Part I
Item 1. Description of Business
Business Development
INCEPTION THROUGH JULY 1995
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 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 32 states and 7 foreign countries including England,
Japan, Singapore, Australia, Germany, Israel, and Canada including
the names of 15 broker-dealer firms holding the Company's common
securities.
The Predecessor formerly was, and currently the Company is,
organized to finance, develop, produce, 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 has an active 19 member Board of Directors; Board
designated committees including Executive, Audit, Finance, and
Personnel; staff operating committees including Production and
Product Development, 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.
(BULLET) 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. 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 of five (5%) percent of
any revenue of the product library of the Company that was owned by
GLP prior to its acquisition by the Predecessor from lease or sale
by him personally to third parties. (There have been no commissions
earned by Mr. Lindsey during the past three years.)
(BULLET) The National Power Corporation Agreement and Plan of
Reorganization
On February 7, 1980, Juggernaut Energy Corporation was incorporated
under the laws of the state of Utah. In April of 1980, 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 totalled 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.
(BULLET) 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 proposed a public offering of its common stock
since the initial public offering of the National Power Corporation
in 1980.
(BULLET) Film Library Acquisition
In November of 1991, 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 has 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.
(BULLET) 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 scheduled on an annual basis and workshops,
lectures and forums intermittently throughout the year. 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.
Business of Company
PRINCIPAL PRODUCTS AND SERVICES OF THE Company
The principal business of the Company is the development, financing,
production, and marketing/distribution of feature films/video
productions and various other forms of filmed and/or televised
entertainment. In addition, the Company and its affiliates
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 two 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
guaranty of a fixed minimum, and (2) licensing to television
networks and independent stations pursuant to agreements which
provide for a fixed number of telecasts over a fixed period of time
for a fixed license fee payable in periodic installments.
Substantial additional profits may accrue from ancillary areas of
the industry including retail home video cassette sales and rentals,
product merchandising, literary rights, and related paraphernalia.
The Company produces/co-produces and markets its 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. 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 for each film or television project is responsible for
general management and coordination of the film or video as well as
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 a year to fully complete.
Producers, directors, performers, writers, and various technicians
who participate in the production of the Company's films and video
projects are generally retained on a project-by-project basis, and
are normally compensated by negotiated fixed fees and all standard
guidelines set down by unions in the motion picture and television
industry.
The Company's various production, development, marketing, and
finance committees continuously review and, in specific cases,
package feature film and television projects for financing,
production, and distribution. Management of the Company has, since
the Company's inception, encouraged screenplay and teleplay
submission and completed projects 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 57 WGA (Writer's Guild of
America) registered properties from which it 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.
Additionally, the Company currently owns and maintains a completed
film and video library encompassing 211 titles of feature length
motion pictures, documentaries, docudramas, and television
projects.
For internal control, the Company's Board of Directors directed
management to retain an independent appraiser in order to verify the
value of its library as currently determined by staff and
management. The Company also owns 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 project such as rewriting, packaging,
financing, production and budgeting. 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. None of the ongoing contracts
"beneficial interest" entered into by the Company is significantly
material to the Company's current financial condition and/or
operations at the present time. 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 generally
handled through the Company's distribution/marketing network of
associated companies (see MARKETING OF THE Company'S PRODUCTS AND
SERVICES), 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, and domestic and
international satellite broadcast. The Company's producer's
representative, in some cases, acts 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 one of its product.
The principals of the Company have a proven record demonstrating
their training and experience 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 100
productions. The production and marketing team is expert in the use
of the latest technological filming and video taping techniques,
state of the art equipment, and administrative control, i.e.,
experienced budget and production/distribution cost supervision and
distribution capabilities. Certain of the technological expertise
and/or equipment that is used by the Company's professional
personnel include platform releasing (e.g., THE RIVER RUNS THROUGH
IT, Tri Star Pictures, in excess of $30 million in gross revenue
worldwide; PULP FICTION, Miramax, in excess of $100 million in gross
revenue worldwide; THE POSTMAN (in current 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: Emmy awards (David
Toma/CBS Movie-of-the-Week, BABIES HAVING BABIES), 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 Academy
award nominations (Fred Baron/feature film ROBOCOP)(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
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, 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, 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
capital acquisitions by small and midsize companies.
Since its creation in July of 1977, the Company's management
continuously researches 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 the 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.
(BULLET) 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 feature 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.
(BULLET) 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.
(BULLET) 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.
(BULLET) 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.
(BULLET) 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 and 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.
(BULLET) Feature Film Acquisition
On September 6, 1990, the Company through an acquisition 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.
(BULLET) 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.
(BULLET) Feature Film Library Acquisition and Distribution
On November 29, 1991, the Company acquired 136 feature film and
television productions ("product") from Presidio Productions Inc.
("Presidio") for marketing and exploitation purposes in all markets
and all territories worldwide. At the time of this filing the
product was 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.
(BULLET) 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 being readied for
distribution in the spring of 1996. 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.
(BULLET) 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 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 Blockbuster Video to 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.
(BULLET) 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"). The narrated product
completed production in July of 1993. At the time of this filing
the product 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.
(BULLET) 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
is part of the Company's acquired film and television library,
including 14 feature length motion pictures and 3 television
productions. The syndication territories include 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.
(BULLET) 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.
CURRENT AND ANTICIPATED DEVELOPMENTS IN THE Company'S BUSINESS
Business Enterprises under Contemplation by the Company
(BULLET) Feature Film Acquisition
The Company has entered into an acquisition agreement ("Agreement")
with M&D Productions of San Jose, CA, for the acquisition of all
right, title and interest for the feature length motion picture
entitled CITIZEN SOLDIER ("product") starring Dean Stockwell and
Billy Gray. Delivery of all final elements was completed on
November 27, 1995. 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.
(BULLET) Feature Film Co-Production
The Company has entered into a preliminary agreement with Jimmy
Williams Productions Inc. of Los Angeles, CA in anticipation of
constructing a formal co-production and marketing/distribution
agreement for the production and distribution of a full length
motion picture entitled MANASOUR ("product"). The product is
currently in principal photography and is expected to be ready for
marketing and distribution in the winter of 1996. According to the
terms of the proposed agreement the Company would retain 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.
(BULLET) Television Co-Production I
The Company has entered into a preliminary agreement with Ironweed
Productions of Detroit, MI for the development, co-production and
distribution of a television pilot production entitled THE DAILY
GRIND ("product") in anticipation of a episodic television
production series to be produced in conjunction with one or more
major broadcast television outlets in the television industry.
According to the terms of the proposed agreement the Company would
retain 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.
(BULLET) Feature Film Library Acquisition
The Company has entered into an acquisition agreement ("Agreement")
with Korrinne Films of Quebec, Canada for the acquisition of all
right, title and interest in the feature length motion pictures ONE
BAD DEAL, HEAT WAVES, UNE ROSE POUR DANIELLE, DANGEROUS DREAMS,
FEMME FATALE, RAINY DAYS and A MATTER OF HONOR ("product"). At the
time of this filing the Agreement was executed between the parties
and the Company anticipates the closing to occur upon delivery of
all final elements of the product by December 31, 1996. According
to the terms of the Agreement the Company retains 100% of any
potential net revenue percentage accruing to the Company from any
and all marketing and exploitation of the product worldwide in
perpetuity.
(BULLET) Feature Film Co-Production
The Company has entered into a preliminary agreement with Bicoastal
Pictures of Los Angeles in anticipation of constructing a
distribution/consulting agreement ("Agreement") for the marketing
and distribution of a full length motion picture entitled THE ROAD
TO FLIN FLON ("product"). The product, which is currently in post
production, will be ready for marketing/distribution in the winter
of 1996. According to the terms of the proposed Agreement the
Company would retain 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.
(BULLET) Television Co-Production II
The Company has 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 ("product"). The series will be distributed to
independent, low power (LP) and cable outlets throughout the United
States. 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.
(BULLET) Corporate Acquisition Negotiations
In December 1995, the Company purchased World Wide Medical Services
Inc. The business of the company is to provide relief staffing of
healthcare professionals such as Registered Nurses, Licensed
Vocational Nurses and Nurse Practitioners for healthcare
institutions including hospitals, clinics, nursing care facilities,
hospices, retirement and convalescent homes and temporary personnel
for private patients.
* For the past three 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 as in
the case of the Medical Services Company referred to above.
Management of the Company has had 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 serious 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.
Further, in the specific case of the medical services company,
management of the Company has been familiar with management of the
medical services company for more than ten years and subsequently
knowledgeable of and confident in their ability to function and grow
using appropriate business acumen in the process. In addition to
the quantitative 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 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, low power (LP) regional television,
public broadcast (PBS) television, and ancillary product
merchandising (ancillary product merchandising includes revenues
created from non-theatrical or non-broadcast exploitation such as
merchandising of t-shirts, 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), 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 foreign and domestic broadcast, television and home video
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), Mntex
Corporation (relationship between the Company and the company
includes sell-thru specialty video 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 60% 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 importance of the overseas market is once again on
the incline due to the decrease in the value of the dollar. Foreign
markets will be responsible for 60% of the total box office revenue
in 1995.
The Company has acquired immaterial revenue at this time from
theatrical exhibition for the feature film product known as MOVIES,
MONEY AND MURDER aka BREAKING UP WITH PAUL. (Further exploitation
of this product by the Company will require additional working
capital.)
According to Lewis O'Neil, Vice President of theatrical exhibition
for Twentieth Century Fox Film Corp., 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 20,000. 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 range
from $100,000 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) 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 deals, have been able to command prices
of $3 to $8 million per film. On a non-exclusive basis, prices
range from $1 to $2 million per film where the film has achieved
average success. Certain of the Company's film library are shown
periodically on cable television.
A relatively new area of exhibition is pay-per-view. At present,
there are approximately 12 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 are
$10 per show to the consumer, of which about 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
serious inroads, primarily in Europe in those countries where
residential cable service is not readily available.
The Company has acquired immaterial revenue at this time from cable
television, pay television, DBS and MATV for the feature film
projects entitled HOLLYWOOD HEARTBREAK, SWEET JUSTICE, COUGAR
JUNCTION, 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 productions. (Further 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 is between $1 million and $5
million. Exceptional films may command substantially higher prices.
The Company has acquired immaterial revenue at this time from
network television exploitation for the feature film product known
as Sweet Justice. (Further exploitation of this product by the
Company 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 immaterial revenue at this time from
syndicated television exploitation for the television production
special known as KJ COUNTRY. (Further exploitation of this product
by the Company will require additional working capital.)
Other Revenue - i.) Non-theatrical revenue results from a film
project being made available to airlines, schools, public libraries,
community groups, ships at sea, prisons, and bases for the military
forces.
ii.) Ancillary markets such as the rights to use the images of
characters in a picture for merchandising purposes in connection
with video games, toys, t-shirts, posters, and like paraphernalia.
iii.) Revenue may also be realized from the novelization of the
screenplay and other related publications, music used in pictures
sold as soundtracks, records, CDs, cassettes, and mechanical
performance and sheet music publication.
The Company has acquired no revenues at this time from these
particular sources of non-theatrical, television, or ancillary
markets.
The Company has participated in a variety of the preceding type
marketing and distribution arrangements over the past fifteen
years.
The Company's major effort has been focused on syndication of
television product and regional broadcast of television product in
the state of California. 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 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.
DEPENDENCE ON A FEW MAJOR CUSTOMERS
The Company and its affiliated companies, due to the diversification
of interests as discussed supra, 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 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 a public
offering of
the Company's securities in the amount of $7,000,000. Terms of this
proposed public offering 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.
$ 700,000 administrative expenses
300,000 development expenses
3,000,000 production expenses
1,250,000 acquisition expenses
1,750,000 marketing expenses
$7,000,000 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.
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 3,500 square feet in buildings of
good condition with an average age of 17 years. 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,
Seacliff Office Park; the Company's corporate records office at 561
E. Jefferson, Detroit, Michigan, 48226; and a branch office of the
Company at 42 King Street, New York, New York, 10014 and 10615
Woodbridge Street, Suite 105, Toluca Lake, California, 91602.
Item 3. Legal Proceedings.
As of December 31, 1995, 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 8 film and television
videotape and 35mm film master copies of feature length motion
picture and television productions owned by the Company and
maintained at a film and video storage 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".
Item 4. Submission of Matters to a Vote to security holders.
N/A.
Part II
Item 5. Market for Common Equity and Related Stockholder Matters.
Market for Common Equity
From December 1983, the date upon which present management took
control of the National Power Corporation, there has been a thin
range of trading occurring with the Company's common shares in the
Over-the-Counter market. The Company's common stock is presently
traded on the over-the-counter (OTC) market through primarily
inter-dealer trades. The Company's history of trading includes
both pink
sheets and NASD's Electronic Bulletin Board system. The most recent
availability for open trading of the Company's common shares was
during fiscal 1992 when the Company was traded on the
over-the-counter market on the NASD's Electronic Bulletin Board
system under
the NQB symbol of "WWMP". Since that time in 1992 there has been
only inter-dealer trades. Inasmuch as the last open trading for the
Company's stock occurred more than 3 years ago, there is no current
data to support a range of sales activity with either high or low
bid information.
Security Holders
As of November 24, 1995, the latest practicable date for which
information is available, the Company had approximately 739 holders
of record of the Company's common equity.
However, based upon its proxy solicitation procedures for the last
year's annual meeting of stockholders and institutional holdings,
the Company believes it has more than 1,000 beneficial owners of its
common stock.
Dividends
There have been no cash dividends declared or paid since the
inception of the Company, and no dividends are contemplated to be
paid in the foreseeable future. The future payment of dividends is
within the discretion of the Board of Directors of the Company and
will depend on the Company's earnings, its capital requirements and
financial condition and other relevant factors.
Item 6. Management's Discussion and Analysis or Plan of Operation
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 1994
and 1995 the Company continued its involvement in a variety of
feature film and television projects relative to development,
production, packaging and distribution/marketing 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 loans, proceeds from the private
sale of equity securities, deferred compensation 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 543,700 shares of common
stock and 7,500 shares of preferred in 1994 for cash and 1,225,000
shares of common and 51,000 shares of preferred for services. In
1995, the Company issued 386,500 shares of common and 0 shares of
preferred for cash and 330,000 shares of common and 0 shares of
preferred for services. Further, in 1994, the Company entered into
a loan agreement with Huntington National Bank whereby the Company
obtained a line of credit in the aggregate maximum amount of
$50,000. The line of credit was for a period of 12 months and
expired in February, 1995. The Company did not find it necessary to
borrow under the line of credit.
The Company's principal liquidity at yearend 1994 included cash of
$18,695 and net accounts receivable of $18,904, and at yearend 1995
cash of $58,634 and net accounts receivable of $1,500. After a
review of the financial statements at yearend 1994 adjusting entries
to the statements were made to reflect a writeoff of some of the
accounts receivable in light of their age and apparent
uncollectibility. The Company's liquidity position has remained
barely sufficient enough to support on-going general administrative
expense, pilot programs, strategic position, and the garnering of
contracts, relationships and film product. Although the Company
during 1994 and 1995 experienced some small amount of revenue,
unless the Company has a substantial influx of capital, the Company
will not be able to accomplish its planned objectives. 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 in the relatively near future for an amount to be
determined by the Company and underwriter.
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
complete exploitation of the Company's current film, television
library, and participations in completed films.
Results of Operations
The Company has presented a consolidated balance sheet which
includes 2 subsidiaries: Environmental Services Corporation and
World Wide Film & Television Institute. The Company's charter
allows it to branch into diversified fields if management concludes
there is a 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' shares, if and when opportunities arise to make
profits for the corporation in a diversified industry, the Company
shall pursue such opportunities.
The Company's motion picture and television strategy has been to
expend its resources and to set in place relationships and contracts
in preparation for the 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.
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 film entitled NATURALLY
BAD originally produced by Northwest Productions Inc. in 1994 with
co-production revenue participation to the Company of 5% of gross
revenue and a feature 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 and the television productions entitled TIPS FOR BETTER
HEALTH and MARKET PLACES OF THE WORLD, both produced by Pacific
Pictures and providing 5% gross revenue co-production participation
to the Company in perpetuity. Additionally in 1994, the Company
entered into a licensing agreement with Media One Broadcasting
Company for $71,000 and 40% of net revenue for the right to telecast
certain feature motion pictures and television productions which the
Company owns. Certain other participations of the Company include
development arrangements including the Company's review and in
certain cases, providing advise and counsel on screenplays in 1994
and 1995 for the subsequent possible packaging and production and
distribution of the project. 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 CHOICE offered by production
company Best Productions Inc. (50%).
Item 7. Financial Statements.
Robert E. Reed
Certified Public Accountant
A Professional Corporation
561 East Jefferson AVenuef
Detroit, Michigan 48226-4324
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors
World Wide Motion Pictures Corporation
I have audited the accompanying consolidated balance sheets of World
Wide Moiton Pictures Corporaiton and subsidiaries as of December 31,
1995 and 1994, and the related statements of income, stockholders'
equity, and cash flows for the two years ended December 31, 1995.
These financial statements and accompanying notes are the
responsibility of the Company's management. My responsibility is to
express an opinion to these financial statements based on my audit.
I conducted my audit in accordance with generally accepted
stadards.
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 audit provides a reasonable basis
for my opinion.
In my 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
Corpration and subsidiaries as of December 31, 1995 and 1994, and
the result of its operations and cash flows for the years then
ended, in conformity with generally accepted accounting principles.
Detroit, Michigan
September 15, 1996
<TABLE>
Consolidated Balance Sheets
<CAPTION>
WORLD WIDE MOTION PICTURES CORPORATION
CONSOLIDATED BALANCE SHEETS
YEAR ENDING DECEMBER 31, 1995 and 1994
Assets
1995 1994
<S> <C> <C>
Cash 12,298 14,515
Accounts Receivable 1,500 -
Completed Motion Pictures/
Television Productions 16,116,258 13,808,000
Film Properties (Screenplays/Teleplays) 1,680,472 1,680,000
Property and Equipment 46,437 40,521
Other Assets 49,000 49,000
Less Accumulated Depreciation (246,543)
Total assets $17,659,422
$15,592,036
Liabilities
Current liabilities
Common Stock Payable 272 -
Preferred Stock Payable 30 -
Notes Payable 16,300 21,800
Total Liabilities 16,602 21,800
Stockholder's Equity
Common Stock $.001 Par Value, 100,000,000
Shares Authorized, 45,463,295 Outstanding 45,463 44,362
Preferred Stock $.01 Par Value, 1,000,000
Shares Authorized, 105,200 Outstanding 1,052 1,052
Capital in Excess of Par Value 18,156,047 15,650,729
Retained earnings (deficit) (559,742) (375,098)
Total Stockholder's Equity $17,642,820 $15,321,045
Total Liabilities and
Stockholder's Equity $17,659,422 $15,592,036
<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
YEAR ENDING DECEMBER 31, 1995 and 1994
1995 1994
<S> <C> <C>
Revenues $71,000 $11,124
Operating expenses:
Administrative 14,937 31,339
Depreciation 240,707 5,836
Total operating expense 255,644 37,175
Net income (loss) $(184,644) $(26,051)
Earnings available to common stockholders 0 $0
Earnings per common share $0 $0
<FN>
<F1>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<TABLE>
Stockholders Equity
<CAPTION>
WORLD WIDE MOTION PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
DECEMBER 31, 1994 AND 1995
STOCK AMT ADDITIONAL RETAINED TOTAL
COMMON PREFERRED (P/V) PAID IN CAPITAL EARNINGS S/E
<S> <C> <C> <C> <C> <C> <C>
BAL,
12/31/94 44,361,765 105,200 45,414 15,650,729 (375,098) 15,321,045
NET INCOME
(LOSS) (184,644)
STOCK
ISSUED 1,101,530 0 1,101 2,505,318
BAL,
12/31/95 45,463,295 105,200 46,515 18,156,047 (559,742) 17,642,820
</TABLE>
WORLD WIDE MOTION PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(To be read in conjunction with Consolidated Financial Statements
for yearend December 1995)
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). The Acquisition was a production and
distribution company for short subjects, docudramas, documentaries
and industrial films. Many of the Acquisition's productions were
made in conjunction with the U.S. Government. The Company
acquired the Acquisition's entire film and television library and
related film production equipment. The Acquisition transaction
was facilitated by the exchange of two million (2,000,000) shares
of the Company's common stock which was issued to Mr. George T.
Lindsey, the sole owner of the Acquisition, for 100% of the common
stock of the acquisition. Mr. Lindsey is currently the Company's
Vice President of Creative Development and he is entitled to a
contractual commission on any of the former product library of the
Acquisition that is leased or sold by him. 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 235 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 a
wholly-owned subsidiary for the purpose of organizing and
presenting seminars and workshops concerning the motion picture
industry. The Company has an active Board of Directors which
currently consists of twenty members with staggered terms, all of
whom are either chairperson or a member of one or more of the four
board designated committees which include executive, finance,
audit, and personnel. The Company also maintains several
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 is not expected to recover the
Company's investment. On the other hand, the profit from a
successful motion picture or television program must be 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. In
fiscal yearend 1995 such purchases amounted to $3,184,900.
Sixteen million one hundred sixteen thousand two hundred fifty
eight ($16,116,258) 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 accordance
with GAAP 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.
The film and television inventory of the Company is regularly
reviewed and evaluated by the Company's management. The
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
inventory is dependent on the acquisition of additional capital.
In years prior to fiscal 1994, the Company did not charge a
provision for depreciation to expense because the cost of
depreciable assets was considered to be immaterial in relation to
the financial statements. In 1994, the Company commenced to
provide for depreciation on a straight line basis with asset lives
ranging from 7-10 years. Prior accounting periods were not
adjusted due to immateriality.
At December 31, 1995, the Company and its subsidiaries have
sustained a cumulative operating loss and may offset this loss
against future taxable income.
NOTE 3 - LEGAL PROCEEDINGS
As of December 31, 1995, 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 4 - 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 & Poors Cusip no. is 981536 10 5. The Company has
advised its stockholders and the public that it will soon become a
fully reporting company and that it expects to apply for NASDAQ
quotation and/or quotations on other exchanges. The Company's
common stock is thinly traded at this printing. Prior to the
stock market crash in 1987, the Company's shares of common stock
traded as high as $.95 per share. As recently as 1993, the
Company was quoted on the OTC (Over-The-Counter) Electronic
Bulletin Board. Castle Securities Inc., the Company's most recent
active primary marketmaker, went into bankruptcy resulting in the
Company's temporary removal from quotation. As of the date of
these financial statements, the Company has negotiated
satisfactory terms establishing a new primary marketmaker.
However, 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 expects to
file annual, periodic, and current reports required pursuant to
Section 12(g) of the Exchange Act, and it is anticipated that
active trading by the Company's new primary marketmaker will not
commence until the Commission has reached the "no comment" stage
of the filing process. NOTE 5 - SUMMARY OF SUBSIDIARIES.
The Company's wholly-owned subsidiary is: World Wide Film and
Television Institute, Inc. (the Institute), with operations
offices at 11611 San Vicente Boulevard, Suite 810, Los Angeles,
California, 90049. The Institute was founded and incorporated in
July 1993. The Institute's primary 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
political/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.
During 1995, the Company considered purchasing a privately held
corporation, World Wide Medical Services Inc. Although merger
agreement and operating agreements were executed, the Company was
unable to obtain from the Medical Services company documents
required in the agreements. Therefore, the company did not issue
its common stock and consummate the acquisition.
NOTE 6 - SUMMARY OF STOCK OPTIONS, EMPLOYMENT CONTRACTS,
AFFILIATES, POTENTIAL DILUTION, AND CONTINGENT LIABILITY.
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. The Company has entered into agreements to
issue its common lettered stock for certain goods and services,
arrangements beneficial to the ongoing activities of the Company.
Further, various employee contracts, non-exclusive affiliate
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
$2,800,000 and has agreed to accept stock or stock options in lieu
of cash.
NOTE 7 - NOTES PAYABLE, LETTER OF CREDIT, ACCRUED PROFESSIONAL AND
ADMINISTRATIVE FEES.
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
accrued professional and administrative fees will be paid
contingent upon the Company's sufficient profitability.
Individuals who are owed such fees are also stockholders of the
Company and have agreed to waive such fees indefinitely if
necessary, or to negotiate payment in the form of common stock if
approved by the Company's management.
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.
NOTE 8 - REVENUE COMPETITION RELATIVE TO EXISTING OR PENDING
EXPLOITATION AGREEMENTS OF THE COMPANY'S MOTION PICTURE AND
TELEVISION PRODUCT LIBRARY.
The generation of revenue in the motion picture and television
industry is highly competitive and may have a material impact on
the Company's financial statements. Management believes that a
motion picture or television production's economic success is
dependent upon several overlapping factors including general
public appetite at the time of release, marketing philosophy and
applicable usage of existing technology, advertising strategy with
resultant penetration and the overall quality of the production.
The Company's motion picture and television productions may
compete for sales 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. 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.
NOTE 9 - ANCILLARY EXPLOITATION OF A PORTION OR PORTIONS OF THE
COMPANY'S MOTION PICTURE LIBRARY TO COMMERCIAL TELEVISION AND HOME
VIDEO MARKETING AND SALES.
Specifically, live action motion pictures are generally licensed
for broadcast on commercial television following 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 motion picture, 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 films in domestic syndication have declined as pay
television licensing has grown. The growth of pay television and
home video technologies has had an adverse effect on the fees
obtainable from the licensing of films to networks and local
television stations. Thereby potentially effecting the Company's
ability to generate substantive revenue from this particular
venue.
Conversely, the Company may derive revenue from the marketing and
sale, either directly or through licensees, of motion pictures and
other filmed product on videocassette for playback on a television
set through the use of videocassette recorders ("VCRs") and
continued advancements of pay television (cable) and satellite
broadcast technologies, domestically and internationally. The
Company currently holds the distribution rights to 235 motion
picture and television titles.
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
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
therefor, 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.
<TABLE>
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.
<CAPTION>
Director and/or
Executive Officer First Elected
Name and Age Position or appointed Term of Office
<S> <C> <C> <C>
Rodney C. Kropf, Esq. Chairman of the 1982 1997
Age 69 Board of Directors
Paul D. Hancock President/Chief 1977 Director/1997
Age 39 Executive Officer Officer/2015
and Director
A. Robert Sobolik Executive Vice President/1981 Director/1997
Age 60 Treasurer and Director Officer/Indefinite
Larry Epstein, Esq. Secretary and Director1989 Director/1996
Age 46 Officer/Indefinite
John R. Woodward Vice President, Film1982 Director/1998
Age 45 Production and Officer/Indefinite
Director
George T. Lindsey Vice President, Creative1982 Director/1998
Age 58 Development and Officer/Indefinite
Director
James J. Aitken, C.P.A. Vice President, Finance 1982 Director/1998
Age 59 and Administration Officer/Indefinite
and Director
John Levingston Vice President, Marketing1983Officer/Indefinite
Age 69 and Distribution
John D. Foley Director 1990 1996
Age 45
Robert E. Capps, Jr. Director 1990 1996
Age 45
Ben Whitfield, Jr., Esq.Director 1980 1996
Age 46
Brendan Cahill Director 1986 1997
Age 49
Karen J. Segel, J.D. Director 1991 1996
Age 48
Alex Trebek Director 1987 1996
Age 55
Leroy J. Steele Director 1987 1996
Age 73
Charles Bailey Director 1985 1997
Age 62
Joseph Dyson, C.P.A. Director 1983 1997
Age 59
Peter Lallos Director 1988 1997
Age 62
Philip Langwald Director 1985 1998
Age 89
Fred Baron Director 1994 1998
Age 44
Charles Newirth Director 1994 1998
Age 40
Brian J. Patnoe Associate Vice President,1986 Indefinite
Age 36 Administration
Michael Maghini Associate Vice President,1985 Indefinite
Age 37 Finance
David A. Toma Associate Vice President, 1990 Indefinite
Age 46 Production
</TABLE>
RODNEY C. KROPF*, age 69 - Mr. Kropf is Chairman of the Board of
Directors of the Company. He is presently involved in the general
practice of law. He has held various public positions with
Federal and local governments. He was Assistant United States
District Attorney for five years and thereafter served as
Assistant City Attorney and City Attorney in the state of
Michigan. Mr. Kropf has had extensive experience in the
organization and development of radio stations throughout the
Midwest such as W.E.R.C. (now W.C.A.R). He has participated in
the acquisition and sale of many radio properties for the Malrite
Broadcasting Company. He is the director and officer of various
corporations and has been active in real estate, development, and
construction of housing and commercial properties. He is a
graduate of the University of Michigan Law School and Wayne State
University.
PAUL D. HANCOCK*, age 39 - Mr. Hancock is the President and Chief
Executive Officer of the Company. He is the founder and developer
of its film production concept and has served as President and
Chief Executive Officer since its inception. He has been a
production and business advisor to various film financing and
production companies and has supervised in-depth research and
work study in moderate budget/cost-controlled feature film
productions. 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. He has maintained
a specialized expertise and conducted diverse consulting in motion
picture and television financial packaging and development. He
has previously been 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 and is a radio talk show host on independent film
production.
A. ROBERT SOBOLIK*, age 60 - 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 46 - 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 45 - 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 companies such as Twentieth Century Fox
Film Corporation, Paramount Pictures, and Castle Rock
Entertainment. Including his 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 "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 58 - 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 59 - 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 & Whinney (now 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 & Whinney. 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 45 - Mr. Foley is currently Executive Vice
President of Miramax Films, overseeing all theatrical acquisitions
and distribution. He was formerly 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 has been 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.
JOHN LEVINGSTON, age 69 - Mr. Levingston has been involved in the
distribution, marketing, television syndication and packaging of
motion picture projects both nationally and internationally for
more than twenty years, working with such companies as A.B.C.,
Gotham-Rhodes Inc., Thompson International and has served as
President of Cinema Systems Inc. His film industry background
also includes authorship of original stories, one of which was for
the feature film "Napoleon & Samantha" and an original musical
composition/co- production for ERA Records. Prior to his work in
the motion picture industry, he created and marketed
internationally high technological industrial instruments while
working as a Vice President with companies such as Setco, Dynalube
Incorporated, British-American Tobacco Co. in London and Batco
Corporation in East Africa. He is the founder of the consulting
firm of Levingston-Lehman specializing in financing and marketing
research.
ROBERT E. CAPPS, JR., age 45 - 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 20 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 has
been 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".
BENJAMIN WHITFIELD, JR., ESQ., age 46 - 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 49 - 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 intregal 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."
KAREN J. SEGEL, age 48 - Ms. Segel has most recently been
independent tax counsel and corporate taxation specialist to
various individuals, corporations and partnerships throughout
Southern California and in New York encompassing among others,
industrial, manufacturing and communications industries. She is a
sole practitioner and was previously senior tax accountant for
Oppenheim, Appel & Dixon in Los Angeles and senior tax accountant
for S.N. Chilkov & Co., CPAs, in Beverly Hills, California. Prior
to Ms. Segel's legal and accounting practice, she was an
administrator for Olds Brunel & Co. and U.S. Banknote Corp. in New
York City. She maintains memberships in several national and
international professional services organizations.
ALEX TREBEK, age 55 - 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 gameshow
"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 73 - 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.
CHARLES C. BAILEY, age 62 - Mr. Bailey was most recently Senior
Vice President of Thomson McKinnon Securities Inc. in New York
City and previously Vice President of Prudential Bache Securities,
two of Wall Street's leading investment banking firms. Mr. Bailey
has been involved in international business and finance for more
than 25 years and is the executive producer for a Broadway
theatrical production company. He was the producer of the musical
Broadway production of "My One and Only" with Twiggy and Tommy
Tune, and "Stardust" with Sean Young.
JOSEPH DYSON*, age 59 - Mr. Dyson is currently the President and
Chief Executive Officer of Health Care Capital Corporation of
California. He was formerly Vice President and Manager of Merrill
Lynch White Weld Capital Groups, Western Region Health Care
Finance Department and Vice President of First America, a
financial consulting firm. In addition, he was a regional partner
at Arthur Young & Co. and managing Vice President of Telco Capital
Corporation. Prior to his private sector career, he was engaged
at the Department of Health, Education and Welfare where he served
as Acting Regional Program Director of the Hill-Burton Program as
well as special consultant to other Regional Loan Offices. He is
a Certified Public Accountant and has served as an official for
the Securities and Exchange Commission.
PETER LALLOS, age 62 - Mr. Lallos was most recently Senior Vice
President for the investment banking firm of Bear, Sterns & Co. in
New York City. He has previously held senior corporate positions
including Managing Director for Manufacturer's Hanover Trust
Company, Senior Vice President - E.F. Hutton & Co. and Senior Vice
President - Donaldson, Luftkin & Jenrette. Mr. Lallos' Wall
Street expertise encompasses more than 25 years of investment
banking, commercial banking and specialized public and corporate
financing around the world.
PHILIP LANGWALD, age 89 - 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 44 - 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 40 - Mr. Newirth is currently an established
Independent Producer in the motion picture industry and has been
responsible for the production of such major motion pictures as
the Academy Award winning and highly successful "Forrest Gump", as
well as "Bugsy" with Warren Beatty and "Toys" with Robin Williams.
His career in production has included production manager for such
films as "Pretty in Pink", "Robocop", and "The Abyss". He has
also worked in such diverse senior production positions as
production supervisor, production coordinator, and location
manager.
BRIAN J. PATNOE, age 36 - 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 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 37 - 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.
DAVID A. TOMA, age 46 - Mr. Toma has most recently been associated
with Cinema Research Corporation and Complete Post Inc. in Los
Angeles responsible for managing all aspects of film and video
post production and production processing. He has been
instrumental in the development and growth of both companies to
become two of the largest and highly sophisticated post production
facilities in the motion picture industry. He has further been a
consultant and advisor on post production techniques and
procedures for several companies including Lorimar Entertainment.
Mr. Toma was also engaged in several film production, marketing
and editing capacities for the motion picture and television
industry including Executive in Charge of Production for Laserus
Entertainment Inc., a leading entertainment commercial company
producing a wide variety of television programming; production/
marketing executive for Pacific Video Inc., a major post
production facility; and post production supervisor for
independent production company, Sun Classic Pictures Inc. Mr.
Toma has specialized expertise in the implementation of favored
nations agreements, extensive knowledge of electronic post
production techniques, state of the art and conventional
theatrical and video editing, as well as new mastering
technologies for European and domestic delivery. His film and
television credits include Robert Altman's "Popeye", "The Lincoln
Conspiracy", "Beyond and Back", the long-running television series
"Soap" and "Benson", and he was the recipient of an achievement
Emmy Award from the Academy of Television Arts and Sciences for
his contributions to the CBS Movie-of-the-Week "Babies Having
Babies".
* (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, longterm and
stock compensation paid for services rendered to the registrant in
all capacities for the fiscal years ended December 31, 1995, 1994,
and 1993.
<TABLE>
Summary Compensation Table
<CAPTION>
ANNUAL COMPENSATION
Annual Compensation
Name and Principal Position
(a) Year(b) Salary($)(c) Bonus ($)(d)Other Annual
*, **, *** Compensation ($)(e)
<S> <C> <C> <C> <C>
Rodney C. Kropf** 1995 0 0 0
Chairman of the Board 1994 0 0 0
1993 0 0 0
Paul D. Hancock*/** 1995 295,000 0 0
President, CEO *** 1994 280,000 0 0
1993 265,000 0 0
A. Robert Sobolik*/** 1995 0 0 0
Exec. V.P./Treasurer 1994 0 0 0
1993 0 0 0
Larry Epstein*/** 1995 0 0 0
Secretary 1994 0 0 0
1993 0 0 0
John R. Woodward*/** 1995 0 0 0
Vice President 1994 0 0 0
1993 0 0 0
George T. Lindsey*/** 1995 0 0 0
Vice President 1994 0 0 0
1993 0 0 0
James J. Aitken*/** 1995 0 0 0
Vice President 1994 0 0 0
1993 0 0 0
John Levingston* 1995 0 0 0
Vice President 1994 0 0 0
1993 0 0 0
John R. Foley** 1995 0 0 0
Director 1994 0 0 0
1993 0 0 0
Robert E. Capps Jr.** 1995 0 0 0
Director 1994 0 0 0
1993 0 0 0
Benjamin Whitfield Jr.** 1995 0 0 0
Director 1994 0 0 0
1993 0 0 0
Brendan Cahill** 1995 0 0 0
Director 1994 0 0 0
1993 0 0 0
Karen J. Segel**
Director 1995 0 0 0
1994 0 0 0
1993 0 0 0
Alex Trebek** 1995 0 0 0
Director 1994 0 0 0
1993 0 0 0
LeRoy J. Steele** 1995 0 0 0
Director 1994 0 0 0
1993 0 0 0
Charles Bailey** 1995 0 0 0
Director 1994 0 0 0
1993 0 0 0
Joseph Dyson** 1995 0 0 0
Director 1994 0 0 0
1993 0 0 0
Peter Lallos** 1995 0 0 0
Director 1994 0 0 0
1993 0 0 0
Philip Langwald** 1995 0 0 0
Director 1994 0 0 0
1993 0 0 0
Fred Baron** 1995 0 0 0
Director 1994 0 0 0
1993 0 0 0
Charles Newirth** 1995 0 0 0
Director 1994 0 0 0
1993 0 0 0
Brian J. Patnoe* 1995 0 0 0
Assoc. V.P. 1994 0 0 0
1993 0 0 0
Michael Maghini* 1995 0 0 0
Assoc. V.P. 1994 0 0 0
1993 0 0 0
David A. Toma* 1995 0 0 0
Assoc. V.P. 1994 0 0 0
1993 0 0 0
<CAPTION>
Awards Payouts All Other
Securities Compensation
Restricted Securities
Stock Award(s)Underlying
($)(f) Options/SARs(#)(g)
<S> <C> <C> <C> <C> <C>
Rodney C. Kropf** 1995 50,000 50,000 0 0
Chairman of the Board 1994 50,000 50,000 0 0
1993 50,000 50,000 0 0
Paul D. Hancock*/**
President, CEO *** 1995 0 250,000 0 0
1994 0 250,000 0 0
1993 0 250,000 0 0
A. Robert Sobolik*/**
Exec. V.P./Treasurer 1995 25,000 25,000 0 0
1994 25,000 25,000 0 0
1993 25,000 25,000 0 0
Larry Epstein*/**
Secretary 1995 25,000 500,000 0 0
1994 25,000 500,000 0 0
1993 25,000 500,000 0 0
John R. Woodward*/**
Vice President 1995 25,000 50,000 0 0
1994 25,000 50,000 0 0
1993 25,000 50,000 0 0
George T. Lindsey*/**
Vice President 1995 0 25,000 0 0
1994 0 25,000 0 0
1993 0 25,000 0 0
James J. Aitken*/**
Vice President 1995 50,000 25,000 0 0
1994 50,000 25,000 0 0
1993 50,000 25,000 0 0
John Levingston*
Vice President 1995 0 20,000 0 0
1994 0 20,000 0 0
1993 0 20,000 0 0
John R. Foley**
Director 1995 50,000 100,000 0 0
1994 50,000 100,000 0 0
1993 50,000 100,000 0 0
Robert E. Capps Jr.**
Director 1995 0 50,000 0 0
1994 50,000 50,000 0 0
1993 0 50,000 0 0
Benjamin Whitfield Jr.**
Director 1995 25,000 25,000 0 0
1994 25,000 25,000 0 0
1993 25,000 25,000 0 0
Brendan Cahill**
Director 1995 0 20,000 0 0
1994 0 20,000 0 0
1993 0 20,000 0 0
Karen J. Segel**
Director 1995 50,000 0 0 0
1994 50,000 0 0 0
1993 50,000 0 0 0
Alex Trebek**
Director 1995 0 20,000 0 0
1994 0 20,000 0 0
1993 0 20,000 0 0
LeRoy J. Steele**
Director 1995 25,000 0 0 0
1994 25,000 0 0 0
1993 25,000 0 0 0
Charles Bailey**
Director 1995 25,000 0 0 0
1994 25,000 0 0 0
1993 25,000 0 0 0
Joseph Dyson**
Director 1995 25,000 25,000 0 0
1994 25,000 25,000 0 0
1993 25,000 25,000 0 0
Peter Lallos**
Director 1995 25,000 0 0 0
1994 25,000 0 0 0
1993 25,000 0 0 0
Philip Langwald**
Director 1995 25,000 0 0 0
1994 25,000 0 0 0
1993 25,000 0 0 0
Fred Baron**
Director 1995 25,000 0 0 0
1994 25,000 250,000 0 0
1993 25,000 0 0 0
Charles Newirth**
Director 1995 125,000 250,000 0 0
1994 31,250 313 0 0
1993 0 0 0 0
Brian J. Patnoe*
Assoc. V.P. 1995 50,000 100,000 0 0
1994 50,000 100,000 0 0
1993 50,000 100,000 0 0
Michael Maghini*
Assoc. V.P. 1995 0 10,000 0 0
1994 0 10,000 0 0
1993 0 10,000 0 0
David A. Toma*
Assoc. V.P. 1995 0 0 0 0
1994 0 0 0 0
1993 25,000 0 0 0
(/TABLE)
* 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 his accumulated back salary of $2,850,000. 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 accept common stock, or preferred convertible stock of
the Company at $.10 per share equivalent 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 affiliate of the Company either
in terms of duties, which will be rendered on behalf of the
Company or in their capacity as an independent affiliate or as an
affiliate 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.
Item 11. Security Owned and Certain Benefits Owners and
Management.
</TABLE>
<TABLE>
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)
<CAPTION>
Amount & Nature
Title Name of Beneficial
Percent
of Class Beneficial Ownership Ownership
of Class
Officers and Directors
<S> <C> <C>
<C>
Common James J. Aitken 150,000
.33%
Vice President, Fin. & Adm. Sole Ownership
Corporate Director Sole Voting Power
12199 55th Ave.
Remus, MI 48340
Common Charles C. Bailey 185,000
.41%
Corporate Director Sole Ownership
42 King Street Sole Voting Power
New York, NY 10014
Common Fred Baron 100,000
.22%
Corporate Director Sole Ownership
531 N. Lillian Way Sole Voting Power
Los Angeles, CA 90004
Common Brendan Cahill 250,000
.55%
Corporate Director Sole Ownership
1141 Marilyn Drive Sole Voting Power
Beverly Hills, CA 90210
Common Robert E. Capps, Jr. 350,000
.77%
Corporate Director Sole Ownership
c/o 2120 Main St., Suite 180 Sole Voting Power
Huntington Beach, CA 92648
Common Joseph Dyson 165,000
.36%
Corporate Director Sole Ownership
8720 Cliffridge Sole Voting Power
La Jolla, CA 92037
Common Larry Epstein, Esq. 316,667
.70%
Secretary Sole Ownership
Corporate Director Sole Voting Power
11733 Baird Ave.
Northridge, CA 91326
Common John D. Foley 300,000
.66%
Corporate Director Sole Ownership
c/o 2120 Main St., Suite 180 Sole Voting Power
Huntington Beach, CA 92648
Common Paul D. Hancock 8,770,444
19.29%
President/C.E.O. Sole Ownership
Corporate Director Sole Voting Power
124 8th Street, #8
Huntington Beach, CA 92648
Common Rodney C. Kropf, Esq. 255,000
.56%
Chairman, Board of Directors Sole Ownership
16268 Country Club Drive Sole Voting Power
Livonia, MI 48154
Common Peter Lallos 125,000
.27%
Corporate Director Sole Ownership
31 Woodfield Court Sole Voting Power
Laurel Hollow, NY 11791
Common Philip Langwald 500,000
1.10%
Chairman Emeritus/ Sole
Ownership
Corporate Director Sole Voting Power
16032 Lemond Hills Trail #173
Del Ray Beach, FL 33446
Common John Levingston 15,000
.03%
Vice President, Marketing Sole Ownership
& Distribution Sole Voting Power
13642 Havenwood Drive
Garden Grove, CA 92643
Common George T. Lindsey 692,750
1.52%
Vice President, Creative Sole Ownership
Development/Corporate Director Sole Voting Power
10412 Pacific St., #106
Omaha, NE 68114
Common Michael Maghini 253,750
.56%
Associate Vice President, Finance Sole
Ownership
48 Stonewall Lane Sole Voting Power
Madison, CT 06443-2248
Common Charles Newirth 125,000
.27%
Corporate Director Sole Ownership
c/o 2120 Main St., Suite 180 Sole Voting Power
Huntington Beach, CA 92648
Common Brian J. Patnoe 932,202
2.05%
Associate Vice President, Sole Ownership
Administration Sole Voting Power
439 62nd St.
Newport Beach, CA 92660
Common Karen J. Segel, J.D. 205,000
.45%
Corporate Director Sole Ownership
223 S. Willaman Drive Sole Voting Power
Beverly Hills, CA 90211
Common A. Robert Sobolik 202,000
.44%
Executive Vice President/Treasurer Sole
Ownership
Corporate Director Sole Voting Power
11453 Tortuga St.
Cypress, CA 90630
Common LeRoy J. Steele 50,000
.11%
Corporate Director Sole Ownership
1977 Gramercy Place Sole Voting Power
Los Angeles, CA 90068
Common David A. Toma 125,000
.27%
Associate Vice President, Production Sole
Ownership
21000 Burton Street Sole Voting Power
Canoga, CA 91304
Common Alex Trebek 350,000
.77%
Corporate Director Sole Ownership
c/o 2120 Main St., Suite 180 Sole Voting Power
Huntington Beach, CA 92648
Common Benjamin Whitfield, Jr., Esq. 78,000
.17%
Corporate Director Sole Ownership
9000 E. Jefferson, Apt. 14-3 Sole Voting Power
Detroit, MI 48214
Common John R. Woodward 175,071
.39%
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 14,670,884
32.27%
<CAPTION>
Owners of 5% or more of the Company's common equity
<S> <C> <C>
<C>
Common Paul D. Hancock 8,770,444
19.29%
President/C.E.O. Sole Ownership
Corporate Director Sole Voting Power
124 8th St., #8
Huntington Beach, CA 92648
Common Richard D. McLellan, Esq. 3,559,164
7.83%
c/o 2120 Main St., Suite 180 Sole Ownership
Huntington Beach, CA 92648 Sole Voting Power
Common Gordon Estate 2,658,097
5.85%
c/o 2120 Main St., Suite 180 Sole Ownership
Huntington Beach, CA 92648 Sole Voting Power
</TABLE>
The foregoing totals are based upon Forty Five Million, Four
Hundred Sixty Three Thousand Two Hundred Ninety Five (45,463,295)
common shares of the Company issued and outstanding stock as of
December 31, 1995.
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.
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
