U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-KSB
(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-27454
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WORLD WIDE MOTION PICTURES CORPORATION
(Name of small business issuer in its charter)
MICHIGAN 33-0081215
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
2120 MAIN STREET, SUITE 180, HUNTINGTON BEACH, CA 92648
(Address of principal executive offices) (Zip Code)
(714) 960-7264
(Issuer's telephone number)
Indicate by check mark whether the registrant (1) filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the past 12 months (or for
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes [x] No [ ]
Indicate the number of shares outstanding of each of the
Issuer's classes of common stock as of the latest practical date:
23,781,752 shares of Common Stock (par value $.001 per share)
outstanding on December 31, 2004.
Part I
Item 1. Description of Business.
BUSINESS DEVELOPMENT
INCEPTION THROUGH DECEMBER 2004
World Wide Motion Pictures (a sole proprietorship)(the "Predecessor") was
founded in July of 1977, with the guidance and consultation of well-known
producer and director Otto Preminger, under the name of World Wide Motion
Pictures and later incorporated under the laws of the state of Michigan on
December 9, 1980 under the name of World Wide Motion Pictures Corporation (the
"Predecessor") and has filed "annual reports" with the state of Michigan
securities bureau as required by Michigan law. The Predecessor was formed for
the purpose of financing, developing, producing, purchasing and distributing
filmed and taped motion picture and television product for consumption by the
general public. In March of 1981 the Predecessor acquired G.L. Productions,
Inc. and all of its facilities, a Washington, D.C. company. In November of
1983, the Predecessor, through a reorganization agreement, merged with the
National Power Corporation (the "Company")(formerly Juggernaut Energy
Corporation), a Utah public corporation. National Power Corporation's common
stock was traded on the over-the-counter market with registered broker-dealer
firms making a market nationally. Contemporaneously with the merger, the name
of the Company was changed to WWMP Inc. and subsequently changed to World Wide
Motion Pictures Corporation. At the time of this filing, the Company has
shareholders in all 50 states and several foreign countries including England,
Japan, Singapore, Australia, Germany, Israel, and Canada including several
broker-dealer firms holding the Company's common securities.
The Predecessor formerly was, and currently the Company is, organized to
finance, develop, produce, purchase and market/distribute a wide variety of
motion picture and television projects including feature films, short subjects,
docudramas, documentaries, industrial films, and television productions using a
formula of high technology, moderate budget, cost control, and continual flow
of product. The Company is engaged in and pursuing diversified business
enterprises with profit potential as authorized by its charter and bylaws such
as new and emerging media technologies and educational seminars.
The Company has an active 19-member Board of Directors; Board designated
committees including Executive, Audit, Finance, Personnel and Ethics; staff
operating committees including Production and Product Development, Ethical
Standards, and Experimental projects; elected officers, and an Advisory Board
of Directors. Certain other individuals who provide technical, theatrical,
marketing, business, and production services to the Company on a specific
ongoing basis have entered into contracts with the Company.
The following transactions represent certain events that have transpired
throughout the history of the Company's business that resulted in major
developments within the Company's current corporate strategic plan and the
specific developments regarding the company's business in the last three years.
CORPORATE ACQUISITION BY THE PREDECESSOR
In March of 1981, the Predecessor acquired G.L. Productions Inc., a Washington,
D.C. company ("GLP") and all of its assets. GLP was a production and
distribution company producing and distributing short subject, docudrama,
documentary and industrial motion pictures. Certain of GLP's productions were
produced and distributed in conjunction with the United States Government
Central Intelligence Agency. The Predecessor acquired GLP by the exchange of
12,469 then authorized and previously unissued shares of the Predecessor which,
upon merger with the Company, became 2,012,814 shares of common stock of the
Company. These shares were issued to GLP's president and sole owner, George T.
Lindsey, for 1000 shares of GLP unregistered common stock representing 100% of
GLP's outstanding common stock. Mr. Lindsey is currently a Vice President for
the Company and is entitled to a contractual sales commission.
Juggernaut Energy Corporation had prepared an offering circular for the
issuance of an initial public offering of up to 500,000 shares of its common
stock for the purpose of acquiring a maximum of $100,000 or minimum of $50,000
in working capital. The offering was underwritten by First Equities Corp. of
Salt Lake City, Utah, the effective date of which was April 18, 1980. The
stock offering price was $.20 per share and the offering was closed upon the
acquisition of the minimum amount of expected proceeds. Combined with the
original incorporator's stock, immediately following the close of the public
offering, the Company's outstanding shares of common stock totaled 1,350,000
(150,000 initially issued to Officers, Directors and Founder of the
corporation; 500,000 from offering; 150,000 at par value $0.01 as partial
consideration for the assignment of interest in oil exploration; 550,000 for
$5,500.00 cash). On October 17, 1981, Juggernaut Energy Corporation amended
its Articles of Incorporation to effect a name change to National Power
Corporation, increase the authorized common stock to 50,000,000 shares, and
decrease the par value from $.01 to $.0025 per share.
On October 14, 1983, National Power Corporation executed a letter of intent
with the Predecessor, the material provisions of which provided that the
Predecessor would exchange 145,578 of its unregistered common shares for
23,500,000 of the issued and outstanding capital stock of National Power
Corporation. On February 10, 1984, pursuant to a special meeting of
shareholders of the National Power Corporation, a majority of the National
Power Corporation's issued and outstanding shares adopted resolutions relating
to the consummation of an Agreement and Plan of Reorganization as between the
Predecessor, namely World Wide Motion Pictures Corporation and the National
Power Corporation. In connection with the foregoing, the Predecessor issued to
the National Power Corporation 145,578 shares of its unregistered common stock
and in consideration therefore, the Predecessor acquired, in a tax-free stock
for stock transaction (calculated to comply with Internal Revenue Codes),
approximately 94% of the issued and outstanding shares of the National Power
Corporation. Further, the merger process resulted in a change in the Company's
number of shares issued, outstanding and authorized and a change in par value.
Also, as a result of the foregoing transaction, a change in control of the
Company took place and a new board of directors was elected. The National
Power Corporation also amended its Articles of Incorporation to effect a name
change to World Wide Motion Pictures Corporation, the Company.
SECURITIES OFFERINGS OF THE PREDECESSOR AND COMPANY
In June of 1982, the Predecessor's securities counsel, Dykema, Gossett,
Spencer, Goodnow & Trigg, under the direction of the Predecessor's management,
prepared an unregistered private placement limited partnership offering
circular for the production of one full length feature motion picture. Net
proceeds to the company would have been $1,000,000 (50 units at $20,000 per
unit).
The offering was prepared as a self-underwriting financing proposed by the
Predecessor to be formed in compliance with the Uniform Limited Partnership Act
of the State of Michigan. The offering was abandoned prior to any sales of
units as a result of a change in strategic planning by the Predecessor's
management. Essentially, management concluded that expending all of its
production resources in the preparation of one motion picture was unduly
speculative and that participation in a broad range of film and television
partnership packages would thereby assure a greater degree of opportunity for
success.
In March of 1986, the Company's securities counsel, Berry, Moorman, King, Cook
and Hudson, under the direction of the Company's management, prepared a
registered private placement limited partnership offering circular for the
production of four full length feature motion pictures. Net proceeds to the
Company would have been $200,000 minimum or $4,960,000 maximum (40 units at
$5,000 per unit minimum/992 units at $5,000 per unit maximum). The offering was
to be underwritten by R.B. Marich Inc., a registered broker/dealer firm in
Denver, Colorado, and W.R. Lazard & Co., a registered broker/dealer firm in New
York, New York. The offering was withdrawn as a result of impending changes
that occurred in the United States tax laws at that time. All proceeds that
were committed to the offering were returned.
The Company has not effected a public offering of its common stock since the
initial public offering of the National Power Corporation in 1980.
FILM LIBRARY ACQUISITIONS
The Company acquires various completed motion pictures and television
productions, some of which are totally or partially purchased in exchange for
common stock, preferred stock, and a revenue participation of the Company. A
significant acquisition occurred in November of 1991, at which time the Company
entered into an agreement with an un-related non-affiliated entity, Presidio
Productions, a California corporation ("Presidio"), whereby the Company
acquired all right, title and interest in 136 motion picture and television
productions ("Product") in exchange for a total consideration aggregating
2,000,000 fully paid, non-assessable, unregistered Rule 144 shares of common
stock of the Company and 25,000 fully paid, non-assessable, unregistered shares
of preferred stock of the Company. Further terms and conditions of the
Company/Presidio transaction were as follows:
a.) The Company agreed to cause all of the common shares being issued to
Presidio thereunder to be issued immediately following the "closing" of the
Company/Presidio transaction; and,
b.) The Company issued the remaining preferred shares upon the delivery of all
physical elements of the product including 35mm gauge negative film footage,
35mm gauge answer print film footage, 1-inch videotape masters, 3/4" videotape
submasters, and 1/2" videotape archival cassettes.
The value of the film library was determined by arms-length negotiations
between the buyer and the seller which included review of production and
replacement costs, previous marketing experience and marketing potential.
Accordingly, the Company, pursuant to GAAP, reported the transaction in the
financial statements at $12,750,000 under unclassified assets. On December 14,
1992, the Company/Presidio transaction was considered closed, with all parties
thereto having executed the agreement and Product delivered to the Company.
Under the terms of that same agreement all Product had been delivered by
Presidio to the Company in good condition and represented to be free of any and
all liens or encumbrances along with a bill of sale regarding the same. To
date, a limited amount of revenue has been received from the leasing of films
and television productions in the library.
FORMATION OF OPERATING SUBSIDIARIES OF THE COMPANY
In July, 1993, the Company formed two fully operational, wholly owned
subsidiaries, World Wide Film & Television Institute and WWMPC Environmental
Services Corporation. The Institute's primary business is the development,
production, marketing, and implementation of educational symposiums, workshops,
lectures, and forums, on a national basis in areas covering the entertainment
industry specifically film and television, financing, packaging, production,
marketing/distribution, and the political/networking process that accompanies
these areas of expertise. Main events (primarily symposiums and seminars with
more than one hundred participants) are periodically scheduled along with
workshops, lectures and forums. The Company's first entry into a completely
diversified field was the formation of WWMPC Environmental Services
Corporation. This company's primary business was the marketing and
distribution of environmental services (including detection and remediation of
indoor air quality for residential and commercial dwellings and
products)(including indoor air quality testing kits for residential and
commercial dwellings); the orchestration, production, marketing, and
implementation of information seminars and infomercials designed specifically
for contractors and other professionals in the energy business desirous of
augmenting their existing activity by entering the environmental services
field. Special staff with expertise in this area was retained by the Company's
management to ensure optimum productivity and growth potential. The Company
discontinued the operation of this business in December 1994.
Subsidiary corporations are formed periodically for the purpose of developing,
producing, or distributing one or more motion picture or television productions
owned and/or controlled by the company. The subsidiary corporations, when
active, individually operate as a separate business with separately defined
boards of directors, executive and operating officers, investors, liabilities,
production or co-production teams and revenue sharing arrangements.
Currently, in addition to World Wide Film and Television Institute Inc., the
company has two active "production" corporation subsidiaries; World Wide
Productions Inc., which was recently used for the production of the feature
length motion picture entitled "Shattered Illusions" featuring Morgan
Fairchild, Bruce Weitz, Richard Lynch, and Dan Monahan; World Wide Productions
Inc. for the production of an upcoming specialty television production entitled
"The Classics", and the feature length motion picture tentatively entitled
"Along for the Ride"; and World Wide Entertainment Inc. with several feature
film and television productions in development and/or distribution including
the award-winning Australian feature film entitled "Amy", starring Rachel
Griffiths and the award-winning historical feature film entitled "Ninth
Street", starring Martin Sheen and Isaac Hayes.
BUSINESS OF COMPANY
PRINCIPAL PRODUCTS AND SERVICES OF THE COMPANY
The principal business of the Company is the development, financing,
production, purchasing and marketing/distribution of feature films/video
productions and various other forms of filmed and/or televised entertainment.
In addition, the Company and its Associates produce/co-produce documentaries,
docudramas, industrial films, and specialty television productions for
consumption by the general public. Feature films and short subject projects
completed and/or marketed by the Company are generally rented or sold to
national and international theater chains, independent television stations and
television networks. Revenue can be generated from a variety of sources. The
three basic sources are: (1) theatrical exhibition pursuant to agreements
which generally provide for payment by the exhibitors of a percentage of box
office receipts with or without a guarantee of a fixed minimum, (2) licensing
to television networks, regional broadcasters and syndicated arrangements
pursuant to agreements which provide for a fixed license fee payable in
periodic installments; and (3) wholesale of film/video product to national and
regional home video outlets encompassing both foreign and domestic markets
pursuant to a fixed retail rental formula. Substantial additional profits may
also accrue from ancillary exploitation of media product including satellite
broadcast, merchandising, literary rights and related paraphernalia.
The Company produces/co-produces and markets its film and television product as
individual motion pictures and television productions which are customarily
organized and accounted for as separate businesses with their own management,
employees, equipment and budgets. Currently, the Company is using wholly owned
subsidiary corporations it has formed for motion picture and television
production. The controlling production entity or co-production entity (in
certain cases, the Company) has primary overall responsibility for all aspects
of a project, from pre-production, principal photography and post production
through marketing and distribution. The individual producer(s) for each film
or television project is responsible for general management and administrative
coordination of the film or video as well as participation in the planning,
principal casting, technical and creative responsibilities to be performed in
conjunction with the director of the production. The production of a full
length motion picture or feature television project involves a number of
related activities which, in general, can take six months to more than a year
to fully complete.
Producers, directors, performers, writers, and various technicians who
participate in the production of the Company's film and television projects are
generally retained on a project-by-project basis, and are normally compensated
by negotiated fixed fees and/or all standard guidelines set down by unions and
guilds in the motion picture and television industry.
The Company's various production, development, marketing, and finance
committees continuously review and, in specific cases consult on or package
feature film and television projects for financing, production, and
distribution. Management of the Company has, since the Company's inception,
encouraged "open" screenplay and teleplay submission in addition to the
submission of completed project acquisition possibilities in all genre of
filmed and video taped entertainment in order to insure the best possible
opportunity for selection of quality and marketable product for the Company to
be involved.
The Company currently owns and maintains a completed screenplay and teleplay
literary library encompassing 59 WGA (Writer's Guild of America) registered
properties and several hundred unregistered from which it periodically reviews
and occasionally selects the most imaginative and promising ones for either
development, production, or marketing. Certain screenplays and teleplays
currently owned or optioned by the Company have been developed and packaged for
production throughout the history of the Company.
Additionally, the Company currently owns and maintains a completed film and
television library encompassing 301 titles of feature length motion pictures,
documentaries, docudramas, and television projects. For internal control
purposes, the Company's Board of Directors directed management to retain an
independent appraiser in order to further establish verification of the value
of its completed product library as currently determined by staff and
management. The Company also owns certain film equipment, a sound effects
library, a still slide library, novels and options on treatments and holds a
beneficial interest in certain ongoing contracts. Options on literary
treatments otherwise defined as developing storylines and creative ideas are
occasionally secured by the Company and company's like the Company for the
purpose of developing the storyline or creative idea into a fully developed
screenplay or teleplay at some unknown time in the future. The Company may or
may not contribute expertise to a film or television project such as script
polishing, script rewriting, packaging, financing, scheduling, budgeting, and
line production. The Company's "beneficial interest" (percentage of future
revenue, if any) in certain ongoing contracts includes certain of the
above-referred to options or options on already fully prepared screenplays or
teleplays which may or may not be produced into a film or television production
at some unknown time in the future. The full development of the contracts is
dependent on the acquisition of additional capital by the Company.
Distribution of product by the Company initially can be and currently is
generally channeled through the Company's distribution/marketing network of
associated companies, the Company's Producer's Representatives, television
syndicators and all other established customary channels used by independent
producers and production companies. The Company's distribution/marketing
network of associated companies is comprised of a wide variety of domestic and
foreign film distributors and television syndicators, all of which have
extensive backgrounds of experience and knowledge in specific areas of
marketing and distribution of film and television product including domestic
film distribution, foreign film distribution, domestic television syndication,
foreign television syndication, domestic home video distribution, foreign home
video distribution, domestic and international cable, pay-per-view and
satellite broadcast and domestic and international ancillary venues. The
Company's Producer's Representatives, in some cases, act as a liaison between
the Company and the above referred distribution network relative to specific
contractual points of discussion for a particular transaction the Company may
be contemplating for the exploitation of one of its product.
The principals of the Company have a proven record of professional experience
demonstrating their training and knowledge in high quality, cost controlled,
moderately budgeted film/video productions and innovative marketing and
distribution skills. Certain of these backgrounds include production and
marketing experience at both large studios and small independent companies.
The combined number of motion pictures and television productions the
production and marketing personnel of the company have been instrumentally
involved with, encompass over 200 productions. The production and marketing
team is skilled and/or expert in the use of the latest technological filming
and video taping techniques, state-of-the-art equipment, and administrative
control, ie, experienced budget scheduling and production/distribution cost
supervision and marketing and exhibition capabilities. Certain of the
technological expertise and/or equipment that is used by the Company's
professional personnel include theatrical "Platform Releasing" (e.g., THE
RIVER RUNS THROUGH IT (in current video release), Tri Star Pictures, in excess
of $30 million in gross revenue worldwide; PULP FICTION (in current video
release), Miramax, in excess of $100 million in gross revenue worldwide; THE
POSTMAN (in current video release), Miramax, in excess of $15 million in gross
revenue worldwide), "Regional Break Releasing", "Test Market Releasing";
Panavision, Kodak, Arroflex, and Nikkagami camera equipment in 16, Super 16 and
35mm gauge format; Avid, Protools, and Media 100 post production and editorial
equipment for film and video; Keylight lighting equipment; and DHX, DAK and
Nagomi sound equipment.
The principals of the Company have developed, produced, distributed and
consulted on a wide variety of feature films, documentaries, docudramas, short
subjects, television productions and industrial motion pictures. They and/or
their productions have earned a wide variety of many national and international
film/television production awards including, as an example: academy awards and
academy award nominations (Jack Foley/feature films PULP FICTION and GOSFORD
PARK), Emmy nominations, Drummer awards (former executive vice president and
current advisor Henry Barth/wide variety of industrial and training films),
gold/silver and bronze medals from various international film festivals (George
Lindsey/New York and Chicago Film Festivals for docudramas and documentaries),
Academy awards and academy award nominations (Charles Newirth/feature film
FORREST GUMP and CITY OF ANGELS) and Academy award nominations (Fred
Baron/feature film ROBOCOP and MOULIN ROUGE)(John R. Woodward/feature film THE
SHAWSHANK REDEMPTION).
The Company and its principals have entered into various ongoing agreements and
arrangements relative to the consultancy, production, financing and
distribution of motion picture or television projects. Many of the agreements
and arrangements contain provisions which could result in revenue to the
Company. Although a significant part of the Company's historical operations has
been devoted to developing and consummating these agreements and arrangements
with a wide variety of companies and individuals within the entertainment
industry, the potential revenue resulting from such agreements and arrangements
has not been shown as receivables or assets on the Company's financial
statements. Potential revenue from the above referred-to ongoing agreements
and arrangements can be acquired by the Company utilizing general and more
specific markets and technologies, which in the opinion of the Company's
management, will also increase in scope and size. As indicated by a wide
variety of industry publications including Variety and The Hollywood Reporter,
current trends indicate that these future markets and expanding technologies,
such as the increase in the deregulation of the European television industry
and 100+ channel global satellite television programming, will extend for a
lengthy period of time. In the opinion of the Company's management, these
future markets and expanding technologies will continue to promote further new
ways to exploit film and television entertainment product; i.e., with mass
appeal increasing as specific technological industries such as high definition
television, CD-Rom, DVD, and expanded Internet communications. Full and
complete exploitation of these agreements and arrangements by the Company will
require the acquisition of additional working capital, which the Company is
anticipating to achieve through financial offerings and/or other traditionally
used methods of private sector, commercial banking, and other methods of
capital acquisition used by small and midsized companies.
Since its creation in July of 1977, the Company's management continuously
researches current data, updates pertinent technical information, and has
subsequently implemented procedures regarding the production of and consultancy
for moderately budgeted feature film (production budgets of approximately
$250,000 to $5,000,000) and television projects produced on a continual flow of
product basis. (Management of the Company define "continual flow of product" as
the production of motion picture and television product produced on an
overlapping production basis; ie., 3 weeks into 4 weeks of post production for
production "A", principal photography on Production "B" begins; and 3 weeks
into 4 weeks of principal photography on Production "B", pre-production on
Production "C" begins.) It is the Company's opinion that following this
production process will help to ensure a "continual flow of product" for the
marketing and distribution of product by the Company and subsequently help to
ensure and increase a continuous revenue stream. The above formula is a
central basis for the Company's profit making strategy. It is the opinion of
management that such strategy has a high percentage of opportunity for success.
The full realization of profits from the Company's strategic preparations is
dependent on the acquisition of additional capital.
The following transactions represent the most significant potentially
revenue-producing arrangements relative to motion picture and television
production, co-production, marketing, consulting and acquisitions the Company
has entered into to date.
DOCUMENTARY/DOCUDRAMA/SCREENPLAY ACQUISITION AND MARKETING
On March 18, 1981, the Company acquired G.L. Productions, Inc. ("GLP") of
Washington, D.C. and all of its facilities and productions including
twenty-eight 30 and 60-minute documentaries and docudramas and 42
completed/registered screen and teleplays ("product"). Certain titles include
RHOUTES TO GYANA featuring Leonard Nimoy, YOU'VE COME A LONG WAY MAYBE
featuring Barbara Walters; and THE LOST ANCIENT CITIES OF TOPAN AND TIKAL
featuring Brock Peters. The Company and GLP have entered into various
television syndication and public broadcast agreements since the acquisition of
the product relative to the marketing and exploitation of the product.
According to the terms of the acquisition, the Company retains 100% of any
potential producer's gross revenue percentage accruing to the Company from any
and all marketing and exploitation of the product worldwide in perpetuity.
SCREENPLAY/TELEPLAY ACQUISITION
On November 28, 1983, the Company entered into an acquisition agreement
(Agreement) with Paul Alex Productions of Huntington Beach, CA for the purpose
of acquiring all right, title and interest in 12 completed screenplays and
teleplays ("product"). The product was registered with the Writer's Guild of
America West and consisted of various genre of story content. According to the
terms of the acquisition, the Company retains 80% of any potential producer's
gross revenue percentage accruing to the Company from any and all marketing and
exploitation of the produced product worldwide in perpetuity.
FEATURE FILM CO-PRODUCTION
On March 26, 1987, the Company entered into a co-production agreement
(Agreement) with G.O.D. Entertainment/The Pitch Limited of Los Angeles, CA for
the purpose of co-producing the feature length motion picture entitled
HOLLYWOOD HEARTBREAK aka PITCH ("product"). The product, which stars Mark
Moses, Carol Mayo Jenkins and James LeGro, completed production in June of
1987, and was distributed by subdistributor, Raystar Distribution Company, to
video outlets throughout the United States and Europe. According to the terms
of the Agreement the Company retains 5% of any of the potential producer's net
revenue percentage accruing to the Company from any and all marketing and
exploitation of the product worldwide in perpetuity.
TELEVISION ACQUISITION
On May 19, 1987, the Company entered into an acquisition agreement (Agreement)
with United Development Industries/Topper Ltd. of Los Angeles, CA for the
purpose of acquiring all right, title and interest in the television production
entitled VEGAS DAZE ("product"). The product, which stars Larry Storch,
Forrest Tucker, Ruth Buzzi and Gary Owens was distributed by sub-distributor
Palm Springs Distribution Company to video outlets in regional southwest
territories. According to the terms of the Agreement the Company retains 50%
of any of the potential producer's net revenue percentage accruing to the
Company from any and all marketing and exploitation of the product worldwide in
perpetuity.
TELEVISION CO-PRODUCTION
On April 11, 1990, the Company entered into a co-production agreement
("Agreement") with Pacific Film Group of Los Angeles, CA for the purpose of
co-producing and distributing three 30-minute television productions entitled
HOLLYWOOD HOTTEST STUNTS, THE REAL GODFATHERS, and THRILLS, CHILLS AND SPILLS
("product"). The three independently hosted productions were distributed by
distributor, Myntex Corporation through the Handleman Company, in a "video
sell-through" arrangement throughout the United States and Canada. According
to the terms of the Agreement the Company retains 3% of any potential
producer's gross revenue percentage accruing to the Company from any and all
marketing and exploitation of the product worldwide in perpetuity.
FEATURE FILM ACQUISITION
On September 6, 1990, the Company through a purchase agreement ("Agreement")
with Tagerick Films of Los Angeles, CA acquired all right, title and interest
in the feature length motion picture entitled TERROR ON SHADOW MOUNTAIN
("product") starring Richard Groat and Bill Smith. At the time of this filing
the product was in post production and has not been distributed in any markets
or territories. According to the terms of the Agreement the Company retains
50% of any potential producer's gross revenue percentage accruing to the
Company from any and all marketing and exploitation of the product worldwide in
perpetuity.
FEATURE FILM CO-PRODUCTION
On October 21, 1991, the Company entered into a co-production agreement
("Agreement") with J.O.E. Productions and Webb Films International of Los
Angeles, CA for the purpose of co-producing the feature length motion picture
entitled BREAKING UP WITH PAUL aka MOVIES, MONEY AND MURDER ("product"). The
product which stars Martin Mull, Karen Black, and Laine Kazan completed
production in December of 1990, and was distributed by Hills Entertainment Inc.
to video retail outlets throughout the world. According to the terms of the
Agreement the Company retains 2% of any potential producer's gross revenue
percentage accruing to the Company from any and all marketing and exploitation
of the product worldwide in perpetuity.
FEATURE FILM LIBRARY ACQUISITION AND DISTRIBUTION
On November 29, 1991, the Company acquired 136 feature film and television
productions ("product") from Presidio Productions Inc. of Palm Springs,
California ("Presidio") encompassing ownership/control and collateral marketing
and exploitation rights in all markets and all territories worldwide. At the
time of this filing the product is in various stages of marketing and
distribution. According to the terms of the agreement the Company retains 50%
of any potential producer's gross revenue percentage accruing to the Company
from any and all marketing and exploitation of the product worldwide in
perpetuity.
TELEVISION CO-PRODUCTION
On June 22, 1992, the Company entered into a co-production agreement
("Agreement") with Webb Films International of Los Angeles, CA for the
co-production of a 60-minute television production special entitled VIDEO MONDO
aka THE RAVE ("product"). At the time of this filing the product was in post
production and has not been distributed in any market or territory. According
to the terms of the Agreement the Company retains 2% of any potential
producer's gross revenue percentage accruing to the Company from any and all
marketing and exploitation of the product worldwide in perpetuity.
FEATURE FILM CO-PRODUCTION/CONSULTANCY
On July 9, 1992, the Company entered into a co-production/consultancy agreement
("Agreement") with Pacific Film Group of Los Angeles, CA for the purpose of
co-producing and rendering financial and industry related advice to Pacific
Film Group for the packaging and production of the feature length motion
picture entitled SWEET JUSTICE ("product"). The product, which stars Mark
Singer, Fynn Carter and Mickey Rooney, completed production in August of 1992
and was distributed by Trimark Pictures to Blockbuster Video for video retail
outlets throughout the United States and Europe. According to the terms of the
Agreement the Company retains 2% of the potential producer's gross revenue
percentage accruing to the Company from any and all marketing and exploitation
of the product worldwide in perpetuity.
DOCUDRAMA CO-PRODUCTION
On May 8, 1993, the Company entered into a co-production and distribution
agreement ("Agreement") with independent film producer, Lance Matthews of New
York, NY, for the co-production and distribution of a 60-minute docudrama
motion picture entitled BLUNTS & STUNTS aka TRULY COMMITTED ("product"). At
the time of this filing, the Product was in post production and has not been
distributed in any markets or territories. According to the terms of the
Agreement the Company retains 40% of any potential producer's gross revenue
percentage accruing to the Company from any and all marketing and exploitation
of the product worldwide in perpetuity.
TELEVISION SYNDICATION AGREEMENT
On August 23, 1994, the Company entered into a license agreement ("Agreement")
with Media One Broadcasting Company of San Francisco, CA for the television
syndication of certain film and television product owned or controlled by the
Company which a portion of such product is part of the Company's acquired film
and television library, including 14 feature length motion pictures and 3
television productions. The syndication territories included Northern
California, Arizona and Washington State. According to the terms of the
Agreement the Company retains 50% of any potential net revenue percentage
accruing to the Company from any and all marketing and exploitation of the
product worldwide in perpetuity.
FEATURE FILM CO-PRODUCTION
On October 14, 1994, the Company entered into a Co-Production Agreement
("Agreement") with Pacific Pictures of Los Angeles, CA for the purpose of
co-producing the feature length motion picture entitled NATURALLY BAD
("product"). The product which stars Robert Z'dar and Shannon Teare completed
production in November of 1994, and was distributed by Northwest Video
Distribution Company to video retail outlets throughout the United States and
Europe. According to the terms of the Agreement the Company retains 2% of any
potential producer's gross revenue percentage accruing to the Company from any
and all marketing and exploitation of the product worldwide in perpetuity.
FEATURE FILM ACQUISITION
On September 28, 1995, the Company entered into a Purchase Agreement
("Agreement") with M&D Productions of San Jose, CA, for the acquisition of all
right, title and interest in the feature length motion picture entitled CITIZEN
SOLDIER ("product") starring Dean Stockwell and Billy Gray. Delivery of all
final picture elements was completed on November 27, 1995. The Company has
added the product to its completed film and television product library catalog
for any and all leasing or rental possibilities. According to the terms of the
Agreement the Company retains 60% of any potential net revenue percentage
accruing to the Company from any and all marketing and exploitation of the
product worldwide in perpetuity.
TELEVISION CO-PRODUCTION II
On November 17, 1995, the Company entered into an agreement ("Agreement") with
Pacific Pictures of Los Angeles, CA for the development, co-production and
distribution of a television series of 5 special interest 30-minute productions
entitled TIPS FOR BETTER HEALTH (three shows) and MARKET PLACES OF THE WORLD
(two shows) ("product"). At the time of this filing, the series has been
distributed to independent, low power (LP) and cable television outlets
throughout the United States and has not yet realized any material revenues.
According to the terms of the Agreement the Company retains 5% of any potential
producer's gross revenue percentage accruing to the Company from any and all
marketing and exploitation of the product worldwide in perpetuity.
SPECIALTY VIDEO DISTRIBUTION ARRANGEMENT
On July 23, 1996, the Company entered into a Distribution Agreement
("Agreement") to market and distribute worldwide the 60-minute specialty
instructional video entitled THE INTERNET TOUR GUIDE ("product"). At the time
of this filing, the product was in the marketing and distribution phase and has
not yet realized any material revenue from such efforts. According to the
terms of the arrangement the Company retains 40% of any potential producer's
gross revenue percentage accruing to the Company from any and all marketing and
exploitation of the product worldwide in perpetuity.
CURRENT AND ANTICIPATED DEVELOPMENTS IN THE COMPANY'S BUSINESS
FEATURE FILM CO-PRODUCTION
On February 19, 1997, the Company's wholly-owned subsidiary, World Wide Films
Inc., entered into a Co-Production and Distribution Agreement ("Agreement")
with Best Pictures Inc. of Redondo Beach, California, for the purpose of
producing the feature length motion picture entitled SHATTERED ILLUSIONS
("Product"). The Product, which features Morgan Fairchild, Bruce Weitz, Sy
Richardson, Richard Lynch and Dan Monahan, was completed in February of 1998
and is currently being distributed by the Company. According to the terms of
the Agreement, World Wide Films Inc. retains 50% of any potential producer's
gross revenue percentage accruing to the company from any and all marketing and
exploitation of the Product worldwide, in perpetuity and the Company retains
26% portion of any potential gross distribution revenue percentage occurring to
the Company for any and all marketing and exhibition of the product world wide
in perpetuity.
WEBSITE DEVELOPMENT, CREATION AND IMPLEMENTATION
On January 29, 1998, the Company entered into an agreement ("Agreement") with
Mr. Ralph Johnson of Los Angeles, California and on May 8, 1998, with
Steelelink Communications of San Francisco, CA, respectively, for the
development, creation and implementation of the Company's Internet web site.
The Company's web site went online in June 1998 and was implemented by
management for the purpose of providing a wide variety of information to the
general public and further increasing the marketing reach of its products and
services including its completed film and television product library.
Corporate financing scenarios will also be explored, via the Internet, such as
limited partnerships and stock offerings. The Company's web page currently
links to the U.S. Securities and Exchange Commission Edgar system, E-Trade and
Ameritrade. On September 10, 2000, the Company entered into an agreement with
Mr. Jeffrey D. Brown, of Costa Mesa, California, for the development, creation
and implementation of the Company's second website established specifically for
the marketing and distribution of the feature film entitled AMY. The Company
updates its websites on a perpetual basis taking into account the latest
technologies offered to the Internet. The corporate site's address is
www.wwmpc.com and the movie site's address is amythemovie.com.
SPECIALTY TELEVISION PRODUCTION
On August 28, 1998, the Company's wholly-owned subsidiary, World Wide
Productions Inc., entered into a Co-Production Agreement ("Agreement") with
Snow Lion Interactive Media of Los Angeles, California, for the purpose of
co-producing the television pilot and series entitled CLASSIC CAR ("Product").
The Product, which was designed as a 13-part series, showcases domestic and
foreign production automobiles and is designed for the car enthusiast and
casual viewer. At the time of this filing, the Product was in production.
According to the terms of the Agreement, the Company retains 50% of any
potential producer's gross revenue percentage accruing the company from any and
all marketing and exploitation of the Product worldwide, in perpetuity.
FILM AND TELEVISION PRODUCTION ACQUISITION
On November 22, 1998, the Company entered into a Purchase Agreement
("Agreement") with Snow Lion Interactive Media of Los Angeles to acquire a
variety of film and television product ("Product") from Snow Lion Interactive
Media. Acquired Product consists of four film and television productions of
various lengths and subject matter and additional archival film footage
including a children's television show and three specialty television shows
ranging in length from 30-60 minutes. At the time of this filing, certain of
the Product had been distributed by IQ Entertainment in the foreign markets.
According to the terms of the Agreement, the Company retains 50% of any
potential producer's gross revenue percentage accruing the company from any and
all marketing and exploitation of the Product worldwide, in perpetuity.
On August 20, 1999, the Company entered into a Purchase Agreement ("Agreement")
with Rocinante Productions Inc. of Los Angeles to acquire all of the right,
title and interest in the feature film "What's In A Cookie". According to the
terms of the Agreement, the Company retains 50% of any potential producer's
gross revenue percentage accruing the company from any and all marketing and
exploitation of the Product worldwide, in perpetuity.
On June 20, 2000, the Company entered into a Purchase Agreement with S.E.
Larson Productions of Los Angeles to acquire all of the right, title and
interest in the feature films "Malevolence" and "The Second Coming". According
to the terms of the Agreement, the Company retains 50% of any potential
producer's gross revenue percentage accruing the company from any and all
marketing and exploitation of the Product worldwide, in perpetuity.
BUSINESS ENTERPRISES UNDER CONTEMPLATION BY THE COMPANY
* CORPORATE ACQUISITION NEGOTIATIONS
* For the past six years, the Company has been in the process of reviewing and
analyzing various potential corporate acquisitions and merger possibilities,
certain of which are highly diversified such as Internet technology,
instructional, bio-technology and medical services. Management of the
Company has conducted indepth internal discussions concerning the risks,
requirements, potential and overall viability of associating with a highly
diversified business. In the opinion of the Company's management, so long as
the diversified business maintains a significant level of potential revenue
producing capability, management expertise for sustaining such ongoing
revenue potential, clarity of mission statement and objectives, and cash flow
potential which could be used in the development of the Company's core
business, management of the Company will encourage such mergers and
acquisitions, investigations and possibilities for the express purpose of
increasing, overall, shareholder value of the Company. In addition to the
quantitative and qualitative aspects of the Company's diversification
decisions, the articles, bylaws and corporate charter of the Company provide
for flexibility in the Company's ability to explore and enter into
diversified fields of enterprise.
MARKETING OF THE COMPANY'S PRODUCTS AND SERVICES
The combined experiences of the Company's management and companies in its
distribution network creates a strong and diverse marketing position for the
Company. Marketing outlets and techniques which have been successfully
utilized for the Company's products or services in the past and/or which will
be utilized in the future either domestically or in foreign territories
include: THEATRICAL EXHIBITION, HOME VIDEO SALES, HOME VIDEO RENTAL, BROADCAST
(NETWORK) TELEVISION, SYNDICATED TELEVISION, CABLE TELEVISION, PAY-PER-VIEW,
SATELLITE TRANSMISSION, LOW POWER (LP) REGIONAL TELEVISION, PUBLIC BROADCAST
(PBS) TELEVISION, THEATRICAL ANCILLARY (including airlines, ships at sea,
colleges/universities, military bases and state/federal institutions), AND
ANCILLARY PRODUCT MERCHANDISING (ancillary product merchandising includes
revenues created from non-theatrical or non-broadcast exploitation such as
merchandising of clothing, toys, books and music). All or some of these outlets
are customarily incorporated into a marketing strategy on either a regional,
national, or international exposure basis with quality, genre public appeal,
and rating, all being factors. The Company's network of marketing and
distribution companies includes independent and major industry leaders such as
UNITED ARTISTS INC. (relationship between the Company and the company includes
foreign and domestic theatrical exhibition of feature film product), MIRAMAX
FILMS INC. (relationship between the Company and the company includes domestic
theatrical exhibition of feature film product), MGM/UA INC. (relationship
between the Company and the company includes foreign and domestic theatrical
exhibition of feature film product), AMC THEATER CIRCUIT INC. (relationship
between the Company and company includes domestic theatrical exhibition of
feature film product), MANN THEATERS (relationship between the Company and
company includes domestic theatrical exhibition of feature film product),
CINEPLEX ODEON (relationship between the Company and company includes domestic
theatrical exhibition of feature film product), EDWARDS THEATER CIRCUIT
(relationship between the Company and company includes domestic theatrical
exhibition of feature film product), RGH/LIONS SHARE PICTURES (relationship
between the Company and the company includes foreign theatrical and all
ancillary exhibition of feature film and television product), ALL CHANNEL FILMS
(relationship between the Company and the company includes all ancillary
domestic exhibition of feature film product), CINETRUST ENTERTAINMENT CO.
(relationship between the Company and the company includes foreign and domestic
broadcast, television and home video exhibition of feature film and television
product), TWENTIETH CENTURY FOX FILM CORPORATION (relationship between the
Company and the company includes foreign and domestic theatrical exhibition of
feature film product), SHAPIRO GLICKENHAUS ENTERTAINMENT (relationship between
the Company and the company includes all ancillary foreign and domestic
exhibition of feature film and television product), PARAGON CABLE TELEVISION
(relationship between the Company and the company includes regional cable
broadcast of television product), CENTURY CABLE TELEVISION (relationship
between the Company and the company includes regional cable broadcast of
television product), SWANK MOTION PICTURES INC. (relationship between the
Company and the company includes domestic and international ancillary sales of
feature film product), TERRY STEINER INTERNATIONAL (relationship between the
Company and the company includes domestic and international ancillary sales of
feature film product), and the HANDLEMAN COMPANY (relationship between the
Company and the company includes sell-thru specialty video product). Primary
expected revenue sources include but are not limited to:
THEATRICAL EXPLOITATION - An average of approximately 65% of theatrical revenue
within the industry as a whole is derived from the North American market with
respect to English language films. The balance comes from overseas outlets with
the most significant being Japan, France, Germany, Italy, the United Kingdom
and Australia. The overseas market is very important to the overall gross
revenues of a film and is once again on the incline due to the decrease in the
value of the dollar. Foreign markets fluctuate, but in general can be
responsible for between 35% and 60% of the total box office revenue of the film.
The Company has earned an immaterial amount of revenue at this time from
theatrical exhibition for the feature film products known as PITCH aka
HOLLYWOOD HEARTBREAK; MOVIES, MONEY AND MURDER aka BREAKING UP WITH PAUL; SWEET
JUSTICE; NATURALLY BAD and CITIZEN SOLDIER. (Further exploitation of this
product by the Company will require additional working capital.)
According to Richard Fay of AMC Theater circuit, the second largest exhibitor
of feature length motion picture product in the world, there is currently a
building boom occurring among exhibitors with the number of screens in the
United States beginning to increase in the 1980's by 7.4% to more than 20,300.
It is the Company's opinion that, due to a widely known increase in public
consumption in, and desire for more feature filmed entertainment domestically
along with the increased desire by foreign markets for United States produced
feature film entertainment, this trend of expansion for the number of screens
in both the United States and foreign territories will continue throughout this
decade and well into the next century. The exhibitors or movie theater owners
generally retain an average of 50% of the box office receipts as their fee and
remit the other 50% frequently referred to as "domestic theatrical film
rentals" to the film's distributor. Home video advances for feature films can
range from $10,000 to more than $5,000,000 plus escalators based upon such
variables as box office performance, print and advertising expenditures and the
number of screens secured during theatrical release.
CABLE TV, PAY TV, DBS, AND MATV EXPLOITATION - Pay television has shown
tremendous growth over the past decade. The market leaders, past and present,
have been Home Box Office (HBO), Cinemax, and Showtime/The Movie Channel.
These pay television services have recently exhibited over 300 films per year.
Of the approximately $20 (basic) price per month that a pay television
subscriber pays to a cable company, about $10 is returned to the pay television
service and in turn, $3 to $6 is returned to the distributor. Distributors, on
exclusive multi-picture studio arrangements, have been able to command prices
of $3 to $8 million per film. On a non-exclusive basis, prices range from
$500,000 to $2 million per film where the film has achieved average success.
Certain of the Company's film and/or television product are or have been shown
periodically on cable television throughout the world.
A relatively new area of exhibition is PAY-PER-VIEW. At present, there are
approximately 14 million homes equipped to receive the service and that number
is expected to increase to 30 million by the end of the decade. Prices
generally charged for pay-per-view range from $10 to $50 per show to the
consumer depending on the nature of the entertainment, of which approximately
60% is being returned to the distributor. The expanding growth in this area
will continue to be a major new revenue source for film distribution.
MATV (Master Antenna Television) systems available in North America produce an
additional though relatively small revenue source for films and DBS (Direct
Broadcast Satellite) is beginning to make substantial inroads, primarily
throughout Europe in those countries where residential cable service is not
readily available.
The Company has earned a relatively moderate amount of revenue at this time
from cable television, pay television, DBS and MATV for the feature film
projects entitled PITCH aka HOLLYWOOD HEARTBREAK; MOVIES, MONEY AND MURDER aka
BREAKING UP WITH PAUL; SWEET JUSTICE, NATURALLY BAD, CITIZEN SOLDIER, and
television production specials entitled KJ COUNTRY, specialty videos entitled
THRILLS, CHILLS & SPILLS; THE REAL GODFATHERS; HOLLYWOOD'S HOTTEST STUNTS, and
fifteen public domain classic feature film production prints owned by the
Company. Substantial exploitation of this product by the Company will require
additional working capital.)
NETWORK TELEVISION EXPLOITATION - The broadcast television industry in North
America is dominated by three networks, ABC, CBS and NBC. With the recent
development of Fox Broadcasting in addition, the network's generally license 75
to 150 theatrical films annually and commission approximately 125
made-for-television movies (MOWs) from independent producers such as the
Company. In addition, they broadcast over 100 hours of miniseries. American
and foreign television networks are still very significant buyers of feature
films. In the United States they have become less aggressive than the pay
television companies in their pricing policies. The price range for multiple
broadcast of a film by a major network is between $500,000 and $5 million.
Exceptional films may command substantially higher prices.
The Company has earned a relatively moderate amount of revenue at this time
from network television exploitation for the feature film product known as
PITCH aka HOLLYWOOD HEARTBREAK; MOVIES, MONEY AND MURDER aka BREAKING UP WITH
PAUL; SWEET JUSTICE, NATURALLY BAD, and CITIZEN SOLDIER. (Substantial
exploitation of this product by the Company and/or its associates will require
additional working capital.)
SYNDICATED TELEVISION EXPLOITATION - Revenue from rights granted to individual
independent television stations (of which there are over 250 in North America),
has increased in recent years as the number (over 300 in U.S./Canada) and
financial strength of local stations has increased. These stations usually
described as the "syndication market" and often loosely associated for product
buying purposes now rival the traditional standard (broadcast) television
networks in competing for viewers. As the core of their programming, these
stations use syndicated (after network) television series and feature length
films.
The Company has acquired moderate revenue at this time from syndicated
television exploitation for the television production special known as KJ
COUNTRY. (Substantial exploitation of this product by the Company will require
additional working capital.)
OTHER REVENUE - i.) Non-theatrical revenue results from a film or television
project being made available to airlines, schools, public libraries, community
groups, ships at sea, prisons, and bases for the military forces; and
ii.) Ancillary markets such as the rights to use the images of characters in a
film or television project for merchandising purposes in connection with video
games, toys, t-shirts, posters, and like paraphernalia; and
iii.) Revenue may also be realized from the novelization of the
screenplay/teleplay and other related publications, music used in the film and
television projects sold as soundtracks, records, CDs, cassettes, and
mechanical performance and sheet music publication.
The Company acquires moderate revenues from these sources at this time.
In addition to the above on-going projects, the company is currently engaged in
substantial theatrical and/or ancillary marketing programs involving 4 full
length feature films. Three of these have modest income and profit potential.
They include the feature films entitled, "Ninth Street" produced by Hodcarrier
Films in Los Angeles, California; "What's In a Cookie?" produced by Rocinante
Productions in Los Angeles, California; "Jigsaw" produced by First Motion
Pictures Inc. in Toronto, Ontario, Canada; and "Malevolence" & "The Second
Coming", produced by Sig Larsen Productions Inc. in Los Angeles, California.
The remaining two projects have the prospect of accruing substantial profit for
the company and include the feature length film "Shattered Illusions" produced
by the company's subsidiary, World Wide Films Inc. and the feature film "Amy"
produced by Cascade Films, with U.S. theatrical distribution underway at this
writing.
The Company has participated in a variety of the preceding types of marketing
and distribution arrangements over the past twenty years.
As previously referenced, in order to further expedite and create revenue from
marketing and distribution efforts of the Company and its distributor network,
the Company requires significant additional working capital to more fully and
properly exploit any appropriate markets and media while creating additional
viable desire by the general public to acquire or consume this product. The
Company's future plans include the acquisition of additional working capital
through financial offerings and/or other customarily used methods of capital
acquisition by small and midsize companies, including debt or equity financing
or a combination of both, to acquire certain of this additionally needed
working capital.
THE COMPANY'S COMPETITION IN THE MOTION PICTURE AND TELEVISION INDUSTRY
The motion picture and television industry is highly competitive. Management of
the Company believes that a picture's theatrical success is dependent upon
general public acceptance, marketing technology, advertising and the quality of
the production. The Company's motion picture and television productions
compete with numerous independent and foreign productions as well as
productions produced and distributed by a number of major domestic companies,
many of which are units of conglomerate corporations with assets and resources
substantially greater than the Company's. Management of the Company believes
that in recent years there has been an increase in competition in virtually all
facets of the Company's business. The motion picture industry itself competes
with television and other forms of leisure-time entertainment. The growth of
pay television and the use of home video products may have an effect upon
theater attendance and non-theatrical motion picture distribution. Since the
Company may distribute product to all of these markets, it is not possible to
determine how its business as a whole will be affected by these developments
and accordingly, the resultant impact on the financial statements. Obtaining
motion pictures for distribution and the distribution of motion pictures are
highly competitive endeavors. In the distribution of motion pictures, there is
very active competition to obtain bookings of pictures in theaters and on
television networks and stations throughout the world. A number of major
motion picture companies have acquired motion picture theaters. Such
acquisitions may have an adverse effect on the Company's distribution
operation, endeavors, and its ability to book certain theaters, which, due to
their prestige, size and quality of facilities, are deemed to be especially
desirable for motion picture bookings.
In producing and distributing television programs, competition is intense
because the number of available broadcast hours is limited, other forms of
programming compete to fill such time and there are numerous suppliers of such
programming, including the networks, other motion picture companies and
independent producers.
Management believes that the decision by the networks, individual television
stations and cable systems to license a motion picture is based primarily on
the quality of the picture, its appropriateness for a general television
audience, its box office and critical success and, if the picture has
previously been shown on television, audience response as measured by ratings.
The Company's ability to compete in certain foreign territories with either
film or television product is affected by local restrictions and quotas. In
certain countries, local governments require that a minimum percentage of
locally produced productions be broadcast, thereby further reducing available
time for exhibition of the product.
Recent regulations effecting the Company's competitive position in the motion
picture and television industry, include the United States inability in 1994 to
reach agreement with its major international trading partners to include
audiovisual works, such as television programs and motion pictures, under the
terms of the General Agreement on Trade and Tariffs Treaty ("GATT"). The
failure to include audiovisual works under GATT allows many countries
(including members of the European Union, which consists of Belgium, Denmark,
Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands,
Portugal and the United Kingdom) to continue enforcing quotas that restrict the
amount of American programming which may be aired on television in such
countries. The Council of Europe has adopted a directive requiring all member
states of the European Union to enact laws specifying that broadcasters must
reserve a majority of their transmission time (exclusive of news, sports, games
shows and advertising) for European works. The directive does not itself
constitute law, but must be implemented by appropriate legislation in each
member country. In addition, France requires that original French programming
constitute a required portion of all programming aired on French television.
These quotas generally apply only to television programming and not to
theatrical exhibition of motion pictures, but quotas on the theatrical
exhibition of motion pictures could also be enacted in the future. There can
be no assurance that additional or more restrictive theatrical or television
quotas will not be enacted or that countries with existing quotas will not more
strictly enforce such quotas. Additional or more restrictive quotas or more
stringent enforcement of existing quotas could materially and adversely affect
the business of the Company by limiting its ability to fully exploit its
productions internationally.
Distribution rights to motion picture and television productions specifically
are granted legal protection under the copyright laws of the United States and
most foreign countries. These laws provide substantial civil and criminal
sanctions for unauthorized duplication and exhibition of motion pictures.
Motion pictures, musical works, sound recordings, art work, still photography
and motion picture properties are separate works, subject to copyright under
most copyright laws, including the United States Copyright Act of 1976, as
amended. The Company plans to take appropriate and reasonable measures to
secure, protect and maintain or obtain agreements to secure, protect and
maintain copyright protection for its film and television projects under the
laws of applicable jurisdictions. Management is aware of reports of extensive
unauthorized misappropriation of videocassette rights to motion pictures.
Motion picture piracy is an industry-wide problem. The Motion Picture
Association of America, an industry trade association (the "MPAA"), operates a
piracy hotline and investigates all reports of such piracy. Depending upon the
results of such investigations, appropriate legal action may be brought by the
owner of the rights. Depending upon the extent of the piracy, the Federal
Bureau of Investigation may assist in these investigations and related criminal
prosecutions.
Motion picture piracy is an international as well as a domestic problem.
Motion picture piracy is extensive in many parts of the world, including South
America, Asia (including Korea, China and Taiwan), the countries of the former
Soviet Union and the former Eastern bloc countries. In addition to the MPAA,
the Motion Picture Export Association, the American Film Marketing Association
and the American Film Export Association monitor the progress and efforts made
by various countries to limit or prevent piracy. In the past, these various
trade associations have enacted voluntary embargoes of motion picture exports
to certain countries in order to pressure the governments of those countries to
become more aggressive in preventing motion picture piracy. In addition, the
United States government has publicly considered trade sanctions against
specific countries which do not prevent copyright infringement of United States
produced motion pictures. There can be no assurance that voluntary industry
embargoes or United States government trade sanctions will be enacted. If
enacted, such actions could impact the Company's competitive position in the
industry and the amount of revenue that the Company realizes from the
international distribution of its programs depending upon the countries subject
to such action and the duration of such action. If not enacted or if other
measures are not taken, the motion picture industry (including the Company) may
continue to lose an indeterminate amount of revenues as a result of motion
picture piracy.
Further, the Code and Ratings Administration of the MPAA assigns ratings
indicating age-group suitability for theatrical distribution of motion
pictures. The Company expects to follow, when appropriate, the practice of
submitting applicable film projects for such ratings.
United States television stations and networks, as well as foreign governments,
impose additional restrictions on the content of film and television
productions which may restrict in whole or in part theatrical or television
exhibition in particular territories. Management's current policy is to
distribute film and television productions for which there will be no material
restrictions on exhibition in any major territories or media. This policy
often requires production of "cover" shots or alternate photography and
recording of certain scenes for insertion in versions of a production exhibited
on television or theatrically in certain territories. There can be no
assurance that current and future restrictions on the content of the Company's
productions may not limit or affect the Company's ability to exhibit it in
certain territories and media.
DEPENDENCE ON A FEW MAJOR CUSTOMERS
The Company and its affiliated companies, due to the diversification of
interests as discussed previously, are not dependent on a few major production
successes or customers. Although the Company has and will continue to utilize
the services of a number of experienced and well-known performers and
technicians, the Company's diversification is such that the loss of any one
such professional would not be a material matter that would seriously adversely
affect the Company's business operations.
THE COMPANY'S FUTURE CAPITAL REQUIREMENTS
The Company has currently been negotiating with various broker-dealer
investment banking firms to underwrite public offerings of the Company's
securities in the total amount of approximately ten million dollars. Terms of
the proposed public offerings have not been finalized but it is anticipated by
management that the Company will utilize the net proceeds from such offering in
the following general manner.
$ 500,000 administrative expenses
300,000 development expenses
4,000,000 production expenses
2,250,000 acquisition expenses
2,950,000 marketing expenses
$10,000,000 Total
The Company intends to further resolve and provide for its liquidity needs as
well as provide for the needed capital resources to expand its operations
through private placements on a project-by-project basis in limited partnership
form. To meet the Company's interim liquidity and capital resources needs
while the Company's proposed future public offering and private placement
offerings are being prepared and examined, the Company, in addition to short
term borrowings, is presently contemplating further sales of its unregistered
common equity to accredited investors under one or more exemptions that provide
for the same.
EMPLOYEES
The Company presently has under contract eight officially elected officers of
the Company, one fulltime and two part-time assistants. Certain of the
contracts have provisions that are contingent upon the acquisition of
substantial working capital by the Company. Accordingly, certain of the
officers do not devote their full time to the business of the Company. Full
and parttime employees involved in motion picture and/or television development
production or distribution operations number between approximately 5-60
depending on the number of projects in process, the complexity of a particular
project, and production and/or marketing timetables. The educational seminar
subsidiary only uses personnel when presenting a seminar or similar event at
which time approximately 3 to 5 employees are required.
Item 2. Description of Property.
The Company owns no real properties. The Company's present offices and
facilities, located in both suburban and metropolitan geographic areas,
encompass approximately 5,500 square feet in buildings of good condition.
Locations which are occupied on a month-to-month or yearly lease basis include
the Company's executive offices since 1984 at Seacliff Office Park, 2120 Main
Street, Suite 180, Huntington Beach, California, 92648; and a video production
office at 1119 Colorado Avenue, Santa Monica, California. The Company's
corporate records office at 326 N. Chestnut, Lansing, Michigan, 48933; and a
branch office of the Company at 220 W. Congress, 2nd Floor, Detroit, MI, 48226.
Item 3. Legal Proceedings.
There are no material pending legal proceedings to which the Company is a party
or to which any of its assets are subject. However, the Company is currently in
ongoing negotiations for the reimbursement of lost material which consists of
eight 1" and/or 3/4" and/or digital betacam videotape and 35mm film submaster
copies of feature length motion picture and television productions, owned or
controlled by the Company which were maintained at a post production film and
video facility. The Company's attorneys are preparing litigation and related
processes relative to the lost material in the event the results of the
negotiations are unsatisfactory. The Company would be seeking damages in the
amount of three hundred ninety seven thousand five hundred ($397,500) dollars
for the loss of its "stored material". Further, the co-producers with the
Company's subsidiary, World Wide Films Inc., pertaining to a feature length
film, commenced litigation to attempt to dissolve the co-production agreement
which exists between the Co-Producer and the Subsidiary relative to the
production processes of that feature length film. The Company's management and
attorneys believed the lawsuit to be groundless and therefore, defended the
action on that basis. The matter ultimately resulted in a favorable settlement
for the Company, requiring the plaintiffs to pay all expenses of litigation.
Further, the Company's attorneys are preparing litigation and related processes
to recover funds due and belonging to the Company which were misappropriated by
subagents of the Company encompassing the sale of feature film product in
foreign territories.
Various legal actions, governmental investigations and proceedings and claims
may be instituted or asserted in the future by the Company or against the
Company and/or its subsidiaries including those arising out of alleged
deficiencies in the company's products; governmental or industry regulations
relating to safety, financial services; employment-related matters;
distributor, exhibitor, co-producer, vendor, supplier, or other contractual
relationships; intellectual property rights; product warranties and
environmental matters. Some of the foregoing matters involve or may involve
compensatory, punitive or anti-trust or other treble damage claims in varying
amounts, environmental remediation programs, sanctions or other relief which,
if granted, would require varying expenditures.
Litigation is subject to many uncertainties, and the outcome of individual
litigated matters is not predictable with assurance. The Company does not
reasonably expect, based on its analysis, that any adverse outcome from such
matters would have a material effect on future consolidated financial
statements for a particular year, although such an outcome is possible.
Item 4. Submission of Matters to a Vote to Security Holders.
On December 23, 2000, the Company filed Proxy material with the Securities and
Exchange Commission in accordance with Rule 14(a). The proxy statement
requested shareholders to vote for management nominees to the Company's Board
of Directors. Of special significance, Management's recommendations were
elected; 25,973,348 shares in favor, 200,000 shares opposed, and 26000 shares
abstained. Management also requested shareholders to approve a combination
restructuring of the outstanding stock of the Company (reverse split). The
shareholders approved the restructuring as filed with the Securities and
Exchange Commission in accordance with Rule 14(a), 25,473,348 shares in
favor, 225,000 shares opposed, and 501,000 shares abstained. The
restructuring effectuated in the years 2000 and 2001 has subsequently had a
substantial affect on the company's financial statements in 2003.
Part II
Item 5. Market for Common Equity and Related Stockholder Matters.
The Company's common stock is traded in the Over-the-Counter market and prices
are quoted by National Quotation Bureau, Inc. (NQB) on the NASD Electronic
Bulletin Board.
The following are the high and low Registrant share prices (NASD Electronic
Bulletin Board) for each fiscal quarter of 2004
Prices
Fiscal 2004 High Low
First Quarter .05 .03
Second Quarter .05 .04
Third Quarter .40 .05
Fourth Quarter .18 .10
The following are the high and low Registrant share prices (NASD Electronic
Bulletin Board) for the previous four years.
Prices
High Low
2000 1.00 .02
2001 .60 .02
2002 .15 .04
2003 .05 .03
As of December 31, 2004, the latest practicable date for which information is
available, the Registrant had approximately 1100 holders of record of the
Registrant's common equity.
The Company has not declared nor paid any cash dividends since its
incorporation, nor does it anticipate that it will pay dividends in the
foreseeable future. Any earnings realized by the Company are expected to be
reinvested in the Company's business; however, the declaration and payment of
dividends in the future will be determined by the board of directors in light
of conditions then existing, including, among which are the Company's earnings,
its financial condition and capital requirements (including working capital)
and any arrangements restricting the payment of dividends.
Item 6. Management's Discussion and Analysis or Plan of Operations.
Management's discussion and analysis of financial condition and results of
operation should be read in conjunction with the consolidated financial
statements and related notes.
RESULTS OF OPERATIONS
Year ended December 31, 2003 compared to year ended December 31, 2004
For the year ended December 31, 2003, net loss was $(6,356,858).
For the year ended December 31, 2004, net loss was $(73,173).
The loss in 2003 resulted primarily from the yearend 2003 $6,241,258 writedown
of motion picture and television properties and the $68,500 provision for
doubtful accounts. The inventory writedown resulted from management's lower
valuation of certain of its completed motion pictures included in its acquired
library due to lower future revenue estimates at December 31, 2003. The lower
estimates were based on recent world events, new industry developments, revised
marketing and capital acquisition strategies, and to some extent, new
accounting and governmental standards.
The operating revenues increase of $26,254 (164%) from $16,000 in 2003 to
$42,254 in 2004 resulted from an increase in fee income received for
production and distribution services. Non-operating income for 2004 was
$35,000 relative to the acquisition memorandum (discussed in Note 7 of the
financial statements) and interest of $273.
Excluding the writedown of motion picture and television properties at year end
2003, operating costs and expenses increased $19,230 (15%) from $130,447 in
2003 to $149,677 in 2004. The increase in 2004 was due primarily to a $15,000
stock-based purchase of inventory.
The Company has presented a consolidated balance sheet which includes four
wholly-owned active subsidiaries: World Wide Inc., World Wide Productions Inc.,
World Wide Film & Television Institute, and World Wide Entertainment Inc. The
Company's charter allows it to branch into diversified fields of enterprise
provided management concludes there is a significant potential for profit. It
is the decision of management to continue the major portion of the Company's
operations in the motion picture and television industry, but since the primary
business objective of the Company is to increase the value of its stockholders'
equity, if and when opportunities arise to make profits for the corporation in
a diversified industry, the Company shall investigate and if appropriate,
pursue such opportunities. The motion picture and television segment of the
Company's current or planned operations is the only segment material to the
Company's financial statements or condition.
The Company's motion picture and television participation strategy has
primarily been to expend its resources and to set in place strategic
relationships and contracts in preparation for the continued development,
acquisitions, production and/or marketing/distribution of quality moderate
budget feature length motion pictures, documentaries, docudramas and television
productions. The strategy additionally includes the acquisition of screenplays
and teleplays suitable for development/packaging and completed motion pictures
and television projects for licensing and marketing/distribution opportunities
for all applicable sales territories throughout the world. At such time that
additional working capital is secured, it is the Company's opinion that
sufficient revenue will be generated by the existing film and television
library and future distribution of potential new product, ultimately realizing
its projected return on investment. Arrangements for participation by the
Company in various feature film and television productions for the last
90 months include gross and net revenue participations in the following feature
film and television productions ranging between 2-60% of worldwide revenue
potential including all markets and all media that the particular production is
distributed in.
(1) In 1997 and 1998, post production and distribution preparation of the
documentary entitled THE OUTLAW TRAIL, 100 YEARS REVISITED, in association with
Western Sunset Films, an 8-year old Los Angeles based documentary production
company. (2) In 1998, development and production of the series television
production entitled CLASSIC CAR, in association with SLIM, Inc., a 4-year old
Los Angeles based television production company. (3) In 1999, the acquisition
and preparation for marketing and distribution of the feature film entitled
WHAT'S IN A COOKIE produced by production company Rocinante Productions Inc.
and providing 50% of gross revenue participation to the Company in perpetuity.
(4) In 2000, the acquisition and preparation for marketing and distribution of
the feature films entitled MALEVOLENCE and THE SECOND COMING produced by
production company Sig Larsen Productions Inc. and providing 50% of gross
revenue participation to the Company in perpetuity. Other arrangements include
preparation for Internet marketing and distribution of a feature length film
acquired by the Company entitled CITIZEN SOLDIER originally produced by M&D
Productions, a 7-year old Los Angeles based film production company, purchased
by the Company in 1995 and providing a 60% gross revenue participation to the
Company in perpetuity.
In 1998, all financing for the completion of the feature length production
entitled SHATTERED ILLUSIONS featuring Morgan Fairchild, Bruce Weitz, Richard
Lynch and Dan Monahan was secured and the production was completed. In 1999,
the Company entered into an agreement with representative RGH/Lions Share
Pictures Inc., a 15-year old, Los Angeles based distribution company for the
purpose of conducting all foreign sales arrangements of the film.
In August, 1999, the Company entered into an agreement with Jaguar
Entertainment Inc., a 12-year old Los Angeles based distribution company, for
the purpose of marketing and distributing the feature length motion picture
entitled NINTH STREET featuring Martin Sheen and Isaac Hayes to all domestic
non-theatrical ancillary markets including home video, pay television, network
television, satellite and DVD.
In August, 1999, the Company entered into an agreement with Rocinante
Productions Inc., a 6 year old Los Angeles based production company, for the
purpose of acquiring all of the right, title, and interest in the feature
length motion picture entitled WHAT'S IN A COOKIE? The agreement also
encompassed the acquisition by the Company of all foreign and domestic
distribution rights to the film in perpetuity.
In August and September, 1999, the Company entered into an agreement with GTL
Productions Inc., a 7-year old Omaha based production company for the purpose
of acquiring the domestic and foreign marketing and distribution rights to a
documentary series entitled ON THESE RUINS encompassing the titles of ANARTICA,
THE GALAPOGOS ISLAND and EASTER ISLAND.
In June, 2000, the Company entered into an agreement for the development of an
electronic commerce marketing arrangement with Pix Media Inc., a 2 year old Los
Angeles based Internet company, for the purpose of providing a national and
international e-commerce exploitation venue for various titles within the
Company's completed film and television library.
Further, during fiscal year 2000 and in addition to continuing to exploit
existing film and television projects such as the feature length films entitled
"Shattered Illusions" and "Ninth Street", the Company negotiated and signed a
North American Distribution contract on June 17, 2000, for the theatrical and
ancillary exploitation of a full length feature film entitled "Amy". A domestic
U.S. only, Distribution Agreement was executed with a sub-agent for First
Motion Picture Inc. in Toronto, Ontario, Canada, on March 27, 2000, for the
exploitation of ancillary rights to the full length feature film entitled
"Jigsaw"; and on May 8, 2000, a domestic U.S. Distribution Agreement was
executed with Praxis Entertainment Inc. in Dallas, Texas for the exploitation
of ancillary rights to five full length feature films entitled "Flying
Changes", "Winning Colors", "Shadow Dancer", "Trance", and "Corndog Man".
In February, 2001, the Company commenced theatrical marketingand distribution
of the feature film entitled "Amy" with a Los Angeles premier of the film at
the AMC Century City theaters, the MANN Westwood Cinema, the Loew's Cineplex,
Beverly Center and throughout the Edwards theater circuit in Orange County,
California. During the first and second quarters of 2001, the theatrical
showings of the film continued with a rollout across the United States in
cities including New York, Detroit, Seattle and Palm Springs.
In 2000, 2001, 2002, 2003 and 2004, certain other film and television
participations of the Company included development and packaging arrangements,
the Company's review and in certain cases, advice and counsel on screenplays
and screenplay development scenarios for the subsequent possible packaging and
production and distribution of a particular project. The most significant of
these productions, their production companies, and percentage of future gross
revenue allocated to the Company, were the feature length film entitled
CORKLESBY offered by co-production company Northstar Entertainment Inc., a
4-year old Los Angeles based production company, (50%); and the feature length
film entitled ALONG FOR THE RIDE offered by production company Wittman
Productions Inc., a 4-year old Los Angeles based production company, (50%). In
2000, the Company prepared for production, began distribution and entered
negotiations.
GENERAL
In fiscal 2003 and 2004, the Company continued its involvement in a variety of
film and television projects relative to development, acquisitions, packaging,
production and marketing/distribution activities. The Company also continued to
pursue potential diversified business opportunities that have cash flow
possibilities. Management believes that a film or television production's
economic success is dependent upon several overlapping factors including
general public appetite of a potential genre or performer at the time of
release, domestic and international marketing philosophy, applicable usage of
existing and new and emerging technology, advertising strategy with resultant
penetration and the overall quality of the finished production. The Company's
film and television productions may compete for sales with numerous independent
and foreign productions as well as projects produced and distributed by a
number of major domestic and foreign companies, many of which are units of
conglomerate corporations with assets and resources substantially greater than
the Company's.
Management of the Company believes that in recent years there has been an
increase in competition in virtually all facets of the Company's business.
Specifically, the motion picture industry competes with television and other
forms of leisure-time entertainment. Since the Company may for certain
undetermined markets and products distribute its product to all markets and
media worldwide, it is not possible to determine how its business as a whole
will be affected by these developments and accordingly, the resultant impact on
the financial statements.
Subject to current market conditions, the Company has currently obtained or
arranged for the investment capital to produce and/or distribute a minimum of
four full length feature films or specialty television productions within the
next two years. In addition to the development, financing, production, and
distribution of motion picture and television product, the Company expects to
continue to exploit a portion or portions of the Company's completed film and
television library to a wide variety of distribution outlets including network
television, cable television, satellite broadcast, pay-per-view, and home video
sales. Specifically, live action motion pictures are generally licensed for
broadcast on commercial television following limited or wide release
distribution to theatrical outlets (theaters), home video and pay television.
Licensing to commercial television is generally accomplished pursuant to
agreements which allow a fixed number of telecasts over a prescribed period of
time for a specified license fee. Television license fees vary widely, from
several thousand to millions of dollars depending on the film or television
production, the number of times it may be broadcast, whether it is licensed to
a network or a local station and, with respect to local stations, whether the
agreement provides for prime-time or off-time telecasting. Licensing to
domestic and foreign television stations (syndication) is an important
potential source of revenue for the Company, although in recent years the
prices obtainable for individual film and television product in domestic
syndication have declined as pay television licensing has grown. The growth of
pay television and home video technologies, i.e. DVD (Digital Video Disk) and
HDTV (High Definition television), has had an adverse affect on the fees
obtainable from the licensing of film and television product to networks and
local television stations. Thereby potentially affecting the Company's ability
to generate substantive revenue from this particular venue; however increasing
revenue potential in other areas. Conversely, the Company may derive revenue
from the marketing and sale, either directly or through licensees, of motion
pictures and other filmed or videotaped product on videocassette or Digital
Video Disk for playback on a television set or monitor through the use of
videocassette recorders ("VCRs"), digital video disk recorders and continued
advancements of pay television (cable), satellite broadcast technologies, and
Internet applications domestically and internationally.
The Company currently holds the distribution rights to 314 motion picture and
television titles. The revenue competition relative to existing or pending
exploitation agreements of the Company's film and television product library
and current and future production and distribution of projects is volatile due
to the many technological and innovative changes in the industry and also
changes regularly occurring in the international economy.
Because the commercial potential of individual motion pictures and television
programming varies dramatically, and does not bear any relationship to their
production, acquisition or marketing costs, it is impossible to predict or
project a trend of the Company's income or loss. However, the likelihood of
the Company reporting losses in the short term is increased by the industry's
general method of accounting which requires the early recognition of the entire
loss (through increased amortization) in instances where a motion picture or
television program produced or acquired is not expected to recover the
Company's investment. On the other hand, the profit from a successful film or
television production is deferred and recognized over the entire period that
revenues are generated by that motion picture or television program. This
method of accounting may also result in significant fluctuations in reported
income or loss, particularly on a quarterly basis, depending on the Company's
release of product into the marketplace and overall domestic/international
exploitation schedule and the performance of individual motion pictures or
television programs.
The company's revenue is derived from a variety of sources. Currently the most
impactual of these sources are its fees as packager and/or the managing
production company of various film and television projects (including feature
length motion pictures, documentaries, docudramas, and television productions),
film and television marketing & distribution fees, fees from the licensing
and/or rental of its completed film and television library and related
entertainment industry consulation fees.
A significant portion of the Company's assets was purchased with the issuance
of shares of its common and preferred stock. In the absence of a consistent
market for the securities issued, the value of the film and television product
purchased by the Company was agreed to by the sellers and the purchaser in arms
length transactions in accordance with generally accepted accounting standards
and additionally, internal evaluation and auditing procedures. The films and
television productions in the Company's library have uncertain future revenues
that may be expected to grow or diminish along with all of the ancillary
markets now and in the future that are available for exploitation. In some
cases, individual films or television productions may be timeless and
irreplaceable, in many cases their book value is nil having been amortized
based on revenues received several years ago and the inability to estimate a
market value or reasonable expected revenue. Certain of the inventory product
without book value produce income and in light of new emerging technology the
company expects additional revenue from these sources.
The Company's film and television library consists of newly produced and
historical film and videotaped product and rights thereto purchsed as an
investment and/or exploitated by leasing and/or rental to a wide variety of
domestic and international outlets. Many film and television libraries such as
the Company's that were purchased for investment over a span of many years,
have appreciated considerably in value as a direct result of new and emerging
technologies, revived or newly created public appeal for a certain performer or
genre, unique applications of particular production process (special digital
effects) and standard and newly developed non-theatrical ancillary markets
throughout the world. New technological advances such as DVD (Digital Video
Disk), HDTV (High Definition Television), CD-ROM, DVD ROM, DVD Audio and
Internet applications have enhanced and are greatly expanding resale and
leasing capability of film or television product no longer in the legal or
physical possession of the original producers or distributors.
The film and television inventory of the Company is regularly reviewed and
evaluated on a film-by-film basis by the Company's management. Complicated
accounting principles make it difficult to discern exactly the value of the
Company's film and television library as carried on its balance sheet; the
value may be buried among films currently in release, television productions
currently in broadcast, future films and television productions under
production or development, and the ubiquitous "other". Forecasting any film or
television project's future revenues is a difficult and uncertain art, even for
major film distributors and television syndicators. The accounting principles
and industry practices in these areas leave unusual discretion with the film
and/or television company executives and often result in "unusual" changes in
individual periods. There is no generally accepted final industry consensus for
valuing motion picture and television inventory, film and television projects
in process, distribution/syndication contracts, participation agreements, and
performer and production related contracts. The accounting profession is
continuously reviewing the problem of how to fairly report film inventory on
financial statements. Since the Financial Accounting Standards Board (FASB)
guidelines do not apply directly to the Company's planned exploitation program,
in an effort to conform as closely as possible to the guidelines and in
accordance with management's discussions with the Securities and Exchange
Commission, the Company has periodically from a cost basis of $20,451,441 in
the year 1996, substantially revalued its inventory of film and television
product, resulting in a net realizable value reduction in the stated value on
the balance sheet. Although the Company has on its Board of Directors and
professional staff personnel qualified to estimate the value of its film and
television inventory for internal verification purposes, it retains the
services of independent appraisers who review the Company's film and television
library, ensuring a greater measure of objectivity.
The Company is continually negotiating with various potential lessors of
portions of the film and television library for the implementation of
exploitation possibilities. The results of such negotiations may materially
affect the asset section of the Company's balance sheet. The Company currently
utilizes stae-of-the-art exploitation such as the Internet to expose its
library catalog to the public. Full exploitation of the Company's investment
in its film and television product inventory is dependent on the acquisition of
additional capital. The Company depreciates each film or television program
starting with its specific exploitation by the Company. The Company continues
to occasionally provide inventory properties it considers potentially revenue
producing.
Significant current and potential revenue may accrue to the Company from a
number of contracts and arangements where no tangible asset is involved.
The Company reviews the current pronoucements of the accounting, government and
industry professionals. In that regard, it continually analyzes its accounting
policies to ensure that it stays up-to-date in the presentation of its
financial statements. The Company believes it is not materialy affected by
any current issues at this time.
LIQUIDITY AND CAPITAL RESOURCES
Cash increased $44,076 to $69,172 at December 31, 2004 from $25,096 at December
31, 2003. This increase was due to $24,656 from operating activities, and
$19,420 from financing activities.
At December 31, 2004, the Company had lines of credit with three financial
institutions totaling approximately $110,000 and unused lines of credit
totaling approximately $97,884. The company also has an excellent Dun and
Bradstreet rating resulting in additional substantial credit with suppliers and
vendors which the use of during film production previously has exceeded
$200,000.
In accordance with the Securities and Exchange Commission "Regulation D", and
subject to Rule 144 restrictions, in 2003 the Company issued 860,290 shares of
its common stock for services and no shares for product or cash and 15,500
shares of preferred stock for product received in 2002. In 2004 the Company
issued 10,000 shares of its common stock and no shares of its preferred stock
for cash and 1,500,000 shares of its common stock and no shares of its preferred
stock for product and services acquired by or provided to the Company. No
proceeds from the sale of the corporation's common stock or preferred stock has
ever been used to pay compensation to employees or executives of the Company.
The Company's principal liquidity at the end of 2003 included cash of $25,096
and net accounts receivable of $84,000, and at the end of 2004 included cash of
$69,172 and no accounts receivable. The Company's liquidity position has
remained sufficient to support on-going general administrative expense, pilot
programs, strategic position, and the garnering of contracts, relationships and
film and television product for addition to the Company's library, and the
financing, packaging, development and production of two feature films and
marketing and distribution of specialty television projects and product.
Although the Company during 2003 and 2004 earned revenues, unless the Company
has an influx of additional capital, the Company will not be able to accomplish
its planned objectives and revenue projections. Accordingly, the Company
intends to resolve and provide for its liquidity needs as well as provide for
the needed capital resources to expand its operations through future proposed
public offerings of its common shares to the public. It is anticipated that
offerings may commence within the next 24 months for an amount to be determined
by the Company and its underwriter(s).
To meet the Company's interim liquidity and capital resources needs, the
Company is presently investigating the possibilities of future loans and is
considering future sales of unregistered common equity to accredited investors
under one or more exemptions that provide for same. In the event loans are
obtained, one of the terms may provide that such loans be repaid from the
proceeds derived from the Company's contemplated public offering. A primary use
of public offering proceeds would be the further exploitation of the Company's
current completed product film and television library, participations in
completed films, and the continued development, production and
marketing/distribution of new film and television production opportunities.
The Company expects its marketing operations to expand considerably over the
next three years. The current inventory and contracts acquired by the Company
are now beginning to be more vigorously exploited as the Company's focus moves
from extensive accumulation of product and contracts in an ownership capacity
to capital acquisition specifically for marketing purposes using recently
developed technologies. Although the Company is conservative regarding its
policy concerning the use of borrowed operating capital, it is now in a
position to use its reputation and contacts in the industry to leverage
operating funds profitably.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS AND
MANAGEMENT'S STATEMENT REGARDING INTERIM PERIOD ADJUSTMENTS
The statements which are not historical facts contained in this Form 10-KSB are
"forward looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, that involve risks and uncertainties. The words
"anticipate", "believes", "expect", "intend", "may" or similar expressions used
in this Form 10-KSB as they relate to the Company or its Management are
generally intended to identify such forward looking statements. These risks
and uncertainties contained in this Form 10-KSB include but are not limited to,
product demand and market acceptance risks, the effect of economic conditions
generally and retail/wholesale in the motion picture and television industry
and marketing conditions specifically, the impact of competition, technological
difficulties, capacity and supply constraints or difficulties, new government
regulations, the results of financing efforts, changes in consumer preferences
and trends, the effect of the Company's accounting policies, weather
conditions, acts of God, and other risks detailed in the Company's Security and
Exchange Commission filings. The Company's management has made all the
adjustments relative to the fiscal yearend statements and the interim period
therein, which in the opinion of management are necessary in order to make the
financial statements straight forward, understandable and not misleading.
Item 7. Financial Statements.
F-1
WORLD WIDE MOTION PICTURES CORPORATION
Index to Financial Statements Page
Report of Independent Auditor F-2
Financial Statements:
Consolidated Balance Sheets as of December 31, 2004 and 2003 F-3
Consolidated Statements of Operations for the years ended
December 31, 2004 and 2003 F-4
Consolidated Statements of Stockholders' Equity
for the years ended December 31, 2004 and 2003 F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 2004 and 2003 F-6
Notes to Consolidated Financial Statements F-7
F-2
REPORT OF INDEPENDENT AUDITOR
To the Board of Directors and Stockholders of
World Wide Motion Pictures Corporation
I have audited the accompanying consolidated balance sheets of World Wide
Motion Pictures Corporation and subsidiaries (the "Company") as of December 31,
2004 and 2003 and the related consolidated statements of operations,
stockholders' equity, and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these consolidated
financial statements based on my audits.
I conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. I believe that my
audits provide a reasonable basis for my opinion.
In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of World Wide Motion
Pictures Corporation and subsidiaries as of December 31, 2004 and 2003 and the
results of their operations and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States.
The consolidated balance sheets of the Company as of December 31, 2004 and 2003
include motion picture and television properties (less accumulated
amortization) of $4,289,032 and $4,279,584, respectively. As more fully
described in Notes 2 and 3 to the consolidated financial statements, the
properties are stated at the lower of amortized cost or estimated fair value on
an individual film basis. Estimated fair values of the respective properties
are based on management estimates of future revenues from the respective
properties. Actual future revenues from these properties may differ materially
from such estimates as a result of many factors, including the amount of
capital available to exploit the properties.
/s/ Michael T. Studer CPA P.C.
Michael T. Studer CPA P.C.
Freeport, New York
March 25, 2005
F-3
WORLD WIDE MOTION PICTURES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
December 31,
2004 2003
Assets
Cash $ 69,172 $ 25,096
Accounts receivable, less allowance for doubtful
accounts of $31,500 and $68,500, respectively - 15,500
Motion picture and television properties, less
accumulated amortization and writedowns of
$6,330,466 and $6,324,914, respectively 4,289,032 4,279,584
Equipment, less accumulated depreciation of $10,276
and $5,232, respectively 40,161 45,205
Total assets $4,398,365 $4,365,385
Liabilities and Stockholders' Equity
Liabilities:
Debt $ 29,116 $ 30,833
Accounts payable and accrued liabilities - -
Total liabilities 29,116 30,833
Stockholders' equity:
Preferred stock, $.01 par value; authorized
1,000,000 shares, issued and outstanding
468,217 and 468,217 shares, respectively
(liquidation preference of $4,682) 4,682 4,682
Preferred stock, $10.00 par value; authorized
100,000 shares, issued and outstanding
23,000 and 23,000 shares, respectively
(liquidation preference of $230,000) 230,000 230,000
Common stock, $.001 par value; authorized
100,000,000 shares, issued and outstanding
23,781,752 and 13,034,752 shares, respectively 23,782 13,035
Additional paid-in capital 10,515,795 10,418,672
Retained earnings (deficit) (6,405,010) (6,331,837)
Total stockholders' equity 4,369,249 4,334,552
Total liabilities and stockholders' equity $4,398,365 $4,365,385
See notes to consolidated financial statements.
F-4
WORLD WIDE MOTION PICTURES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Year Ended December 31,
2004 2003
Operating revenues $ 42,254 $ 16,000
Operating costs and expenses:
General and administrative (including stock-based
compensation of $77,370 and $8,603, respectively) 123,581 51,539
Provision for doubtful accounts 15,500 68,500
Depreciation of equipment 5,044 5,044
Amortization of motion picture and television properties 5,552 5,364
Writedown of motion picture and television properties - 6,241,258
Total operating costs and expenses 149,677 6,371,705
Income (loss) from operations (107,423) (6,355,705)
Other income (expense):
Interest income 273 328
Interest expense (1,023) (1,481)
Income resulting from terminated
Acquisition Memorandum 35,000 -
Net loss $ (73,173) $(6,356,858)
Loss per share - basic and diluted $ (0.00) $ (0.51)
Weighted average number of common shares outstanding:
Basic 17,194,127 12,531,720
Diluted 17,959,395 13,296,988
See notes to consolidated financial statements.
F-5
WORLD WIDE MOTION PICTURES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Years Ended December 31, 2004 and 2003
Additional Retained Total
Preferred Stock Common Stock Paid-in Earnings Stockholders'
Shares Amount Shares Amount Capital (Deficit) Equity
Balances,
December 31, 2002
476,217 $224,542 12,174,462 $12,174 $10,420,920 $ 25,021 $10,682,657
Shares issued for services:
- - 860,290 861 7,742 - 8,603
Shares issued for payable:
15,000 10,140 - - (9,990) - 150
Net loss:
- - - - - (6,356,858) (6,356,858)
Balances,
December 31, 2003
491,217 234,682 13,034,752 13,035 10,418,672 (6,331,837) 4,334,552
Shares issued:
- - - 7,737 69,633 - 77,370
for services:
- - 3,087,000 - - - -
for accumulated compensation:
- - 3,150,000 - - - -
for reimbursement:
- - 1,500,000 - - - -
Shares issued in connection with Acquisition Memorandum:
- - 1,500,000 1,500 13,500 - 15,000
Shares issued for motion picture and television properties:
- - 1,500,000 1,500 13,500 - 15,000
Shares issued for cash:
- - 10,000 10 490 - 500
Net loss:
- - - - - (73,173) (73,173)
Balances,
December 31, 2004
491,217 $234,682 23,781,752 $23,782 $10,515,795 $(6,405,010) $4,369,249
See notes to consolidated financial statements.
F-6
WORLD WIDE MOTION PICTURES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Year Ended December 31,
2004 2003
Cash flows from operating activities:
Net income (loss) $ (73,173) $(6,356,858)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Shares issued for services 77,370 8,603
Provision for doubtful accounts receivable 15,500 68,500
Amortization of motion picture and
television properties 5,552 5,364
Writedown of motion picture and
television properties - 6,241,258
Depreciation of equipment 5,044 5,044
Changes in assets and liabilities:
Accounts receivable - 22,478
Other assets - 634
Accounts payable and accrued liabilities - (560)
Net cash provided by (used in) operating activities 30,293 (5,537)
Cash flows from investing activities:
Additions to motion picture and television properties - (17,564)
Net cash provided by (used in) investing activities - (17,564)
Cash flows from financing activities:
Common stock sold for cash 500 -
Shares issued in connection with
Memorandum of Understanding 15,000 -
Net increase (decrease) in debt (1,717) (1,002)
Net cash provided by (used in) financing activities 13,783 (1,002)
Net increase (decrease) in cash 44,076 (24,103)
Cash, beginning of year 25,096 49,199
Cash, end of year $ 69,172 $ 25,096
Supplemental disclosures:
Cash payments made during the year:
Interest $ 1,023 $ 1,481
Income taxes $ - $ -
See notes to consolidated financial statements.
F-7
WORLD WIDE MOTION PICTURES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Years Ended December 31, 2004 and 2003
1. Description of Business
World Wide Motion Pictures Corporation ("WWMPC") was incorporated in Michigan
on December 9, 1980. WWMPC and its subsidiaries (collectively, the "Company")
acquire, produce, finance, develop, and distribute motion picture and
television properties and render consulting services to the entertainment
industry.
2. Summary of Significant Accounting Policies
a. Principles of consolidation
The consolidated financial statements include the accounts of WWMPC and
its four wholly owned subsidiaries. All significant intercompany
balances and transactions are eliminated in consolidation.
b. Cash and cash equivalents
For purposes of the consolidated balance sheets and statements of cash
flows, the Company considers all highly liquid debt instruments purchased
with a maturity of three months or less to be cash equivalents.
c. Revenue recognition
The Company recognizes revenues in accordance with Statement of Position
No. 00-2, "Accounting by Producers or Distributors of Films" (the "SOP")
issued by the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants in June 2000.
d. Motion picture and television properties
Motion picture and television properties are stated at the lower of
amortized cost or estimated fair value on an individual film basis. The
valuation is reviewed on a title-by-title basis and is determined using
management's future revenue and cost estimates and a discounted cash flow
approach.
Costs of acquired libraries and other costs are amortized using the
individual-film-forecast method, whereby costs are amortized and
participation and residual costs are accrued in the proportion that
current year's revenue bears to management's estimate of ultimate revenue
at the beginning of the current year expected to be recognized from the
exploitation, exhibition, or sale of the properties. Additional
amortization is recorded in the amount by which the unamortized costs
exceed the estimated fair value of the motion picture or television
program.
A substantial portion of the Company's properties are completed motion
pictures and television programs purchased from third parties by the
exchange of shares of WWMPC Common Stock and WWMPC Preferred Stock.
e. Equipment
Equipment is stated at cost. Depreciation is provided using the
straight-line method over the estimated useful lives of the respective
assets.
f. Income taxes
Income taxes are accounted for under the assets and liability method.
Deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using enacted tax rates
in effect for the year in which those temporary differences are expected
to be recovered or settled.
g. Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
h. Loss per share
Basic earnings (loss) per share is calculated based on the weighted
average common stock outstanding for the period. Diluted earnings (loss)
per share includes the impact of convertible securities (such as
convertible preferred stock), if dilutive.
i. Stock-based compensation
The Company expenses stock-based compensation at fair value in accordance
with SFAS No. 123, "Accounting for Stock-Based Compensation".
j. Reclassification
Certain prior year information has been reclassified to be comparable to
the current year presentation.
3. Motion Picture and Television Properties
Motion picture and television properties consist of:
December 31,
2004 2003
Library of completed motion
pictures and television productions $ 9,713,549 $ 9,698,549
Screenplays and development costs 905,949 905,949
Totals 10,619,498 10,604,498
Accumulated amortization and writedowns (6,330,466) (6,324,914)
Motion picture and television properties - net $ 4,289,032 $ 4,279,584
Motion picture and television properties (net) changed as follows:
Year Ended December 31,
2004 2003
Balance, beginning of year $ 4,279,584 $10,508,642
Additions 15,000 17,564
Amortization (5,552) (5,364)
Writedowns - (6,241,258)
Balance, end of year $ 4,289,032 $ 4,279,584
The majority of the Company's motion picture and television properties were
acquired from third parties in exchange for shares of WWMPC Common Stock and
WWMPC Preferred Stock.
The motion picture and television properties are stated at the lower of
amortized cost or estimated fair value on an individual film basis. Estimated
fair values of the respective properties are based on management estimates of
future revenues from the respective properties. Actual future revenues from
these properties may differ materially from such estimates as a result of many
factors, including the amount of capital available to exploit the properties.
4. Debt
Debt consists of:
December 31,
2004 2003
Due bank (under $70,000 line of credit),
interest at 8%, due in monthly installments
of principal and interest, secured by personal
guarantees of WWMPC officers $ 12,116 $ 13,833
Due related party, interest at 0%, due on demand
(lender has agreed to waive payment until such
time as the Company has sufficient working
capital to accomplish its objectives) 17,000 17,000
Totals $ 29,116 $ 30,833
At December 31, 2004, the Company had lines of credit with three financial
institutions totaling approximately $110,000, unused lines of credit totaling
approximately $97,884, and unsecured credit available from a variety of
suppliers and vendors which it uses for daily operations.
5. Preferred Stock
Commencing in 1988, WWMPC has issued different series of preferred stock, some
$.01 par value and some $10.00 par value, to acquire motion picture and
television properties and to compensate for services. The preferred stock
ranks senior to the common stock in respect of dividends and liquidation
rights. Shares of preferred stock are nonvoting and are not entitled to
mandatory dividends. Some series of preferred stock are convertible into
common stock; other series are not.
At December 31, 2004, preferred stock consists of:
Number
Number Shares of
Shares of Common Stock
Series Preferred Stock Convertible Into
$.01 Par Value:
89-B 717 2,868
91-C 1,000 4,000
02-D+E 26,000 104,000
94-F+E 51,000 20,400
94-H+I 7,500 30,000
96-J 15,000 30,000
99-K 10,000 0
00-L+M 25,000 0
01-M+O 28,000 0
02-Q 75,000 150,000
02-R 200,000 400,000
02-S 10,000 20,000
02-T 5,000 0
03-U 14,000 0
$.01 par value totals 468,217 761,268
$10.00 Par Value:
88-A 20,000 4,000
01-N+P 2,000 0
03-V 1,000 0
$10.00 par value totals 23,000 4,000
Total preferred stock 491,217 765,268
6. Income Taxes
WWMPC and its subsidiaries file consolidated federal income tax returns.
The Company's effective tax rate differs from the U.S. federal income tax rate
for the following reasons:
Year Ended December 31,
2004 2003
Computed federal income tax (benefit) at 34% $ (24,879) $(2,161,332)
Computed state income tax (benefit), net of federal
tax effect (4,269) (370,885)
Change in valuation allowance 29,148 2,532,217
Provision for (benefit from) income taxes $ - $ -
Management has not determined it to be more likely than not that a deferred tax
asset attributable to the future utilization of net operating loss
carryforwards as of December 31, 2004 will be realized. Accordingly, the
Company has provided a 100% allowance against the deferred tax asset in the
financial statements at December 31, 2004. The Company will continue to review
this valuation allowance and make adjustments as appropriate. The net
operating loss carryforwards are available in varying amounts through year 2024
to offset future taxable income.
Current tax laws limit the amount of loss available to be offset against future
taxable income when a substantial change in ownership occurs. Therefore, the
amount available to offset future taxable income may be limited.
7. Acquisition Memorandum
On September 10, 2004, WWMPC executed a Memorandum of Understanding (the
"Memorandum") with American Pioneer Financial Services Inc. ("APFS"). Later in
September 2004, pursuant to the Memorandum, APFS paid WWMPC $50,000 to be used
for WWMPC legal, accounting, consulting work and miscellaneous expenses,
WWMPC's president sold 1,000,000 unrestricted shares of WWMPC Common Stock to a
trust designated by APFS at a price of $.001 per share, or $1,000, and WWMPC
issued 1,500,000 shares of WWMPC Restricted Common Stock to a trust designated
by APFS. In September 2004, these transactions were recorded as a $15,000
increase in stockholders' equity and a $35,000 increase in accounts payable and
accrued liabilities.
Among other things, the Memorandum provided that the parties would work
together to prepare an Acquisition Agreement whereby, if approved by each
party's Board of Directors and Shareholders, WWMPC would acquire 100% of APFS
in a tax free exchange and the former APFS shareholders would acquire a
majority interest in the resulting entity (approximately 95%) in a "reverse
acquisition". The Memorandum also provided that a "fairness opinion"
respecting the transaction be provided by a certain certified public
accountant. The Memorandum also provided that neither the $50,000 nor the
1,500,000 shares were refundable and that the 1,000,000 shares transferred by
WWMPC's president would be refunded if the acquisition was consummated.
The Memorandum terminated effective December 22, 2004. Accordingly, the
Company has reversed the $35,000 liability and recognized $35,000 income in the
three months ended December 31, 2004.
8. Related Party Transactions
In the year ended December 31, 2004, WWMPC issued 3,150,000 shares of WWMPC
Restricted Common Stock to its president and director for prior accumulated and
current services rendered, issued a total of 610,000 shares of WWMPC Restricted
Common Stock to other Company officers and directors for services rendered and
1,500,000 as reimbursement pursuant to the Acquisition Memorandum. The Company
recorded these issuances as an expense valued at $.01 per share, or $52,600
total.
In the year ended December 31, 2003, WWMPC issued 750,000 restricted shares of
WWMPC Common Stock to a Company vice president for services rendered. The
Company recorded this issuance as an expense valued at $.01 per share, or
$7,500.
9. Commitments and Contingencies
Employment agreement - On October 20, 1983, WWMPC executed an agreement with
its president (hereafter, "Hancock"). The agreement provided that Hancock will
be the chief executive officer of WWMPC until April 1, 2012 (April 1, 2022, if
renewed by Hancock). Under the agreement, Hancock is entitled to an annual
salary of $85,000 per year for 1983 and annual salaries thereafter equal to
$85,000 plus annual increases equal to the greater of (a) $15,000 or (b)
proportionate increases in the Consumer Price Index, plus up to 5% of certain
revenues earned by the Company. Hancock was paid cash compensation totaling
$24,653 and $19,251 in the years ended December 31, 2004 and 2003,
respectively, and has waived all unpaid compensation due him through December
31, 2004.
Lease agreement - The Company leases its executive office in Huntington Beach,
California under a one year lease expiring December 2005 at rentals of $736 per
month. Rent expense was $9,742 and $7,878 for the years ended December 31,
2004 and 2003, respectively.
Item 8. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.
N/A
Part III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance With Section 16(a) of the Exchange Act.
The Board of Directors is divided into three classes as nearly equal in number
as may be, with the term of office of one class expiring each year.
When the number of directors is changed, any newly created directorships or any
decrease in directorships are so apportioned among the classes as to make all
classes as nearly equal in number as possible. When the number of directors is
increased by the Board and any newly created directorships are filled by the
Board, there are no classifications of the additional directors until the next
annual meeting of shareholders. Notwithstanding the foregoing, unless voting
rights thereon are equated to those on the Common Stock, whenever the holders
of any series of Preferred Stock are entitled, voting separately as a class, to
elect directors, the terms of all directors elected by such holders expires at
the next succeeding annual meeting of shareholders. Subject to the foregoing,
at such annual meeting of shareholders the successors to the class of directors
whose term then expires are elected to hold office for a term expiring at the
third succeeding annual meeting.
At each annual meeting of the shareholders for the election of the directors
(or special meeting of shareholders in lieu thereof) at which a quorum is
present, those persons equal in number to the number of director positions for
which a class, series or aggregation of classes and/or series are voting, who
receive the highest number of votes in such class, series or aggregation which
is voting for directors, counting all shareholders voting in person or by proxy
entitled to vote therefore, are elected as directors.
Vacancies that occur prior to the expiration of the then current term (whether
as a result of a newly created director position on the Board or otherwise), if
filled by the Board shall be filled only until the next succeeding annual
meeting. Each of the directors of the Company hold office until the annual
meeting of shareholders at which the class to which the director has been
elected has expired and until his successor is elected and qualified or until
his earlier death, resignation or removal.
The following sets forth the names and ages of all of the Directors and
Executive Officers of the Company, positions held by such person, length of
service, when first elected or appointed and term of office.
DIRECTOR AND/OR
EXECUTIVE OFFICER FIRST ELECTED TERM OF
NAME AND AGE POSITION OR APPOINTED OFFICE
- --------------- --------- ------------ ------
Charles Bailey Chairman of the 1985 2006
Age 72 Board of Directors
Paul D. Hancock President/Chief 1977 Director/2006
Age 49 Executive Officer Officer/2015
and Director
A. Robert Sobolik Exec. Vice President 1981 Director/2006
Age 69 Treasurer and Director Officer/Indefinite
Larry Epstein, Esq. Secretary 1989 Director/2005
Age 56 Director Officer/Indefinite
John R. Woodward Vice President, 1982 Director/2006
Age 54 Film Production and Officer/Indefinite
Distribution Director
George T. Lindsey Vice President, 1982 Director/2006
Age 67 Creative Development Officer/Indefinite
Director
James J.Aitken,C.P.A. Vice President, 1982 Director/2006
Age 64 Finance and Officer/Indefinite
Administration, Director
John D. Foley Director 1990 2005
Age 54
Robert E. Capps, Jr. Director 1990 2005
Age 54
Lewis O'Neil Director 1998 2006
Age 53
Ben Whitfield Jr. Esq. Director 1980 2005
Age 55
Brendan Cahill Director 1986 2006
Age 56
Alex Trebek Director 1987 2005
Age 64
Leroy J. Steele Director 1987 2005
Age 80
Robert Lisnow Director 1998 2006
Age 55
Philip Langwald Director 1985 2006
Age 100
Fred Baron Director 1994 2006
Age 53
Charles Newirth Director 1994 2006
Age 49
Linda Fausey Director 2004 2007
Age 51
Tony Miller Associate V.P. 1999 Indefinite
Age 59 Production
Brian J. Patnoe Associate V.P. 1986 Indefinite
Age 46 Administration
Michael Maghini Associate V.P. 1985 Indefinite
Age 47 Finance
CHARLES C. BAILEY*, age 72 - Mr. Bailey is the Chairman of the Board of the
Company. Mr. Bailey has most recently been the producer of a variety of
Broadway and other theatrical stage productions including the award winning
musical "My One and Only" with Twiggy and Tommy Tune, "Stardust" with Sean
Young, 'Lucky Guy' with Faith Prince, and "Dream" with Lesley Ann Warren and
Margaret Whiting. In addition, he is the Executive Producer of King Street
Productions, a theatrical production company in New York City, which develops
and produces Broadway and regional stage productions. Prior to his
professional Broadway activities, Mr. Bailey was Senior Vice President of
Thompson McKinnon Securities Inc. and previously Vice President of Prudential
Bache Securities (now Prudential Securities), both in New York and two of Wall
Street's leading investment banking firms. As a fully licensed investment
banker with Prudential Bache and Thompson McKinnon, Mr. Bailey prepared a wide
variety of multi-million dollar national municipal bond issues for the capital
markets and was responsible for the underwriting of those and other issues. In
conjunction with Mr. Bailey's investment banking responsibilities, he was the
principal of O.B. Bailey Associates, a financial advisory service. He has been
involved in international business and finance for more than 35 years,
encompassing organizations and enterprises throughout the Orient, Europe, South
America and the Middle East. He is a graduate of Hamilton College in New York
and a member of several professional organizations including past National
Director, International Director of the United States Junior Chamber of
Commerce and Commission Chairman of Junior Chamber International (JCI).
PAUL D. HANCOCK*, age 49 - Mr. Hancock is the President and Chief Executive
Officer of the Company. He is the founder and developer of its film/television
production concept and corporate mission objectives, and has served as
President and Chief Executive Officer since its inception. Prior to and during
his tenure with the corporation, he has functioned as a production and business
advisor to various film financing and production companies and has supervised
the development/packaging and production of a wide variety of moderately
budgeted/cost-controlled feature film and television projects. Mr. Hancock
was responsible for leading one of the first exploratory film finance teams to
the Wall Street capital markets in the late 1970's in order to develop and
encourage motion picture financing by the investment banking community. He was
instrumental in the formulation of entertainment industry relationships
specifically in moderate budget feature film production financing with
companies such as E.F. Hutton & Co.; Kidder, Peabody and Prudential-Bache
Securities. Mr. Hancock has also been a lecturer on various aspects of the
entertainment industry, entrepreneurship and finance at University Graduate
Schools of Business, seminars and conferences, is a frequent radio talk show
guest discussing independent film financing, production and marketing, and is
published in various print media encompassing film and television industry
topics. He has developed and maintained a specialized expertise in and
conducted diverse consulting for motion picture and television financial
packaging, specifically for public securities offerings, private sector
investments and commercial banking. He was previously employed in a variety of
management capacities in the theater and hotel businesses for Farber
Enterprises and Ramada Incorporated. Mr. Hancock attended the Cranbrook
Academies, Eastern Michigan University, and the University of California at Los
Angeles. He belongs to several professional organizations including the
Academy of Television Arts and Sciences.
A. ROBERT SOBOLIK*, age 69 - Mr. Sobolik is the Executive Vice President and
Treasurer of the Company. He has previously held senior corporate positions
including Vice President of Operations for Stratavision Inc. in Southern
California specializing in computer software development. Mr. Sobolik has been
a financial consultant and advisor to various international and U.S. Fortune
500 corporations including HRT Industries; Senior Consultant/financial
services, Saudi Airlines in Saudi Arabia and Senior Project Manager for Sierra
Power Co. and the Texas Legislative Counsel. Prior to his consulting services,
he was Project Manager and Director for computer systems in corporate
development with the U.S. Borax Chemical Corporation and before that supervised
computer operations, computer systems and corporate data processing. He has
also been a Manager and Controller of computer operations for a major Los
Angeles based corporation. Mr. Sobolik has served in corporate management for
more than twenty-five years in business, finance and industry throughout the
western U.S. and abroad.
LARRY EPSTEIN*, age 56 - Mr. Epstein is the Secretary of the Company. He is a
practicing attorney in Southern California He has been a sole practitioner
since 1987 specializing in business, family and entertainment law. He was
previously involved for three years as Executive Vice President and in-house
legal counsel to Cherrystone Pictures, Inc., an independent feature film
production company based in Los Angeles, and in that capacity oversaw all
corporate and administrative fiduciary responsibilities of the company and
orchestrated all documentation for domestic and international co-ventures and
related agreements. Prior to his production company involvement, Mr. Epstein
was a Senior Partner in the Los Angeles-based law firm of Abouaf, Epstein,
Meyers & Gronemeier, specializing in business, tax, and entertainment law. He
is a member of the State Bar of California, San Fernando Valley Bar
Association, Los Angeles County Bar Association and The American Bar
Association. Mr. Epstein has sat for 7 years as special referee and judge for
the State Bar of California and is also currently Judge Pro Tem for the
Superior Court, State of California, County of Los Angeles.
JOHN R. WOODWARD, age 54 - Mr. Woodward is the Vice President for Film
Production of the Company. He is responsible for the technical production
procedures of the film and television projects the Company produces or
co-produces. His career has spanned more than 20 years of both independent and
studio film and television production for numerous companies such as Twentieth
Century Fox, Paramount Pictures, Sony Pictures, Jerry Bruckheimer Films and
Castle Rock Entertainment. Including studio involvement, he was executive in
charge of production for independent production company Melco General,
Incorporated in Los Angeles. He has been a senior member of the production
team for a wide variety of film and television projects, including most
recently "Liar Liar", "Gattaca", "Wild Thing", "Sweet Dreams", "Flashdance",
"The Manitou", "Tales from the Crypt", "Young Guns II", "Universal Soldier",
and the recent Academy Award nominated "Shawshank Redemption", among many
others. Mr. Woodward has additionally been associated with and instrumental in
productions at other major studios such as Warner Brothers, Columbia, Disney,
the C.B.S. Studio Center, Samuel Goldwyn, and Bavaria-Atelier Studio in
Germany. His television commercial background is varied having worked on
commercials for the Sony Corporation, Lincoln- Mercury, and Pepsi. He has
specialized training and expertise in pre-production through post production
coordination and requirements, and film production budget control. He holds a
Bachelor of Arts degree in Visual Arts, a Masters degree in Cinema Production,
and is a member of the Director's Guild of America.
GEORGE T. LINDSEY, age 67 - Mr. Lindsey is the Vice President of Creative
Development of the Company. He is responsible, with the production committee,
for the selection and development of film projects for the Company. His film
career spans over twenty-five years of literary and production film work. He
has most recently completed writing feature film projects for New West Films
Corp. He has been associated in the past with film production houses and
television stations, including service as an executive producer and director on
the staff of the National Broadcasting Company and its affiliate W.R.C.-T.V.
and W.I.T.F. Formerly, as President of a motion picture production company,
he produced documentaries and docudramas throughout Europe, Africa, and South
America. He has worked with such talent as Eli Wallach, Henry Fonda, Raymond
Massey, Leonard Nimoy, Brock Peters and Lorne Green. Mr. Lindsey has done
in-depth work in the field of pre-production of motion picture projects and has
earned over eighteen national film awards for film and television productions,
including regional emmy awards, local emmy awards, the N.E.T. award for
excellence in film production along with gold, silver and bronze medals in film
production from the New York International Film Festival. He is a member of
the Writer's Guild of America, West, Inc. and the Director's Guild of America.
JAMES J. AITKEN, age 64 - Mr. Aitken is the Vice President of Finance and
Administration of the Company. He is responsible for the overall business
management and administrative systems of the Company. He is a Certified Public
Accountant and was formerly a Partner and Regional Manager for Ernst & Young, a
national and international public accounting firm. His experience while
engaged in public accounting encompassed a wide variety of clients including
many companies in the entertainment industry including television, radio,
cablevision and professional sports teams. Mr. Aitken has led many conferences
and advanced workshops in professional management and accounting sponsored by
Ernst & Young. He has also been an instructor and professor of business and
finance and accounting courses at the University level. He is a member of the
American Institute of Certified Public Accountants and several other
professional societies and organizations related to business management and
finance.
JOHN D. FOLEY, age 54 - Mr. Foley is currently President, Worldwide
Distribution for October Films and was previously Executive Vice President of
City Cinemas, a theatrical exhibition corporation in New York, and Executive
Vice President of Miramax Films overseeing all theatrical acquisitions and
distribution. Prior to Miramax, he was President of MGM/UA and was recruited
by MGM in 1987 as Vice President/Sales where he managed domestic sales in the
Southern and Western divisions of the United States. In 1989 he was named
President, managing all North American activities for the company. Certain
recent Miramax and MGM production successes he was instrumental in include
"Pulp Fiction", "Benny and Joon" and "Untamed Heart". Other past productions
he has been instrumental in include "Rainman", "A Fish Called Wanda", and
"Moonstruck". Mr. Foley began his film career in 1975 on the East Coast with
Columbia Pictures. He held various management positions with Columbia during
his tenure with the company, encompassing regional sales throughout the midwest
and southern United States. In 1986, DeLaurentis Entertainment Co. recruited
him as Vice President of Distribution to establish the distribution operations
for the company's opening in 1986.
ROBERT E. CAPPS, JR., age 55 - Mr. Capps, most recently Executive Vice
President-Film for United Artists, has been involved in the marketing,
distribution and exhibition of feature motion pictures for more than 25 years.
Formerly, Senior Vice President and General Sales Manager for Tri Star
Pictures, he has been instrumental in the development of new film marketing
technology strategies for the motion picture industry, primarily the theatrical
market. He has been directly involved in the building and expansion of
distribution departments for companies such as Columbia Pictures, Paramount
Pictures, and MGM. Mr. Capps was an instrumental force over the span of his
career in the distribution and exhibition of a wide variety of both major and
independent feature films including such classic film productions as the
"Terminator" films, "Legend of Boggy Creek", and "Where the Red Fern Grows".
He has also been a consultant to such major domestic and international
exhibitor chains as Mann, Loew's and AMC.
LEWIS O'NEIL, age 53 - Mr. O'Neil was most recently Executive Vice President,
Domestic Distribution for Polygram Filmed Entertainment overseeing all domestic
theatrical exhibition of Polygram Films. Prior to Polygram he was Senior Vice
President, domestic theatrical distribution for Twentieth Century Fox Film
Corporation overseeing all theatrical exhibition of Fox Film throughout the
western United States. Prior to his tenure with Fox, he was Executive Vice
President of Metropolitan Theaters, a regional exhibition chain in the
southwest. Certain major feature films Mr. ONeil has been instrumental in the
distribution of include "Rocky", "Ghostbusters", "Dances with Wolves", "Star
Wars Trilogy" and "Independence Day". He has also been a consultant in the area
of theatrical exhibition and distribution to various independent producers,
production companies and industry professionals including Michael Ovitz
(Artists Management Group), the new entertainment website iAM.com, and the
recent advance in theatrical film projection known as Maxivision.
BENJAMIN WHITFIELD, JR., ESQ., age 55 - Mr. Whitfield is presently a practicing
civil attorney with an emphasis in the field of entertainment law. He has
served as United States Assistant District Attorney and as an Assistant
Attorney General. Mr. Whitfield is a member of the law firm of Wright, Reed &
Whitfield, P.C., one of the entertainment law firms serving the corporation.
BRENDAN CAHILL, age 58 - Mr. Cahill was most recently Vice President for Music
and Creative Affairs for Universal Studios. Prior to his employment with
Universal, he was Vice President in charge of creative affairs and musical
director at Columbia Pictures and is currently a development and production
consultant in the film/television industry and production consultant to Michael
Phillips and Michael Douglas (Michael Douglas Productions). He has in the past
been a personal advisor for production and musical affairs to Steven Spielberg
(Amblin Light Entertainment), having been involved with such film projects as
BACK TO THE FUTURE, CLOSE ENCOUNTERS OF THE THIRD KIND and E.T., THE EXTRA
TERRESTRIAL. In the 1960's, Mr. Cahill was credited with being integral in the
success of such musical groups as the Birds, Jefferson Starship, and the
Monkees, and was executive producer on the successfully syndicated television
show, THE PARTRIDGE FAMILY for ABC. Other feature film and television
production credits for Mr. Cahill include CALIFORNIA SUITE, THE BREAKFAST CLUB,
OUT OF AFRICA, MIAMI VICE, and the Emmy Award winning MURDER SHE WROTE.
ALEX TREBEK, age 64 - Mr. Trebek has been involved in the television industry
for over twenty-five years as a producer, host and innovator of a wide variety
of entertainment shows. He has produced and hosted the internationally
successful game-show JEOPARDY which has been the second highest rated
television show in syndication. Mr. Trebek was also the host of the successful
television game show CLASSIC CONCENTRATION. As a television media executive,
he is currently developing other projects for television and film as well. Mr.
Trebek, originally from Sudbury, Ontario, Canada, worked for the Canadian
broadcasting company (C.B.C.) throughout the 1960's and early 70's before
relocating to the United States in 1973.
LEROY J. STEELE, age 82 - Mr. Steele's background encompasses over 40 years as
an executive with various corporations within the United States and in Canada,
including Executive Vice President and Chief Operating Officer for Bullock's
company in Los Angeles, Vice President and General Manager for the Boston
stores on the Eastern seaboard, and Chairman of the Board/Chief Executive
Officer for A.J. Freeman Ltd. in Ottawa, Canada. Mr. Steele has also been a
business management consultant and advisor for many years.
ROBERT LISNOW, age 55 - Mr. Lisnow is currently a practicing attorney in
Southern California, with an emphasis in business transactional/entertainment
law and litigation. He was formerly a partner in the law firm of Karpel,
Karpel & Lisnow located in Los Angeles specializing in business, entertainment
and real estate litigation. Mr. Lisnow's business and corporate background
also includes past managing director of Forstmann & Rayfield (formerly
Forstmann & Co.), a venture capital/investment banking firm overseeing a
multi-million dollar portfolio of various industries throughout the world
including high technology, global communications and environmental sciences.
Prior to Forstmann & Co., Mr. Lisnow was a principal in the artist management
firm of Mitchell, Lisnow Business Management, Inc. overseeing the careers of a
wide variety of theatrical and commercial performers such as television and
screen artists James Best, Tim Reid and Frank Bonner. More recently, Mr.
Lisnow has acted in the capacity of Managing Member/Counsel of Intermedia Video
Products (LLC), a VSDA (Video Sales Dealers Association), MPAA (Motion Picture
Association of America) approved supplier of videotape, video equipment and
video services with major film and television industry clients.
PHILIP LANGWALD, age 100 - Mr. Langwald is Chairman Emeritus of the Board of
Directors of the Company and is currently a retired municipal administrative
executive. He has been involved with land development and appraising for real
estate and managing the construction and development of shopping and
residential areas in the midwestern United States. He was formerly with the
United States Department of Labor and Internal Revenue Audit Division.
FRED BARON, age 53 - Mr. Baron is currently Senior Production Executive for
Twentieth Century Fox Film Corp. where he is responsible for all phases of
production oversight for all feature film production at the studio. Prior to
his studio involvement, he was production representative at HBO, overseeing a
wide range of features and M-O-Ws. Mr. Baron has also acted as co-producer on
television productions such as TALES FROM THE CRYPT and production coordinator
and production supervisor on a wide variety of independent motion
picture/television production.
CHARLES NEWIRTH, age 49 - Mr. Newirth is currently an established independent
producer and executive producer in the motion picture industry and has been
responsible for the production of such major motion pictures as the recently
released "Patch Adams" with Robin Williams, "City of Angels" with Meg Ryan and
Nicolas Cage, the Academy Award winning and highly successful "Forrest Gump"
with Tom Hanks, as well as "Bugsy" with Warren Beatty, "Toys" with Robin
Williams, and "The American President" with Michael Douglas. His career in
feature film production has also included production manager for such films as
"Pretty in Pink", "Robocop", and "The Abyss". In addition, he has worked in
other diverse senior production positions as production supervisor, production
coordinator, and location manager.
LINDA FAUSEY, age 51 - Ms. Fausey is a practicing attorney specializing in
regulatory law, health care and insurance, and is also a registered lobbyist.
Formerly, Ms. Fausey worked with various legislative committees and the Speaker
of the House Research Staff.
TONY MILLER, age 59 - Mr. Miller is a veteran of more than 25 years in the
motion picture industry. His job responsibilities within the industry have
included co-production, editing and post production supervision for a wide
variety of feature film and television projects. He has acted in the capacity
of editor of over 40 feature films and 50 television productions. He has also
produced 10 feature films, 180 television commercials, a variety of music
videos, as well as directed and edited electronic video press kits. Mr. Miller
was in charge of production for the Cinamerica Satellite Network and The
Professionals Group, both located in Southern California, supervising a variety
of different types of film and video productions. He has also served in
numerous production capacities for New World Pictures, United Artists, MGM, A&M
Records, CBS and Universal Pictures. He was the executive producer, editor and
post production supervisor for the Witchcraft series of feature films, the most
successful direct to video film series ever produced. He has won numerous
awards including the Houston World Fest Gold Award for best dramatic picture,
as co-producer and editor of the feature film DREAMRIDER with James Earl Jones.
Mr. Miller is a graduate of the University of California, Los Angeles and was
the head of the film and television department at the prestigious Harvard
Westlake School in No. Hollywood, California.
BRIAN J. PATNOE, age 46 - Mr. Patnoe's tenure with the corporation began in
1987 as Executive Assistant in the areas of finance and administration. In
1989, he was elevated to the post of Associate Vice President, Administration,
working as key liaison between senior officers of the corporation and members
of the Board of Directors. His responsibilities also included monitoring and
maintaining WWMPC's corporate due diligence data information, finance material
information, and monitoring basic stockholder relations. He has worked closely
with senior management of the company in the negotiations of co-financing
production scenarios with domestic and foreign companies, consortiums, and
independent financiers. Mr. Patnoe has also been associated with Siemens and
Motorola ISG as national accounts manager and McDonnell Douglas Corporation as
a configuration management analyst and product definition specialist; both
senior technical and analytical corporate administrative positions assuring
quality control and infrastructure communications. He maintains a degree in
Business Administration and Economics from California State University,
Fullerton and a Masters in Business Administration from the University of
Southern California.
MICHAEL MAGHINI, age 47 - Mr. Maghini was most recently Vice President with
Eden Financial Group, a Wall Street investment banking firm providing wholesale
financial products to associate brokerage firms around the country, as well as
a Managing Partner and Vice President with Famco, Inc. a real estate holding
company in New York City. Mr. Maghini's well established financial experience,
including his executive association for investment with the Putnam's Golden
Scale Council, and his membership in the Million Dollar Round Table Club,
complement his past investment management and development training with Paine
Webber. Prior to Paine Webber, he held an investment executive position with
Thompson McKinnon Securities. Mr. Maghini has helped develop the investment
banking division of a major New York financial firm and has also managed a
variety of many diverse institutional and, private investment portfolios. He
is a graduate of Southern Connecticut University where he received his Bachelor
of Science Degree in Political Science and Economics.
* (Indicates members of the Executive Committee)
FAMILY RELATIONSHIPS
There are no family relationships among directors, executive officers or
persons chosen by the Company to be nominated as a director or appointed as an
executive officer of the Company or any of its affiliated subsidiaries.
Item 10. Executive Compensation.
The summary compensation table below sets forth certain information for all
compensation, including: annual, long term and stock compensation paid for
services rendered to the Company in all capacities for the fiscal years ended
December 31, 2004, 2003, and 2002.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Awards Payouts
Name and Securities Underlying
Principal Other Annual Stock Restricted Options/LTIP All Other
Position Year Salary Bonus Compensation Awards Awards Payouts Compensation
(a) (b) ($)(c) ($)(d) ($)(e) ($)(f) SARs(#)(g) ($)(h) ($)(i)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- --------------------- ---- ------- ---- ---- ---- --------- ---- ----
Charles Bailey** 2004 0 0 0 0 50,000 0 0
Chairman of the Board 2003 0 0 0 0 0 0 0
2002 0 0 0 0 25,000 0 0
Paul D. Hancock*/** 2004 95,000 0 0 0 3,150,000 0 0
President, CEO *** 2003 85,000 0 0 0 1,080,000 0 0
2002 70,000 0 0 0 80,000 0 0
A. Robert Sobolik*/** 2004 0 0 0 0 0 0 0
Exec. V.P./Treasurer 2003 0 0 0 0 0 0 0
2002 0 0 0 0 40,000 0 0
Larry Epstein*/** 2004 0 0 0 0 100,000 0 0
Secretary 2003 0 0 0 0 0 0 0
2002 0 0 0 0 50,000 0 0
John R. Woodward*/** 2004 0 0 0 0 0 0 0
Vice President 2003 0 0 0 0 0 0 0
2002 0 0 0 0 0 0 0
George T. Lindsey*/** 2004 0 0 0 0 0 0 0
Vice President 2003 0 0 0 0 0 0 0
2002 0 0 0 0 0 0 0
James J. Aitken*/** 2004 0 0 0 0 100,000 0 0
Vice President 2003 0 0 0 0 0 0 0
2002 0 0 0 0 35,000 0 0
John R. Foley** 2004 0 0 0 0 0 0 0
Director 2003 0 0 0 0 0 0 0
2002 0 0 0 0 0 0 0
Robert E. Capps Jr.** 2004 0 0 0 0 200,000 0 0
Director 2003 0 0 0 0 0 0 0
2002 0 0 0 0 0 0 0
Lewis O'Neil 2004 0 0 0 0 0 0 0
Director 2003 0 0 0 0 0 0 0
2002 0 0 0 0 0 0 0
Benjamin Whitfield Jr.**2004 0 0 0 0 10,000 0 0
Director 2003 0 0 0 0 5,000 0 0
2002 0 0 0 0 25,000 0 0
Brendan Cahill** 2004 0 0 0 0 0 0 0
Director 2003 0 0 0 0 4,000 0 0
2002 0 0 0 0 20,000 0 0
Alex Trebek** 2004 0 0 0 0 4,000 0 0
Director 2003 0 0 0 0 4,000 0 0
2002 0 0 0 0 20,000 0 0
LeRoy J. Steele** 2004 0 0 0 0 0 0 0
Director 2003 0 0 0 0 0 0 0
2002 0 0 0 0 0 0 0
Robert Lisnow 2004 0 0 0 0 5,000 0 0
Director 2003 0 0 0 0 45,000 0 0
2002 0 0 0 0 0,000 0 0
Philip Langwald** 2004 0 0 0 0 0 0 0
Director 2003 0 0 0 0 0 0 0
2002 0 0 0 0 0 0 0
Fred Baron** 2004 0 0 0 0 0 0 0
Director 2003 0 0 0 0 0 0 0
2002 0 0 0 0 0 0 0
Charles Newirth** 2004 0 0 0 0 0 0 0
Director 2003 0 0 0 0 0 0 0
2002 0 0 0 0 0 0 0
Linda Fausey 2004 0 0 0 0 50,000 0 0
Director ---- - - - - - - -
---- - - - - - - -
Tony Miller 2004 0 0 0 0 0 0 0
Associate V.P. 2003 0 0 0 0 0 0 0
2002 0 0 0 0 0 0 0
Brian J. Patnoe* 2004 0 0 0 0 100,000 0 0
Associate V.P. 2003 0 0 0 0 750,000 0 0
2002 0 0 0 0 100,000 0 0
Michael Maghini* 2004 0 0 0 0 0 0 0
Associate V.P. 2003 0 0 0 0 0 0 0
2002 0 0 0 0 10,000 0 0
* Indicates - Although many of the corporate officers have entered into
contractual agreements with the Company, certain of the contract's
provisions are contingent upon the acquisition of substantial working capital
by the Company. Accordingly, certain of the officers do not devote their
full-time to the business of the Company.
** Indicates - Certain members of the Board of Directors who are not officers
of the Company receive a mutually agreeable amount of restricted Rule 144
common stock of the Company for each board meeting that they attend and are
also periodically reimbursed for the travel expenses incurred, if any, to
attend such meetings.
*** Indicates - The President and Chief Executive Officer has waived
accumulated back salary. Also, he has agreed to waive his current salary
indefinitely as long as the Company does not have sufficient funds on hand. In
return he has agreed to also accept common stock, or preferred convertible
stock of the Company or mutually agreeable stock options in lieu of cash, at
the Company's discretion, except in the event of a merger or takeover of the
Company in which he descents.
ARRANGEMENTS WITH DIRECTORS
As indicated above, there are certain arrangements or understandings regarding
compensation for services provided by a director including additional
consideration payable for special assignments. Each of the directors and/or
executive officers of the Company has an understanding with the Company
regarding compensation by the Company as an officer of the Company either in
terms of duties, which will be rendered on behalf of the Company or in their
capacity as an independent associate or as an associate of one of the Company's
wholly-owned subsidiaries.
The Company has evaluated the experience and reputation of its directors and
allocated compensation of common stock accordingly. Executive officers of the
Company maintain various terms and conditions relative to compensation in their
specific employment contracts.
The following sets forth the security ownership of Management of the Company
and any holders of the Company's common stock known to own 5% or more of the
Company's issued and outstanding common stock. (in alphabetical order)
NAME OF AMOUNT & NATURE
TITLE BENEFICIAL OWNERSHIP BENEFICIAL PERCENT
OF CLASS OFFICERS AND DIRECTORS OWNERSHIP OF CLASS
- --------- ---------------------- ------------- --------
Common James J. Aitken 175,000 .74%
Vice President, Fin. & Adm. Sole Ownership
Corporate Director Sole Voting Power
12199 55th Ave.
Remus, MI 49340
Common Charles C. Bailey 144,000 .48%
Chairman of the Board Sole Ownership
42 King Street Sole Voting Power
New York, NY 10014
Common Fred Baron 20,000 .08%
Corporate Director Sole Ownership
531 N. Lillian Way Sole Voting Power
Los Angeles, CA 90004
Common Brendan Cahill 50,000 .21%
Corporate Director Sole Ownership
13816 Bora Bora Way Sole Voting Power
Marina Del Rey, Ca 90292
Common Robert E. Capps, Jr. 201,700 .85%
Corporate Director Sole Ownership
c/o 2120 Main St., Suite 180 Sole Voting Power
Huntington Beach, CA 92648
Common Larry Epstein, Esq. 305,333 1.28%
Secretary Sole Ownership
Corporate Director Sole Voting Power
11733 Baird Ave.
Northridge, CA 91326
Common Linda Fausey 50,000 .21%
Corporate Director Sole Ownership
328 N. Walnut Sole Voting Power
Lansing, MI 48933
Common John D. Foley 60,000 .25%
Corporate Director Sole Ownership
c/o 2120 Main St., Suite 180 Sole Voting Power
Huntington Beach, CA 92648
Common Paul D. Hancock 5,613,384 23.60%
President/C.E.O. Sole Ownership
Corporate Director Sole Voting Power
124 8th Street, #8
Huntington Beach, CA 92648
Preferred Paul D. Hancock 250,000
President/C.E.O. Sole Ownership
Corporate Director Sole Voting Power
124 8th Street, #8
Huntington Beach, CA 92648
Common Philip Langwald 108,333 .46%
Chairman Emeritus/ Sole Ownership
Corporate Director Sole Voting Power
16032 Lemond Hills Trail #173
Del Ray Beach, FL 33446
Preferred Philip Langwald 2,500
Chairman Emeritus/Corporate Director Sole Ownership
16032 Lemond Hills Trail #173 Sole Voting Power
Del Ray Beach, FL 33446
Common George T. Lindsey 138,550 .58%
Vice President, Creative Sole Ownership
Development/Corporate Director Sole Voting Power
3218 S. 101st St.
Omaha, NE 68124
Common Robert Lisnow 115,000 .48%
Corporate Director Sole Ownership
10866 Wilshire Blvd. Sole Voting Power
Los Angeles, CA 90024
Common Michael Maghini 56,750 .24%
Associate Vice President, Finance Sole Ownership
48 Stonewall Lane Sole Voting Power
Madison, CT 06443-2248
Common Tony Miller 22,000 .09%
Associate Vice President, Production Sole Ownership
14014 Hamlin Sole Voting Power
Van Nuys, CA 91401
Common Charles Newirth 25,000 .11%
Corporate Director Sole Ownership
c/o 2120 Main St., Suite 180 Sole Voting Power
Huntington Beach, CA 92648
Common Lewis O'Neil 9,800 .04%
Corporate Director Sole Ownership
c/o 2120 Main St., Suite 180 Sole Voting Power
Huntington Beach, CA 92648
Common Brian J. Patnoe 1,236,300 5.20%
Associate Vice President, Sole Ownership
Administration Sole Voting Power
c/o 2120 Main St., Suite 180
Huntington Beach, CA 92648
Preferred Brian J. Patnoe 55,000
Associate Vice President, Sole Ownership
Administration Sole Voting Power
c/o 2120 Main St., Suite 180
Huntington Beach, CA 92648
Common A. Robert Sobolik 80,400 .34%
Executive Vice President/Treasurer Sole Ownership
Corporate Director Sole Voting Power
132 Ascot Place
Grass Valley, CA 95940
Common LeRoy J. Steele 10,000 .04%
Corporate Director Sole Ownership
1977 Gramercy Place Sole Voting Power
Los Angeles, CA 90068
Common Alex Trebek 70,000 .29%
Corporate Director Sole Ownership
c/o 2120 Main St., Ste 180 Sole Voting Power
Huntington Beach, CA 92648
Common Benjamin Whitfield, Jr., Esq 25,800 .11%
Corporate Director Sole Ownership
9000 E. Jefferson Sole Voting Power
Detroit, MI 48214
Common John R. Woodward 235,014 .99%
Vice President, Film Production Sole Ownership
Corporate Director Sole Voting Power
850 Alabama Dr., Rte. 2
Lone Pine, CA 93545
OFFICERS & DIRECTORS AS A GROUP 8,722,364 36.68%
OWNERS OF 5% OR MORE OF THE COMPANY'S COMMON EQUITY
Common Paul D. Hancock 5,613,384 23.60%
President/C.E.O. Sole Ownership
Corporate Director Sole Voting Power
124 8th St., #8
Huntington Beach, CA 92648
Common Brian J. Patnoe 1,236,300 5.20%
Associate Vice President, Sole Ownership
Administration Sole Voting Power
c/o 2120 Main St., Suite 180
Huntington Beach, CA 92648
Common Richard W. Linford Trustee 2,500,000 10.51%
c/o 2120 Main St., Suite 180
Huntington Beach, CA 92648
The foregoing totals are based upon Twenty-Three Million Seven Hundred
Eighty-One Thousand Seven Hundred Fifty-Two (23,781,752) common shares of the
Company issued and outstanding stock as of December 31, 2004.
To the best knowledge and belief of the Company, there are no arrangements,
understandings, or agreements relative to the disposition of the Company's
securities, the operation of which would at a subsequent date result in a
change in control of the Company. Notwithstanding the foregoing, the company
is aggressively pursuing various opportunities for acquisition or merger, which
if consummated, could result in a change in control.
Item 12. Certain Relationships and Related Transactions.
As of this filing, there have been and are presently no transactions to which
the Company was or is to be a party in which any of the directors, executive
officers or immediate family members thereof have been a party to. It is
contemplated, however, that in certain instances directors, executive officers,
or immediate family members thereof will be a party to future transactions.
Item 13. Exhibits and Reports on Form 8-K.
N/A
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
WORLD WIDE MOTION PICTURES CORPORATION
March 26, 2005 /s/ A. Robert Sobolik
A. Robert Sobolik
Executive Vice President/Treasurer
WORLD WIDE MOTION PICTURES CORPORATION
A Michigan corporation
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual Report of World Wide Motion Pictures Corporation
(the "Company") on Form 10-KSB for the year ended December 31, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, A. Robert Sobolik, Executive Vice President and Treasurer of the Company,
certify to the best of our knowledge, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/ A. Robert Sobolik
----------------------------------
A. Robert Sobolik
March 26, 2005 Executive Vice President/Treasurer
CERTIFICATION OF CEO
WORLD WIDE MOTION PICTURES CORPORATION
A Michigan corporation
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual Report of World Wide Motion Pictures Corporation
(the "Company") on Form 10-KSB for the year ended December 31, 2003, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Paul D. Hancock, President and Chief Executive Officer of the Company,
certify to the best of our knowledge, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/ Paul D. Hancock
-----------------------------------
Paul D. Hancock,
President and Chief Executive Officer
March 27, 2005
WORLD WIDE MOTION PICTURES CORPORATION
A Michigan corporation
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
Section 302 Certification
I, Paul D. Hancock, certify that;
(1) I have reviewed this annual report on Form10-KSB of World Wide
Motion Pictures Corporation, a Michigan corporation (the "registrant");
(2) Based on my knowledge, this annual report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this annual report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
(4) The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing
the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability
to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
(6) The registrant's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other facts that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: March 27, 2005 /s/ Paul D. Hancock
_______________________________
Paul D. Hancock
President and Chief Executive Officer
WORLD WIDE MOTION PICTURES CORPORATION
A Michigan corporation
CERTIFICATION OF EXECUTIVE VICE PRESIDENT/TREASURER
Section 302 Certification
I, A. Robert Sobolik, certify that;
(1) I have reviewed this annual report on Form10-KSB of World Wide Motion
Pictures Corporation, a Michigan corporation (the "registrant");
(2) Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this annual report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this annual
report;
(4) The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing
the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability
to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
(6) The registrant's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other facts that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: March 26, 2005 /s/ A. Robert Sobolik
______________________________
A. Robert Sobolik
Executive Vice President/Treasurer