##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

þ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934

For the quarterly period ended August 31, 2008

 ̈ Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period  to

Commission File Number 0-29901

PUBLIC MEDIA WORKS, INC.

(Exact name of small business issuer as specified in its charter)



|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                       |  | 98-0220849                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)

14759 Oxnard Street

Van Nuys, California 91411

(Address of principal executive offices)

818-904-9029

(Issuers telephone number,

including area code)





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

Check whether the issuer
(1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days YES þ NO  ̈

Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): YES  ̈ NO þ

On October 13, 2008, the registrant had outstanding 5,211,440 shares of Common Stock, which is the registrants only class of common equity

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting Company. See
definitions of large accelerated filer, accelerated filer and smaller reporting Company in Rule 12b-2 of the Exchange Act.



|                                                                      |  |                            
|--------------------------------------------------------------------- |  | ---------------------------
|Large accelerated filer  ̈                                             |  | Accelerated filer  ̈        
|Non accelerated filer  ̈ (Do not check if a smaller reporting company) |  | Smaller reporting company þ

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











---

##### Table of Contents

PUBLIC MEDIA WORKS, INC.

Form 10-Q

For the Quarter Ended August 31, 2008





TABLE OF CONTENTS







|                                                                                           |  |     
|------------------------------------------------------------------------------------------ |  | ----
|                                                                                           |  | Page
|PART I  FINANCIAL INFORMATION                                                             |  |     
|                                                                                           | 
|Item 1. Financial Statements                                                               |  |     
|                                                                                           | 
|Consolidated Balance Sheets (Unaudited) as of August 31, 2008                              |  | 4   
|                                                                                           | 
|Consolidated Statements of Operations (Unaudited) for the six months ended August 31, 2008 |  | 5   
|                                                                                           | 
|Consolidated Statements of Cash Flows (Unaudited) for the six months ended August 31, 2008 |  | 6   
|                                                                                           | 
|Notes to Consolidated Financial Statements (Unaudited)                                     |  | 7   
|                                                                                           | 
|Item 2. Managements Discussion and Analysis or Plan of Operations                         |  | 17  
|                                                                                           | 
|Item 3(A) T. Controls and Procedures                                                       |  | 21  
|                                                                                           | 
|PART II  OTHER INFORMATION                                                                |  |     
|                                                                                           | 
|Item 1. Legal Proceedings                                                                  |  | 22  
|                                                                                           | 
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                        |  | 22  
|                                                                                           | 
|Item 3. Defaults Upon Senior Securities                                                    |  | 23  
|                                                                                           | 
|Item 4. Submission of Matters to a Vote of Security Holders                                |  | 23  
|                                                                                           | 
|Item 5. Other Information                                                                  |  | 23  
|                                                                                           | 
|Item 6. Exhibits and Reports on Form 8-K                                                   |  | 23  
|                                                                                           | 
|Signatures                                                                                 |  | 23  



2



---

##### Table of Contents

Note Regarding Forward Looking Statements

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this
Quarterly Report on Form 10-Q may contain statements relating to future results of Public Media Works, Inc. (including certain projections and business trends) that are forward-looking statements. Our actual results may differ materially
from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to, without limitation, statements that express or involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as expects or does not expect, is expected, anticipates or
does not anticipate, plans, estimates or intends, or stating that certain actions, events or results may, could, would, might or will be
taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results
or achievements of the Company to be materially different from any future results or achievements of the Company expressed or implied by such forward-looking statements. Such factors include, among others, those set forth herein and those detailed
from time to time in our other Securities and Exchange Commission (SEC) filings including those contained in our most recent Form 10-KSB. These forward-looking statements are made only as of the date hereof, and we undertake no
obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law. The Company cautions readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events. There can be no assurance that the Company will be able to raise sufficient capital to continue as a going concern.



3



---

##### Table of Contents

PART I

Item 1. Financial Statements.

PUBLIC MEDIA WORKS, INC.

Consolidated Balance Sheets



|                                                                                                                                                                        |  |                |            |   |                  |   |            |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | - | ---------------- | - | ---------- | -
|                                                                                                                                                                        |  | August 31,2008 |            |   | February 29,2008 |  
|                                                                                                                                                                        |  | (unaudited)    |            |   |                  |  
|ASSETS                                                                                                                                                                  | 
|Current assets:                                                                                                                                                         |  |                |            |   |                  |   |            |  
|Cash and cash equivalents                                                                                                                                               |  | $              | 2,095      |   |                  | $ | 1,212      |  
|Prepaid expenses and other current assets                                                                                                                               |  |                | 2,140      |   |                  |   | 4,741      |  
|                                                                                                                                                                        |  |                |            |   |                  |   |            |  
|Total current assets                                                                                                                                                    |  |                | 4,235      |   |                  |   | 5,953      |  
|Equipment, net                                                                                                                                                          |  |                | 1,279      |   |                  |   | 2,279      |  
|Film development costs                                                                                                                                                  |  |                | 25,000     |   |                  |   | 248,390    |  
|                                                                                                                                                                        |  |                |            |   |                  |   |            |  
|Total assets                                                                                                                                                            |  | $              | 30,514     |   |                  | $ | 256,622    |  
|                                                                                                                                                                        |  |                |            |   |                  |   |            |  
|                                                                                                                                                                       
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                                                                                                   | 
|                                                                                                                                                                        |  |               
|Current liabilities:                                                                                                                                                    |  |                |            |   |                  |   |            |  
|Accounts payable and accrued expenses                                                                                                                                   |  | $              | 128,184    |   |                  | $ | 59,454     |  
|Accrued interest to stockholders                                                                                                                                        |  |                | 300,715    |   |                  |   | 285,442    |  
|Due to creditor                                                                                                                                                         |  |                |           |   |                  |   | 25,000     |  
|Related party advances                                                                                                                                                  |  |                |           |   |                  |   | 22,500     |  
|Film participation interests                                                                                                                                            |  |                |           |   |                  |   | 120,000    |  
|Notes payable to stockholders                                                                                                                                           |  |                | 495,437    |   |                  |   | 608,980    |  
|Line of credit due to related party                                                                                                                                     |  |                | 182,622    |   |                  |   | 182,622    |  
|                                                                                                                                                                        |  |                |            |   |                  |   |            |  
|Total current liabilities                                                                                                                                               |  |                | 1,106,958  |   |                  |   | 1,303,998  |  
|                                                                                                                                                                        |  |               
|Commitments and contingencies                                                                                                                                           |  |                |            |   |                  |   |            |  
|                                                                                                                                                                        |  |               
|Stockholders' deficit                                                                                                                                                   |  |                |            |   |                  |   |            |  
|Common stock, $0.001 par value, 100,000,000 shares authorized, 5,211,440 and 4,481,440 issued and outstanding as of August 31, 2008 and
February 29, 2008, respectively |  |                | 521        |   |                  |   | 448        |  
|Additional paid-in capital                                                                                                                                              |  |                | 3,969,295  |   |                  |   | 3,570,464  |  
|Accumulated deficit                                                                                                                                                     |  |                | (5,046,260 | ) |                  |   | (4,618,288 | )
|                                                                                                                                                                        |  |                |            |   |                  |   |            |  
|Total stockholders' deficit                                                                                                                                             |  |                | (1,076,444 | ) |                  |   | (1,047,376 | )
|                                                                                                                                                                        |  |                |            |   |                  |   |            |  
|Total liabilities and stockholders' deficit                                                                                                                             |  | $              | 30,514     |   |                  | $ | 256,622    |  
|                                                                                                                                                                        |  |                |            |   |                  |   |            |  

See accompanying notes, which are an integral part of these financial statements



4



---

##### Table of Contents

PUBLIC MEDIA WORKS, INC.

Consolidated Statements of Operations (Unaudited)



|                                                     |  |                    |           |   |                  |   |           |      |  |   |                 |   |  |   |           |  
|---------------------------------------------------- |  | ------------------ | --------- | - | ---------------- | - | --------- | ---- |  | - | --------------- | - |  | - | --------- | -
|                                                     |  | Three Months Ended |           |   | Six Months Ended |  
|                                                     |  | August 31,         |           |   | August 31,       |  
|                                                     |  | 2008               |           |   | 2007             |   |           | 2008 |  |   | 2007 (Restated) |  
|Revenue                                              |  | $                  |          |   |                  | $ |          |      |  | $ |                |   |  | $ |          |  
|                                                     |  |                    |           |   |                  |   |           |      |  |   |                 |   |  |   |           |  
|Impairment of film development costs                 |  |                    | 9,050     |   |                  |   |          |      |  |   | 9,050           |   |  |   | 11,135    |  
|Gross Loss                                           |  |                    | (9,050    | ) |                  |   |          |      |  |   | (9,050          | ) |  |   | (11,135   | )
|General and administrative expenses                  |  |                    | 201,642   |   |                  |   | 16,336    |      |  |   | 244,724         |   |  |   | 100,511   |  
|Professional fees                                    |  |                    | 50,205    |   |                  |   | 34,230    |      |  |   | 87,935          |   |  |   | 77,861    |  
|                                                     |  |                    |           |   |                  |   |           |      |  |   |                 |   |  |   |           |  
|Total operating expenses                             |  |                    | 251,847   |   |                  |   | 50,566    |      |  |   | 332,659         |   |  |   | 178,372   |  
|                                                     |  |                    |           |   |                  |   |           |      |  |   |                 |   |  |   |           |  
|Loss from operations                                 |  |                    | (260,897  | ) |                  |   | (50,566   | )    |  |   | (341,709        | ) |  |   | (189,507  | )
|Interest expense                                     |  |                    | (14,259   | ) |                  |   | (14,893   | )    |  |   | (27,349         | ) |  |   | (30,136   | )
|Loss on issuance of common stock                     |  |                    | (30,000   | ) |                  |   |          |      |  |   | (57,500         | ) |  |   |          |  
|Equity in losses on investment                       |  |                    |          |   |                  |   |          |      |  |   | (1,414          | ) |  |   | (2,215    | )
|                                                     |  |                    |           |   |                  |   |           |      |  |   |                 |   |  |   |           |  
|Loss before income taxes                             |  |                    | (305,156  | ) |                  |   | (65,459   | )    |  |   | (427,972        | ) |  |   | (221,858  | )
|Income tax expense                                   |  |                    |          |   |                  |   |          |      |  |   |                |   |  |   | 1,600     |  
|                                                     |  |                    |           |   |                  |   |           |      |  |   |                 |   |  |   |           |  
|Net loss                                             |  | $                  | (305,156  | ) |                  | $ | (65,459   | )    |  | $ | (427,972        | ) |  | $ | (223,458  | )
|                                                     |  |                    |           |   |                  |   |           |      |  |   |                 |   |  |   |           |  
|Net loss available to common shareholders per share: |  |                    |           |   |                  |   |           |      |  |   |                 |   |  |   |           |  
|Basic and Diluted                                    |  | $                  | (0.06     | ) |                  | $ | (0.03     | )    |  | $ | (0.09           | ) |  | $ | (0.12     | )
|                                                     |  |                    |           |   |                  |   |           |      |  |   |                 |   |  |   |           |  
|Weighted average shares outstanding:                 |  |                    |           |   |                  |   |           |      |  |   |                 |   |  |   |           |  
|Basic and Diluted                                    |  |                    | 5,074,049 |   |                  |   | 1,959,789 |      |  |   | 4,867,907       |   |  |   | 1,934,925 |  
|                                                     |  |                    |           |   |                  |   |           |      |  |   |                 |   |  |   |           |  

See accompanying notes, which are an integral part of these financial statements



5



---

##### Table of Contents

PUBLIC MEDIA WORKS, INC.

Consolidated Statements of Cash Flows (Unaudited)



|                                                                             |  |                  |          |   |                 |   |          |  
|---------------------------------------------------------------------------- |  | ---------------- | -------- | - | --------------- | - | -------- | -
|                                                                             |  | Six Months Ended |         
|                                                                             |  | August 31,       |         
|                                                                             |  | 2008             |          |   | 2007 (Restated) |  
|Operating activities:                                                        |  |                  |          |   |                 |   |          |  
|Net loss                                                                     |  | $                | (427,972 | ) |                 | $ | (223,458 | )
|Adjustments to reconcile net loss to net cash used in operating activities:  |  |                  |          |   |                 |   |          |  
|Depreciation and amortization                                                |  |                  | 1,000    |   |                 |   | 1,500    |  
|Impairment of film development costs                                         |  |                  | 9,050    |   |                 |   | 11,135   |  
|Loss on issuance of common stock                                             |  |                  | 57,500   |   |                 |   |         |  
|Equity in losses on investment                                               |  |                  |         |   |                 |   | 2,215    |  
|Stock option compensation                                                    |  |                  | 120,043  |   |                 |   |         |  
|Common stock issued for services                                             |  |                  | 7,800    |   |                 |   | 51,200   |  
|Effect of changes in:                                                        |  |                  |          |   |                 |   |          |  
|Loans to unconsolidated subsidiaries                                         |  |                  |         |   |                 |   | (4,120   | )
|Prepaid expenses and other current assets                                    |  |                  | 2,601    |   |                 |   | 2,806    |  
|Accounts payable and accrued expenses                                        |  |                  | 72,254   |   |                 |   | (26,694  | )
|Accrued interest                                                             |  |                  | 28,849   |   |                 |   |         |  
|                                                                             |  |                  |          |   |                 |   |          |  
|Net cash used in operating activities                                        |  |                  | (128,875 | ) |                 |   | (185,416 | )
|                                                                             |  |                  |          |   |                 |   |          |  
|Investing activities:                                                        |  |                  |          |   |                 |   |          |  
|Increase in film development costs                                           |  |                  | (36,750  | ) |                 |   | (26,395  | )
|Decrease in cash from sale of membership interests                           |  |                  | (2,600   | ) |                 |   |         |  
|                                                                             |  |                  |          |   |                 |   |          |  
|Net cash used in investing activities                                        |  |                  | (39,350  | ) |                 |   | (26,395  | )
|                                                                             |  |                  |          |   |                 |   |          |  
|Financing activities:                                                        |  |                  |          |   |                 |   |          |  
|Proceeds from related party advances                                         |  |                  | 12,750   |   |                 |   | 6,000    |  
|Proceeds from borrowing from creditor                                        |  |                  |         |   |                 |   | 25,000   |  
|Proceeds from notes payable to stockholders                                  |  |                  | 66,358   |   |                 |   | 42,296   |  
|Payment of notes payable to stockholders                                     |  |                  |         |   |                 |   | (12,000  | )
|Proceeds from sale of common stock                                           |  |                  | 90,000   |   |                 |   | 165,000  |  
|                                                                             |  |                  |          |   |                 |   |          |  
|Net cash provided by financing activities                                    |  |                  | 169,108  |   |                 |   | 226,296  |  
|                                                                             |  |                  |          |   |                 |   |          |  
|Net increase (decrease) in cash                                              |  |                  | 883      |   |                 |   | 14,485   |  
|Cash, beginning of period                                                    |  |                  | 1,212    |   |                 |   | 6,802    |  
|                                                                             |  |                  |          |   |                 |   |          |  
|Cash, end of period                                                          |  | $                | 2,095    |   |                 | $ | 21,287   |  
|                                                                             |  |                  |          |   |                 |   |          |  
|Supplemental disclosures of cash flow information:                           |  |                  |          |   |                 |   |          |  
|Cash paid for interest                                                       |  | $                |         |   |                 | $ | 1,000    |  
|Cash paid for income taxes                                                   |  | $                |         |   |                 | $ | 800      |  
|Supplemental disclosure of non-cash investing and financing activities:      |  |                  |          |   |                 |   |          |  
|Settlement of debt through issuance of common stock                          |  | $                | 30,000   |   |                 | $ |         |  
|Settlement of debt and accrued interest through sale of membership interests |  | $                | 55,475   |   |                 | $ |         |  

See accompanying notes, which are an integral part of these financial statements



6



---

##### Table of Contents

PUBLIC MEDIA WORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

AUGUST 31, 2008

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Public Media Works, Inc. (We or the Company), have been prepared in accordance with accounting principles generally accepted in
the United States of America for interim financial statements and with instructions to Form 10-Q pursuant to the rules and regulations of Securities and Exchange Act of 1934, as amended (the Exchange Act) and Rule 8-03 of Regulation S-X
under the Exchange Act. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary (consisting of normal recurring
adjustments) for a fair presentation are included herein. Operating results for the six-month period August 31, 2008 are not indicative of the results that maybe expected for the fiscal year ending February 28, 2009. These unaudited
consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Companys Annual Report to Shareholders on Form 10-KSB for the fiscal year ended February 29,
2008.

Use of Estimates

The preparation of
unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and recording / or disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
Such estimates relate primarily to the estimated lives of film development costs, certain accruals, deferred tax accounts and related valuation allowance and the fair value of equity instruments issued. In the opinion of management, all adjustments
that are necessary for the fair presentation of the periods presented have been reflected.

Organization and Business

Public Media Works, Inc. (formerly Burnam Management, Inc.) (the Company) was incorporated under the laws of the State of Delaware on March 3, 2000. The
Company is engaged in the development, production, marketing and distribution of film, music and television entertainment media. On August 30, 2003, the Company entered into a share exchange agreement with Public Media Works, Inc., a private
company formed to pursue opportunities in the film/TV and entertainment industry. The share exchange agreement is essentially a reverse merger with Public Media Works, Inc., the surviving company.

On January 11, 2007, the Company formed DOD, LLC (a California Limited Liability Company and wholly-owned Subsidiary) for the purpose of production and exploitation
of a motion picture entitled Donna On Demand. On April 29, 2007, the Company obtained a 20% equity ownership in Dead Air, LLC (Dead Air) (a California Limited Liability Company) for the purpose of production and exploitation of a
motion picture entitled Dead Air. As of the year ended February 29, 2008, the consolidated financial statements included the accounts of the Company and DOD, LLC, a wholly owned subsidiary and its equity interest ownership in Dead Air. All
significant inter-company accounts and transactions were eliminated in consolidation.

Effective August 26, 2008, the Company entered into a purchase
agreement with one of its shareholders to sell its membership interests in DOD, LLC and Dead Air. As a result, effective August 26, 2008, the accounts of DOD, LLC are no longer included in the consolidated financial statements. In exchange for
the sale of the membership interests, all outstanding debt and accrued interest owed by the Company to the shareholder, amounting to $55,475 was forgiven. The Company also had a net liability of $34,562 due to DOD, LLC which was forgiven as part of
the transaction. Given its related party nature, the transaction has been accounted as capital contribution and the difference of $93,561 between the debt forgiven and



7



---

##### Table of Contents

the assets transferred to the shareholder has been reflected as additional paid-in capital in the accompanying consolidated balance sheet at August 31,
2008.

The calculation of the gain on the sale of membership interests was calculated as follows.



|                                           |  |   |        |  
|------------------------------------------ |  | - | ------ | -
|Debt Forgiven                              |  |   |        |  
|Note payable and accrued interest          |  | $ | 55,475 |  
|Due to DOD, LLC                            |  |   | 34,562 |  
|                                           |  |   |        |  
|Transaction consideration                  |  |   | 90,037 |  
|Net assets transferred to shareholder      |  |   | (3,524 | )
|                                           |  |   |        |  
|Total gain on sale of membership interests |  | $ | 93,561 |  
|                                           |  |   |        |  



The Company has agreements to share in the
future profits of DOD, LLC (12.5% of any distributions) and Dead Air (10% of any distributions), should their profitability reach certain defined levels. Management considers it remote that it will receive any profit participation royalties in the
future relating to these films.

Reverse Stock Split

Effective June 28, 2007, the Company completed a 1 for 20 reverse stock split. The accompanying consolidated financial statements reflect all common stock share data and share prices, including stock options to purchase common stock as
restated for all periods presented to give the effect to the reverse stock split. Per share amounts, including net loss per share-basic and diluted, have been increased by a factor of 20 and shares have been divided by 20.



8



---

##### Table of Contents

Reclassifications

Certain reclassifications have been made to prior comparative quarterly financial statements to conform to the current quarterly presentation. These reclassifications had no effect on previously reported results of operations or accumulated
deficit.

2. Restatements of August 31, 2007 Interim Financial Statements

Certain film development costs were capitalized in the first quarter of fiscal 2008 that did not meet the criteria for capitalization in accordance with AICPA Statement of Position (SOP) No. 00-2, Accounting by
Producers or Distributors of Films, which resulted in an understatement of the Companys net loss in the amount of $11,135 for the six months ended August 31, 2007.

The Company did not properly account for its share of losses in Dead Air, LLC, which is accounted for using the equity method. Losses in Dead Air, LLC and the net loss for the six months ended August 31, 2007 was
understated by $2,215.

The Company did not properly account for share based compensation related to services provided by an investors relation
group. As a result, an overstatement of general & administrative expenses of $26,800 occurred for the six months ended August 31, 2007.

A
summary of the aggregate effects of the foregoing restatements on the Companys unaudited interim financial statements for the periods herein is shown below.

Six Months Ended August 31, 2007



|                                                |  |             |            |   |             |   |            |  
|----------------------------------------------- |  | ----------- | ---------- | - | ----------- | - | ---------- | -
|Changes to Unaudited Consolidated Balance Sheet |  |             |            |   |             |   |            |  
|                                                |  |            
|                                                |  | As Reported |            |   | As Restated |  
|Film development costs                          |  | $           | 343,581    |   |             | $ | 332,446    |  
|Total assets                                    |  |             | 376,578    |   |             |   | 365,443    |  
|Accounts payable and accrued expenses           |  |             | 82,385     |   |             |   | 84,600     |  
|Total liabilities                               |  |             | 1,414,390  |   |             |   | 1,416,605  |  
|Additional paid-in capital                      |  |             | 3,118,452  |   |             |   | 3,091,652  |  
|Accumulated deficit                             |  |             | (4,156,478 | ) |             |   | (4,143,028 | )
|Total stockholders' deficit                     |  |             | (1,037,812 | ) |             |   | (1,051,162 | )
|Total liabilities and stockholders' deficit     |  |             | 376,578    |   |             |   | 365,453    |  
|                                                |  |            
|Changes to Consolidated Statement of Operations |  |             |            |   |             |   |            |  
|                                                |  |            
|                                                |  | As Reported |            |   | As Restated |  
|Total operating expenses                        |  | $           | 205,172    |   |             | $ | 189,507    |  
|Loss from operations                            |  |             | (205,172   | ) |             |   | (189,507   | )
|Equity in losses on investment                  |  |             |           |   |             |   | (2,215     | )
|Net loss                                        |  |             | (236,908   | ) |             |   | (223,458   | )

3. Going Concern and Liquidity Matters

The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the
normal course of business. Historically, the Company has incurred significant losses, and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations.

The Companys continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain
additional financing as may be required, and



9



---

##### Table of Contents

ultimately to attain profitability. During the six months ended August 31, 2008 the Company generated net proceeds from the sale of stock and issuance
of debt amounting to $169,108.

Managements plan regarding this is to raise additional capital through the issuance of equity or debt securities. The
sale of additional securities or debt financing could result in additional dilution to the Companys current stockholders. There can be no assurance that such financing will be available on acceptable terms, or at all.

The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

4. Recent Accounting Developments

In April 2008, the
Financial Accounting Standards Board, or FASB issued FASB Staff Position (FSP) No. FAS 142-3 Determination of the Useful Life of Intangible Assets. This FSP amends the factors that should be considered in developing renewal
or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. The intent of this FSP is to improve the consistency between the useful
life of a recognized intangible asset under Statement 142 and the period of expected cash flows used to measure the fair value of the asset under FASB Statement No. 141 (revised 2007), Business Combinations and other U.S. generally
accepted accounting principles (GAAP). This FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The Company will adopt
this FSP beginning March 1, 2009 and it is not believed that this will have an impact on the Companys financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements (SFAS NO. 160). SFAS No. 160 amends ARB 51 to establish accounting
and reporting standards for the non-controlling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity
that should be reported as equity in the consolidated financial statements and establishes a single method of accounting for changes in a parents ownership interest in a subsidiary that do not result in deconsolidation. SFAS No. 160 is
effective for fiscal years beginning on or after December 15, 2008. The Company has not yet determined the impact, if any, that SFAS No. 160 will have on its consolidated financial statements, but believes any impact will not be material.

In December 2007, FASB issued SFAS No. 141R, Business Combinations. SFAS No. 141R replaces SFAS No. 141, Business Combinations.
SFAS No. 141R establishes principles and requirements for determining how an enterprise recognizes and measures the fair value of certain assets and liabilities acquired in a business combination, including non-controlling interests, contingent
consideration and certain acquired contingencies. SFAS No. 141R also requires acquisition-related transaction expenses and restructuring costs be expensed as incurred rather than capitalized as a component of the business combination. This
Statement shall be applied prospectively to business combinations for which the acquisition date is on or after beginning of the first annual reporting period beginning on or after December 15, 2008. Management is currently evaluating the
impact of the adoption of this statement; however, but believes any impact with respect to future acquisitions could be material.

In May 2008, the FASB
issued FSP No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement). FSP APB 14-1 addresses instruments commonly referred to as Instrument C from Emerging
Issues Task Force No. 90-19, which requires the issuer to settle the principal amount in cash and the conversion spread in cash or net shares at the issuers option. FSP APB 14-1 requires that issuers of these instruments account for their
liability and equity components separately by bifurcating the conversion option from the debt instrument, classifying the conversion option in equity, and then accreting the resulting discount on the debt as additional interest expense over the
expected life of the debt. FSP APB 14-1 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years, and requires retrospective application to all periods presented. Early application is not
permitted. Management is currently evaluating the impact of the adoption of this statement; however, but believes any impact with respect to future debt transactions could be material.



10



---

##### Table of Contents

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American
Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Companys present or future consolidated financial statements.

5.Net Loss per Common Share  Basic and Diluted

The Company computes loss per common share using SFAS No. 128, Earnings per share. Net loss per common share  basic and diluted is computed based on the weighted average number of shares outstanding for the period.
Diluted loss per common share is computed by dividing net loss by the weighted average shares outstanding assuming all dilutive potential common shares were issued. As of August 31, 2008 and 2007, the Company had 925,000 and 125,000 stock
options, respectively, that were not included in the net loss per common share due to the options being anti-dilutive. Additionally, there were no adjustments to net loss to determine net loss available to common stockholders. As such, basic and
diluted loss per common share equals net loss, as reported, divided by the weighted average common shares outstanding for the respective periods.

6.
Film Development Costs

As of August 31, 2008 and February 29, 2008, the Company had capitalized film development costs of $25,000 and
$248,390, respectively.

On April 8, 2008, the Company paid $25,000 for a 50% interest in the option to develop, produce and exploit an original
feature length motion picture based on the book Without A Badge by Jerry Speziale, which has been capitalized in accordance with Statement of Position 00-2.

In January 2007, DOD, LLC started production of a movie titled Donna on Demand. Effective August 26, 2008, the Company sold its membership interest in DOD, LLC (see Note 1). Therefore, as of
August 31, 2008, there were no remaining capitalized film costs included in the accompanying consolidated balance sheet relating to Donna on Demand.

The Company assessed the valuation of its film development costs and the Companys management has determined that $9,050 of capitalized film development costs were impaired as of August 31, 2008.

7. Equipment

Equipment consisted of the following as of
August 31, 2008 and February 29, 2008.



|                                     |  |                |         |   |                  |   |         |  
|------------------------------------ |  | -------------- | ------- | - | ---------------- | - | ------- | -
|                                     |  | August 31,2008 |         |   | February 29,2008 |  
|Furniture and leasehold improvements |  | $              | 2,554   |   |                  | $ | 2,554   |  
|Computers and office equipment       |  |                | 36,190  |   |                  |   | 36,190  |  
|                                     |  |                |         |   |                  |   |         |  
|                                     |  |                | 38,744  |   |                  |   | 38,744  |  
|Less: accumulated depreciation       |  |                | (37,465 | ) |                  |   | (36,465 | )
|                                     |  |                |         |   |                  |   |         |  
|                                     |  | $              | 1,279   |   |                  | $ | 2,279   |  
|                                     |  |                |         |   |                  |   |         |  

Depreciation expense for the six months ended August 31, 2008 and 2007 amounted to $1,000 and $1,500,
respectively.



11



---

##### Table of Contents

8. Line of Credit Due To Related Party

On August 19, 2004, the Company obtained a $250,000 unsecured line of credit from Mainas Development Corporation (a company owned by a shareholder and director of the Company) to be drawn down upon as needed with
an interest rate of 9% per annum. As of August 31, 2008 and February 29, 2008, the outstanding balance is $182,622 and is due on demand.

9. Note Payable to Stockholders

Notes payable to stockholders consist of the following at August 31, 2008 and February 29,
2008.



|                                                                                                                                                                               |  |                |         |                  |   |        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------- | ------- | ---------------- | - | -------
|                                                                                                                                                                               |  | August 31,2008 |         | February 29,2008
|Note payable to an individual, also a stockholder and director of the Company, interest is being charged at 8% per annum on $340,000, the note
is unsecured and due on demand. |  | $              | 436,722 |                  | $ | 442,947
|                                                                                                                                                                               |  |               
|Note payable to a stockholder and director of the Company, earning interest at 7% per annum. The note is unsecured and due on
demand.                                          |  |                | 42,000  |                  |   |       
|                                                                                                                                                                               |  |               
|Note payable to an individual, also a stockholder and director of the Company, the note is unsecured, due on demand and non-interest bearing.                                  |  |                | 16,715  |                  |   | 16,715 
|                                                                                                                                                                               |  |               
|Note payable to an individual and also a stockholder of the Company, earning interest at 6% per annum. The note is unsecured and due on
demand.                                |  |                |        |                  |   | 49,318 
|                                                                                                                                                                               |  |               
|Note payable to an individual, also a stockholder of the company, interest is being charged at 6 % per annum, the note is unsecured and due on
demand.                         |  |                |        |                  |   | 100,000
|                                                                                                                                                                               |  |                |         |                  |   |        
|                                                                                                                                                                               |  |               
|Total notes payable to stockholders, all current                                                                                                                               |  | $              | 495,437 |                  | $ | 608,980
|                                                                                                                                                                               |  |                |         |                  |   |        



|10. | Fair Value Measurement
|--- | ----------------------

We adopted SFAS 157 effective
March 1, 2008 for financial assets and liabilities measured on a recurring basis. On February 6, 2008, the FASB deferred the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or
disclosed at fair value in the financial statements on a recurring basis. SFAS 157 defines fair value, establishes a framework for measuring fair value and generally accepted accounting principles and expands disclosures about fair value
measurements. This standard applies in situations where other accounting pronouncements either permit or require fair value measurements. SFAS 157 does not require any new fair value measurements.

Fair value is defined in SFAS 157 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Fair value measurements are to be considered from the perspective of a market participant that holds the asset or owes the liability. SFAS 157 also establishes a fair value hierarchy which requires an entity to
maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs
that may be used to measure fair value:



| | Level  1: | Quoted prices in active markets for identical or similar assets and liabilities.
| | --------- | --------------------------------------------------------------------------------



| | Level  2: | Quoted prices for identical or similar assets and liabilities in markets that are not active or
| | --------- | -----------------------------------------------------------------------------------------------



12



---

##### Table of Contents

| | observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.
| | -------------------------------------------------------------------------------------------------------------



| | Level | 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------

The carrying amount of the Companys financial assets and liabilities, including cash, accounts payable and accrued expenses approximate fair value, without being
discounted, due to the short-term maturities during which these amounts are outstanding.

Management has concluded that it is not practical to determine
the estimated fair value of amounts due to related parties. SFAS No. 107 requires that for instruments for which it is not practicable to estimate their fair value, information pertinent to those instruments be disclosed, such as the carrying
amount, interest rate, and maturity, as well as the reasons why it is not practicable to estimate fair value. Management believes it is not practical to estimate the fair value of such financial instruments because the transactions cannot be assumed
to have been consummated at arms length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an independent valuation would not be practicable due to the lack of data regarding similar
instruments, if any, and the associated potential costs.

The Company adopted SFAS 159 effective March 1, 2008. This statement provides companies with
an option to report selected financial assets and liabilities at fair value. The Company did not elect the fair value option for any of such eligible financial assets or financial liabilities as of August 31, 2008.

11. Common Stock

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

On May 31, 2007, the Company filed a Definitive Information Statement (the Information
Statement) pursuant to Section 14(a) of the Securities Exchange Act of 1934 (the Exchange Act) with the Securities and Exchange Commission and mailed the statement to the Companys shareholders. The Information Statement
was filed and mailed in connection with the Companys solicitation of consents seeking approval to amend the Companys Certificate of Incorporation to effect a consolidation of its outstanding shares of Common Stock at a ratio of one share
for every 20 shares of Common Stock outstanding. On June 22, 2007, the Company filed the Certificate of Amendment (the Amendment) to the Certificate of Incorporation with State of Delaware effectuation of the reverse stock split as
of June 28, 2007.

On March 16, 2007, the Company sold 50,000 shares of its common stock at $2.00 per share for a total amount of $100,000.

On April 4, 2007, the Company entered into an investor relations and consulting agreement with CRG Partners, Inc. to provide services over a three
month period under which it issued 15,000 shares of its common stock in exchange for such services. The shares were valued based on the value of the services totaling $78,000 (which is more clearly determinable) and were expensed and included as
general and administrative expenses in the accompanying consolidated statement of operations for 2008.

On August 16, 2007, the Company issued 216,667
shares of its common stock at $0.30 per share for a total amount of $65,000.

On April 8, 2008, the Company issued 250,000 shares of its common stock
at $0.10 per share for a total amount of $25,000.

On April 22, 2008, the Company entered into an investor relations and consulting agreement with CRG
Partners, Inc. The agreement requires the Company to issue 60,000 shares of its common stock upon signing the agreement and 300,000 shares if the Company renews the agreement during the renewal period. The 60,000 shares issued on April 22, 2008
were valued at $.13 per share or $7,800 and has been expensed in the statement of operations. The Company has not yet renewed the agreement.



13



---

##### Table of Contents

On May 21, 2008, the Company issued 100,000 shares of its common stock at $.25 per share for a total amount of
$25,000.

On June 2, 2008, the Company executed a debt conversion agreement with George Mainas, a Company director and principal stockholder and debt
holder, for the conversion of $30,000 in Company debt into 120,000 shares of the Companys common stock for $.25 per share. The issuance of the Companys shares of common stock to Mr. Mainas was exempt from registration under the
Securities Act pursuant to Section 4(2) thereof. The shares of the Companys Common Stock to issued to Mr. Mainas are restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities
Act or an exemption thereunder. As the fair value of the common stock issued amounted to $60,000 on the date of the agreement, the conversion resulted in a loss on the issuance of common stock of $30,000, which is reflected in the accompanying
consolidated statement of operations for the six months ended August 31, 2008.

On August 1, 2008, the Company raised $40,000 through the sale of
a total of 200,000 shares of common stock at $.20 per share to two accredited investors, directors and stockholders of the Company. The issuance of the Companys shares of common stock was exempt from registration under the Securities Act
pursuant to Section 4(2) thereof. The shares of the Companys common stock issued are restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption thereunder.

12. Share Based Compensation

The
Companys 2007 Equity Incentive Plan (the Plan), which is not yet shareholder-approved, permits the grant of share options and shares to its employees and affiliates for up to one million shares of common stock. The Company believes
that such awards better align the interests of its employees and affiliates with those of its shareholders. Option awards are generally granted with an exercise price that approximates the market price of the Companys stock at the date of
grant.

On October 1, 2005, the Company issued stock options (outside of the Plan) to two members of its management. Each of the two individuals
received the right to purchase up to 50,000 shares of the Companys common stock at $5.00 per share. The stock options expire on October 1, 2008 or six months after the individual terminates its affiliation with the Companys board of
directors, whichever comes first. In addition, the Company granted its legal counsel stock options to purchase up to 25,000 shares of its common stock at $5.00 per share. These stock options expire October 1, 2008. All of the stock options
vested on October 1, 2005.

On November 12, 2007, the Company granted its legal counsel stock options to purchase up to 200,000 shares of its
common stock at $.10 per share. These stock options expire on November 12, 2012. All of these stock options vested on the grant date.

On
March 18, 2008, the Company granted its Chief Executive Officer and principle financial officer to purchase up to 200,000 of its common stock at $.25 per share. These stock options expire on March 18, 2008. All of these stock options
vested on the grant date.

On June 20, 2008, the Company granted options to purchase an aggregate total of 400,000 shares of Company common stock to
two stockholders and directors of the Company under the Companys 2007 Equity Incentive Plan at an exercise price of $.25 per share. The options vest immediately and have a 5 year contractual life. Of these options, 100,000 were subsequently
cancelled in August 2008. The issuance of the options was exempt from registration under the Securities Act pursuant to Section 4(2) thereof. The value of the options issued amounted to $74,802, which is reflected as an operating expense in the
accompanying consolidated statement of operations for the six months ended August 31, 2008.

On July 23, 2008, the Company granted options to
purchase 100,000 shares of Company Common Stock under the Companys 2007 Equity Incentive Plan at an exercise price of $.25 per share, in consideration for certain consulting services. The options vest immediately and have a 3 year contractual
life. The issuance of the options was exempt from registration under the Securities Act pursuant to Section 4(2) thereof. The value of the options issued amounted to $22,521, which is reflected as an operating expense in the accompanying
consolidated statement of operations for the six months ended August 31, 2008.



14



---

##### Table of Contents

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that
uses the assumptions noted in the following table. Because the Black-Scholes option valuation model incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on implied volatilities from traded options
on the Companys stock, historical volatility of the Companys stock, and the other factors. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options
granted is derived from estimates and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at
the time of grant.



|                        |  |                                 
|----------------------- |  | --------------------------------
|                        |  | Six Months Ended August 31, 2008
|Expected life in years  |  | 2-5                             
|Stock price volatility  |  | 113% -379%                      
|Risk free interest rate |  | 2.81% - 3.30%                   
|Expected dividends      |  | None                            
|Forfeiture rate         |  | 0%                              

A summary of option activity as of August 31, 2008, and changes during the period then ended is presented
below:



|                                               |  |         |  |                               |      |                                         |      |                         |   |        
|---------------------------------------------- |  | ------- |  | ----------------------------- | ---- | --------------------------------------- | ---- | ----------------------- | - | -------
|                                               |  | Options |  | Weighted-AverageExercisePrice |      | AverageRemainingContractualLife (Years) |      | AggregateIntrinsicValue
|Outstanding at February 29, 2008               |  | 325,000 |  | $                             | 1.99 |                                         | 2.90 |                         | $ | 335,755
|Granted                                        |  | 600,000 |  |                               | 0.25 |                                         | 4.39 |                         |   | 54,000 
|Exercised                                      |  |        |  |                               |     |                                         |      |                         |   |        
|Forfeited                                      |  |        |  |                               |     |                                         |      |                         |   |        
|                                               |  |         |  |                               |      |                                         |      |                         |   |        
|Outstanding at August 31, 2008                 |  | 925,000 |  |                               | 0.86 |                                         | 3.87 |                         |   | 389,755
|                                               |  |         |  |                               |      |                                         |      |                         |   |        
|                                               |  |         |  |                              
|Vested and expected to vest at August 31, 2008 |  | 925,000 |  |                               | 0.86 |                                         | 3.87 |                         |   | 389,755
|                                               |  |         |  |                               |      |                                         |      |                         |   |        
|                                               |  |         |  |                              
|Exercisable at August 31, 2008                 |  | 925,000 |  |                               | 0.86 |                                         | 3.87 |                         |   | 389,755

There were no options exercised during the six months ended August 31, 2008 or 2007. There is no unvested
compensation as of August 31, 2008.

13. Income Taxes

The Company adopted the provisions of FIN 48 on March 1, 2007, and has commenced analyzing filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well
as all open tax years in these jurisdictions. As a result of adoption, the Company has recorded no additional tax liability. There are no unrecognized tax benefits as of March 1, 2007. As of February 29, 2008 the Company has
not yet completed its analysis of the deferred tax assets for net operating losses. As such, this amount and the offsetting valuation allowance have been removed from the Companys deferred tax assets. The Company will complete a
Section 382 analysis regarding the limitation of the net operating loss, if the company utilizes the net operating loss.



15



---

##### Table of Contents

Due to the existence of the valuation allowance, future changes in our unrecognized tax benefits will not
impact the Companys effective tax rate.

The Company is subject to taxation in the U.S. and state jurisdictions. The Companys tax
years for 1993 and forward are subject to examination by the U.S. and 2003 and forward by California tax authorities due to the carry forward of unutilized net operating losses. The Company is currently not under examination by any taxing
authorities.

The adoption of FIN 48 did not impact the Companys financial condition, results of operations or cash flows. As of August 31,
2008, the Company had net deferred tax assets of approximately $1.457 million. Due to uncertainties surrounding the Companys ability to generate future taxable income to realize these assets, a full valuation has been established to
offset the net deferred tax asset. Additionally, the future utilization of the companys net operating loss carry forwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that may have
occurred previously or that could occur in the future. The Company has not yet determined whether such an ownership change has occurred. Until this analysis has been completed the Company has removed the deferred tax assets associated with
these carry forwards from its deferred tax asset schedule and has recorded a corresponding decrease to their valuation allowance.

The Company is primarily
subject to U.S. federal and state income tax. The Companys policy is to recognize interest and penalties related to income tax matters in income tax expense. As of August 31, 2008 and February 29, 2008, the Company had no accruals
for interest or penalties related to income tax matters.



16



---

##### Table of Contents

Item 2. Managements Discussion and Analysis or Plan of Operations.

The following discussion and analysis of should be read in conjunction with its financial statements and the related notes. This discussion contains
forward-looking statements based upon current expectations that involve risks and uncertainties, such as its plans, objectives, expectations and intentions. Its actual results and the timing of certain events could differ materially from those
anticipated in these forward-looking statements.

Overview

Public Media Works, Inc. (the Company or PMW or we or our) is engaged in the development, production, marketing and distribution of film, music and television entertainment media.

Going Concern and Liquidity Matters

The accompanying financial
statements of PMW have been prepared under the assumption that we will continue as a going concern. Such assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the
financial statements, the Company incurred a net loss of $427,972 during the six months ended August 31, 2008, and has incurred net cash outflows from operating activities during the six months ended August 31, 2008. Our independent
accountants report for 2008 and 2007 in our Form 10KSB filed with the SEC on July 14, 2008 state that these factors create substantial doubt as to the Companys ability to continue as a going concern.

The Companys continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain
additional financing as may be required, and ultimately to attain profitability. We will need to obtain additional financing through the sale of equity securities and/or the issuance of debt. There can be no assurance that such financing will be
available on acceptable terms, or at all. The financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

Plan of Operations

The Company did not generate any revenues during the six months ended August 31, 2008 or
during the six months ended August 31, 2007.

For the six months ended August 31, 2008, the Companys operating expenses amounted to
$341,709. This represented an increase of $152,202 in expenses as compared to the operating expenses of $189,507 for the six months ended August 31, 2007. Operating expenses increased during the six months ended August 31, 2008 due
primarily to increased general and administrative expenses of $144,213 due to increased stock option and share-based compensation expense of approximately $68,000, as well as an increase in travel and related expenses of approximately $70,000. The
Company also had increased professional fees of $10,074 due to increases in legal and accounting fees.

During the six months ended August 31, 2008,
the Companys net loss amounted to $427,972. This represented an increased net loss of $204,514 as compared to the net loss of $223,458 for the six months ended August 31, 2007. The increased net loss is primarily the result of increased
operating expenses of $152,202, as described above, as well as $57,500 in losses from the issuance of common stock for the settlement of debt.

For the
quarter ended August 31, 2008, the Companys operating expenses amounted to $260,897. This represented an increase of $210,331 in expenses as compared to the operating expenses of $50,566 for the quarter ended August 31, 2007.
Operating expenses increased during the quarter ended August 31, 2008 due primarily to an increase in general and administrative expenses of $185,306 due to increased stock option compensation expense of approximately $97,000, as well as an
increase in travel and related expenses of approximately $70,000. The Company also had increased professional fees of $15,975 due to increases in legal and accounting fees, as well as an increase of $9,050 in the impairment of film development
costs.

The Company has reported a cumulative net loss of ($5,046,260) from its inception on March 3, 2000 through August 31, 2008.

The Company does not currently have sufficient cash to satisfy its cash requirements and will have to raise additional funds in the next twelve months. During the
next twelve months, the Company does not



17



---

##### Table of Contents

anticipate any product research or development, any purchase or sale of plant or significant equipment, or any significant changes in the number of its
employees.

Liquidity and Capital Resources

At
August 31, 2008, our total assets were $30,514, our current assets totaled $4,235 and our current liabilities were $1,106,958. Our stockholders deficit at August 31, 2008 was ($1,076,444), compared to stockholders deficit at
February 29, 2008 of ($1,047,376).

As of August 31, 2008, the Company had a cash balance of $2,095. The Company does not currently have
sufficient cash on hand to satisfy its operating costs and continued development efforts, and will need to raise additional capital. The Company anticipates raising additional funds through debt, convertible debt, or through the sale of
equity. There can be no assurance as to whether, when, or upon what terms the Company will be able to consummate any financing. The Company may raise capital from third parties to fund specific television and film projects.

To date, the Company has funded its operations through the issuance of common stock in exchange for cash and services, as well as through unsecured notes payable to
stockholders and third parties. As of August 31, 2008, the Company has aggregate outstanding notes payable and accrued interest balances of $978,774, under the following obligations:

1. On August 30, 2000, the Company and George Mainas, a member of the Board of Directors of the Company and a shareholder, entered into an unsecured
promissory note bearing interest at 8% per annum. As of August 31, 2008, the Company had an outstanding balance of $672,529 under the promissory note, including accrued interest. The promissory note is payable on demand.

2. On August 19, 2004, the Company entered into an unsecured line of credit with Mainas Development Corporation, which is wholly-owned by George Mainas. The
non-revolving line of credit has a maximum draw-down of $250,000, bears interest of 9% annually, does not maintain an outstanding balance limitation, and is payable on demand. The outstanding balance on this account as of August 31, 2008 was
$247,163 including accrued interest. Mr. Mainas and Mainas Development Corporation made demand to the Company on March 31, 2005 for payment of all amounts due and owing by the Company under the unsecured promissory note and unsecured line
of credit.

3. In July 2008, the Company entered into an unwritten, unsecured promissory obligation to George Mainas to borrow $42,000 bearing interest at
7% per annum. As of August 31, 2008, the Company had an outstanding balance of $42,367 under the obligation, including accrued interest. The promissory obligation is due on demand.

4. In May 2002, the Company entered into an unwritten, unsecured promissory obligation to Denis Shusterman, a stockholder, in exchange for his payment of $16,715 in
general and administrative expenses on behalf of the Company. This obligation is payable upon demand and bears no interest. As of August 31, 2008, the outstanding balance under this obligation was $16,715. On May 18, 2007, the
Company received a Writ of Garnishment from the U.S. Department of Justice related to a judgment due from Denis Shusterman to the United States. The Company expects the U.S. Department of Justice to make demand for repayment of the amounts due and
owing under the Companys obligation to Denis Shusterman.

The Board of Directors of the Company has passed a corporate resolution in September 2005
providing that 50% of all future Company revenues, or debt or equity financing proceeds, will be used to pay down the Companys obligations under the Companys outstanding debt obligations; provided, however, to date the Board of Directors
has waived the application of this resolution.

Sale of Certain Interests in Limited Liability Companies and Projects

On August 26, 2008, the Company entered into a Purchase Agreement with Corbin Bernsen, Team Cherokee Productions, Inc., a company owned by Corbin Bernsen, providing
for the sale of certain Company limited liability company interests and projects. The agreement provided for the sale of the Companys entire membership interests in DOD, LLC and Dead Air, LLC and for the Company to resign as the manager of
each; the Companys sale of one-half of its 40% interest in the production of the film



18



---

##### Table of Contents

Car Pool Guy; and the Companys sale of a one-half interest in the script for the film 3 Day Test. In consideration for the
assets, Mr. Bernsen agreed to forgive all of the Company debt to him (in the approximate amount of $55,000) and agreed to pay the Company future royalty payments from the projects. The Company received the right to receive royalty payments in
the amount of 12.5% of any future distributions from DOD, LLC and 10% of any future distributions from Dead Air, LLC. The agreement also terminated the Project Management Agreement dated March 18, 2008 previously entered into between the
Company and Mr. Bernsen. The transactions under the agreement were effective as of August 26, 2008. The description of the terms of the agreement is qualified by reference to the complete copy of such agreement which is filed as an exhibit
to our Form 8-K filed with the SEC on August 29, 2008. In exchange for the sale of the membership interests, all outstanding debt and accrued interest owed by the Company to the shareholder, amounting to $55,475 was forgiven. The Company also
had a net liability of $34,562 due to DOD, LLC which was forgiven as part of the transaction. Given its related party nature, the transaction has been accounted for as a capital contribution and the difference of $93,561 between the debt forgiven
and the assets transferred to the shareholder has been reflected as additional paid-in capital in the accompanying consolidated balance sheet at August 31, 2008.

USE OF ESTIMATES ANDCRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results
of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (US GAAP).

The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets liabilities and the
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during each reporting period. On an ongoing basis, management evaluates its estimates and assumptions,
including those related to film development costs, income taxes, long lived asset valuation, and stock based compensation. Management basis its estimates and judgments on historical experience of operations and on various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

Management believes the following critical accounting policies, among others, will affect its more
significant judgments and estimates used in the preparation of our financial statements.

Film Development Costs. Included in film
development costs are films produced by the Company, capitalized costs include all direct production and financing costs, capitalized interest and production overhead. Film development costs are stated at the lower of amortized cost or estimated
fair value. The valuation of investment in films and television programs is reviewed on a title-by-title basis, when an event or change in circumstances indicates that the fair value of a film or television program is less than its unamortized cost.
The fair value of the film or television program is determined using managements future revenue and cost estimates and a discounted cash flow approach. Additional amortization is recorded in the amount by which the unamortized costs exceed the
estimated fair value of the film or television program. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films may be required as a consequence of changes
in managements future revenue estimates. Management evaluates the valuation of Film Development Costs on a quarterly basis. For the six months ended August 31, 2008, we recognized approximately $9,000 of film development cost impairments.

Income Taxes.In determining the carrying value of the Companys net deferred tax assets, PMW must assess the likelihood of sufficient
future taxable income in certain tax jurisdictions, based on estimates and assumptions, to realize the benefit of these assets. If these estimates and assumptions change in the future, PMW may record a reduction in the valuation allowance, resulting
in an income tax benefit in the Companys Statements of Operations. Management evaluates the realizability of the deferred tax assets and assesses the valuation allowance quarterly.

Effective March 1, 2007, we adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxesan
interpretation of FASB



19



---

##### Table of Contents

Statement No. 109. The implementation of FIN 48 had no significant impact on the Companys financial statements.

Stock-Based Compensation. On January 1, 2006, we adopted Statement of Financial Accounting Standards (SFAS) No.123 (Revised 2004),
Share Based Payment, (SFAS 123R), using the modified prospective method. In accordance with SFAS 123R, PMW measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date
fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the awardthe requisite service period. We determine the grant-date fair value of employee share options
using the Black-Scholes option-pricing model.

Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 141(R), Business Combinations (SFAS
No. 141R). SFAS 141R retains the fundamental requirements in SFAS 141 that the acquisition method of accounting (which SFAS 141 called the purchase method) be used for all business combinations and for an acquirer to be identified
for each business combination. SFAS 141R also establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any
non-controlling interest in the acquiree; (b) improves the completeness of the information reported about a business combination by changing the requirements for recognizing assets acquired and liabilities assumed arising from contingencies;
(c) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (d) determines what information to disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. SFAS No. 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15,
2008. Early application is not permitted. The Company has not yet determined the impact, if any, SFAS No. 141R will have on its consolidated financial statements, but believes any impact with respect to future acquisitions could be
material.

In December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements (SFAS
NO. 160). SFAS No. 160 amends ARB 51 to establish accounting and reporting standards for the non-controlling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling
interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and establishes a single method of accounting for changes in a parents ownership interest
in a subsidiary that do not result in deconsolidation. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008. The Company has not yet determined the impact, if any, that SFAS No. 160 will have on its
consolidated financial statements, but believes any impact will not be material.

In May 2008, the FASB issued FSP No. APB 14-1, Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement). FSP APB 14-1 addresses instruments commonly referred to as Instrument C from Emerging Issues Task Force No. 90-19, which requires the
issuer to settle the principal amount in cash and the conversion spread in cash or net shares at the issuers option. FSP APB 14-1 requires that issuers of these instruments account for their liability and equity components separately by
bifurcating the conversion option from the debt instrument, classifying the conversion option in equity, and then accreting the resulting discount on the debt as additional interest expense over the expected life of the debt. FSP APB 14-1 is
effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years, and requires retrospective application to all periods presented. Early application is not permitted. Management is currently evaluating
the impact of the adoption of this statement; however, but believes any impact with respect to future debt transactions could be material.

Quantitative
And Qualitative Disclosures About Market Risk

Market risk refers to the risk that a change in the level of one or more market factors such as interest
rates, foreign currency exchange rates, or equity prices will result in losses for a certain financial instrument or group of instruments. We do not hold any instruments that are subject to such risks.



20



---

##### Table of Contents

Interest rate risk

We do
not believe that interest rate risk will negatively impact out business plans.

Inflation

We do not believe that inflation will negatively impact our business plans.

Off-Balance Sheet Arrangements

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

Item 3(A)T. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.We conducted an evaluation under the supervision
and with the participation of our management, including our Chief Executive Officer who is also our acting principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule
13a-15(b) of the Exchange Act. The term disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information
required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms. Based on this
evaluation, our Chief Executive Officer has concluded that, as of August 31, 2008, our disclosure controls and procedures were not effective in ensuring that the information required to be filed or submitted under the Exchange Act is
recorded, presented, summarized and reported as specified in the Securities and Exchange Commissions rules and forms, and accumulated and communicated to our management, including our Chief Executive Officer who is also acting as our principal
financial officer, as appropriate to allow timely decisions regarding required disclosure. We believe, however, that the accompanying consolidated financial statements presented in this Form 10-Q fairly present the financial condition and results of
operations for the periods indicated.

The identified material weaknesses in our internal control over financial reporting relate to the following matters:



| |  |  | We identified a lack of sufficient segregation of duties, particularly in cash disbursements. Specifically, this material weakness is such that the design over the
areas of cash disbursements relies primarily on detective controls and could be strengthened by adding preventative controls to properly safeguard company assets.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Management has identified a lack of sufficient personnel in the accounting function due to the limited resources of the Company with appropriate skills, training
and experience to perform the review of the Company with appropriate skills, training and experience to perform the review processes to ensure the complete and proper application of generally accepted accounting principles, particularly as it
relates to taxes, valuation of share based payments, consolidation of various entities, the valuation and capitalization of film development costs, and other equity transactions. Specifically, this material weakness lead to segregation of duties
issues and resulted in audit adjustments to the annual consolidated financial statements and revisions to related disclosures, including tax reporting, share based payments, consolidation of various entities, the valuation of capitalization of film
development costs, and other equity transactions.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our plan to remediate those material weaknesses remaining as of August 31, 2008
is as follows:



| |  |  | Improve the effectiveness of the accounting group by continuing to augment existing Company resources with additional consultants or employees to improve
segregation procedures and to assist in the analysis and recording of complex accounting transactions and preparation of tax disclosures. The Company plans to mitigate the segregation of duties issues by hiring additional personnel in the accounting
department once the Company is generating revenue, or has raised significant additional working capital.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



21



---

##### Table of Contents

| |  |  | Improve segregation procedures by strengthening cross approval of various functions including cash disbursements and quarterly internal audit procedures where
appropriate.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

CHANGES IN CONTROLS AND PROCEDURES

As required by Rule 13-15(d) of the Exchange Act, the Company, under the supervision and with the participation of the Companys management, including the Chief Executive Officer and principal financial officer,
also evaluated whether any changes have occurred to the Companys internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, such control.
Based on the evaluation, there has been no such changes during the period covered by this report.

PART
IIOTHER INFORMATION

Item 1. Legal Proceedings.

There are no legal proceedings to which the Company is a party at this time. Further, its officers and directors know of no legal proceedings against the Company, or its property contemplated by any governmental
authority.

Item 1A. Risk Factors

In addition to
the other information set forth in this report, you should carefully consider the factors discussed in Part II, Item 6 Managements Discussion and Analysis of Financial Condition and Results of OperationsRisk
Factors in our Annual Report on Form 10-KSB for the fiscal year ended February 29, 2008 which was filed with the SEC on July 14, 2008 (the Form 10KSB). These risks and uncertainties have the potential to materially affect
our business, financial condition, results of operations, cash flows, projected results and future prospects. As of the date of this report, we do not believe that there have been any material changes to the risk factors previously disclosed in our
Form 10-KSB.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On June 2, 2008, the Company executed a debt conversion agreement with George Mainas, a Company director and principal shareholder and debt holder, for the
conversion of $30,000 in Company debt into 120,000 shares of Company Common Stock for $.25 per share. The issuance of the Companys shares of common stock to Mr. Mainas was exempt from registration under the Securities Act pursuant to
Section 4(2) thereof. The shares of the Companys Common Stock to issued to Mr. Mainas are restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption
thereunder.

On June 20, 2008, the Company granted each of Mr. Kearney and Mr. Mainas options to purchase 200,000 shares of Company Common
Stock under the Companys 2007 Equity Incentive Plan at an exercise price of $.25 per share. The issuance of the options was exempt from registration under the Securities Act pursuant to Section 4(2) thereof.

On July 23, 2008, the Company granted Stuart Rogers options to purchase 100,000 shares of Company Common Stock under the Companys 2007 Equity Incentive Plan
at an exercise price of $.25 per share, in consideration for certain consulting services. The issuance of the options was exempt from registration under the Securities Act pursuant to Section 4(2) thereof.

On August 1, 2008, the Company raised $40,000 through the sale of a total of 200,000 shares of Company common stock at $.20 per share to Mr. Kearney and
Mr. Mainas, both of which are accredited investors and directors and shareholders of the Company. The issuance of the Companys shares of common stock was exempt from registration under the Securities Act pursuant to Section 4(2)
thereof. The shares of the Companys Common Stock issued to Mr. Kearney and Mr. Mainas are restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption
thereunder.



22



---

##### Table of Contents

Item 3. Defaults Upon Senior Securities.

As reported above in Part 1, Item 2Managements Discussion and Analysis or Plan of OperationsLiquidity and Capital Resources, the
Company is in default under an unsecured promissory note and unsecured line of credit with Mr. Mainas and his company, Mainas Development Corporation.

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



|           |  |                                                                                                                
|---------- |  | ---------------------------------------------------------------------------------------------------------------
|ExhibitNo. |  | Description                                                                                                    
|31         |  | Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act                              
|           | 
|32         |  | Certification pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K

The Company filed a Form 8-K on June 5, 2008 regarding the appointment of Mr. Kearney as a director and the issuance of unregistered securities to CRG Partners, Inc., Mr. Mainas and Mr. Kearney.

The Company filed a Form 8-K on August 29, 2008 regarding the purchase agreement with Team Cherokee Productions, Inc. and Corbin Bernsen for the sale of certain
interests in limited liability companies and projects.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.



|                       |  |                                                               
|---------------------- |  | --------------------------------------------------------------
|                       |  | Public Media Works, Inc.                                      
|                       |  | (Registrant)                                                  
|                       | 
|Date: October 15, 2008 |  | /s/ Al Hayes                                                  
|                       |  |                                                               
|                       |  | By: Al Hayes                                                  
|                       |  | Title: Chief Executive Officer and principal financial officer



23