Part I. Financial Information
Item 1. Financial Statements
<TABLE>
Consolidated Balance Sheets
<CAPTION>
WORLD WIDE MOTION PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997
UNAUDITED
Assets
<S> <C>
Cash 70,799
Accounts Receivable 2,720
Work in Process 484,038
Completed Motion Pictures/
Television Productions 16,118,061
Film Properties (Screenplays/Teleplays) 1,680,967
Property and Equipment 46,437
Other Assets 49,000
Less Accumulated Depreciation (553,006)
Total assets $17,899,016
Liabilities
Accounts Payable 5,265
Common Stock Payable 1,329
Preferred Stock Payable 30
Notes Payable 16,300
Total Liabilities 22,924
Stockholder's Equity
Common Stock $.001 Par Value, 100,000,000
Shares Authorized, 46,854,240 Outstanding 46,854
Preferred Stock $.01 Par Value, 1,000,000
Shares Authorized, $10.00 Par Value 100,000
Shares Authorized, 121,217 Outstanding 1,212
Capital in Excess of Par Value 18,164,129
Capital Investment 205,724
Retained earnings (deficit) (541,827)
Total Stockholder's Equity $17,876,092
Total Liabilities and
Stockholder's Equity $17,899,016
<FN>
<F1>
The accompanying notes are an integral part of these financial
statements.
</FN>
</TABLE>
<TABLE>
Consolidated Statements of Income
<CAPTION>
WORLD WIDE MOTION PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
JULY 1, 1997 - SEPTEMBER 30, 1997
UNAUDITED
<S> <C>
Revenues $ 5,086
Operating expenses:
Administrative 3,766
Depreciation (allocated annually) -
Total operating expense
Net income (loss) $ 1,320
Earnings available to common stockholders $0
Earnings per common share, assuming
full dilution $0
<FN>
<F1>
The accompanying notes are an integral part of these financial
statements.
</FN>
</TABLE>
<TABLE>
Consolidated Statement of Cash Flows
<CAPTION>
WORLD WIDE MOTION PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
SEPTEMBER 30, 1997
UNAUDITED
<S> <C> <C>
Cash flows from operating activities:
Net Income (deficit) $ 1,320
Adjustments to reconcile net income to
net cash provided by operating activities:
Increase in accounts receivable $31
(Decrease) in accounts payable $18,111
Net cash provided by operating
activities: $ (18,079)
Cash flows from investing activities:
Investment work-in-process $11,851
Net cash provided by investing
activities: $11,851
Cash flows from financing activities:
Proceeds from issuance of
preferred and common stock $5,000
Net cash provided by financing
activities: $5,000
Net increase in cash and equivalents $92
Cash and cash equivalents - beginning of quarter $70,706
Cash and cash equivalents - end of quarter $70,799
<FN>
<F1>
The accompanying notes are an integral part of these financial
statements.
<F2>
During the third quarter ending September 30, 1997, 160,000
common shares and 0 preferred shares were issued for product and
services provided by or provided to the Company.
</FN>
</TABLE>
<TABLE>
Consolidated Statement of Stockholder's Equity
<CAPTION>
WORLD WIDE MOTION PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
DECEMBER 31, 1996 THROUGH END OF QUARTER SEPTEMBER 30, 1997
UNAUDITED
STOCK AMT ADDITIONAL RETAINED TOTAL
COMMON PREFERRED (P/V) PAID IN CAPITAL EARNINGS S/E
<S> <C> <C> <C> <C> <C> <C>
STOCK
ISSUED 636,297 16,017796 7,372
BAL,
12/31/96 46,099,592 121,217 47,311 18,163,259 (802,828) 17,407,742
STOCK
ISSUED 249,698 0 250 0 193,868
BAL,
3/31/97 46,349,290 121,217 47,561 18,192,109 (608,960) 17,630,711
STOCK
ISSUED 404,950 0 405 0 65,812
BAL,
6/30/97 46,754,240 121,217 47,966 18,364,953 (543,148) 17,869,772
STOCK
ISSUED 100,000 0 100 0 1,321
BAL,
9/30/97 46,854,240 121,217 48,046 18,369,853 (541,827) 17,876,092
<FN>
<F1>
The accompanying notes are an integral part of these financial
statements.
<F2>
</TABLE>
REED & TAYLOR
CERTIFIED PUBLIC ACCOUNTANTS
PROFESSIONAL CORPORATION
561 E. JEFFERSON AVE.
DETROIT, MI 48226-4324
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors
World Wide Motion Pictures Corporation
We have audited the accompanying consolidated balance sheets of World Wide
Motion Pictures Corporation and subsidiaries as of December 31, 1996 and
1995, and the related statements of income, stockholders' equity, and cash
flows for the years then ended. These financial statements and
accompanying notes are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted standards.
Those standards require that we 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. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
and accompanying notes present fairly, in all material respects, the
financial position of World Wide Motion Pictures Corporation and
subsidiaries as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
Reed & Taylor, CPAs, P.C.
Detroit, Michigan
June 30, 1997
WORLD WIDE MOTION PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(To be read in conjunction with Consolidated Financial Statements for
the year ended December 31, 1996)
NOTE 1 - DESCRIPTION AND HISTORY OF THE BUSINESS.
The Company was founded in July 1977 and incorporated December 9, 1980.
In March 1981, the Company acquired G.L. Productions Inc. The
acquisition was a production and distribution company for short
subjects, docudramas, documentaries and industrial films, many of which
were made in conjunction with the U.S. Government. The Company acquired
the entire film and television library and related film production
equipment. The transaction was facilitated by the exchange of two
million (2,000,000) shares of the Company's common stock for 100% of the
common stock of the acquisition. The Company has also acquired other
motion picture and television productions and acquired
marketing/distribution interest in additional motion picture and
television productions. The Company's total library of live action
motion pictures and videotaped productions consists of 273 projects of
various lengths and subject matter.
In November 1983 the Company merged with the National Power Corporation,
a public corporation. The National Power Corporation's common stock was
traded on the over-the-counter market with registered broker/dealers
throughout the United States making a market in its stock. The merger
process resulted in a change in the Company's number of shares issued,
outstanding, and authorized and a change in par value.
The Company operates several wholly-owned subsidiaries, five of which
are currently active, to facilitate the operation of its core business
and diversified enterprises. The Company has an active Board of
Directors which currently consists of seventeen members with staggered
terms, all of whom are either chairperson or a member of one or more of
the four board designated committees: executive, finance, audit, and
personnel. The Company also maintains four operating committees
including production and product development, special projects,
minorities and standards.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
These consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. Because the commercial
potential of individual motion pictures and television programming
varies dramatically, and does not bear any relationship to their
production or acquisition 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 method of accounting which requires the immediate recognition
of the entire loss (through increased amortization) in instances where a
motion picture or television program produced is not expected to recover
the Company's investment. On the other hand, the profit from a
successful motion picture or television program 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
schedule and the performance of individual motion pictures or television
programs.
A significant portion of the Company's assets was purchased with the
issuance of shares of its common and preferred stock. Sixteen million
one hundred eighteen thousand and sixty one ($16,118,061) dollars of the
assets is represented by its completed film and television library. In
the absence of a consistent market for the securities issued, the value
of the films 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 library have uncertain
future revenues that may be expected to grow or diminish along with all
of the ancillary markets. In some cases, individual films or television
productions may be timeless and irreplaceable, in many cases their book
value is almost nil having been amortized based on revenues received
several years ago and the inability to estimate a market value or
reasonable expected revenue.
The film and television inventory of the Company is regularly reviewed
and evaluated 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's future revenues is a difficult and uncertain art,
even for major film distributors and television syndicators. The
accounting principles in these areas leave unusual discretion with the
film company executives and often result in "unusual" changes in
individual periods. There is no generally accepted standard for valuing
motion picture and television inventory, film and television projects in
process, distribution/syndication contracts, participation agreements,
and performer and production related contracts. FASB Statement of
Financial Accounting Standards No. 53, paragraph "Inventory Valuation",
states "16. Unamortized production and exploitation costs shall be
compared with 'net realizable value' for each reporting period on a
film-by-film basis;" and in the paragraph "Net Realizable Value" it
states, "Net Realizable Value is the estimated selling price (rental
value) in the ordinary course of business less estimated cost to
complete and exploit in a manner consistent with realization of that
income". The accounting profession is currently reviewing the problem
of "how to fairly report film inventory on financial statements".
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 retained the
services of an independent appraiser who reviewed the Company's film and
television library. The net result of this appraisal did not materially
affect the Company's balance sheet.
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
value of the film and television inventory is based on regular review
and re-evaluation by the Company's management. Full exploitation of the
Company's investment in its film inventory is dependent on the
acquisition of additional capital. The Company depreciates each film or
television program starting with its specific exploitation.
In years prior to fiscal 1994, the Company did not charge a provision
for depreciation to expense for equipment because the cost of the
depreciable assets was considered to be immaterial in relation to the
financial statements. In 1994, the Company began to provide for such
depreciation on a straight line basis with asset lives ranging from 7-10
years. Prior accounting periods were not adjusted due to immateriality.
The financial statements as of December 31, 1995, and for the year then
ended have been restated to increase depreciation on assets of films
which were exploited in 1995. For the year 1995, depreciation expense
was increased from $5,786 to $240,707.
The Company's interim quarterly financial reports do not include
estimated quarterly depreciation allocations.
NOTE 3 - EARNINGS PER SHARE
Earnings per common share were computed by dividing Net Income (Loss) by
the nubmer of common shares outstanding during the year. Fully diluted
earnings per share were cmputed assuming the conversion of all
convertible preferred shares.
NOTE 4 - TAXES
The Company presents its tax returns on an accrual basis. Certain state
and local tax filings may differ from the federal returns to take
advantage of beneficial local tax law. At December 31, 1996, the
Company and its subsidiaries have sustained a cumulative operating loss
and may offset this loss against future taxable income. The Company
does not expect to utilize the accelerated depreciation option available
under the U.S. Tax Code.
NOTE 5 - LEGAL PROCEEDINGS
As of December 31, 1996, there were no material pending legal
proceedings to which the Company was a party or to which any of its
assets was subject. However, the Company is currently in negotiations
for the reimbursement of lost material which consists of eight videotape
and 35mm film submaster copies of feature length motion picture and
television productions, owned by the Company and maintained at a post
production film and video facility. The Company's attorneys are
preparing litigation and related processes in the event the results of
the negotiations are unsatisfactory. The Company is seeking damages in
the amount of $397,500 for the loss of its "stored material".
NOTE 6 - SUMMARY OF CORPORATE SECURITIES MATTERS AND
STOCK ISSUANCE.
Since November 1983, the Company's shares of common stock have traded on
the over-the-counter market. The Company is currently a Rule 144
Regulation D publicly-held corporation. The Company's NQB (National
Quotations Bureau) call symbol is WWMP and its Standard & Poor's Cusip
no. is 981536 10 5. The Company has advised its stockholders and the
public it expects to apply for NASDAQ quotation and/or quotations on
other exchanges. The Company's common stock is thinly traded at this
printing. The Company has previously been quoted on the OTC
(Over-The-Counter) Electronic Bulletin Board. The Company's most recent
active
primary marketmaker went into bankruptcy resulting in the Company's
temporary removal from quotation. The Company is also currently in the
process of filing its Registration Statement on Form 10SB with the U.S.
Securities and Exchange Commission and accordingly, the Company files
annual, periodic, and current reports required pursuant to Section 12(g)
of the Exchange Act, and it is anticipated that substantial trading will
not commence until the Commission has reached the "no comment" stage of
the filing process.
<TABLE>
The following is the Company's common and preferred stock authorized and
issued and outstanding.
<CAPTION>
Company's common and preferred stock authorized and issued and
outstanding.
SHARES COMMON STOCK:
<S> <C>
PAR .001
AUTHORIZED 100,000,000
ISSUED AND OUTSTANDING 46,099,592
SHARES PREFERRED STOCK:
<S> <C>
PAR 10.00
AUTHORIZED 100,000
ISSUED AND OUTSTANDING 20,000
PAR .01
AUTHORIZED 1,000,000
ISSUED AND OUTSTANDING 115,000
OUTSTANDING CONVERSION RATIO TO COMMON:
PAR # SHARES CONVRSN PRICE $ AMT
RATIO
<C> <C> <C> <C> <C>
<S>
1) 10.00 20,000 1:1 10.00 20,000
2) .01 717 1:20 10.00 14,340
3) .01 26,000 1:20 5.00 520,000
4) .01 15,000 1:10 5.00 150,000
5) .01 51,000 1:2 5.00 102,000
6) .01 1,000 1:20 3.00 20,000
7) .01 7,500 1:20 .10 150,000
TOTAL 121,217 CONTINGENT 976,340
</TABLE>
NOTE 7 - SUMMARY OF SUBSIDIARIES.
The Company operates several wholly-owned subsidiaries. Certain of
these subsidiary corporations are used to each produce individual motion
pictures or television productions. Currently, three of the motion
picture production subsidiary corporations are active. World Wide
Productions, Inc., for the purpose of producing the motion pictures
tentatively entitled Along for the Ride and Choice; World Wide
Entertainment, Inc., for the purpose of producing a special television
production. The Company operates two diversified subsidiaries; one
which is related to the Company's core industry, World Wide Film and
Television Institute Inc. The Institute's business is the development,
production, marketing, and implementation of educational symposiums,
workshops, lectures and forums in areas covering the entertainment
industry, specifically film and television financing, packaging,
production, marketing/distribution, and the politicial/networking
process that accompanies the entertainment business. Revenue is created
primarily from the sale of tickets to these events. Primary symposiums
are generally held annually and are designed to accommodate 250 to 1000
people per event. Workshops are held in between the primary symposiums
designed to accommodate a maximum of 15 individuals. The symposium and
workshop events are further designed to be duplicated in major cities
around the country.
The Company has entered into a diversified business of providing medical
home health care and providing temporary nursing staff to hospitals and
various other health care institutions through its subsidiary World Wide
Medical Services Ltd.
NOTE 8 - SUMMARY OF STOCK OPTIONS, EMPLOYMENT CONTRACTS, ASSOCIATES,
POTENTIAL DILUTION, CONTINGENT LIABILITY AND ACCRUED PROFESSIONAL FEES.
The Company has provisions for the issuance of options to purchase
shares of its common lettered stock and certain of its preferred stock
issued has conversion provisions wherein the holder may convert his/her
preferred shares to common lettered stock under certain conditions.
There are 121,217 shares of preferred stock outstanding that is
potentially convertible to shares of common, dependent upon the market
price of the common stock. The Company has entered into agreements to
issue its common lettered stock for certain goods and services and
arrangements beneficial to the ongoing activities of the Company.
Further, various employee contracts, non-exclusive associates
agreements, and service or purchase contracts contain provisions for
stock issuance. The Company expects to continue to enter into such
agreements subject to all applicable securities law. The potential
contingent dilution from the issuance of the above stock is 9,498,340
shares. The Company had an unpaid contingent salary liability to its
President and Chief Executive Officer, Paul D. Hancock. Mr. Hancock has
waived this accumulated back salary of $3,080,000. The accrued
professional fees of $269,191 have been waived by the providers of
service and accounted for as contributed capital.
NOTE 8 - NOTES PAYABLE, LETTERS OF CREDIT, LINE OF CREDIT
The note holder holding the note comprising the long-term debt has
agreed to waive payment until such time that the Company has sufficient
working capital to accomplish its objectives. The Company was issued a
standby irrevocable Letter of Credit from the Huntington Bank,
Cleveland, Ohio, in the amount of fifty thousand ($50,000). The terms
of the Huntington Bank Letter of Credit require that, if utilized, the
Company will pledge as collateral a portion of its film and television
library. If the Letter of Credit is exercised, the resultant loan will
be secured by a commensurate portion of the Company's film and
television library. The Huntington Bank terms also provide that the
Company will continue to be able to sell or lease any portion of the
library as long as it retains sufficient material to secure any loans
made as a result of the Letter of Credit. This credit arrangement
expired in February 1995 and remains available to the company under the
same above terms and conditions. The Company currently utilizes a fifty
thousand dollar ($50,000) line of credit with the Wells Fargo Bank of
California to accommodate its daily cash flow needs and occasionally its
credit lines at other financial institutions and with its suppliers.
Item 2. Management's Discussion and Analysis or Plan of Operation
Nine Months Ended September 30, 1997
LIQUIDITY AND CAPITAL RESOURCES
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. In fiscal 1995 and 1996 the
Company continued its involvement in a variety of feature 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. In order to finance its operations,
working capital needs and capital expenditures, the Company utilized
revenue from licensing fees, loans, proceeds from the private sale of
equity securities, deferred compensation, profit participation, and
equity in exchange for services and product. In accordance with the
Securities and Exchange Commission "Regulation D", and subject to Rule
144 restrictions, the Company issued 386,500 shares of common stock and
0 shares of preferred stock in 1995 for cash and 973,000 shares of
common stock and 0 shares of preferred stock for product and services.
In 1996, the Company issued 123,123 shares of common stock and 0 shares
of preferred stock for cash and 491,507 shares of common stock and
15,000 shares of preferred stock for product and services acquired by or
provided to the Company. During the third quarter ending September 30,
1997, the Company issued 300,500 shares of common stock and 0 shares of
preferred stock for cash and 301,500 shares of common stock and 0 shares
of preferred stock for product and services provided by or provided to
the Company. Further, in 1994, the Company entered into a loan agreement
with Huntington National Bank whereby the Company obtained a letter of
credit in the aggregate maximum amount of $50,000. The letter of credit
was for a period of 12 months and the agreement expired in February,
1995. The Company did not find it necessary to borrow under that
agreement. This credit arrangement remains available to the registrant
under the same above terms and conditions. The Company uses its primary
business loan ($50,000) line of credit provided by Wells Fargo Bank for
current cash flow needs and occasionally its credit lines at other
financial institutions, and with its suppliers.
The Company's principal liquidity at September 30, 1996 included cash of
$9,914 and net accounts receivable of $1,500, and at September 30, 1997
cash of $70,798 and net accounts receivable of $486,758. The Company's
liquidity position has remained sufficient enough 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. Although
the Company during 1995 and 1996 experienced revenue, 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 a future proposed public offering of its common
shares to the public. It is anticipated that such an offering will
commence within the next 24 months for an amount to be determined by the
Company and underwriter(s).
To meet the Company's interim liquidity and capital resources needs
while the Company's contemplated public offering is being prepared and
examined, 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 the same. In the event a loan is obtained, one of the terms may
provide that the same 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 film, television library, participations in completed films, and
the continued development, production and marketing/distribution of new
film and television production opportunities.
RESULTS OF OPERATIONS
The Company has presented a consolidated balance sheet which includes
five wholly-owned subsidiaries: Environmental Services Corporation,
World Wide Films Inc., World Wide Productions Inc., World Wide Film &
Television Institute, and World Wide Medical Services Ltd. 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 pursue such
opportunities.
The Company's motion picture and television participation strategy has
been to expend its resources and to set in place relationships and
contracts in preparation for the continued development, acquisitions,
production and/or marketing/distribution of quality moderate budget
feature length motion pictures and television productions. The strategy
additionally includes the acquisition of screenplays and teleplays
suitable for development 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 the above-referred to additional working capital is
secured, it is the Company's opinion that substantial 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
24-month period include gross and net revenue participations in one
feature film and two television productions ranging between 2-60% of
worldwide revenue potential including all markets and all media that the
particular production is distributed in. These arrangements include a
feature length film entitled CITIZEN SOLDIER originally produced by M&D
Productions, purchased by the Company in 1995 and providing a 60% gross
revenue participation to the Company in perpetuity. Also, in 1995, the
Company purchased thirty-seven feature film submaster (videotape) prints
from Stanley Pappas providing 20% of any gross revenue of the product in
perpetuity and the television productions entitled TIPS FOR BETTER
HEALTH and MARKET PLACES OF THE WORLD, both owned and produced by
Pacific Pictures and providing 5% gross revenue co-production
participation to the Company in perpetuity. Additionally in 1995, the
Company licensed to Media One Broadcasting for $71,000 and 40% of net
revenue the right to telecast four feature motion pictures and seventeen
television productions which the Company owns as part of its library.
In 1996 the Company licensed to Whitman Productions twenty feature films
and television productions for $75,000 and 40% of net revenue for the
right to telecast and exploit those productions which the Company owns
as part of its library. In 1995 and 1996, 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 EXCHANGE STUDENT offered by production company
Loon Star Film Partners (20%); and BLOOD PASSION offered by production
company Risk Productions (20%); CHOICE offered by production company
Best Pictures Inc. (50%); and ALONG FOR THE RIDE offered by production
company Wittman Productions Inc. (50%).
In 1997 and 1998, the Company expects to complete two full length
feature films produced for theatrical and video worldwide exploitation.
Both productions will be entirely under the responsibility, control and
ownership of the Company. All financing for the completion of the first
feature length production tentatively entitled SHATTERED ILLUSION
starring Morgan Fairchild, Bruce Weitz, and Richard Lynch was secured
and the production has been completed. The second production, ALONG FOR
THE RIDE, has approximately 75% of the financing secured and
negotiations for the remainder in process.
Relative to the completely diversified subsidiary activity in health
care, the federal government has temporarily placed a moratorium on
certain businesses in the home health care industry which will adversely
effect the Company's projected revenues of this subsidiary, World Wide
Medical Services Ltd.
Part II. Other Information
Item 1. Legal Proceedings
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
To the best knowledge and belief of the Registrant, during the past five
years, no present or former director, executive officer or person
nominated to become a director or an executive officer of the
Registrant, has been involved in:
(1) Any bankruptcy petition by or against any business of which such
person was a general partner or executive officer either at the time of
the bankruptcy or within two years prior to that time;
(2) Any conviction in criminal proceeding or subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
(3) Being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily, barring, suspending, or otherwise limiting
his involvement in any type of business, securities or banking
activities; and
(4) Being found by any court of competent jurisdiction (in a civil
action), the Commission or the Commodities Futures Trading Commission to
have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended or vacated.
As of September 30, 1997, there were no material pending legal
proceedings to which the Registrant was a party or to which any of its
assets was subject. However, the Registrant is currently in
negotiations for the reimbursement of 8 film and television videotape
and 35mm film master copies of feature length motion picture and
television productions owned by the Registrant and maintained at a film
and video storage facility. The Registrant's attorneys are preparing
litigation and related processes in the event the results of the
negotiations are unsatisfactory. The Registrant is seeking damages in
the amount of $397,500 for the loss of its "stored material".
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
N/A
Item 4. Submission of Matters to a Vote of Security Holders
N/A
Item 5. Other Information
N/A
Item 6. Exhibits and Reports on Form 8-K
N/A
