it presents a project, OBN then has a60 day period during which they have the exclusive right to determine whetheror not they will distribute the television show on their network.  At the close of the 60 day “first look”period, if OBN chooses not to distribute the show, the Company may then presentthe show to other distributors and/or networks.  This provision is in effect for the duration of the agreement.  This agreement expires August 20, 2005,and is self-renewing unless terminated by either party.  The Company does not have any televisionprograms scheduled for production or pre-production in the next twelve monthsthat it anticipates presenting to OBN for distribution.

 

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Liquidity

 

Based upon the costs and expenses indicated above, the Companycurrently has cash on hand to satisfy its total operating costs, continueddevelopment of its actual and potential revenue sources and the cost of itscurrent secondary offering until July 31, 2004.  The Company is currently investigating several methods ofcapital-raising during this period, keeping in mind the status of theoffering.  The Company anticipatesraising additional funds through one or all of the following methods: arevolving credit facility, debt, convertible debt, or through the future saleof equity.  The Company has not enteredonto any agreements or discussions, preliminary or otherwise, regarding any ofthese options.  None of the Company’sagreements with production companies, actors or distribution companies,including but not limited to letters of intent, require additional capitalcontributions other than as described herein. Over the next twelve months, the Company does not anticipate significantchanges in the number of its employees, nor does the Company anticipate thepurchase or sale of any significant equipment.

 

The Company previously considered acquiring a production studio, andentered into a non-binding letter of intent on December 8, 2003 with OldTucson Company in Tucson, Arizona. Subsequently, four of Old Tucson Company’s shareholders invested in theCompany, each and in the aggregate holding less than 5% ownership in the Company.  These shareholders, in the aggregate,represented a controlling interest in Old Tucson Studios.  On December 19, 2003, while engaged inthe letter of intent, the Company loaned $125,000 to Old Tucson Company foroperations.  The note to Old TucsonCompany matured on June 20, 2004, and bears interest at 4%.  The note is secured by the all of theshareholders’ stock in the Company.  Asa result of the mutual shareholders, the Company’s loan to Old Tucson Companymay have been deemed a related party. However, during the course of its due diligence, the Company elected notto pursue this option, and the letter of intent expired unexercised onJanuary 15, 2004, although the note still remains an account receivablefor the Company.  The Company does notcurrently have any affiliation with either the four shareholders or Old TucsonCompany, although the shareholders still retain their equity interest in theCompany.  The Company is currently innegotiations with Old Tucson to extend the term of this note.

 

As of June 15, 2004, the Company had a current cash balance of $88,696.84.

 

***Off-Balance SheetTransactions***

 

The Company does not have any off-balance sheet transactions.

 

**Item 3.Controls and Procedures**

 

Under the supervision and with the participation of the Company’ssenior management, including its chief executive officer and chief financialofficer, the Company conducted an evaluation of the effectiveness of the designand operation of its disclosure controls and procedures, as defined in Rules13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended,as of the end of the period covered by this quarterly report (the “EvaluationDate”).  Based on this evaluation, theCompany’s chief executive officer and chief financial officer concluded as ofthe Evaluation Date that the Company’s disclosure controls and procedures wereeffective such that the information relating to the Company, including anyconsolidated subsidiaries, required to be disclosed in the Company’s Securitiesand Exchange Commission (“SEC”) reports (i) is recorded, processed, summarizedand reported within the time periods specified in SEC rules and forms, and (ii)is accumulated and communicated to the Company’s management, including itschief executive officer and chief financial officer, as appropriate to allowtimely decisions regarding required disclosure.

 

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There were no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation.

 

PART II - OTHERINFORMATION

 

**Item 1.Legal Proceedings.**

 

None.

 

**Item 2.Changes in Securities.**

 

None.

 

**Item 3.Defaults Upon Senior Securities.**

 

None.

 

**Item 4.Submission of Matters to a Vote of Security Holders.**

 

None.

 

**Item 5.Other Information.**

 

None.

 

**Item 6.Exhibits and Reports on Form 8-K.**

 

(a) Exhibits required by Item 601 of Regulation S-B

 
| **Exhibit No.** |   | **Description**                                                                                                                       |
|-----------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|            |   |                                                                                                                                  |
| 2.1             |   | Share Exchange Agreement by and between Burnam Management,  Inc. and Public Media Works, Inc., dated August 30, 2003 (2)    |
| 3.1             |   | Certificate of Incorporation of Burnam Management,  Inc. (1)                                                                     |
| 3.2             |   | Certificate of Amendment of Certificate of  Incorporation  (2)                                                              |
| 3.3             |   | By-laws of Burnam Management, Inc. (1)                                                                                           |
| 3.4             |   | Amended By-laws of Public Media Works, Inc. (4)                                                                                  |
| 5.1             |   | Form of Stock Certificate (3)                                                                                                    |
| 10.1            |   | Form of Letter of Intent for appearing  talent (3)                                                                               |
| 10.2            |   | Writers Agreement by and between Public Media Works,  Inc. and Mr. Peter Soldinger, dated September 11, 2003 (3)            |
| 10.3            |   | Writers Agreement by and between Public Media Works,  Inc. and Mr. Peter Soldinger, dated February 3, 2004 (3)              |
| 10.4            |   | Distribution Agreement by and between Public Media  Works, Inc. and Regent Entertainment, Inc., dated February 9,  2004 (4) |
| 10.5            |   | Distribution Agreement by and between Public Media  Works, Inc. and OBN Holdings, Inc., dated February 20, 2004 (4)         |

 

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| 10.6  |   | Agreement by and between Public Media Works, Inc.  and Stone-Stanley Productions, dated October 10, 2003 (4)            |
|-------|--------|-----------------------------------------------------------------------------------------------------------------------------------|
| 10.7  |   | Amendment to Agreement by and between Public Media  Works, Inc. and Stone-Stanley Productions, dated April 22, 2004 (4) |
| 10.8  |   | Agency Representative Agreement by and between  Public Media Works, Inc. and U4oria, Inc., dated January 29,  2004 (4)  |
| 10.9  |   | Promissory Note by and between Public Media Works,  Inc. and Mr. George Mainas, dated August 30, 2000 (4)               |
| 10.10 |   | Memorialized Agreement by and between Public Media  Works, Inc. and Mr. George Mainas, dated December 31, 2003 (3)      |
| 10.11 |   | Agreement by and between Public Media Works, Inc.  and Behind the Hedge Productions, dated February 27, 2004 (4)        |
| 10.12 |   | Agreement by and between Public Media Works, Inc.  and the American Basketball Association, dated February 5, 2004 (3)  |
| 10.13 |   | Agreement by and between Public Media Works, Inc.  and MMT Solutions, dated August 25, 2000 (4)                         |
| 10.14 |   | Letter of Termination and Release by and between  Public Media Works, Inc. and MMT Solutions, dated June 2, 2003 (4)    |
| 10.15 |   | Agreement by and between Public Media Works, Inc.  and New Media Dimensions, Inc., dated August 8, 2003 (4)             |
| 10.16 |   | Affiliation Agreement by and between Public Media  Works, Inc. and Amazon.com, Inc., dated May 14, 2002 (3)                  |
| 10.17 |   | Affiliation Agreement by and between Public Media  Works, Inc. and Allposters.com, Inc., dated May 14, 2002 (3)              |
| 10.18 |   | Agreement by and between Public Media Works, Inc.  and Charles Sherman Public Relations, dated September 22, 2003 (4)   |
| 10.19 |   | Promissory Note by and between Public Media Works,  Inc. and Old Tucson Company, dated December 19, 2003 (4)            |
| 10.20 |   | Letter of Intent by and between Public Media Works,  Inc. and Old Tucson Company, dated December 08, 2003 (4)           |
| 10.21 |   | Agreement by and between Public Media Works, Inc.  and Mike Wittlin, dated June 1, 2004                                           |
| 31.1  |   | Certification pursuant to Rule 13a-14(a)/15d-14(a)  of the Securities Exchange Act, as amended, by Chief Executive Officer        |
| 31.2  |   | Certification pursuant to Rule 13a-14(a)/15d-14(a)  of the Securities Exchange Act, as amended, by Chief Financial Officer        |
| 32.1  |   | Certification pursuant to 18 U.S.C. §1350 by Chief Executive Officer                                                         |
| 32.2  |   | Certification pursuant to 18 U.S.C. §1350 by Chief Financial Officer                                                         |

 

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(1)   Incorporated by reference fromthe Company’s Form 10-SB, as filed on March 29, 2000 (File No. 0-29901).

(2)   Incorporated by reference fromthe Company’s Form 8-K, as filed on September 8, 2003.

(3)   Incorporated by reference fromAmendment No. 1 to the Company’s Form SB-2, as filed on May 4, 2004 (File No.333-113060).

(4)   Incorporated by reference from AmendmentNo. 2 to the Company’s Form SB-2, as filed on June 29, 2004.

 

(b)           Reportson Form 8-K

 

The Company filed the following reports on Form8-K:  On April 14, 2004, the Companyfiled a report regarding Items 4 and 7. On May 12, 2004, the Company filed an amendment to a previously filedreport on Form 8-K regarding Items 1 and 7. Neither of these reports included financial statements.

 

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The Company filed the following reports on Form 8-K for the periodended May 31, 2004:

 

(1)   On April 14, 2004, the Company filed an 8-Kreporting Items 4 and 7 (change in certifying accountant).  No financial statements were included withthis report.

 

(2)   On May 12, 2004, the Company filed an 8-K/A,clarifying its previously reported share exchange.  Items 1 and 7 were reported, and no financial statements wereincluded with this report.

 

**SIGNATURES**

 

In accordance with the requirements of the Exchange Act, the registrantcaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 
|                         | Public Media Works  |                                 |
|------------------------------|---------------------|--------------------------------------|
|                         | (Registrant)        |
|                         |                |
| Date:  August  17, 2004 | /s/ Thomas A. Szabo |                                 |
|                         | By:                 | Thomas A. Szabo                      |
|                         | Title:              | Chief Executive Officer and Chairman |
|                              |                     |                                      |  |

 

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