**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

**FORM 10-KSB**

 
| **ý**                                                                                                                                                                                                                                                                                                                | ** ** | **ANNUAL  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                      |       |                                                                                |
| **For the year ended February 29, 2004**                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                      |       |                                                                                |
| **o**                                                                                                                                                                                                                                                                                                                     | ** ** | **TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934**        |
|                                                                                                                                                                                                                                                                                                                      |       |                                                                                |
| **For the transition period  from                       to                       ** |

 

**0-29901****(Commission File No.)**

** **

| **PUBLIC MEDIA WORKS, INC.**                                  |
|---------------------------------------------------------------|
| (Exact name of registrant as specified in its charter)        |
|                                                          |   |   |
| **Delaware**                                                  | ** ** | **98-0220849** |
| (State or jurisdiction or incorporation or organization)      |   | (I.R.S. Employer Identification Number) |
|                                                          |   |   |
| **14759 Oxnard Street**                                       |
| **Van Nuys, California 91411**                                |
| (Address and telephone number of principal executive offices) |
|                                                          |   |   |
| **818-904-9029**                                              |
| (Issuer’s telephone number)                              |

 

Securities registered under Section 12(b) of the Exchange Act:

 

| **Title of  class** | ** ** | **Name of each exchange on which registered** |   |
|---------------------|------------|-----------------------------------------------|--------|
| N/A                 |       | N/A                                           |   |

 

Securities registered under Section 12(g) of the Exchange Act:

 

**Common Stock**

 

Check whether the issuer (1) filed all reports required to be filedSection 13 or 15(d) of the Exchange Act during the past 12 months (or for suchshorter period for which the registrant was required to file reports), and (2)has been subject to such filing requirements for the past 90 days.  oYes ý No

 

Check if there is no disclosure of delinquent filers in response toItem 405 of Regulation S-B is not contained in this form, and no disclosurewill be contained, to the best of registrant’s knowledge, in definitive proxyor information statements incorporated by reference in Part III of this Form10-KSB or any amendment to this Form 10-KSB: o

 

State issuer’s revenues for its most recent fiscal year:  $0

 

State the aggregate market value of the voting and non-voting commonequity held by non-affiliated computed by reference to the price at which thecommon equity was sold, or the average bid and asked price of such commonequity, as of a specified date within the past 60 days:  N/A (no public market)

 

State the number of shares outstanding of each of the issuer’s classesof common equity, as of the latest practicable date:  25,512,500 shares of common stock issued andoutstanding as of August 1, 2004.

 

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

 

 

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**SPECIALNOTE REGARDING FORWARD-LOOKING STATEMENTS**

 

 

This annual report on Form10-KSB contains “forward-looking statements” which are based on its currentexpectations, assumptions, estimates and projections about its business and itsindustry. Words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “may,” and other similar expressions identify forward-lookingstatements. In addition, any statements that refer to expectations, projectionsor other characterizations of future events or circumstances areforward-looking statements. These forward-looking statements are subject tocertain risks and uncertainties that could cause actual results to differmaterially from those reflected in the forward-looking statements.

 

Factors that might cause such adifference include, but are not limited to, those discussed in the section ofthis report titled “Item 6. Management’s Discussion andAnalysis of Financial Condition and Results of Operation-Factors AffectingBusiness, Operating Results and Financial Condition”, as well as other factors,such as a decline in the general state and viability of the television and filmindustries, which will be outside its control. You are cautioned not toplace undue reliance on these forward-looking statements, which relate only toevents as of the date on which the statements are made. The Company undertakesno obligation to publicly revise these forward-looking statements to reflectevents or circumstances that arise after the date hereof. Please refer to andcarefully review the information in future documents the Company files with theSecurities and Exchange Commission.

 

**Item 1.****                   ****Description of Business**

 

Public Media Works, Inc. was a privately-held company until August 30,2003.  In order to maintain clarity,references to Public Media Works prior to the reverse merger effected August30, 2003 will be indicated as “PMW.” References to “Public Media Works, Inc.,” “Public Media,” “the Company,”etc. collectively refer to the Company immediately following the merger andcurrently.

 

***Overview and History***

 

The Company is a media studio that develops full-length films andtelevision shows.  Development includesdrafting the script, creating a working budget and shooting schedule, andattaching actors.  In this context,“attachment” of actors generally refers to entering into non-binding letters ofintent with actors for a particular production, pending finalization ofbudgets, producers, director and other significant factors.  If commissioned, the Company’s involvementgenerally ends upon completion of development. The Company may also develop films and shows internally, which willrequire it to use an outsourced production studio.

 

Public Media Works also maintains a proprietary technology whichcreates a virtual studio, which viewers may access through its website,www.publicfilmworks.com.  The virtualstudio enables viewers to participate and interact with the production processof making filmed entertainment.  TheCompany targets viewers through two main outlets:  its media partners, who discuss and promotethe Company’s films and shows via editorial content in publications andpromotions, and its sponsors, who promote and co-brand the Company’s films andshows by association with their products. Viewers wishing to view real-time filming of its internally developedproductions can register on its virtual studio website, and can then vote toinfluence content style in the pre-production phase, view the filming andinteract with the actors in the production once filming begins.  The virtual studio is capable of a number ofinteractive production activities, which are described further in thedisclosure

 

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titled“Description of Business-Business Units-Virtual Studio.”  The Company may choose to integrate itsvirtual studio with varying levels of interaction for each production,depending on the type of production, the potential audience for suchproduction, as well as potential revenues through sponsorship from advertisingand the licensing of its virtual studio to third party production companies.

 

Public Media’s management intends to outsource the Company’s physicalproduction to third party production studios on a project-by-projectbasis.  The Company does not intend toenter into exclusive relationships with any particular studio, although it maydo so in the future if it proves advantageous to us and its operations.  The Company’s management previouslyconsidered acquiring a production studio, and entered into a non-binding letterof intent on December 8, 2003 with Old Tucson Company in Tucson, Arizona.  The primary aspects of consideration includedcost advantage by working in a non-union state, and the reduced labor costs inthe Tucson area.  However, during thecourse of its due diligence, the Company elected not to pursue this option, andthe letter of intent expired unexercised on January 15, 2004.  The Company and its management furtherdecided that outsourcing its production needs would provide the most flexibleand cost-effective arrangement for us. Accordingly, Public Media is not exploring acquisition opportunities atthis time.

 

The Company intends to sell completed films and television showsthrough distribution agreements and traditional channels of theatrical release,network broadcast, rental release, retail sales, and direct-to-consumerchannels.  After distribution, theCompany’s interaction with its virtual studio viewers will continue withrespect to future and ongoing products, and the Company will continue to serveas gatekeeper between the sponsoring advertisers and their targeted virtualstudio consumers.

 

The Company has retained Charles Sherman Public Relations to engage andmanage public relations and its publicity needs.  Mr. Sherman was formerly the Director ofPublic Relations for 15 years for CBS daytime drama “The Young and theRestless”, and primarily develops and maintains the Company’s relationshipswith leading entertainment publications. Mr. Sherman works with a variety ofpublications geared to specific audiences, who provide editorial coverage ofthe Company’s films and shows based upon the interests of their coreaudiences.  The Company does not maintainwritten agreements with any of these publications, and only provides contentfor their publications as appropriate and accepted by each publication.    The Company has retained this firm on amonthly basis, for a fee of $2,000 per month. The Company executed this agreement on September 22, 2003, and thisagreement can be terminated by either party upon 30-day notice.

 

Incorporation and Share Exchange

 

Burnam Management was incorporated in the State of Delaware on March 3,2000, and registered its common stock with the Securities and ExchangeCommission on March 9, 2000.  Fromincorporation until August 30, 2003, Burnam functioned effectively as a publicshell, without any operations or business plan, and did not trade on anyexchange or trading system.  Public MediaWorks (PMW) was incorporated as a privately held company in the State ofDelaware on May 15, 2000.  PMW decided toenter into a merger with Burnam in order to rapidly effectuate a public marketand public presence within its industry, and Burnam and its shareholdersentered into the merger in order to increase the value of Burnam by obtainingan operating business.

 

On August 30, 2003, PMW entered into a reverse merger with Burnam, theterms of which are as follows:  On August29, 2003, Burnam Management entered into a Share Exchange Agreement to acquirePMW.  At the time of the exchange, therewere 5,000,000 shares of Burnam common stock issued and outstanding.  Under the terms of the agreement, Burnamissued 20,000,000 restricted shares of common stock to all outstanding PMWsecurity holders on a pro-rata basis, in exchange for which Burnam received20,000,000 shares of PMW common stock, representing all

 

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of the issued andoutstanding shares of PMW.

 

The share exchange took effect on August 30, 2003, at which timeBurnam’s sole officer and director, Rick Plotnikoff, resigned after electingThomas Szabo, Shaun D.C. Edwardes, and Corbin Bernsen as the newdirectors.  PMW remains a wholly-ownedsubsidiary of Public Media, and has no operations.

 

No finders or other third parties were used in connection with theshare exchange and merger, and no finders’ fees or commissions were paid inconjunction with the merger.

 

***Business Units***

 

To serve the needs of the traditional production market sector, as wellas emerging markets, the Company has established and manages several businessunits.  The Company manages each unitseparately, but they are cross-marketed and reported as a consolidatedbusiness.

 

**FeatureFilm Production**

 

The Company creates and develops full-length feature films, which maybe commissioned by a third party, or may be developed and produced byinternally in conjunction with an outsourced production studio.  The Company maintains a virtual studio anduses both internal and external scriptwriting talent to develop its films.  Its relationships in the entertainmentindustry give Public Media a wide pool of potential acting talent for use inthese films, which enable it to maximize the value the Company adds to anyproduct it develops or produces.

 

Its film production unit will develop and produce original featurefilms for theatrical release, network and cable television licensing, DVD andVHS rental, and commercial sale.  TheCompany will pay for the development and production with its own monies orthrough limited partnerships established for each production, and may utilizethird-party producers to actually shoot the projects.  In addition, the Company may combine its filmproduction with its virtual studio and sponsorship businesses, providing additionalrevenue during pre-production using advertiser sponsorship and pre-sales ofproduction material and content.  Viewersmay participate in certain aspects of pre-production, such as selection ofparticular products and items to be used in the film, and may view the actualfilming via the virtual studio in real time. The Company is currently developing three feature films, two of which,“3 Day Test” and “The Action”, are in early pre-production.  The Company has completed the script for thethird film, “Carpool Guy,” and intends to begin pre-production in late2005.  The Company is currentlydeveloping a fourth film, “Over the Hedge,” which was commissioned by Behindthe Hedge Productions, Inc. an unaffiliated third party.  The Company does not own “Over the Hedge,”and has generated revenue on a flat fee basis in exchange for its scriptdevelopment.

 

Projects

 

*3 Day Test*

 

The Company intends to use what the management believes is the loyalfan base and worldwide appeal of daytime drama soap opera stars in casting theleading actors for the film.  The Companyhas formal letters of intent regarding their participation.  Committed actors include Kin Shriner(“General Hospital”, “Full House”, Melrose Place”), Eileen Davidson (“Young andthe Restless”,  “Eternity”,“Easy Wheels”), Farah Fath (“Days of its Lives”), Tony Geary (“GeneralHospital”, All in the Family”, Starsky and Hutch”, “Murder, She Wrote”), JessWalton (“Young and the Restless”), 

 

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James Mitchell (“All My Children”, “Charlie’s Angels”), John McCook(“Bold and the Beautiful”, “LA Law”, “Moonlighting”), Kristoff St. John (“Youngand the Restless”), Arianne Zucker (“Days of its Lives”), James Reynolds (“Daysof its Lives”, “The Incredible Hulk”, Different Strokes”, “The Dukes of Hazard”,“Generations”), Steven Martinez (“Guiding Light”, “General Hospital”), JacobYoung (“All My Children”, “The Bold and the Beautiful”) and Jeanne Cooper(“Young and the Restless”).  Theseletters of intent are not binding, and obligate actors to work on particularproductions pending finalization of budgets, production scheduling, directorselection, the shooting schedule, the actor’s compensation and othersignificant factors.  The letters do notexpire, and are used primarily to assist in financing, budgeting anddistribution, as well as to assist scriptwriters in tailoring roles forspecific actors based on their agreement to appear in the film.

 

The basic film concept is summarized as follows:  On the verge of another Christmas holiday,Martin Taylor decides not to waste his vacation time this winter.  With a strong desire to connect with hischildren and rekindle an unsatisfying marriage, he forces his family toparticipate in a test.  Over three days,Martin keeps his family inside the house, cutting off the water, electricity,and phones on which they have become so dependent.  He only allows them to use resources they canfind in the house in order to provide themselves with just enough heat, food,and sanity.  As they grind out the days,they encounter many adversities from the outside world including Martin’sapocalypse-fearing brother.  They learnthat if they are going to survive the three day test, and life beyond, they aregoing to need each other.

 

The Companyhas completed the screenplay and intend to beginproduction in the first quarter of 2005.

 

*The Action*

 

On February 5, 2004, the Company entered into an exclusive, five-yearagreement with the American Basketball Association (“ABA”) to develop allfilmed and digital entertainment products. This includes movies, video games and television shows, among otherthings.  The first of these projects willbe the film “The Action,” which was tentatively titled “The Shock” at the timeof its agreement.  “The Action” has anestimated budget of $8 — 10 million budget, which the Company anticipates willbe funded by the ABA or its affiliated parties. The Company contracted a screenwriter to draft the script for $4,000,and received the first full draft in April. The Company has begun developing the project by casting actors,identifying locations and commencing the budgeting and scheduling process.  The Company has obtained a letter of intentwith Dennis Rodman, and is in the process of securing additional talent for thefilm.  The Company anticipates commencingproduction in the second quarter of 2005.

 

The basic film concept is summarized as follows:  Hollywood Action Movie Producer Dab Mannershas generated more than a billion dollars at the box office but the formula isgrowing old so he looks for a new vehicle to wield his powers andexpertise.  He finds it in the newlyreinvented ABA (American Basketball Association) With the ABA’s signature red,white and blue ball and history of wild antics on the court, Dab has all theingredients he needs to “produce” Los Angeles’ new basketball team:  the Hollywood “Action.”  Much to everyone’s surprise however, hepasses up some great players and instead fills his squad with 12 of thegreatest misfits to have ever professionally played or dreamed of playing thegame:  “Dab’s Dirty Dozen.”  The plan backfires however as these playersfind themselves wanting to be real players, which doesn’t sell tickets.  The players must choose:  basketball Dab’s way or the highway.

 

 

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*Carpool Guy*

 

On September 11, 2003, the Company retained a screenwriter for $4,000to draft the script for this film, and received a completed first draft inFebruary 2004.  The Company intends tobegin pre-production of “Carpool Guy,” including development and casting, inthe third quarter of 2005, and production in the fourth quarter of 2005.

 

The basic film concept is summarized as follows:  The story centers around a junior executiveat a large company who finds himself at a standstill in life.  He can’t seem to make headway at home or atwork.  To further complicate his life, heis quite literally at a standstill in two hours of traffic during his commuteto and from work each day.  Then, oneday, he spots a disheveled homeless fellow sitting on a bench near the freewayramp.  He offers the man some money toride with him to and from work allowing him access to the carpool lane and alittle smooth sailing.  It works, as hefrees up an hour in his day, and it makes a huge difference.  More time for his family, more time forwork.  Big things really begin to changefor him when he starts to listen to the little pearls of wisdom the Carpool Guyemits from the back seat of his car. Then, when the Carpool Guy mysteriously disappears, he must make somedifficult choices before it all falls apart again.

 

*Over the Hedge*

 

On February 27, 2004, the Company entered into an agreement with Behindthe Hedge Productions, Inc. to produce its first feature-length film, “Over theHedge.”  The Company was commissioned byBehind the Hedge Productions, Inc. to develop and budget a script for$50,000.  The Company received $25,000upon executing this agreement, and completed and presented its proposed scriptand budgeting, which were accepted by Behind the Hedge Productions.

 

Although the Company does not own the script, as the Company wascommissioned to develop it, the Company has entered into negotiations withBehind the Hedge Productions to produce this film.  If its negotiations result in its ownershipof an equity position in the film, the Company may then enter into furthernegotiations with Behind the Hedge Productions, Inc. to distribute the filmthrough its distribution agreements.

 

As of February 29, 2004, Behind the Hedge Productions, Inc. is a majorcustomer, and accounted for 100% of its revenues.

 

Distribution

 

On February 9, 2004, the Company entered into an agreement with RegentEntertainment to distribute three of its films to theaters and/or in retailform (such as DVD or VHS videocassette) worldwide, each of which must have aproduction budget over $1 million.  Foreach proposed film that is accepted for distribution, Regent must securepre-sold revenues in varying amounts from various European territories. For eachfilm distributed in this manner, the Company agrees to pay a fee equal to 25%of its gross revenues for each film, as well as marketing expenses up to$100,000 per film.  This agreementexpires in December 31, 2005.

 

Suppliers

 

The Company has identified apool of independent or freelance screenwriters. The Company entered into an agreement with one of these freelancewriters, Mr. Peter Soldinger, for the development of both “Carpool Guy” and“The Action.”  Its President, CorbinBernsen, is the author of “3 Day Test” and “Over the Hedge,” and will continueto serve as screenwriter for specific projects on occasion.  Mr. Bernsen does not receive additionalcompensation for scriptwriting.  TheCompany does not anticipate paying more than $5,000 for the development of anyscript or treatment, which will

 

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increaseto Writers Guild of America’s minimum payment for any specific project thatreaches production.  WGA minimum payvaries according to each project’s budget and various other factors determinedby the WGA.

 

**TelevisionProduction**

 

Its television production unit develops and produces original contentprograms for television distribution. Using multiple elements from its development and sponsorship model, theCompany develops its content internally and produces the content with severalproduction companies.  The Companyintends to pay for the development costs, and intend to enter into jointventure agreements during the production and distribution phases.  The Company currently owns seven productionsin various stages of development.

 

Projects

 

*The Ultimate 18*

 

On October 10, 2003, the Company entered into an agreement withStone-Stanley Productions to create and develop a reality-based golf show in anundetermined format and for a period of time, which will be based on networkinterest and purchases.  The Company hasdeveloped a suggested format and treatment for the show, and is currentlynegotiating with actors and golf celebrities for involvement in the show.  Stone-Stanley is in the process of meetingwith interested networks in order to sell the show for broadcast.   As creators of the show, the Company owns100% of the concept for this show. However, in order to develop and produce this show, the Company hasgranted 100% of its ownership to Stone-Stanley for a period of six months.  Should Stone-Stanley execute a productionagreement with a network to produce and broadcast the show before the ownershipgrant expires, the Company will receive 50% ownership of the revenue generatedby the produced and broadcast show.   Both the Company and Stone-Stanley are currently corresponding withvarious targeted celebrities in order to determine interest andscheduling.   Messrs. Szabo, Bernsen andEdwardes will be executive producers for “The Ultimate 18,” although none willreceive additional compensation for this work.

 

The basic show concept is as follows: A widely-known and well-regarded golf course architect will select hisor her favorite 18 holes from golf courses around the world, creating oneultimate course.  Celebrity and sportfigures will then be teamed together to play the course in a compressed-timeformat.  Viewers will see thesecelebrities in a real-world, behind-the-scenes format as they traverse theworld, competing in an elimination format.

 

*The Circuit*

 

TheCompany has drafted six single-episode script treatments for this televisiondrama, and is currently in the early stages of development.  The Company has presented “The Circuit” toOBN as a possible show for distribution under its agreement, but has notentered into any agreements related to this show.  The Company anticipates enteringpre-production for this show during the second half of 2005.

 

Thebasic show concept is summarized as follows: By 1859, the Southwest territories of the great American Frontier werebecoming increasingly dense, and from it spawned a lawless society withvigilantes taking the law into their own hands. This is the period when Archibald Bishop, a newly appointed CircuitJudge for these territories, is given the task to bring justice to theland,  In the spirit of the present daylegal drama “LA LAW”, The Circuit is about a lone judge who will pave the way

 

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for the American judicial system in the OldWest.

 

The Companyhas also developed treatments for a number of other shows, which have beenregistered as its intellectual property, but have not been furtherdeveloped or scripted.  Due to its fullproduction and development schedule, the Company does not have any currentestimated date for pre-production for these shows.

 

*A Taste of History:* The Company has completed six episodetreatments and produced a promotional clip for this food and beverageshow.  The basic show concept is summarized as follows:  Many of today’s most famous food dishes andbeverages have a story behind them that details their history andcreation.  This series combines a cookingshow, a history show, and a travel show into a series package that tells thestory behind these favorites.

 

*TechStyle:*  The Company has completed a treatment of thistechnology and style show.  The basic show concept is summarized asfollows:  In a world of high levelcompetition between technology driven products, companies are increasinglyfocusing on style to be “cutting edge”.  *TechStyle* takes a step into the future and explores newproducts from a style point of view. Without losing sight of technology, the series searches for the hippestlooking gear for the home, office, recreation, and vehicles.  Each episode is written to look into the nearfuture.

 

*3 Day Test Reality Show:*  The Company has completed a treatment of thisreality show based on its film.  The basic show concept is summarized asfollows:  Based on its feature film, afamily spends three days in a house with utilities, water, poweror outside help. Various challenges and incentives are introduced in order totest whether the family can stay inside the house for the period.

 

*Run and Gun:*  The Company has completed a treatment of thisreality filmmaking competition.  The basic show concept is summarized asfollows:  Two filmmaking teams are giventhe same script, budget, time, and equipment to make the same film.  The winning team is determined by independentjudges as well as viewer telephone and online vote.

 

*The Fastest Car in America:*  The Company has completed a treatment of thisreality car competition.   The basic show concept is summarized asfollows:  A search across the country tofind the fastest “street legal” car in America. This involves a series of localcompetitions in various locations around the country, culminating in a finalcompetition in a closed course.

 

 

Distribution

 

On February 20, 2004, the Company entered into a distribution agreementwith OBN Holdings, which conducts television distribution via its subsidiary,Omni Broadcasting.  OBN is a nationaltelevision network with one owned station and 115 independent broadcast andcable affiliates throughout the United States. OBN airs both created and licensed content.   Its agreement provides that OBN will providefree airtime in exchange for 50% of the revenue generated by sponsorsadvertising on its broadcast shows.  TheCompany has agreed to provide six feature-length films, one hour-long dramaticseries and one half-hour situation comedy. The Company has also granted OBN a limited “first look” provision.  Pursuant to this provision, the Company maypresent projects to OBN which the Company believes are suitable fordistribution on their network.  Once theCompany presents a project, OBN then has a 60 day period during which they

 

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have theexclusive right to determine whether or not they will distribute the televisionshow on their network.  At the close ofthe 60 day “first look” period, if OBN chooses not to distribute the show, theCompany may then present the show to other distributors and/or networks.  This provision is in effect for the durationof the agreement.  This agreement expiresAugust 20, 2005, and is self-renewing unless terminated by either party.

 

Suppliers

 

TheCompany has identified a pool of independent or freelance scriptwriters, whichthe Company will use for development of its television shows as necessary.  The Company has not yet commissioned anyscripts for any of its internally developed treatments.  The Company does not anticipate paying morethan $500 per week for the development of any script or treatment, regardlessof production status.

 

 

**Virtual Studio**

 

The Company has completed the development of its proprietary virtualstudio, which viewers may access through its website,www.publicfilmworks.com.  Its virtualstudio enables viewers to participate and interact with the production processof making filmed entertainment.  TheCompany gains viewers through two main outlets: its media partners and its sponsors. Its media partners consist of genre publications, such as Soap OperaDigest and Soap Opera Weekly.  Inexchange for editorial content, they discuss and promote its films and shows.   The Company does not maintain agreements withits media partners, and do not anticipate doing so in the future.  Its sponsors promote and co-brand its filmsand shows by association with their products. The Company intends to maintain agreements with sponsors, although noneare currently in place.

 

Viewers then register on its site in order to view real-time filming ofits productions, and can vote to influence content style in the pre-productionphase. Registered viewers can then view the filming and interact with theactors in the production via predetermined online chats and actor blogs ordiaries.

 

The virtual studio measures viewer interest in real time, and creates adatabase of viewers, along with an increasing profile including theirgeographic and demographic information.  As viewers continue to interact with the virtual studio, the volumeand precision of information in the database increases, resulting in a complexand specific profile of the Company’s viewers and their preferences.  The Company may use this information in itssponsorship and advertising business, in order to provide targeted marketinginformation to advertisers, as well to assist in generating and refining scriptideas and treatments for its own films and shows in development.

 

The virtual studio lot is an online, virtual presentation that mirrorsthe physical studio lot where its shows or movies will be filmed.  Once viewers register and log on to its site,they become virtual “associate producers.” If the filming is in pre-production, viewers, as associate producers,are encouraged to make various decisions which, when votes are tabulated, willbe implemented in the actual production of the movie or show.  These decisions include general and specificselections for props, locations, wardrobe, set design, set dressing andtransportation.  As the pre-productionprogresses, viewers will be able to influence the look and feel of each sceneby selecting from various props, wardrobes, and set elements provided bysponsors of each production.  As viewerscast votes, they gain “points,” which will eventually make them eligible forprizes from its sponsors.  Casting votesalso enables its database to compile an extensive and detailed list of theirpreferences, which the Company submits to its sponsors.  Its sponsors are never granted direct accessto its viewers’ information, maintaining its position as gatekeeper to itsviewers for the purposes of

 

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directedadvertisement and solicitation.

 

Once the filming enters production, viewers will not be able to changeaspects of the filming, but will be able to view the other areas of the virtualstudio in addition to viewing actual filming. The virtual studio permits viewers to view recently shot footage ofprojects in production, out-takes of their favorite stars, rough cuts ofcontent prior to their release, trailers from films currently in theaters,selections from an extensive library of classic movie trailers and oldtelevision commercials, and chat with actors during production.  The virtual studio also maintains links toselected trade magazines, film festivals, national and international newspapers and arts sections, film schools, studios and other industry links.  In addition, the Company has a virtual studiostore with suggested purchases, which include books, software, posters, andcollectibles, along with a link to the vendor’s site.  The Company does not fulfill any ordersdirectly, but receives a negotiated commission as an affiliate from vendors forall sales.  The commission varies fromvendor to vendor, and covers items purchased from each vendor by viewers, aswell as items purchased within a defined period of days from the original dateof connecting from its link to the vendor’s site.  On May 14, 2002, the Company entered intoongoing, self-renewing agreements with Amazon.com and Allposters.com.  Both of these agreements are standardaffiliation commission agreements, which are non-negotiated agreements thatallow these vendors to track purchases from its viewers.   The Company has not generated any revenuesfrom its virtual studio as of the date of this prospectus.

 

The Company intends to sell proprietary collectibles and items relatedto its films and shows.  In addition, theCompany will sell press release kits of its films and shows, which will includeshooting schedules, scripts, autographed head shots of actors in theproduction, and other collectibles and memorabilia related to eachproject.  The Company intends to fulfillthese orders ourselves initially, but may outsource order fulfillment should itbecome logistically and/or financially beneficial.

 

Once the film or show enters post-production, viewers will again havethe opportunity to select from a variety of film-related marketing materials,including posters, music, and soundtrack selections.  The Company intends to use its sponsors andadvertisers in the same manner as its pre-production process, which willprovide these advertisers and sponsors similar access to its direct marketingdatabase.  The Company does not have anyagreements with post-production sponsors and advertisers at this time.

 

On August 8, 2003, the Company entered into an agreement with New MediaDimensions, Inc., an unaffiliated software development and hosting firm, todevelop and maintain its virtual studio based on its internally developedarchitecture, as well as host its website and maintain its server for both thevirtual studio and its main website.  Itsagreement requires us to pay their fees on an hourly basis, ranging from $50 to$70 per hour, based upon the expertise of the billing employee.  The agreement does not have a set terminationdate, and is subject to termination by either party with 15 days’ writtennotice.

 

**Sponsorshipand Marketing**

 

According to the 2002 Nielsen Media Report, the US theatrical boxoffice revenues were $9.5 billion, which represents an increase of 13%.  According to ABI Research, the US cablemarket exceeds $60 billion in revenue, and there are approximately 108,410,160television households in the US, within 210 designated market areas, generatingan additional $60 billion in national and local advertising (Nielsen MediaReport).  The 2004 Advertising Age AgencyIncome Report stated that US media agencies received $1.51 billion, andestimates total global revenues for advertising at $10.66 billion.  The advent of new technologies, such asfast-forward and advertisement-skipping 

 

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functions onvideo-on-demand services, personal video recorders and TiVO, has limited thereach of many advertisers, while not reducing their cost by a comparableamount.

 

While the Company believes that advertisers will still use television,theatrical and traditional distribution products to reach the broadest possibleaudience, the Company and its management also believe that advertisers willincreasingly link their products and brands to programming, and advertiserswill search for different methods to incorporate their products into televisionshows and films.  More importantly, theCompany believes that advertisers need a method to measure and analyze theirsuccess, and maximize their return on investment with targeted advertisementsto a receptive audience.

 

On January 29, 2004, the Company entered into a nonexclusive agencyrepresentative agreement with U4oria Inc., whereby U4oria will seek out andprocure advertisers and corporate sponsors for its films and shows, and forincorporation into its virtual studio operations.  In exchange, U4oria will receive 20% of allgross sponsorship sales revenue up to $1 million, then 15% on all gross over $1million.  U4oria will also receive 10% onall gross sponsorship when shared with any other representative for theduration of the agreement.  All fees areto be paid within 10 days of its receipt of the revenue.  The Company also agreed to enter into goodfaith negotiations with U4oria for an exclusive representative contract, whichwould include a $15,000 to $20,000 monthly retainer, should they procure aminimum of $1,000,000 in advertising revenue for its company prior to March 30,2004.  U4oria did not achieve thisminimum revenue, and this term expired unexercised.  This agreement is commission-based, and doesnot expire unless terminated by either party.

 

The Company intends to use marketing and sponsorship revenue to financeup to 20% of the costs of creating and producing its films and shows, althoughthere is no guarantee that the Company will be able to obtain such revenues.  Its primary means of achieving this will befrom integrating its sponsorship and marketing campaigns into its variousbusiness units.  For example, as viewersinteract with its virtual studio, the items voted on and selected forproduction will be based upon products that advertisers select for viewerparticipation, and may then be integrated into the advertiser’s or sponsor’sdirect marketing campaign.  For furtherdiscussion of this direct marketing campaign by use of its virtual studiodatabase, please refer to the discussion in “Description of Business-BusinessUnits-Virtual Studio.”

 

The Company also intends to realize revenue through more standardInternet-based advertising, which will include page views on its websitecontaining brand logos, click-through charges from its studio page to thebrand’s website, and brand interaction when consumers select a brand on itssite.  The Company also intends toincorporate specific “storefronts” in its virtual studio.  These will be particular interactivestructures on the studio site which are sponsored by relevant advertisers.  For example, as viewers enter its “screeningroom,” the logo above the screening room would indicate the sponsor, such as amajor retailer or theater chain.  Thebenefit of storefronts, as opposed to simple banners, is that storefronts willbe a stable advertisement for the duration of sponsorship (e.g., one year) andcan provide a measure of “branding” (or brand identification), rather than theconstantly rotating space represented by shorter-term banneradvertisements.  Both banners andstorefronts will have the capability to direct viewer traffic to the sponsor’swebsite by hyperlink.  The Company doesnot have any agreements for standard sponsors at this time, but U4oria is inthe process of negotiating with a number of different advertisers for both itsvirtual studio sponsorship and its more general Internet-based advertisers.

 

***IntellectualProperty***

 

The Company owns and maintains the Internet domain nameswww.publicfilmworks.com,

 

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www.publicmediaworks.com,and www.publicmusicworks.com (for future content development).  The Company has also registered Internetdomain names for specific content projects www.3DayTest.com,www.threedaytest.com, www.ultimate18.com, www.laaction.com,www.laactionbasketball.com, www.laactionthemovie.com, www.theactionmovie.com,www.thelaaction.com, www.thelaactionmovie.com, and www.thelaactionthemovie.com.

 

The Company intends to apply for process and design patents relatedprimarily to several areas of the virtual studio and design patents for new,original, and ornamental designs, as well as for articles of manufacturespecific to its company television and motion picture related products, andspecific point-of-sale merchandise. Although the Company has not yet submitted applications for thesepatents to the US Patent and Trademark Office, the Company intends to submitits applications during 2004.

 

The Company owns a service mark for “PublicFilmWorks” (registration no.2806883).  The Company also intends toprotect various other words, names, symbols, and devices that are used withgoods produced by the Company to distinguish them from those produced by othersthrough the use of trademarks, and will identify and distinguish the source ofseveral of its services through the use of service marks.  These include “Public Media Works” and itslogo.  The Company intends to registerand maintain both trademarks and service marks through the United States Patentand Trademark Office.  The Company hasnot filed applications to protect any other trade or service marks.

 

The Company intends to copyright all screenplays, project treatments,and other original material that it produces. The Company intends to use copyrights issued and maintained by theCopyright Office of the Library of Congress as the primary form of protectionfor all original works of authorship, including literary, dramatic, musical,artistic, and certain other intellectual works, both published and unpublished. The 1976 Copyright Act allows PublicMedia the exclusive right to reproduce the copyrighted work, to preparederivative works, to distribute the copyrighted work, to perform thecopyrighted work, and to display the copyrighted work publicly.  The Company will also register applicablescreenplays and scripts with the Writers Guild of America.

 

The Company has registered the following screenplays and scripts withthe Writers Guild of America.

 
| **Title**               | ** ** | **Medium**   | ** ** | **Type**  |
|-------------------------|------------|--------------|------------|-----------|
|                    |       |         |       |      |
| TechStyle               |       | Television   |       | Treatment |
| Taste of History        |       | Television   |       | Treatment |
| 3 Day Test              |       | Feature Film |       | Treatment |
| 3 Day Test Reality Show |       | Television   |       | Treatment |
| The Ultimate 18         |       | Television   |       | Treatment |
| Run and Gun             |       | Television   |       | Treatment |
| The Action              |       | Feature Film |       | Treatment |
| Fastest Car in America  |       | Television   |       | Treatment |
| Carpool Guy             |       | Feature Film |       | Treatment |

 

All treatments for its films and shows are developed internally, andare the property of Public Media Works. All agreements with independent and freelance writers will require thatall content, treatments, ideology, screenplays, scripts and full use become andremain the sole and exclusive property of Public Media Works, Inc. for all timeand in all markets.  However, there canbe no assurance that the Company can protect its intellectual property, or thatthe Company

 

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will be able toreceive all benefits from its intellectual property.

 

# ***Competition***

 

Feature Film and Television Production

 

*Feature Film Production (Theatrical release)*

 

US box office receipts grew 13%in 2002 (the last complete statistical year) to $9.5 billion.  According to the 2002 Nielsen Media Researchreport, the top 20 films in the United States made up 40% of the total domesticbox office.  The Company competes withmajor and independent studios, which include Viacom, Fox, Pixar and MGM, formarket share, as they represent the leading productions which capture asignificant percentage of volume.  Itscurrent revenues represent less than 1% of the total market share for thisbusiness segment.   However, the Companybelieves that its virtual studio will generate market awareness duringpre-production and production of its films, which will result in increasedrevenues and market share for its productions once they are in theaters.

 

*Television Production*

 

According to Nielsen MediaResearch, there are approximately 108,410,160 television households in theUnited States with 210 designated market areas.   For every accepted program, OBN Holdingswill distribute its television programs to approximately 40,000,000 households,representing approximately 38% of this market. The Company understands that this distribution will increase toapproximately 50,000,000 households in November 2004, and 70,000,000households, or 69%, by the spring of 2004. The Company does not maintain an exclusive arrangement with OBN, and maydistribute its programs in conjunction with, or even concurrently, to otherdistributors’ networks, including its competitors (for the purposes of contentcreation).

 

However, there are a number ofcompanies producing and distributing television shows, including but notlimited to the six national networks, hundreds of cable channels and numerousprivate production companies, such as Carsey-Werner-Mandabach or Mark BurnettProductions.  These competitors havegreater resources, market presence and name recognition than its company.  Moreover, although the Company has severaltelevision shows under development, the Company has not yet produced a show fordistribution.  Consequently, the Companyhas not yet established a position in the television industry, and face intensecompetition upon entry.

 

*Market Share for Film and Television*

 

The movie and televisionproduction industry remains highly varied and fragmented.  Primary participants in the industry continueto drive production and competition for distribution revenue and ad share.  The production industry grew to $115 billionin 2002 comprised of the following significant public companies (informationprovided by Variety.com, published 2004):

 

**STUDIO MARKET SHARE**

**2004**

**January 2 - May 2, 2004**

**Overall Gross: $2,779,403,652**

 
| **Rank** | ** ** | **LW** | ** ** | **Distributor**   | ** ** | **Market Share** | ** ** | **Total Gross*** | ** ** | **Movies   Tracked** | ** ** | **2004   Movies**** | ** ** |
|----------|------------|--------|------------|-------------------|------------|------------------|------------|------------------|------------|----------------------|------------|---------------------|------------|
| 1        |       | 1      |       | Sony              | ** ** | **15.8**         | **%**      | $                | 439.6      |                 | 12         |                | 6          |   |
| 2        |       | 2      |       | Newmarket         | ** ** | **14.4**         | **%**      | $                | 400.9      |                 | 2          |                | 1          |   |
| 3        |       | 3      |       | Warner Bros.      | ** ** | **12.3**         | **%**      | $                | 343.1      |                 | 16         |                | 10         |   |
| 4        |       | 4      |       | Buena Vista       |       | **11.3**         | **%**      | $                | 314.9      |                 | 15         |                | 7          |   |
| 5        |       | 6      |       | Miramax           | ** ** | **6.7**          | **%**      | $                | 186.5      |                 | 13         |                | 6          |   |
| 6        |       | 7      |       | New Line          | ** ** | **6.6**          | **%**      | $                | 184.5      |                 | 6          |                | 3          |   |
| 7        |       | 5      |       | Universal         | ** ** | **6.6**          | **%**      | $                | 184.2      |                 | 8          |                | 3          |   |
| 8        |       | 8      |       | 20th Century  Fox | ** ** | **6.6**          | **%**      | $                | 182.4      |                 | 8          |                | 4          |   |
| 9        |       | 9      |       | MGM/UA            | ** ** | **4.7**          | **%**      | $                | 131.4      |                 | 7          |                | 4          |   |
| 10       |       | 10     |       | Paramount         | ** ** | **4.3**          | **%**      | $                | 119.7      |                 | 8          |                | 5          |   |
| 11       |       | 11     |       | Lions Gate        | ** ** | **2.5**          | **%**      | $                | 70.0       |                 | 9          |                | 6          |   |
| 12       |       | 12     |       | Focus             | ** ** | **2.0**          | **%**      | $                | 54.9       |                 | 4          |                | 2          |   |
| 13       |       | 13     |       | Fox  Searchlight  | ** ** | **1.9**          | **%**      | $                | 52.0       |                 | 5          |                | 4          |   |
| 14       |       | 14     |       | DreamWorks        | ** ** | **1.8**          | **%**      | $                | 50.4       |                 | 4          |                | 3          |   |
| 15       |       | 15     |       | Sony  Classics    | ** ** | **0.7**          | **%**      | $                | 19.5       |                 | 12         |                | 5          |   |
| 16       |       | 16     |       | Dimension         | ** ** | **0.2**          | **%**      | $                | 6.8        |                 | 3          |                | 0          |   |
| 17       |       | 17     |       | IFC               | ** ** | **0.2**          | **%**      | $                | 5.4        |                 | 3          |                | 3          |   |

 

----

* In millions. ** # of totalmovies tracked that were 2004 releases.

Copyright ©1998-2004 by **Box Office Mojo**.All rights reserved

 

No information regarding specific market shares forindividual companies within the television industry is available,as such information may skew advertising position and revenue.

 

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Virtual Studio

 

The Company believes that thevirtual studio that the Company has developed is unique and does not have anydirect competition.  The Company and itsmanagement do believe, however, that the virtual studio implementation on theInternet competes with other entertainment and information websites for a shareof the consumer’s attention.  Several andvaried games, interactive website, portals, studio information sites, andcommerce sites contain elements of the PublicFilmWorks virtual studio andcompete with us for a finite number of potential consumers.

 

Sponsorship and Marketing

 

The Company believes that thecreation of an integrated virtual studio coupled with an inbound and outboundmarketing and branding campaign is new and unique.  The Company and its management also believe,however, that the Company must compete with other new and also incumbentmarketing and branding techniques and companies.   Its most direct competitors include Grey Advertising($1.3 billion in revenues in 2003), Ogilvy and Mather ($720 million in revenuesin 2003), McCann-Erickson ($1.22 billion in revenues in 2003), and Y & RAdvertising ($517 million in revenues in 2003).    The largest industry competitors and theirmarket shares are indicated below:

 

 

Many of its competitors havegreater resources, market presence and name recognition than its company.  However, the Company intends to compete withthe large domestic advertising agencies including by introducing the virtualstudio concept to leading US advertisers, demonstrating its ability to offerfocused information on its users and their consumers (such as geographic anddemographic information, determinations regarding which specific products andmodels are most and least desired, and which advertisements are most likely tolead to purchase).

 

Retail and Internet Sales of Produced Films and Related Products

 

The Company intends to sell itsfilms, along with scripts, posters and related products, through its website.  Its chief competitors primarily consist ofall of the competitors previously listed under the subheadings “Film(Theatrical release)” and “Television”, as they generally also sell theirproducts online.  The Company intends tocompete with these companies by directing its sales efforts in a more targetedmanner to those individuals who have indicated their interest in certain of itsproducts, or certain of its related products, as a result of its sponsorshipand marketing efforts.  For example,individuals who have signed up to view the filming of its movie “3 Day Test” atthe PublicFilmWorks virtual studio (www.publicfilmworks.com) may purchase the“3 Day Test” script and photographs taken during filming, which the Companybelieve they are more likely to purchase due to their expressed interest inviewing the cast and production of the movie itself.  The Company believes that, by offeringspecific products to targeted customers, it will be able to effectively competein the Internet marketplace.

 

***GovernmentRegulation***

 

The Company does not require any government approval for the operationof its business.  Its operations aresubject to various federal, state and local requirements which affectbusinesses generally, such as taxes, postal regulations, labor laws, andenvironmental and zoning regulations and ordinances.

 

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***Research andDevelopment***

 

Its research and development costs currently consist of web developmentcosts and film development costs.  In thefiscal year ended February 28, 2001, the Company spent $115,000 on research anddevelopment, 100% of which was dedicated to web development costs.  There were no additional costs for the fiscalyears ended February 28, 2002 and 2003. In the fiscal year ended February 29, 2004, the Company spent $121,744on research and development, 95.7% of which was dedicated to web developmentcosts, and 4.3% of which was dedicated to film development costs.  All research and development costs related toweb development are fully expensed, and its film development costs arecapitalized until each project is developed, at which point they becomeexpensed.  None of its research anddevelopment costs flow through to its viewers.

 

***Employees***

 

The Company currently employs 4 full-time individuals, and onepart-time employee.  The Companyconsiders its relations with its employees to be good, and do not haveemployment agreements with any of its employees.

 

***Publicly Available Information***

 

The Company is not required todeliver an annual report to our security holders and does not intend to doso.  Public Media Works is required tofile annual, quarterly and current reports, proxy statements and otherinformation with the Securities and Exchange Commission.  For further information with respect to theCompany and its common stock, see the Company’s filings, including exhibits andschedules thereto.  The Company’s filingswith the Commission are also available to the public from the Commission’swebsite at www.sec.gov.

 

You may also read and copy any materials theCompany files with the Securities and Exchange Commission at the SEC’s publicreference room at 450 Fifth Street N.W., Washington, D.C. 20549. Please callthe SEC at 1-800-SEC-0330 for further information on the operation of thepublic reference rooms.

 

**Item 2.****                    Description ofProperty**

 

The Company currently leases1,800 square feet of office space on a month-to-month basis from ChandlerAssociates, an unaffiliated entity, at a rate of $900 per month.  The Company does not have a lease agreementwith Chandler Associates.  The Companyoperates in converted and remodeled warehouse space that is in good condition.

 

**Item 3.****                    LegalProceedings**

 

There are no threatened or actual legal proceedings to which theCompany is a party at this time.

 

No director, officer, significant employee, or consultant of theCompany has been convicted in a criminal proceeding, exclusive of trafficviolations.

 

No director, officer, significant employee, or consultant of theCompany has been permanently or temporarily enjoined, barred, suspended, orlimited from involvement in any type of business, securities or bankingactivities.

 

No director, officer, significant employee, or consultant of theCompany has been convicted of

 

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violating afederal or state securities or commodities law.

 

Further, its officers and directors know of no legal proceedingsagainst the Company, or its property contemplated by any governmentalauthority.

 

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

 

No matters were submitted to a vote of security holders during thefourth quarter of the fiscal year covered by this report.

 

**PART II**

 

**Item 5.****                    Market forCommon Equity and Related Stockholder Matters**

 

***Market Information***

 

As of the end of the period covered by this report:

 

•      there are no outstanding options or warrants to purchase, orother instruments convertible into, common equity of the company;

 

•      thereare no shares eligible for sale pursuant to Rule 144 under the Securities Actof 1933, as amended (the “Securities Act”); and

 

•      there is no public market for its common stock.

 

On August 30, 2004, 25,000,000 shares will become eligible for salepursuant to Rule 144 of the Securities Act.

 

Other than the shares registered hereunder, there are no shares ofcommon stock that will be, or are proposed to be, publicly offered by itscompany pursuant to an employee benefit plan, other plan, or otherwise, whichmay have a material effect on the market price of its equity.

 

***Holders***

 

As of February 29, 2004, 25,512,500 shares of its common stock (parvalue $0.0001) were issued and outstanding, and held by approximately 48shareholders of record.

 

***Transfer Agent***

 

Public Media’s transfer agent is Holladay Stock Transfer, 2939 North67th Place, Scottsdale, Arizona 85251, telephone (480) 481-3940.

 

***Dividends***

 

The Company has never declaredor paid any cash dividends on its common stock. For the foreseeable future, the Company intends to retain any earningsto finance the development and expansion of its business, and the Company doesnot anticipate paying any cash dividends on its common stock.  Any future determination to pay dividendswill be at the discretion of its Board of Directors and will be dependent uponthen existing conditions, including its financial condition and results ofoperations, capital requirements, contractual restrictions, business prospects,and

 

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otherfactors the Board of Directors considers relevant.

 

***Recent sales of unregistered securities***

 

As of August 1, 2004, the Company had 25,512,500 shares of common stockissued and outstanding.  “BurnamManagement” refers to Burnam Management prior to August 30, 2003.  “PMW” refers to Public Media Works, Inc. priorto August 30, 2003.  The “Company” refersto the company after August 30, 2003.

 

Burnam Management did not issue any stock forthe three years prior to the merger on August 30, 2003.

 

From April 1 to August 6, 2003PMW sold 2,100,000 shares of restricted common stock to 20 investors inexchange for $840,000. All investors were “accredited” within the meaning ofthe Securities Act of 1933, as amended (the “Act”), and all investors wereunaffiliated. No brokers or finders were used in conjunction with thistransaction and no commissions were paid in connection with this transaction.This transaction was exempt from registration under the act pursuant to Section4(2) and Rule 506 of the Act.  Thecorporate offices and management were made accessible and available for allinvestors and their advisors in order to assist them in evaluating theCompany’s business and financial position. All investors were notified of this access and took advantage of suchaccess according to their needs. This transaction was not conducted inconnection with a public offering, and no public solicitation or advertisementwas made or relied upon by any investors in connection with this offering.

 

In November 2002, PMW issued 5,000,000 sharesof restricted common stock, valued at $0.01 per share, to Mr. Thomas Szabo, itsChief Executive Officer and a director, in exchange for services then renderedand to be rendered as an officer of its company, such services being valued at$50,000.  Mr. Szabo is an “accredited”investor within the meaning of the Act, and was unaffiliated with its companyprior to November 2002.  No brokers orfinders were used in conjunction with this transaction and no commissions werepaid in connection with this transaction. This transaction was exempt from registrationunder the act pursuant to Section 4(2) of the Act. This transaction was notconducted in connection with a public offering, and no public solicitation oradvertisement was made or relied upon by any investors in connection with thisoffering.

 

On August 30, 2003, PMW conducted a shareexchange with Burnam Management.  At thetime of the exchange, there were 5,000,000 shares of Burnam common stock issuedand outstanding.  Under the terms of theagreement, Burnam issued 20,000,000 restricted shares of common stock to alloutstanding PMW security holders on a pro-rata basis, in exchange for whichBurnam received 20,000,000 shares of PMW common stock, representing all of theissued and outstanding shares of PMW.  Nobrokers or finders were used in conjunction with this transaction and nocommissions were paid in connection with this transaction. This transaction wasexempt from registration under the act pursuant to Section 4(2) of the Act.This transaction was not conducted in connection with a public offering, and nopublic solicitation or advertisement was made or relied upon by any investorsin connection with this offering.

 

From September 1, 2003 through February 23, 2004 the Company sold512,500 shares of restricted common stock to 6 investors in exchange for$205,000. All investors were “accredited” within the meaning of the SecuritiesAct of 1933, as amended (the “Act”), and all investors were unaffiliated. Nobrokers or finders were used in conjunction with this transaction and nocommissions were paid in connection with this transaction. This transaction wasexempt from

 

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registrationunder the act pursuant to Section 4(2) and Rule 506 of the Act. Thistransaction was not conducted in connection with a public offering, and nopublic solicitation or advertisement was made or relied upon by any investorsin connection with this offering.

 

**Item 6.****                   ****Management’s Discussion andAnalysis or Plan of Operation**

 

*Thefollowing discussion and analysis of its plan of operation should be read inconjunction with its financial statements and the related notes.  This discussion contains forward-lookingstatements based upon current expectations that involve risks and uncertainties,such as its plans, objectives, expectations and intentions. Its actual resultsand the timing of certain events could differ materially from those anticipatedin these forward-looking statements as a result of certain factors, includingthose set forth under “Description of Business” and elsewhere in this annualreport.*

 

***Plan of Operation***

 

Costs and Expenses

 

From PMW’s inception on May 15, 2000 through the end of the fiscal yearended February 29, 2004, the Company has funded the development of itsproducts, including the development of its virtual studio and its main website,through the issuance of common stock in exchange for cash and services, as wellas through unsecured notes payable to stockholders.  As of February 29, 2004, the Company had25,512,500 shares of common stock issued and outstanding, 15,000,000 shares ofwhich were issued in exchange for services by its management team.  The Company also entered into an unsecuredpromissory note with George Mainas, a shareholder, on August 30, 2000 for$340,000, bearing interest at 8% and is payable on demand.  As of February 29, 2004, the Company had anoutstanding balance of $435,299, including accrued interest.  The proceeds of this note were used for generalworking capital.  Mr. Mainas has alsoagreed to pay various, unclassified business expenses from time to time onbehalf of its company, and the Company agreed to reimburse him for theseexpenditures as soon as practicable.  OnDecember 31, 2003, the Company memorialized this agreement, including termsindicating that any expenses so paid would bear no interest, and would bepayable on demand to Mr. Mainas.  Theoutstanding balance as of February 29, 2004 was $70,491.  The Company has also entered into a thirdunwritten, unsecured promissory note with Denis Schusterman, a shareholder, inMay 2002 in exchange for payment of approximately $16,000 in general andadministrative expenses.  This note ispayable upon demand and bears no interest. As of February 29, 2004, the outstanding balance was $16,715.

 

The Company had a net loss of $779,427 for the fiscal year endedFebruary 29, 2004, and from March 3, 2000 (inception of Burnam) throughFebruary 29, 2004, the Company reported a cumulative net loss of $1,844,513.

 

The development of its main website and its virtual studio was conductedin conjunction with two companies: New Media Dimensions, Inc. and MMTSolutions.  On August 25, 2000, theCompany entered into an agreement with MMT Solutions to begin the basicdevelopment of the virtual studio based upon its internally developed architecture,in exchange for two payments of $115,000, the first of which was made onSeptember 6, 2000.  The development wasnot completed according to the terms of its agreement, and the Companyterminated the agreement in November 2000, with no further payment to MMT.  The Company executed a letter of terminationand release on June 2, 2003, and no further claims or obligations exist on thepart of either party.  On August 8, 2003,the Company entered into an agreement with New Media

 

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Dimensions to complete the development of itsvirtual studio and its main website, and to act as host and server for itsvirtual studio and website.  The development of the virtual studio andmain website, as well as software development, was completed January 1, 2004,for which New Media Dimensions received $70,000.  New Media Dimensions also received anadditional $7,732 for the purchase of two Pentium-based server hosts andhardware.

 

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

 

On September 22, 2003, the Company entered into an agreement withCharles Sherman Public Relations to engage and manage public relations and itspublicity needs.  See the discussionherein in “Description of Business-Overview and History.”    The Company has retained this firm on amonthly basis for a fee of $2,000 per month. This agreement may be terminated by either party upon 30-day notice.

 

Its general monthly expenses include rental and maintenance for itsoffices are approximately $4,000 per month. Its operating expenses, includingsalaries and travel reimbursement, are approximately $36,000 per month, withtotal monthly costs of $40,000.  We note that our previous expenditures didnot reflect this estimation as a result of the one-time expense of our webdevelopment costs.  However, we believethis estimation is appropriate on a going-forward basis.

 

Revenue

 

The following projects are in progress, and expect to be its primarysources of revenue of the next twelve months. To the extent that the Company has estimated budgeting and productiondates, the timing and amounts indicated may be subject to change.

 

On February 27, 2004 the Company entered into an agreement with Behindthe Hedge Productions, Inc., an unaffiliated production company, to develop abudgeted script and treatment for a feature-length film in exchange for$50,000. $25,000 of this fee was received on March 1, 2004, as an advancepayment for its script development.  Thescript was developed internally, without additional fee to an independentscreenwriter.  See the discussion in“Business-Business Units-Feature Film Production-Over the Hedge.”   As the Company has prepared this scriptdevelopment under contract, the Company currently does not have any ownershipposition in the script or in any revenue generated by the produced film.  However, upon acceptance by Behind the HedgeProductions of its script development, the Company anticipates entering into aproduction agreement with Over the Hedge by August 30, 2004.  The Company expects the terms of thisagreement to grant it some degree of equity ownership in exchange for areduction of its production fee.  If theCompany enters into this agreement, the Company intends to use an outsourcedproduction studio, and anticipates realizing revenue from its producers’ feeupon commencing production.  If theCompany gains some level of equity ownership in the project, the Company wouldrealize any additional revenue in an amount and at a time which will be subjectto any distribution agreement in effect with respect to this film.  The Company does not need any additionalfinancing with respect to this project, as the Company does not owe any additionalfunds to complete the script development, and any costs paid with respect tothe production of the film will be financed by Behind the Hedge Productions.

 

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On October 10, 2003, theCompany entered into a co-production agreement with Stone-Stanley Productionsto develop and sell the television production “The Ultimate 18.”  See the discussion in “Description ofBusiness-Business Units-Television Production-The Ultimate 18.”  The Company and Stone-Stanley are currentlyapproaching actors, golf celebrities and sponsors for involvement in the show,according to the terms of its option agreement described herein in the Businessdisclosure.  The Company anticipatescompleting casting and beginning production by July 31, 2004, at which pointthe Company will receive 50% of the revenue paid by the purchasing network,with Stone-Stanley receiving the other 50%. As television networks are billed in advance of production, the Companydoes not anticipate additional financing requirements for this project.  Once the Company enters into an agreementwith a network, the Company estimates that production will concludeapproximately 90 days following the date of such agreement.

 

The Company has completed thescript and has attached the actors under formal letters of intent for the film“3 Day Test.” See the discussion in “Description of Business-BusinessUnits-Feature Film Production-3 Day Test.” The Company anticipates entering pre-production for its film “3 DayTest” in the third quarter of 2004, and intends to begin filming in December2004 and end filming in January 2005.  “3Day Test” is wholly owned by the Company, and will require $1 million ofadditional financing in the fourth quarter of 2004, and $1.5 million ofadditional financing in the first quarter of 2005.  The Company intends to finance this projectthrough the following methods, in order of priority:  (1) corporate sponsorship and productplacement in the film, (2) pre-sales of the film through the virtual studio andforeign sales, (3) debt or equity financing in the film itself, and (4) debt orequity financing in its company.  TheCompany does not have any agreements regarding sources for this financing.  The Company will not proceed with thisproject until the Company has secured the additional financing.  The Company has 100% ownership of this film,and, once funded, anticipates generating revenue through its producers’ fee, aswell as its portion of box-office sales, retail sales, and sponsorship via itsvirtual studio.

 

On February 5, 2004, theCompany entered into a five-year agreement with the American BasketballAssociation (ABA) to develop all filmed and digital entertainmentproducts.  See the discussion titled“Description of Business-Business Units-Feature Film Productions-The Action.”  The Company anticipates that “The Action”will be funded by the ABA or its affiliated parties by September 30, 2004.  The Company has secured a letter of intentwith Dennis Rodman, and is in the process of securing additional talent for thefilm.  The Company intends to use anoutsourced production studio.  TheCompany has 100% ownership in this film, and may present the film to Regentunder the terms of its distribution agreement, or may seek distribution througha major studio.

 

On February 9, 2004, theCompany entered into a distribution agreement with Regent Entertainment todistribute its feature films.  See thediscussion herein titled “Description of Business-Business Units-Feature FilmProduction-Distribution.”  For each filmdistributed, the Company agrees to pay a fee equal to 25% of its gross revenuesfor each film, as well as marketing expenses up to $100,000 per film.  Although the Company has not yet formallypresented any films for distribution, the Company anticipates presenting one ormore of the films described in this section for distribution in the next twelvemonths.

 

On February 20, 2004, theCompany entered into a distribution agreement with OBN Holdings.  See the discussion herein titled “Descriptionof Business-Business Units-Television Production-Suppliers.”  Under the terms of its agreement, OBN willprovide free airtime for its television programs in exchange for 50% of therevenue generated by sponsors advertising on its broadcast shows.  The

 

20

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Company does not have anytelevision programs scheduled for production or pre-production in the nexttwelve months that the Company anticipates presenting to OBN for distribution.

 

Liquidity

 

Based upon the costs andexpenses indicated above, the Company currently has cash on hand to satisfy itstotal operating costs, continued development of its actual and potentialrevenue sources and the cost of the offering until June 30, 2004.  The Company is currently investigatingseveral methods of capital-raising during this period, keeping in mind thestatus of this offering.  The Companyanticipates raising additional funds through one or all of the followingmethods: a revolving credit facility, debt, convertible debt, or through thefuture sale of equity.  The Company hasnot entered onto any agreements or discussions, preliminary or otherwise,regarding any of these options.  None ofits agreements with production companies, actors or distribution companies,including but not limited to letters of intent, require additional capitalcontributions other than as described herein. Over the next twelve months, the Company does not anticipate significantchanges in the number of its employees, nor does the Company anticipate thepurchase or sale of any significant equipment.

 

The Company previouslyconsidered acquiring a production studio, and entered into a non-binding letterof intent on December 8, 2003 with Old Tucson Company in Tucson, Arizona.  Subsequently, four of Old Tucson Company’sshareholders invested in its company, each and in the aggregate holding lessthan 5% ownership in its company.  Theseshareholders, in the aggregate, represented a controlling interest in OldTucson Studios.  On December 19, 2003,while engaged in the letter of intent, the Company loaned $125,000 to OldTucson Company for operations.  The noteto Old Tucson Company matured on June 20, 2004, and bears interest at 4%.  The note is secured by the all of theshareholders’ stock in its company.  As aresult of its mutual shareholders, its loan to Old Tucson Company may have beendeemed a related party.  However, duringthe course of its due diligence, the Company elected not to pursue this option,and the letter of intent expired unexercised on January 15, 2004, although thenote still remains an account receivable for the Company.  The Company does not currently have anyaffiliation with either the four shareholders or Old Tucson Company, althoughthe shareholders still retain their equity interest in Public Media Works.  The Company is currently in negotiations withOld Tucson to extend the term of this note.

 

As of February 29, 2004, theCompany had a current cash balance of $12,200.

 

***Off-Balance Sheet Transactions***

 

The Company does not have anyoff-balance sheet transactions.

 

21

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**Item 7.****                   ****Financial Statements**

 

PUBLIC MEDIA WORKS, INC. AND SUBSIDIARY

(A Development Stage Company)

(Formerly Burnam Management, Inc.)

 

CONSOLIDATEDFINANCIAL STATEMENTS

 

 

FEBRUARY 29, 2004 AND FEBRUARY 28, 2003

 

22

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PUBLIC MEDIA WORKS, INC. AND SUBSIDIARY

(A Development Stage Company)

(Formerly Burnam Management, Inc.)

 

TABLE OF CONTENTS

 
| Financial Statements:                                 |   |
|-------------------------------------------------------|--------|
|                                                  |   |
| Independent Auditors’ Report                     |   |
|                                                  |   |
| Consolidated Balance Sheets                           |   |
|                                                  |   |
| Consolidated Statements of Operations                 |   |
|                                                  |   |
| Consolidated Statements of Stockholders’  Equity |   |
|                                                  |   |
| Consolidated Statements of Cash Flows                 |   |
|                                                  |   |
| Notes to Consolidated Financial Statements            |   |

 

23

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INDEPENDENTAUDITORS’ REPORT

 

To the Board of Directors and Stockholdersof Public Media Works, Inc. (formerly Burnam Management, Inc.)

 

We have audited the accompanying consolidatedbalance sheets of Public Media Works, Inc. and subsidiary (a development stagecompany)(formerly Burnam Management, Inc.) (a Delawarecorporation) as of February 29, 2004 and February 28, 2003, and the relatedconsolidated statements of operations, stockholders’ equity and cash flows forthe year ended February 29, 2004 and the years ended February 28, 2003 and2002. These consolidated financial statements are the responsibility of theCompany’s management.  Our responsibilityis to express an opinion on these consolidated financial statements based onour audits.

 

We conducted our audits in accordance withthe standards of the Public Company Accounting Oversight Board (UnitedStates).  Those standards require that weplan and perform the audit to obtain reasonable assurance about whether theconsolidated financial statements are free of material misstatement.  An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the consolidated financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation.  Webelieve that our audits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated financialstatements referred to above present fairly, in all material respects, thefinancial position of Public Media Works, Inc. and subsidiary as of February29, 2004 and February 28, 2003, and the results of its operations and its cashflows for the year ended February 29, 2004 and the years ended February 28,2003 and 2002 in conformity with U.S. generally accepted accounting principles.

 

The accompanying consolidated financialstatements have been prepared assuming that the Company will continue as agoing concern. As disclosed in Note 8 to the financial statements, the Companyincurred a net loss of $779,427 and $272,818, respectively, during the yearended February 29, 2004 and the year ended February 28, 2003, and as ofFebruary 29, 2004, the Company’s current liabilities exceeded its currentassets by $228,854. These factors create an uncertainty as to the Company’sability to continue as a going concern. The ability of the Company to continueas a going concern is dependent upon additional capital contributions from thesale of stock and the ability to generate operating revenue as the Companytransitions from a development stage company to an operating company. Thefinancial statements do not include any adjustments that might be necessaryshould the company be unable to continue as a going concern.

 

Salt Lake City, UtahMay 19, 2004

 

24

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PUBLIC MEDIA WORKS, INC. AND SUBSIDIARY

(A Development Stage Company)

(Formerly Burnam Management, Inc.)

 

CONSOLIDATEDBALANCE SHEETS

 

 
| ** **                                                                                                     | ** ** | **February 29,** | ** ** | **February 28,** | ** ** |
|----------------------------------------------------------------------------------------------------------------|------------|------------------|------------|------------------|------------|
| ** **                                                                                                     | ** ** | **2004**         | ** ** | **2003**         | ** ** |
| Assets                                                                                                         |       |             |       |             |       |
| Current Assets:                                                                                                |       |             |       |             |       |
| Cash                                                                                                           |       | $                | 12,200     |             | $          | — |   |
| Note receivable, related party                                                                                 |       | 125,000          |       | —           |       |
| Prepaid expenses                                                                                               |       | 1,154            |       | 210              |       |
| Interest receivable                                                                                            |       | 986              |       | —           |       |
| Stock subscriptions receivable                                                                                 |       | 155,000          |       | —           |       |
| Receivable, officers and directors                                                                             |       | 65,000           |       | —           |       |
|                                                                                                           |       |             |       |             |       |
| Total current assets                                                                                           |       | 359,340          |       | 210              |       |
|                                                                                                           |       |             |       |             |       |
| Property and Equipment:                                                                                        |       |             |       |             |       |
| Furniture and leasehold improvements                                                                           |       | 20,649           |       | 20,054           |       |
| Computers and office equipment                                                                                 |       | 54,443           |       | 38,384           |       |
|                                                                                                           |       | 75,092           |       | 58,438           |       |
| Less: accumulated depreciation                                                                                 |       | 38,846           |       | 26,622           |       |
|                                                                                                           |       | 36,246           |       | 31,816           |       |
| Other Assets:                                                                                                  |       |             |       |             |       |
| Film development costs                                                                                         |       | 5,500            |       | —           |       |
|                                                                                                           |       |             |       |             |       |
| Total Assets                                                                                                   |       | $                | 401,086    |             | $          | 32,026 |   |
|                                                                                                           |       |             |       |             |       |
| Liabilities and Stockholders’ Equity                                                                      |       |             |       |             |       |
|                                                                                                           |       |             |       |             |       |
| Current Liabilities:                                                                                           |       |             |       |             |       |
| Accounts payable and accrued expenses                                                                          |       | $                | 65,719     |             | $          | 3,289 |   |
| Accrued interest, stockholders                                                                                 |       | 95,299           |       | 63,566           |       |
| Notes payable, stockholders                                                                                    |       | 427,176          |       | 459,852          |       |
|                                                                                                           |       |             |       |             |       |
| Total current liabilities                                                                                      |       | 588,194          |       | 526,707          |       |
|                                                                                                           |       |             |       |             |       |
| Stockholders’ Equity:                                                                                     |       |             |       |             |       |
| Common stock, $.0001 par value 100,000,000  shares authorized, 25,512,500 and 5,000,000 issued and outstanding |       | 2,551            |       | 500              |       |
| Additional paid-in capital                                                                                     |       | 1,654,854        |       | 569,905          |       |
| Deficit accumulated during the development  stage                                                              |       | (1,844,513  | )          | (1,065,086       | )          |
|                                                                                                           |       |             |       |             |       |
| Total stockholders’ equity                                                                                |       | (187,108         | )          | (494,681         | )          |
|                                                                                                           |       |             |       |             |       |
| Total Liabilities and Stockholders’Equity                                                                 |       | $                | 401,086    |             | $          | 32,026 |   |

 

The accompanying notes are an integralpart of the financial statements.

 

25

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PUBLIC MEDIA WORKS, INC. AND SUBSIDIARY

(A Development Stage Company)

(Formerly Burnam Management, Inc.)

 

CONSOLIDATEDSTATEMENTS OF OPERATIONS

 
| ** **                       | ** ** | ** **       | ** ** | ** **       | ** ** | ** **       | ** ** | **For the period** | ** ** |
|----------------------------------|------------|------------------|------------|------------------|------------|------------------|------------|--------------------|------------|
| ** **                       | ** ** | ** **       | ** ** | ** **       | ** ** | ** **       | ** ** | **March 3, 2000**  | ** ** |
| ** **                       | ** ** | **For the**      | ** ** | **For the**      | ** ** | **For the**      | ** ** | **(Inception)**    | ** ** |
| ** **                       | ** ** | **Year Ended**   | ** ** | **Year Ended**   | ** ** | **Year Ended**   | ** ** | **Through**        | ** ** |
| ** **                       | ** ** | **February 29,** | ** ** | **February 28,** | ** ** | **February 28,** | ** ** | **February 29,**   | ** ** |
| ** **                       | ** ** | **2004**         | ** ** | **2003**         | ** ** | **2002**         | ** ** | **2004**           | ** ** |
|                             |       |             |       |             |       |             |       |               |       |
| Revenues                         |       | $                | —     |             | $          | —           |       | $                  | —     |   | $ | — |   |
| Operating Expenses:              |       |             |       |             |       |             |       |               |       |
| Advertising and promotion        |       | 491              |       | —           |       | 130              |       | 17,155             |       |
| Auto expenses                    |       | 33,815           |       | —           |       | 2,280            |       | 38,997             |       |
| Insurance                        |       | —           |       | —           |       | 4,745            |       | 10,561             |       |
| Professional fees                |       | 34,153           |       | 20,960           |       | 290              |       | 70,223             |       |
| Office expenses                  |       | 25,079           |       | 2,586            |       | 11,561           |       | 69,856             |       |
| Rent                             |       | 12,600           |       | 1,000            |       | 8,410            |       | 28,370             |       |
| Salaries                         |       | 331,234          |       | 150,000          |       | —           |       | 725,479            |       |
| Payroll taxes                    |       | 21,888           |       | —           |       | —           |       | 29,105             |       |
| Telephone and utilities          |       | 10,116           |       | 1,139            |       | 3,987            |       | 26,669             |       |
| Consulting costs                 |       | 49,700           |       | 21,361           |       | 41,137           |       | 206,484            |       |
| Web site development costs       |       | 121,744          |       | —           |       | —           |       | 236,744            |       |
| Depreciation                     |       | 12,224           |       | 11,451           |       | 12,509           |       | 42,510             |       |
| Travel and entertainment         |       | 82,918           |       | 30,691           |       | 4,651            |       | 177,151            |       |
| Other                            |       | 10,973           |       | 974              |       | 1,364            |       | 58,765             |       |
|                             |       |             |       |             |       |             |       |               |       |
| Total operating expenses    |       | 746,935          |       | 240,162          |       | 91,064           |       | 1,738,069          |       |
|                             |       |             |       |             |       |             |       |               |       |
| Operating loss                   |       | (746,935         | )          | (240,162         | )          | (91,064          | )          | (1,738,069         | )          |
|                             |       |             |       |             |       |             |       |               |       |
| Other income (expense):          |       |             |       |             |       |             |       |               |       |
| Loss on disposal of fixed assets |       | —           |       | (4,656           | )          | (2,245           | )          | (6,901             | )          |
| Interest income                  |       | 986              |       | —           |       | —           |       | 1,635              |       |
| Interest expense                 |       | (31,878          | )          | (27,200          | )          | (27,200          | )          | (97,178            | )          |
| Total other income (expense)     |       | (30,892          | )          | (31,856          | )          | (29,445          | )          | (102,444           | )          |
|                             |       |             |       |             |       |             |       |               |       |
| Loss before income taxes         |       | (777,827         | )          | (272,018         | )          | (120,509         | )          | (1,840,513         | )          |
|                             |       |             |       |             |       |             |       |               |       |
| Provision for income taxes       |       | 1,600            |       | 800              |       | 800              |       | 4,000              |       |
|                             |       |             |       |             |       |             |       |               |       |
| Net Loss                         |       | $                | (779,427   | )                | $          | (272,818         | )          | $                  | (121,309   | ) | $ | (1,844,513 | ) |
|                             |       |             |       |             |       |             |       |               |       |
| Net loss per share               |       | $                | (.06       | )                | $          | (.05             | )          | $                  | (.02       | ) | $ | (.36 | ) |

 

The accompanying notes are an integralpart of the financial statements.

 

26

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PUBLIC MEDIA WORKS, INC. AND SUBSIDIARY

(A Development Stage Company)

(Formerly Burnam Management, Inc.)

 

CONSOLIDATEDSTATEMENTS OF STOCKHOLDERS’ EQUITY

 

FOR THE PERIOD MARCH 3, 2000 (INCEPTION)

THROUGH FEBRUARY 29, 2004

 
| ** **                                                                                       | ** ** | ** **       | ** ** | ** **  | ** ** | ** **      | ** ** | **Deficit**     | ** ** |
|--------------------------------------------------------------------------------------------------|------------|------------------|------------|-------------|------------|-----------------|------------|-----------------|------------|
| ** **                                                                                       | ** ** | ** **       | ** ** | ** **  | ** ** | ** **      | ** ** | **Accumulated** | ** ** |
| ** **                                                                                       | ** ** | ** **       | ** ** | ** **  | ** ** | **Additional**  | ** ** | **During the**  | ** ** |
| ** **                                                                                       | ** ** | **Common Stock** | ** ** | **Paid-in** | ** ** | **Development** | ** ** |
| ** **                                                                                       | ** ** | **Shares**       | ** ** | **Amount**  | ** ** | **Capital**     | ** ** | **Stage**       | ** ** |
|                                                                                             |       |             |       |        |       |            |       |            |       |
| Balance, March 3, 2000                                                                           |       | —           |       | $           | —     |            | $          | —          |       | $ | — |   |
|                                                                                             |       |             |       |        |       |            |       |            |       |
| Common stock issued to officer and director  on March 3, 2000                                    |       | 5,000,000        |       | 500         |       | (290            | )          | —          |       |
|                                                                                             |       |             |       |        |       |            |       |            |       |
| Cash contributed, services** **rendered and Company expenses paid  directly by shareholders |       | —           |       | —      |       | 331,750         |       | —          |       |
|                                                                                             |       |             |       |        |       |            |       |            |       |
| Net loss for the period March 3, 2000  (inception) through February 28, 2001                     |       | —           |       | —      |       | —          |       | (670,959        | )          |
|                                                                                             |       |             |       |        |       |            |       |            |       |
| Balance, February 28, 2001                                                                       |       | 5,000,000        |       | 500         |       | 331,460         |       | (670,959        | )          |
|                                                                                             |       |             |       |        |       |            |       |            |       |
| Cash contributed and Company expenses paid  directly by shareholders                             |       | —           |       | —      |       | 77,595          |       | —          |       |
|                                                                                             |       |             |       |        |       |            |       |            |       |
| Net loss for the year ended February 28,  2002                                                   |       | —           |       | —      |       | —          |       | (121,309        | )          |
|                                                                                             |       |             |       |        |       |            |       |            |       |
| Balance, February 28, 2002                                                                       |       | 5,000,000   |       | $           | 500        |            | $          | 409,055         |       | $ | (792,268 | ) |

 

The accompanying notes are an integralpart of the financial statements.

 

27

----

 
| ** **                                                                               | ** ** | ** **       | ** ** | ** **  | ** ** | ** **      | ** ** | **Deficit**     | ** ** |
|------------------------------------------------------------------------------------------|------------|------------------|------------|-------------|------------|-----------------|------------|-----------------|------------|
| ** **                                                                               | ** ** | ** **       | ** ** | ** **  | ** ** | ** **      | ** ** | **Accumulated** | ** ** |
| ** **                                                                               | ** ** | ** **       | ** ** | ** **  | ** ** | **Additional**  | ** ** | **During the**  | ** ** |
| ** **                                                                               | ** ** | **Common Stock** | ** ** | **Paid-in** | ** ** | **Development** | ** ** |
| ** **                                                                               | ** ** | **Shares**       | ** ** | **Amount**  | ** ** | **Capital**     | ** ** | **Stage**       | ** ** |
|                                                                                     |       |             |       |        |       |            |       |            |       |
| Balance, February 28, 2002                                                               |       | 5,000,000   |       | $           | 500        |            | $          | 409,055         |       | $ | (792,268 | ) |
|                                                                                     |       |             |       |        |       |            |       |            |       |
| Cash contributed and services rendered by  shareholders                                  |       | —           |       | —      |       | 160,850         |       | —          |       |
|                                                                                     |       |             |       |        |       |            |       |            |       |
| Net loss for the year ended February 29,  2003                                           |       | —           |       | —      |       | —          |       | (272,818        | )          |
|                                                                                     |       |             |       |        |       |            |       |            |       |
| Balance, February 28, 2003                                                               |       | 5,000,000        |       | 500         |       | 569,905         |       | (1,065,086      | )          |
|                                                                                     |       |             |       |        |       |            |       |            |       |
| Common stock issued in connection with the  acquisition of subsidiary on August 30, 2003 |       | 20,000,000       |       | 2,000       |       | 880,000         |       | —          |       |
|                                                                                     |       |             |       |        |       |            |       |            |       |
| Common stock issued for $.40 a share in  September 2003                                  |       | 12,500           |       | 1           |       | 4,999           |       | —          |       |
|                                                                                     |       |             |       |        |       |            |       |            |       |
| Common stock issued for $.40 a share in  January and February 2004                       |       | 500,000          |       | 50          |       | 199,950         |       | —          |       |
|                                                                                     |       |             |       |        |       |            |       |            |       |
| Net loss for the year ended February 29,  2004                                           |       | —           |       | —      |       | —          |       | (779,427        | )          |
|                                                                                     |       |             |       |        |       |            |       |            |       |
| Balance, February 29, 2004                                                               |       | 25,512,500  |       | $           | 2,551      |            | $          | 1,654,854       |       | $ | (1,844,513 | ) |

 

The accompanying notes are an integralpart of the financial statements.

 

28

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PUBLIC MEDIA WORKS, INC. AND SUBSIDIARY

(A Development Stage Company)

(Formerly Burnam Management, Inc.)

 

CONSOLIDATEDSTATEMENTS OF CASH FLOWS

 
| ** **                                                                   | ** ** | ** **       | ** ** | ** **       | ** ** | ** **       | ** ** | **For the period** | ** ** |
|------------------------------------------------------------------------------|------------|------------------|------------|------------------|------------|------------------|------------|--------------------|------------|
| ** **                                                                   | ** ** | ** **       | ** ** | ** **       | ** ** | ** **       | ** ** | **March 3, 2000**  | ** ** |
| ** **                                                                   | ** ** | **For the**      | ** ** | **For the**      | ** ** | **For the**      | ** ** | **(Inception)**    | ** ** |
| ** **                                                                   | ** ** | **Year Ended**   | ** ** | **Year Ended**   | ** ** | **Year Ended**   | ** ** | **Through**        | ** ** |
| ** **                                                                   | ** ** | **February 29,** | ** ** | **February 28,** | ** ** | **February 28,** | ** ** | **February 29,**   | ** ** |
| ** **                                                                   | ** ** | **2004**         | ** ** | **2003**         | ** ** | **2002**         | ** ** | **2004**           | ** ** |
| Cash flows from operating activities:                                        |       |             |       |             |       |             |       |               |       |
| Net loss                                                                     |       | $                | (779,427   | )                | $          | (272,818         | )          | $                  | (121,309   | ) | $ | (1,844,513 | ) |
|                                                                         |       |             |       |             |       |             |       |               |       |
| Adjustments to reconcile net loss to cash  provided by operating activities: |       |             |       |             |       |             |       |               |       |
| Expenses paid directly by related party  creditors                           |       | 17,325           |       | 66,715           |       | —           |       | 84,040             |       |
| Loss on disposal of fixed assets                                             |       | —           |       | 4,656            |       | 2,245            |       | 6,901              |       |
| Depreciation                                                                 |       | 12,224           |       | 11,451           |       | 12,509           |       | 42,510             |       |
| Contributions from stockholders                                              |       | —           |       | —           |       | 26,805           |       | 55,305             |       |
| Common stock issued for services                                             |       | —           |       | 150,000          |       | —           |       | 318,000            |       |
| Increase in shareholder and stock  subscription receivables                  |       | (65,000          | )          | —           |       | —           |       | (65,000            | )          |
| Increase in prepaid expenses and interest  receivable                        |       | (1,930           | )          | —           |       | —           |       | (1,930             | )          |
| Increase in accounts payable and accrued  expenses                           |       | 94,163           |       | 27,940           |       | 27,180           |       | 161,018            |       |
|                                                                         |       |             |       |             |       |             |       |               |       |
| Net cash used by operating activities:                                  |       | (722,645         | )          | (12,056          | )          | (52,570          | )          | (1,243,669         | )          |
| Cash flows from investing activities:                                        |       |             |       |             |       |             |       |               |       |
| Cash loaned to related party                                                 |       | (125,000         | )          | —           |       | —           |       | (125,000           | )          |
| Purchase of property and equipment                                           |       | (16,655          | )          | —           |       | —           |       | (85,658            | )          |
| Film development costs capitalized                                           |       | (5,500           | )          | —           |       | —           |       | (5,500             | )          |
|                                                                         |       |             |       |             |       |             |       |               |       |
| Net cash used by investing activities                                        |       | $                | (147,155   | )                | $          | —           |       | $                  | —     |   | $ | (216,158 | ) |

 

The accompanying notes are an integral

part of thefinancial statements.

 

29

----

 
| ** **                                | ** ** | ** **       | ** ** | ** **       | ** ** | ** **       | ** ** | **For the period** | ** ** |
|-------------------------------------------|------------|------------------|------------|------------------|------------|------------------|------------|--------------------|------------|
| ** **                                | ** ** | ** **       | ** ** | ** **       | ** ** | ** **       | ** ** | **March 3, 2000**  | ** ** |
| ** **                                | ** ** | **For the**      | ** ** | **For the**      | ** ** | **For the**      | ** ** | **(Inception)**    | ** ** |
| ** **                                | ** ** | **Year Ended**   | ** ** | **Year Ended**   | ** ** | **Year Ended**   | ** ** | **Through**        | ** ** |
| ** **                                | ** ** | **February 29,** | ** ** | **February 28,** | ** ** | **February 28,** | ** ** | **February 29,**   | ** ** |
| ** **                                | ** ** | **2004**         | ** ** | **2003**         | ** ** | **2002**         | ** ** | **2004**           | ** ** |
| Cash flows from financing activities:     |       |             |       |             |       |             |       |               |       |
| Issuance of common stock                  |       | $                | 930,000    |             | $          | —           |       | $                  | —     |   | $ | 1,011,500 |   |
| Cash contributed by stockholders          |       | 2,000            |       | 10,850           |       | 50,790           |       | 117,390            |       |
| Proceeds from related party borrowings    |       | —           |       | 1,000            |       | —           |       | 393,137            |       |
| Repayment of related party borrowings     |       | (50,000          | )          | —           |       | —           |       | (50,000            | )          |
|                                      |       |             |       |             |       |             |       |               |       |
| Net cash provided by financing activities |       | 882,000          |       | 11,850           |       | 50,790           |       | 1,472,027          |       |
|                                      |       |             |       |             |       |             |       |               |       |
| Net increase (decrease) in cash           |       | 12,200           |       | (206             | )          | (1,780           | )          | 12,200             |       |
|                                      |       |             |       |             |       |             |       |               |       |
| Cash, beginning of period                 |       | —           |       | 206              |       | 1,986            |       | —             |       |
|                                      |       |             |       |             |       |             |       |               |       |
| Cash, end of period                       |       | $                | 12,200     |             | $          | —           |       | $                  | 206        |   | $ | 12,200 |   |
|                                      |       |             |       |             |       |             |       |               |       |
| Interest paid                             |       | $                | 145        |             | $          | —           |       | $                  | —     |   | $ | 1,879 |   |
|                                      |       |             |       |             |       |             |       |               |       |
| Income taxes paid                         |       | $                | 1,600      |             | $          | —           |       | $                  | —     |   | $ | 1,600 |   |
|                                      |       |             |       |             |       |             |       |               |       |
| Stock subscriptions                       |       | $                | 155,000    |             | $          | —           |       | $                  | —     |   | $ | 155,000 |   |

 

The accompanying notes are an integral

part of thefinancial statements.

 

30

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PUBLIC MEDIA WORKS, INC. AND SUBSIDIARY

(A Development Stage Company)

(Formerly Burnam Management, Inc.)

 

NOTES TOCONSOLIDATED FINANCIAL STATEMENTS

 

1.             Summary ofBusiness and Significant Accounting Policies

 

a.   Summary of Business

 

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

 

The Company has not commenced principaloperations and is considered a “Development Stage Company” as defined by theFinancial Accounting Standards Board Statement No. 7.

 

b.   Principles of Consolidation

 

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

 

c.   Cash Flows

 

For purposes of the statement of cash flows,the company considers all highly liquid investments purchased with a maturityof three months or less to be cash or cash equivalents.

 

d.   Property and Equipment

 

Property and equipment are stated at costless accumulated depreciation. Depreciation is provided using straight-linemethods based on estimated useful lives of five to seven years.

 

31

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e.   Net Loss Per Share

 

The net loss per share calculation is basedon the weighted average number of shares outstanding during the period.

 

f.    Use of Estimates

 

The preparation of financial statements inconformity with generally accepted accounting principles requires management tomake estimates and assumptions that affect certain reported amounts anddisclosures. Accordingly, actual results could differ from those estimates.

 

g.   Statement Presentation

 

Certain previously reported amounts have beenreclassified to conform to 2004 report classifications. These reclassificationshad no effect on net income and stockholders’ equity.

 

2.             Note Receivable,Related Party

 

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

 

3.             Film DevelopmentCosts

 

At February 29, 2004, the Company hascapitalized $5,500 for the purchase of two original screenplays. The Companyintends to develop the screenplays into  feature films within the next threeyears.

 

4.             Notes Payable,Stockholders

 

The Company has notes payable with twostockholders. The balance at February 29, 2004 and February 28, 2003 was$427,176 and $459,852, respectively. The notes are unsecured and due on demand.Interest is being charged at 8% on $340,000. The remaining amount isnon-interest bearing.

 

32

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5.             Issuance of CommonStock

 

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

 

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

 

On August 30, 2003, 20,000,000 shares ofcommon stock were issued in a share exchange agreement with a private company,Public Media Works, Inc. (PMW). PMW is a wholly-owned subsidiary of the Companyand is considered the survivor. Burnam Management, Inc. has no assets,liabilities or operations at the time of the merger; therefore, a pro formastatement of operations is not provided.

 

In September2003 through February 2004, the Company issued 512,500 shares of its commonstock at $.40 per share for a total amount of $205,000 of which $50,000 wasreceived in cash and $155,000 is reported as stock subscriptions receivable.

 

6.             Stock Options andWarrants

 

No options or warrants are outstanding toacquire the Company’s common stock.

 

7.             Income Taxes

 

The provision for income tax consists of thefollowing components at February 29, 2004 and February 28, 2003 and 2002:

 
| ** **                    | ** ** | **February 29,** | ** ** | **February 28,** | ** ** | **February 28,** | ** ** |
|-------------------------------|------------|------------------|------------|------------------|------------|------------------|------------|
| ** **                    | ** ** | **2004**         | ** ** | **2003**         | ** ** | **2002**         | ** ** |
| Current:                      |       |             |       |             |       |             |       |
| Federal income** **taxes |       | $                | —     |             | $          | —           |       | $ | — |   |
| State income taxes            |       | 1,600            |       | 800              |       | 800              |       |
| Deferred                      |       | —           |       | —           |       | —           |       |
|                          |       | $                | 1,600      |             | $          | 800              |       | $ | 800 |   |

 

The following reconciles income taxesreported in the financial statements to taxes that would be obtained byapplying regular tax rates to income before taxes:

 
| ** **                               | ** ** | **February 29,** | ** ** | **February 28,** | ** ** | **February 28,** | ** ** |
|------------------------------------------|------------|------------------|------------|------------------|------------|------------------|------------|
| ** **                               | ** ** | **2004**         | ** ** | **2003**         | ** ** | **2002**         | ** ** |
| Expected tax benefit using regular rates |       | $                | (264,461)  |             | $          | (92,486          | )          | $ | (40,973 | ) |
| State minimum tax                        |       | 1,600            |       | 800              |       | 800              |       |
| Valuation allowance                      |       | 264,461          |       | 92,486           |       | 40,973           |       |
|                                     |       |             |       |             |       |             |       |
| Tax Provision                            |       | $                | 1,600      |             | $          | 800              |       | $ | 800 |   |

 

33

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Due to the Company being in the developmentstage and incurring net operating losses, a valuation allowance has beenprovided to reduce deferred tax assets to the amount that is more likely to berealized. The net deferred tax assets consist of the following components:

 
| ** **               | ** ** | **February 29,** | ** ** | **February 28,** | ** ** | **February 28,** | ** ** |
|--------------------------|------------|------------------|------------|------------------|------------|------------------|------------|
| ** **               | ** ** | **2004**         | ** ** | **2003**         | ** ** | **2002**         | ** ** |
|                     |       |             |       |             |       |             |       |
| Deferred tax assets      |       | $                | 621,584    |             | $          | 356,771          |       | $ | 265,747 |   |
| Valuation allowance      |       | (621,584         | )          | (356,771         | )          | (265,747         | )          |
| Deferred tax liabilities |       | —           |       | —           |       | —           |       |
|                     |       |             |       |             |       |             |       |
| Net deferred tax assets  |       | $                | —     |             | $          | —           |       | $ | — |   |

 

The Company has loss carryforwards totaling$1,309,049 that may be offset against future federal income taxes. If not used,the carryforwards will expire as follows:

 
| ** ** | ** ** | **Operating** | ** ** |
|------------|------------|---------------|------------|
| ** ** | ** ** | **Losses**    | ** ** |
|       |       |          |       |
| 2020       |       | $             | 380,704    |   |
| 2021       |       | 128,030       |       |
| 2022       |       | 125,383       |       |
| 2023       |       | 674,932       |       |
|       |       |          |       |
|       |       | $             | 1,309,049  |   |

 

8.             Development Stageand Operating Deficits

 

As shown in the accompanying financialstatements, the Company incurred a net loss of $779,427 during year endedFebruary 29, 2004 and accumulated losses of $1,844,513 since opening forbusiness in 2000. The Company’s current liabilities exceed its current assetsby $228,854 at February 29, 2004. These factors create an uncertainty as to theCompany’s ability to continue as a going concern. The ability of the Company tocontinue as a going concern is dependent upon the success of raising additionalcapital through the issuance of common stock and the ability to generateoperating revenue. The financial statements do not include any adjustments thatmight be necessary should the Company be unable to continue as a going concern.

 

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**Item 8.****                   ****Changes In and Disagreements With Accountants on Accounting and Financial Disclosure**

 

On April 12, 2004, the Companydismissed its independent accountant, Epstein, Weber & Conover, C.A.  No reports on the financial statementsprepared by Epstein, Weber & Conover for the two most recent fiscal yearscontained any adverse opinion or disclaimer of opinion, or was qualified ormodified as to uncertainty, audit scope, or accounting principals.  Thedecision to change accountants was approved by the Board.  During its two most recent fiscal years, andany subsequent interim period preceding the dismissal, the Company did not haveany disagreement with Epstein, Weber, nor is the Company aware of anydisagreement Epstein, Weber has with it, regarding any matter of accountingprincipals or practices, financial statement disclosure, or auditing scope orprocedure, which, if not resolved to the satisfaction of Epstein, Weber, wouldhave caused them to make reference to the subject matter of such disagreementin connection with their reports.

 

On May 19, 2003, PMW engaged Burnham & Schumm P.C. as itsindependent auditors, and continued its engagement after the reverse mergerwith Burnam Management on August 30, 2003. Burnham effectively served as its primary auditors up to and includingApril 12, 2004, at which time the Company affirmatively dismissed BurnamManagement’s auditors, Epstein, Weber. Burnham & Schumm conducted all auditing functions for PMW prior tothe reverse merger, and has conducted all auditing functions since the reversemerger.  Burnham & Schumm is anunrelated party to both Burnam Management and Public Media Works.  For further information, see its disclosureand auditors’ letter from Epstein, Weber in its Form 8-K, filed with theSecurities and Exchange Commission on April 14, 2004.

 

**Item 8A.****                ****Controls and Procedures**

 

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

 

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

 

**PART III**

 

**Item 9.****                   ****Directors, Executive Officers,Promoters and Control Persons; Compliance with Section 16(a) of theExchange Act**

 

Each of its directors is elected by the stockholders to a term of one(1) year and serves until his successor is elected and qualified.  Each of the officers is appointed by theBoard of Directors to a term of one (1) year and serves until his successor isduly elected and qualified, or until he is removed from office.  The Board of Directors has no nominating,auditing, or compensation committees.

 

The following table sets forth certain information regarding executiveofficers and directors of the Company as of February 29, 2004:

 

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| **Name and Address** | ** ** | **Age** | ** ** | **Position**                                                          |
|----------------------|------------|---------|------------|-----------------------------------------------------------------------|
| Thomas A. Szabo      |       | 43      |       | Chairman and Chief Executive Officer                                  |
| Corbin Bernsen       |       | 49      |       | President and director                                                |
| Shaun D.C. Edwardes  |       | 41      |       | Executive Vice President, Acting Chief Financial Officer and director |

 

Biographies

 

**THOMAS A. SZABO** hasserved as Chairman and Chief Executive Officer to its company sinceAugust 30, 2003.  FromNovember 1, 2002 to the date of its merger, he served as Chief ExecutiveOfficer and Chairman to Public Media Works, its predecessor.  From May 1997 to June 2002, Mr. Szaboserved as Chairman and Chief Executive Officer to Digital On-Demand, Inc., andinteractive digital entertainment network. Mr. Szabo also continues to serve as a director to AllianceEntertainment Corp., a privately held global entertainment distributor, aposition he has held since August 2000. In addition, Mr. Szabo serves as Chairman of Telanetix, Inc, a privatelyheld real-time interactive network for business and entertainmentcommunication, a position he has held since June 2002.

 

**CORBIN BERNSEN** hasserved as President and a director to its company since August 30, 2003.Prior to that, Mr. Bernsen served as President and a director to Public MediaWorks, Inc., its predecessor, from November 2002 to August 30, 2003.  From February 2002 throughJuly 2003, Mr. Bernsen was Chief Executive Officer and a director to 1stStep, Inc., a privately held entertainment consulting company. Mr. Bernsenserved as Chief Executive Officer to Public Media Works from its inception inMarch 2000 until November 2002. Mr. Bernsen continues to serve assole owner of Team Cherokee, Inc., which serves as Mr. Bernsen’s vehicle formaintaining his acting contracts and agreements, a position he has held since1987.  Mr. Bernsen continues to for workas an actor and scriptwriter for films and television.

 

**SHAUN D.C. EDWARDES** has served as Executive Vice President, ActingChief Financial Officer and a director to its company since August 30,2003.  Prior to that time, he served asExecutive Vice President, Acting Chief Financial Officer and a director toPublic Media Works, its predecessor, from inception in May 2000 toAugust 30, 2003.  Mr. Edwardesserved as a director to 1st Step, Inc., a privately held entertainmentconsulting company, from February 2002 to June 2003.  Mr. Edwardes served as Executive VicePresident and interim Chief Executive Officer to EssTec, Inc., a privately heldsoftware platform development company, from March 2002 toSeptember 6, 2002.  Mr. Edwardes servedas Vice President of Business Development to Voxsurf Software Ltd., a privatesoftware development company, from August 1999 to January 2000.  He also served as sole owner of DCManagement, a talent management company for recording artists, from January 1999to August 1999.

 

Each and all of its officers devote a minimum of 40 hours per week toPublic Media and its operations, and intend to increase or decrease this amountas necessary to promote and maintain the Company’s business and operations.

 

*Board of Directors*

 

The Company’s organizational documents authorize five board members,three of which are 

 

36

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currently filled by Messrs. Szabo, Bernsen,and Edwardes.  The Company is currentlyseeking two independent directors for its board, including a “financialexpert,” as described herein in “Directors, Officers... .-Audit Committee Financial Expert.”

 

*Board of Advisors*

 

The Company has engaged seven members from the entertainment communityto act as its Board of Advisors.  Thesemembers are:

 

•       Steven Bochco - creator of “LA LAW”, “NYPDBlue”, “Hill Street Blues”

•       Denise Chamian - casting director “SavingPrivate Ryan”, “Eyes Wide Shut” and “Big Fish”

•       Kevin J. Foxe - producer “The Blair WitchProject”, “In the Eye of the Storm”

•       Sid Ganis - Vice Chairman of Columbia Picture,Emeritus

•       Barry Kemp - creator of “Newhart”, “Coach”,“Patch Adams” and “Catch Me if You Can”

•       Jordan Kerner - producer of “Less Than Zero”,“Fried Green Tomatoes”

•       Ed Scott - producer of “Young and the Restless”

 

Its Board of Advisors consists of a number of entertainment industryleaders with vast and varied experience in several entertainment businesssectors. The Company consults with its advisors regularly for general insighton the entertainment industry, and specific advice regarding actual orpotential projects.  Public Media’sconsultations with these members are informal and vary in frequency based uponthe projects the Company are developing, and stage of development, at any giventime.  All members formally acceptedtheir positions as advisors, and there are no term limits for any of itsadvisors.  The Company does not have anyformal agreements with any of its advisors, and none receive compensation fortheir services.

 

*Family Relationships*

 

None.

 

*Compensation*

 

The Company does not have any stock option, retirement, incentive,defined benefit, actuarial, pension or profit-sharing programs for the benefitof its officers or directors, although the Board of Directors may recommendadoption of one or more such programs in the future.  The Company has no employment contracts orcompensatory plans or arrangements with any of its officers.

 

Each director of the Company is entitled to receive reasonableout-of-pocket expenses incurred in attending meetings of its Board of Directorsbut do not receive compensation for services that they have provided asdirectors.  There is no compensationcommittee and no compensation policies have been adopted.  The Company may elect to pay non-cashconsideration in the form of options to officers and directors in thefuture.  In the future, the Company mayelect a cash payment as well as a non-cash consideration.

 

Audit Committee Financial Expert

 

The Company does not currently have an Audit Committee FinancialExpert, as defined in CFR §228.401(h). Mr. Edwardes, the Company’s Acting Chief Financial Officer and ExecutiveVice 

 

37

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President, serves as the Company’s financial expert regarding USgenerally accepted accounting principals and general application of suchprinciples in connection with the accounting for estimates, accruals andreserves, including an understanding of internal control procedures andpolicies over financial reporting.  Mr.Edwardes is also a director to the Company, and serves as *de facto*audit committee financial expert to the Board of Directors.  However, Mr. Edwardes is serving in thiscapacity temporarily while the Company undertakes an extensive search to find apermanent Chief Financial Officer and director who is qualified to serve inthis capacity on a full-time basis.

 

The Company has undergone a significant change in management andactivity since the consummation of the reverse merger with Burnam Management inthe fiscal year covered by this report. The Company’s by-laws permit it to maintain a Board consisting of up tofive members.  Accordingly, the Company is actively seeking at least oneadditional director who is deemed a “financial expert” pursuant to theSecurities Acts to serve as member of the audit committee in suchcapacity.  The Company may also elect toemploy such director as Chief Financial Officer, or the Company may seek aseparate individual to serve as CFO in order to maintain the independence ofthe financial expert.  The Company mayalso nominate a second director to serve as an independent director and amember of the audit committee.

 

Changes in Nominee Recommendation Procedures

 

There are no material changes to the procedures by which shareholderscan nominate directors.

 

Compliance with Section 16(a) of the Exchange Act

 

Based solely upona review of Forms 3, 4 and 5 furnished to the Company pursuant toSection 16(a)-3e of the Securities Act of 1934, the Company notes thefollowing delinquencies for the period ended February 29, 2004:

 

Messrs. Szabo,Bernsen or Edwardes did not file their Forms 3 on a timely basis. Each Form 3was filed on August 5, 2004.  None ofMessrs. Szabo, Bernsen or Edwardes has filed Forms 4 or 5, if required.  The Company is not aware of the requirementor exemption of any of such individuals to file a Form 5, but notes the absenceof any written representation identified in paragraph (b)(2)(i) of Item 405of Regulation S-B.

 

Code of Ethics

 

The Company has adopted a code of ethics, the Code of Business Ethicsand Conduct (the “Code”), that applies to the every officer of and director tothe Company, including its principal executive officer, principal financialofficer and controller (principal accounting officer). The Code is attachedhereto as an exhibit, and is available free of charge, upon request, to PublicMedia Works, Inc., 14759 Oxnard Street, Van Nuys, California 91411, Attention:Shaun Edwardes.  Any amendment to, orwaiver from, the Code will be publicly filed on Form 8-K as required by theSecurities Exchange Act of 1934, as amended (the “Exchange Act”), during thetime periods allocated by the Exchange Act.

 

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**Item 10.****                 ExecutiveCompensation**

 

**Summary Compensation Table**

 
| **Name  and  Principal  Position**                                                   | ** ** | **Year  (fiscal  year  ending  February  28)** | ** ** | **Salary  ($)**   | ** ** | **Bonus  ($)**  | ** ** | **Other Annual  Compensation  ($)** | ** ** | **Restricted  Stock  Award(s)  ($)** | ** ** | **Securities  Underlying  Options/  SARS (#)** | ** ** | **LTIP  Payouts  ($)** | ** ** | **All Other  Compensation**    | ** ** |
|--------------------------------------------------------------------------------------|------------|------------------------------------------------|------------|-------------------|------------|-----------------|------------|-------------------------------------|------------|--------------------------------------|------------|------------------------------------------------|------------|------------------------|------------|--------------------------------|------------|
| Thomas A. Szabo, Chief Executive Officer                                             |       | 2004  2003 (1)                                 |       | 110,000  N/A      |       | 5,000  N/A      |       | N/A  N/A                            |       | N/A  *                               |       | N/A  N/A                                       |       | N/A  N/A               |       | N/A  5,000,000 shares (*)      |       |
| Corbin Bernsen, President                                                            |       | 2004  2003 (2)  2002 (2)                       |       | 110,000  N/A  N/A |       | 5,000  N/A  N/A |       | N/A  N/A  N/A                       |       | N/A  N/A  N/A                        |       | N/A  N/A  N/A                                  |       | N/A  N/A  N/A          |       | N/A  5,000,000 shares (*)  N/A |       |
| Shaun D.C. Edwardes,  Executive  Vice President, Acting Chief Financial Officer |       | 2004  2003  2002                               |       | 110,000  N/A  N/A |       | 5,000  N/A  N/A |       | N/A  N/A  N/A                       |       | N/A  N/A  N/A                        |       | N/A  N/A  N/A                                  |       | N/A  N/A  N/A          |       | N/A  5,000,000 shares (*)  N/A |       |

 

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*      There was no publicly traded market for these sharesat the time of issuance, and the company had a negative net tangible bookvalue.  Accordingly, these shares werevalued at par value of $0.0001.

 

(1)           Mr. Szabo became Chief Executive Officer inNovember 1, 2002.  Prior to thattime, Mr. Szabo was unaffiliated with the Company.

(2)           Mr. Bernsen served as Chief ExecutiveOfficer and President from May 2000 to October 31, 2002.

 

***Options, LTIPs, SARsand other rights***

 

The Company has not granted any options, SARs or LTIPs, nor does theCompany maintain any stock option, retirement, incentive, defined benefit,actuarial, pension or profit-sharing programs for the benefit of directors,officers or other employees, although the Board of Directors may recommendadoption of one or more such programs in the future.

 

***Employment contracts***

 

The Company has no employment contracts with its executiveofficers.  The Company does not have acompensation committee, and the Company has not adopted any compensationpolicies.  See the discussion hereintitled “Certain Relationships and Related Transactions.”

 

The Board of Directors has established that each and all of itsexecutive officers are compensated at a fixed rate of $10,000 per month forservices rendered,subject to adjustment by the Board of Directors based upon its resources thenavailable, as well as any other considerations the Board of Directors shalldeem advisable.  Executive officers arealso entitled to payment or reimbursement of expenses incurred which are relatedto carrying out their position.  Executiveofficers serving in multiple capacities concurrently are not entitled to morethan one salary as an executive officer, but may be provided with additionalcompensation at the discretion of the Board of Directors.  The Board of Directors will re-evaluate thesalary of each and all of the executive officers 

 

39

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annually, and determine modifications incompensation based upon services rendered and the resources of the company thenavailable.  This compensation is inaddition to any equity compensation received by any executive officer basedupon individual merit or arrangement.

 

***Compensation ofDirectors***

 

The Company does not have any current arrangement regardingcompensation of its directors, other than reimbursement of travel expenses andother standard out-of-pocket expenditures. The Company does not anticipate compensating its directors for committeeparticipation, board attendance or other service to the Company at thistime.  The Company is seeking between oneand two independent directors at this time, and anticipates entering into somecompensation arrangement with them, in addition to reimbursement ofout-of-pocket expenditures, based upon its financial position at the time ofelection.

 

**Item 11.****                 SecurityOwnership of Certain Beneficial Owners and Management and Related StockholderMatters**

 

The following table sets forth certain information as of the date ofthis offering with respect to the beneficial ownership of its common stock byall persons known by us to be beneficial owners of more than 5% of any suchoutstanding classes, and by each director and executive officer, and by allofficers and directors as a group. Unless otherwise specified, the named beneficial owner has, to itsknowledge, either sole or majority voting and investment power.

 

| **Title of Class**                                     | ** ** | **Name and Address of  Beneficial Owner (1)** | ** ** | **Number of Shares  Held** | ** ** | **Percent of Class (2)** | ** ** |
|--------------------------------------------------------|------------|-----------------------------------------------|------------|----------------------------|------------|--------------------------|------------|
| Common                                                 |       | Thomas A. Szabo (3)                           |       | 5,000,000                  |       | 19.6                     | %          |
| Common                                                 |       | Corbin Bernsen (4)                            |       | 5,000,000                  |       | 19.6                     | %          |
| Common                                                 |       | Shaun D.C. Edwardes (5)                       |       | 5,000,000                  |       | 19.6                     | %          |
| **All officers and directors as a group (3  persons)** |       |                                          |       |                       |       | 58.8                     | %          |

 

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(1)           Unless otherwise indicated, all addressesare 14759 Oxnard Street, Van Nuys, California 91411.

(2)           Percentages are based on 25,512,500 sharesof common stock issued and outstanding as of February 29, 2004.

(3)           Mr. Szabo is its Chairman and ChiefExecutive Officer.

(4)           Mr. Bernsen is its President and a director.

(5)           Mr. Edwardes is its Acting Chief FinancialOfficer, Executive Vice President and a director.

 

***Securities authorized for issuance underequity compensation plans***

 

None.

 

40

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**Item 12.****                 CertainRelationships and Related Transactions**

 

All material assets for the Company, which consists primarily ofscripts, treatments and other intellectual property, were given to PMW prior tothe merger in 2003 by Messrs. Edwardes, Szabo and Bernsen, who constitute thepromoters of PMW.  Prior to the Company’smerger in 2003, its merger partner, Burnam Management, held no assets orcapital.  The sole shareholder of thatentity was Mr. Rick Plotnikoff, who purchased the entity from Mr. GeraldGhini.  Messrs. Plotnikoff and Ghiniconstituted the promoters of Burnam Management, neither of whom appears to havecontributed anything to the company other than the resources required topublicly register the shell’s class of equity and maintain suchregistration.  In May 2000, Mr. Bernsenand Mr. Edwardes each received 5,000,000 restricted shares of common stock inPMW in exchange for unvalued intellectual property and services rendered (Mr.Bernsen as Chief Executive Officer and President, and Mr. Edwardes as ExecutiveVice President and Acting Chief Financial Officer).  In November 2002, Mr. Szabo received5,000,000 shares of restricted stock in exchange for services rendered as ChiefExecutive Officer.

 

On August 30, 2003, the Company issued 15,000,000 shares to itsofficers and directors in conjunction with its share exchange and merger.  These shares were exchanged for sharesoriginally issued by PMW prior to the share exchange.  Of these, 5,000,000 shares were issued to Mr.Thomas Szabo, its Chief Executive Officer and Chairman, 5,000,000 shares wereissued to Mr. Corbin Bernsen, its President and a director, and 5,000,000shares were issued to Mr. Shaun Edwardes, its Executive Vice President, ActingChief Financial Officer and a director.

 

On August 30, 2000 the Company entered into an unsecuredpromissory note with Mr. George Mainas, a shareholder.  On February 29, 2004, the Company had anoutstanding balance of $435,299, including accrued interest.  On December 31, 2003, the Companymemorialized an agreement with Mr. Mainas whereby Mr. Mainas will pay various,unclassified business expenses from time to time on behalf of its company, andthe Company agreed to reimburse him for these expenditures as soon aspracticable.  On February 29, 2004,the Company had an outstanding balance of $70,491, including accrued interest.  The Company has also entered into a thirdunwritten, unsecured promissory note with Mr. Denis Schusterman, a shareholder,in May 2002 in exchange for payment of approximately $16,000 in general andadministrative expenses.  OnFebruary 29, 2004, the Company had an outstanding balance of $16,715,including accrued interest.  The terms oneach of these notes are disclosed in its discussion titled “Management’sDiscussion and Analysis-Plan of Operation-Costs and Expenses.”

 

The Company previously considered acquiring a production studio, andentered into a non-binding letter of intent on December 8, 2003 with OldTucson Company in Tucson, Arizona. Subsequently, four of Old Tucson Company’s shareholders invested in itscompany, each and in the aggregate holding less than 5% ownership in itscompany.  These shareholders, in theaggregate, represented a controlling interest in Old Tucson Studios.  On December 19, 2003, while engaged inthe letter of intent, the Company loaned $125,000 to Old Tucson Company foroperations.  The note to Old TucsonCompany matured on June 20, 2004, and bears interest at 4%.  The note is secured by the all of theshareholders’ stock in its company.  As aresult of its mutual shareholders, its loan to Old Tucson Company may have beendeemed a related party.  However, during thecourse of its due diligence, the Company elected not to pursue this option, andthe letter of intent expired unexercised on January 15, 2004, although thenote still remains an account receivable for the Company.  The Company does not currently have anyaffiliation with either the four shareholders or Old Tucson Company, althoughthe shareholders still retain their equity interest in Public Media.  The Company is currently in negotiations withOld Tucson to extend the terms of this note.

 

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The Company does not maintain a formal conflicts of interest policywith respect to related and/or affiliated parties.  All transactions with affiliated parties areconducted at arms-length.

 

**Item13.****                 Exhibitsand Reports on Form 8-K**

# ** **

*(a)  Exhibits required by Item601 of Regulation S-B*

 
| **Exhibit  No.** | ** ** | **Description**                                                                                                                 |
|------------------|------------|---------------------------------------------------------------------------------------------------------------------------------|
|             |       |                                                                                                                            |
| 2.1              |       | Share Exchange Agreement by and between Burnam Management, Inc. and  Public Media Works, Inc., dated August 30, 2003 (2)   |
| 3.1              |       | Certificate of Incorporation of Burnam Management, Inc. (1)                                                                     |
| 3.2              |       | Certificate of Amendment of Certificate of Incorporation (2)                                                                    |
| 3.3              |       | By-laws of Burnam Management, Inc. (1)                                                                                          |
| 3.4              |       | Amended By-laws of Public Media Works, Inc. (4)                                                                                 |
| 4.1              |       | Form of Stock Certificate (5)                                                                                                   |
| 10.1             |       | Form of Letter of Intent for appearing talent (5)                                                                               |
| 10.2             |       | Writers Agreement by and between Public Media Works, Inc. and Mr.  Peter Soldinger, dated September 11, 2003 (5)           |
| 10.3             |       | Writers Agreement by and between Public Media Works, Inc. and Mr.  Peter Soldinger, dated February 3, 2004 (5)             |
| 10.4             |       | Distribution Agreement by and between Public Media Works, Inc. and  Regent Entertainment, Inc., dated February 9, 2004 (4) |
| 10.5             |       | Distribution Agreement by and between Public Media Works, Inc. and  OBN Holdings, Inc., dated February 20, 2004 (4)        |
| 10.6             |       | Agreement by and between Public Media Works, Inc. and Stone-Stanley  Productions, dated October 10, 2003 (4)               |
| 10.7             |       | Agency Representative Agreement by and between Public Media Works,  Inc. and U4oria, Inc., dated January 29, 2004 (4)      |
| 10.8             |       | Promissory Note by and between Public Media Works, Inc. and Mr.  George Mainas, dated August 30, 2000 (4)                  |
| 10.9             |       | Memorialized Agreement by and between Public Media Works, Inc. and  Mr. George Mainas, dated December 31, 2003 (5)         |
| 10.10            |       | Agreement by and between Public Media Works, Inc. and Behind the  Hedge Productions, dated February 27, 2004 (4)           |
| 10.11            |       | Agreement by and between Public Media Works, Inc. and the American  Basketball Association, dated February 5, 2004 (5)     |
| 10.12            |       | Agreement by and between Public Media Works, Inc. and MMT Solutions,  dated August 25, 2000 (4)                            |
| 10.13            |       | Letter of Termination and Release by and between Public Media Works,  Inc. and MMT Solutions, dated June 2, 2003 (4)       |
| 10.14            |       | Agreement by and between Public Media Works, Inc. and New Media  Dimensions, Inc., dated August 8, 2003 (4)                |
| 10.15            |       | Affiliation Agreement by and between Public Media Works, Inc. and  Amazon.com, Inc., dated May 14, 2002 (5)                     |
| 10.16            |       | Affiliation Agreement by and between Public Media Works, Inc. and  Allposters.com, Inc., dated May 14, 2002 (5)                 |
| 10.17            |       | Agreement by and between Public Media Works, Inc. and Charles Sherman  Public Relations, dated September 22, 2003 (4)      |
| 10.18            |       | Promissory Note by and between Public Media Works, Inc. and Old  Tucson Company, dated December 19, 2003 (4)               |

 

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| 10.19 |   | Letter of Intent by and between Public Media Works, Inc. and Old  Tucson Company, dated December 8, 2003 (4)          |
|-------|--------|----------------------------------------------------------------------------------------------------------------------------|
| 14.1  |   | Code of Business Conduct and Ethics adopted June 16, 2004                                                             |
| 16.1  |   | Letter on change in certifying accountant by Epstein, Weber &  Conover, PLC, dated April 12, 2004 (3)             |
| 31.1  |   | Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities  Exchange Act, as amended, by Chief Executive Officer |
| 31.2  |   | Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities  Exchange Act, as amended, by Chief Financial Officer |
| 32.1  |   | Certification pursuant to 18 U.S.C. §1350 by Chief Executive Officer                                                  |
| 32.2  |   | Certification pursuant to 18 U.S.C. §1350 by Chief Financial Officer                                                  |

 

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(1)           Incorporated by reference from the Company’sForm 10-SB, as filed on March 29, 2000 (File No.: 0-29901).

(2)           Incorporated by reference from the Company’sForm 8-K, as filed on September 8, 2003.

(3)           Incorporated by reference from the Company’sForm 8-K, as filed on April 14, 2004.

(4)           Incorporated by reference from Amendment No.2 to the Company’s Form SB-2, as filed on June 29, 2004.

(5)           Incorporated by reference from Amendment No.1 to the Company’s Form SB-2, as filed on May 4, 2004.

 

*(b)**          Reportson Form 8-K*

 

The Company did not file any reports on Form 8-K for the last quarterof the year ended February 29, 2004.

 

**Item 14.****                 PrincipalAccountant Fees and Services**

 

Audit Fees

 

The Company paid an aggregate of $12,452 to its principal accountantfor the audit of its annual financial statements and review of its financialstatements included in its Form 10-QSB and for services normally provided inconnection with the statutory and regulatory filings or engagements for thefiscal year ended February 29, 2004. The Company paid an aggregate of $9,478 to its principal accountant forthe audit of its annual financial statements and review of its financialstatements included in its Form 10-QSB and for services normally provided inconnection with the statutory and regulatory filings or engagements for thefiscal year ended February 28, 2003.

 

Audit-Related Fees

 

The Company paid an aggregate of $0 to its principal accountant forassurance and related services by its principal accountant that were reasonablyrelated to the performance of the audit of review of its financial statements(and were not reported herein) for the fiscal year ended February 29,2004.  The Company paid an aggregate of$0 to its principal accountant for assurance and related services by itsprincipal accountant that were reasonably related to the performance of theaudit of review of its financial statements (and were not reported herein) forthe fiscal year ended February 28, 2003.

 

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Tax Fees

 

The Company anticipates paying an estimated aggregate of $2,000 to itsprincipal accountant for services related to tax compliance, tax advice and taxplanning for the fiscal year ended February 29, 2004, although suchservices have not yet been invoiced. Such services comprised the following: preparation of federal and statecorporate tax returns.  The Company paidan aggregate of $1,350 to its principal accountant for assurance and relatedservices by its principal accountant for services related to tax compliance,tax advice and tax planning for the fiscal year ended February 28,2003.  Such services comprised thefollowing: preparation of federal and state corporate tax returns.

 

All Other Fees

 

The Company paid no other fees to its principal accountant for productsand services provided, other than those previously described, for the fiscalyears ended February 29, 2004 and February 28, 2003.

 

Audit Committee Pre-Approval Policies 

 

The Company is in the process of establishing a formal audit committee,and will formalize its pre-approval policies and procedures once the auditcommittee has been formally established. The Board of Directors has approved all of the fees paid and identifiedherein.

 

Auditor’s work performance attribution

 

All work for the Company was conducted by the Company’s principalaccountant and/or its full-time, permanent employees.

 

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**SIGNATURES**

 

In accordance with Section 13 or 15(d) of the Exchange Act, theregistrant caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

 
|                        | Public Media Works  |
|-----------------------------|---------------------|
|                        | (Registrant)        |
|                        |                |
|                        |                |
| Date:  August 11, 2004 | /s/ Thomas A. Szabo |
|                        | By:                 | Thomas A. Szabo |
|                        | Title:              | Chief Executive Officer and  Chairman |

 

In accordance with the Exchange Act, this report has been signed belowby the following persons on behalf of the registrant and in the capacities anon the dates indicated.

 
| /s/ Thomas A. Szabo     |   | Chief Executive Officer and  Chairman (principal                                                          |   | August 11, 2004 |
|-------------------------|--------|-----------------------------------------------------------------------------------------------------------|--------|-----------------|
| Thomas A. Szabo         |   | executive officer)                                                                                        |   |            |
|                    |   |                                                                                                      |   |            |
| /s/ Corbin Bernsen      |   | President and director                                                                                    |   | August 11, 2004 |
| Corbin Bernsen          |   |                                                                                                      |   |            |
|                    |   |                                                                                                      |   |            |
| /s/ Shaun D.C. Edwardes |   | Executive Vice President, Acting  Chief Financial Officer and director  (principal accounting officer and |   | August 11, 2004 |
| Shaun D.C. Edwardes     |   | principal financial officer)                                                                              |   |            |

 

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