http://quotes.barchart.com/texadv.asp?sym=WWMO
http://quotes.barchart.com/texsnap.asp?sym=WWMO Form 10QSB/A for WORLD WIDE MOTION PICTURES CORP
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27-May-2004
Quarterly Report
Item 2. Management's Discussion and Analysis or Plan of Operation
Management's discussion and analysis of financial condition andresults of operation should be read in conjunction with theconsolidated financial statements and related notes.
RESULTS OF OPERATIONS
The Company's revenue for the three months ending March 31, 2004was $1,796 as compared to $162 for the comparable period of 2003.The three month period ending March 31, 2004 net loss prior todepreciation expense and returned sales was ($10,588), and net loss before depreciation for the comparable period ending 2003 of $(10,058).For the three months ending March 31, 2004, expenses for theCompany's development, production and distribution operations andits miscellaneous operations totaled $10,588 compared to $10,221for the comparable period of 2003. The increase in operatingexpenses of March 31, 2004 was primarily attributable to themarketing and distribution of the feature length film entitled"Amy", the reproduction of film and the marketing of the filmproject "Ninth Street" and the promotion of several other projects.The increase in revenue attributable to the first quarter 2004 is due to revenue pursuant to the exploitation of the film project "Ninth Street", "Shattered Illusions" and "Amy". There were no resultant pershare earnings to common stockholders in March 31, 2004 and March31, 2003. The Company derives its revenues from the licensing ofits newly created film and television productions, the licensingof its inventory of previously produced films or televisionproductions and fees received for professional services providedto the industry. The Company also receives revenue for themarketing and distribution of product produced or owned by 3rdparty producers and production companies. The generation ofrevenue in the motion picture and television industry is highlycompetitive which may have a material impact on the Company'sfinancial statements.
The following table presents operations data and selectedstatistical information for the periods indicated.
Three Months Ended March 31, 2003 2004 ---- ----
Revenues $162 $ 1,796Less: Sales returned 50,000 Net Revenues 162 (48,204) Costs and Expenses Operating & Administration expenses 10,221 10,588 Depreciation and amortization 1,388 1,388
Income (Loss) $ (11,446) $(60,180)
The Company has presented a consolidated balance sheet whichincludes four wholly-owned active subsidiaries: World Wide FilmsInc., World Wide Productions Inc., World Wide Film & TelevisionInstitute, and World Wide Entertainment Inc. The Company'scharter allows it to branch into diversified fields of enterpriseprovided management concludes there is a significant potentialfor profit. It is the decision of management to continue themajor portion of the Company's operations in the motion pictureand television industry, but since the primary business objectiveof the Company is to increase the value of its stockholders'equity, if and when opportunities arise to make profits for thecorporation in a diversified industry, the Company shallinvestigate and if appropriate, pursue such opportunities. Themotion picture and television segment of the Company's current orplanned operations is the only segment material to the Company'sfinancial statements or condition.
The Company's motion picture and television participationstrategy has been to expend its resources and to set in placerelationships and contracts in preparation for the continueddevelopment, acquisitions, production and/or marketing/distribution of quality moderate budget feature length motionpictures, documentaries, docudramas and television productions.The strategy additionally includes the acquisition of screenplaysand teleplays suitable for development/packaging and completedmotion pictures and television projects for licensing andmarketing/distribution opportunities for all applicable salesterritories throughout the world. At such time that the above-referred to additional working capital is secured, it is theCompany's opinion that substantial revenue will be generated bythe existing film and television library and future distributionof potential new product, ultimately realizing its projectedreturn on investment. Arrangements for participation by theCompany in various feature film and television productions forthe last 63 months include gross and net revenue participationsin the following feature film and television productions rangingbetween 2-60% of worldwide revenue potential including allmarkets and all media that the particular production isdistributed in.(1) In 1997 and 1998, post production anddistribution preparation of the documentary entitled THE OUTLAWTRAIL, 100 YEARS REVISITED, in association with Western SunsetFilms, an 8-year old Los Angeles based documentary productioncompany. (2) In 1998, development and production of the seriestelevision production entitled CLASSIC CAR, in association withSLIM, Inc., a 4-year old Los Angeles based television productioncompany. (3) In 1999, the acquisition and preparaton formarketing and distribution of the featurefilm entitled WHAT'S INA COOKIE produced by production company Rocinante ProductionsInc. and providing 50% of gross revenue particiation to theCompany in perpetuity. (4) In 2000, the acquisition andpreparation formarketing and distribution of the feature filmsentitled MALEVOLENCE and THE SECOND COMING produced by productioncompany Sig Larsen Productions Inc. and providing 50% of grossrevenue particiation to the Company in perpetuity. Otherarrangements include preparation for Internet marketing anddistribution of a feature length film acquired by the Companyentitled CITIZEN SOLDIER originally produced by M&D Productions,a 7-year old Los Angeles based film production company, purchasedby the Company in 1995 and providing a 60% gross revenueparticipation to the Company in perpetuity.
In 1998, all financing for the completion of the feature lengthproduction entitled SHATTERED ILLUSIONS featuring MorganFairchild, Bruce Weitz, Richard Lynch and Dan Monahan was securedand the production was completed. In 1999, the Company enteredinto an agreement with representative RGH/Lions Share PicturesInc., a 15-year old, Los Angeles based distribution company forthe purpose of conducting all foreign sales arrangements of thefilm.
In August, 1999, the Company entered into an agreement withJaguar Entertainment Inc., a 12-year old Los Angeles baseddistribution company, for the purpose of marketing anddistributing the feature length motion picture entitled NINTHSTREET featuring Martin Sheen and Isaac Hayes to all domesticnon-theatrical ancillary markets including home video, paytelevision, network television, satellite and DVD.
In August and September, 1999, the Company entered into anagreement with GTL Productions Inc., a 7-year old Omaha basedproduction company for the purpose of acquiring the domestic andforeign marketing and distribution rights to a documentary seriesentitled ON THESE RUINS encompassing the titles of NARTICA, THEGALAPOGOS ISLAND and EASTER ISLAND.
In June, 2000, the Company entered into an agreement for thedevelopment of an electronic commerce marketing arrangement withPix Media Inc., a 2 year old Los Angeles based Internet company,for the purpose of providing a national and international e-commerce exploitation venue for various titles within theCompany's completed film and television library.
Further, during fiscal year 2000 and in addition to continuing toexploit existing film and television projects such as the featurelength films entitled "Shattered Illusions" and "Ninth Street",the Company negotiated and signed a North American Distributioncontract on June 17, 2000, for the theatrical and ancillaryexploitation of a full length feature film entitled "Amy". TheCompany also executed an agreement on June 20, 2000 for thecomplete purchase of two full length feature films entitled"Malevolence" and "The Second Coming" from Sig Larsen ProductionsInc. in Los Angeles, California, which includes all foreign anddomestic rights to each film; a domestic U.S. only, DistributionAgreement was executed with a sub-agent for First Motion PictureInc. in Toronto, Ontario, Canada, on March 27, 2000, for theexplotatation of ancillary rights to the full length feature filmentitled "Jigsaw"; and on May 8, 2000, a domestic U.S.Distribution Agreement was executed with Praxis EntertainmentInc. in Dallas, Texas for the exploitation of ancillary rights tofive full length feature films entitled "Flying Changes","Winning Colors", "Shadow Dancer", "Trance", and "Corndog Man".
In February, 2001, the Company commenced theatrical marketing anddistribution of the feature film entitled "Amy" with a LosAngeles premier of the film at the AMC Century City theaters, theMANN Westwood Cinema, the Loew's Cineplex, Beverly Center andthroughout the Edwards theater circuit in Orange County,California. During the first and second quarters of 2001, thetheatrical showings of the film continued with a rollout acrossthe United States in cities including New York, Detroit, Seattleand Palm Springs.
In 1999, 2000,2001,2002 and 2003 certain other film and televisionparticipations of the Company included development and packagingarrangements, the Company's review and in certain cases, adviceand counsel on screenplays and screenplay development scenariosfor the subsequent possible packaging and production anddistribution of a particular project. The most significant ofthese productions, their production companies, and percentage offuture gross revenue allocated to the Company, were the featurelength film entitled CORKLESBY offered by co-production companyNorthstar Entertainment Inc., a 4-year old Los Angeles basedproduction company, (50%); and the feature length film entitledALONG FOR THE RIDE offered by production company WittmanProductions Inc., a 4-year old Los Angeles based productioncompany, (50%). In 2000, the Company prepared for production,began distribution and entered negotiations.
The following is a table showing the comparison of balance sheetdata between 2004 and 2003.
Three Months Ended March 31,
CATEGORY 2004 2003 -------- ---------
Assets 10,618,818 10,703,385Common Stock Outstanding 13,034,752 12,174,462Stockholders'Equity 10,588,985 10,671,211Total Liabilities 29,833 32,174Inventory 10,604,498 10,586,934Retained Earnings (69,661) 13,575
The Company experienced no material changes during the firstquarter of 2004 regarding its operations or its financialposition relative to first quarter 2003. There are no seasonalor other factors regarding the Company's intra-year operationsthat require explanation of a percentile swing in inter-quarterreports.
GENERAL
In fiscal 2003 and the first three months of 2004 the Companycontinued its involvement in a variety of film and televisionprojects relative to development, acquisitions, packaging,production and marketing/distribution activities. The Companyalso continued to pursue potential diversified businessopportunities that have cash flow possibilities. Managementbelieves that a film or television production's economic successis dependent upon several overlapping factors including generalpublic appetite of a potential genre or performer at the time ofrelease, domestic and international marketing philosophy,applicable usage of existing and new and emerging technology,advertising strategy with resultant penetration and the overallquality of the finished production. The Company's film andtelevision productions may compete for sales with numerousindependent and foreign productions as well as projects producedand distributed by a number of major domestic and foreigncompanies, many of which are units of conglomerate corporationswith assets and resources substantially greater than theCompany's. Management of the Company believes that in recentyears there has been an increase in competition in virtually allfacets of the Company's business. Specifically, the motionpicture industry competes with television and other forms ofleisure-time entertainment. Since the Company may for certainundetermined markets and products distribute its product to allmarkets and media worldwide, it is not possible to determine howits business as a whole will be affected by these developmentsand accordingly, the resultant impact on the financialstatements. The Company has currently obtained or arranged forthe investment capital to produce and/or distribute a minimum oftwo full length feature films or specialty television productionswithin the next two years. In addition to the development,financing, production, and distribution of motion picture andtelevision product, the Company expects to continue to exploit aportion or portions of the Company's completed film andtelevision library to a wide variety of distribution outletsincluding network television, cable television, satellitebroadcast, pay-per-view, and home video sales. Specifically, liveaction motion pictures are generally licensed for broadcast oncommercial television following limited or wide releasedistribution to theatrical outlets (theaters), home video and paytelevision. Licensing to commercial television is generallyaccomplished pursuant to agreements which allow a fixed number oftelecasts over a prescribed period of time for a specifiedlicense fee. Television license fees vary widely, from severalthousand to millions of dollars depending on the film ortelevision production, the number of times it may be broadcast,whether it is licensed to a network or a local station and, withrespect to local stations, whether the agreement provides forprime-time or off-time telecasting. Licensing to domestic andforeign television stations (syndication) is an importantpotential source of revenue for the Company, although in recentyears the prices obtainable for individual film and televisionproduct in domestic syndication have declined as pay televisionlicensing has grown. The growth of pay television and home videotechnologies, i.e. DVD (Digital Video Disk) and HDTV (HighDefinition television), has had an adverse effect on the feesobtainable from the licensing of film and television product tonetworks and local television stations. Thereby potentiallyeffecting the Company's ability to generate substantive revenuefrom this particular venue; however increasing revenue potentialin other areas. Conversely, the Company may derive revenue fromthe marketing and sale, either directly or through licensees, ofmotion pictures and other filmed or videotaped product onvideocassette or Digital Video Disk for playback on a televisionset or monitor through the use of videocassette recorders("VCRs"), digital video disk recorders and continued advancementsof pay television (cable), satellite broadcast technologies, andInternet applications domestically and internationally. TheCompany currently holds the distribution rights to 292 motionpicture and television titles.The revenue competition relative toexisting or pending exploitation agreements of the Company's filmand television product library and current and future productionand distribution of projects is volatile due to the manytechnological and innovative changes in the industry and alsochanges regularly occurring in the international economy.
LIQUIDITY AND CAPITAL RESOURCES
At yearend 2003, the Company experienced a net loss of (34,501).At March 31, 2004, the Company had $15,304 in cash and no cash equivalents and in the same period, 2003, the Company had $38,764in cash and no cash equivalents. The Company anticipates that its existing capital resources may be adequate to satisfy its capitalrequirements for the forseeable future. However, to accomplish the Company's planned activities, it will need to raise additional funds through public or private financings in the form of debt or equity. The Company has available substantial loss carry forwards for federal income tax purposes. The exact amount of the loss carryforwards isuncertain until the Company reaches an understanding with theInternal Revenue Service in that regard.In order to finance itsoperations, working capital needs and capital expenditures, theCompany utilized revenue from licensing fees, loans, proceedsfrom the private sale of equity securities, deferredcompensation, profit participation, and equity in exchange forservices and product.
In accordance with the Securities and Exchange Commission"Regulation D", and subject to Rule 144 restrictions, the Companyissued no shares of its common stock and no shares of itspreferred stock for cash and no shares of its common stock and noshares of its preferred stock for product and services acquiredby or provided to the Company in the first quarter period endingMarch 31, 2004. For the comparable period in 2003, the Companyissued no shares of its common stock and no shares of itspreferred stock for cash and no shares of its common stock and noshares of its preferred stock for product and services. Noproceeds from the sale of the corporation's common stock orpreferred stock has ever been used to pay compensation toemployees or executives of the Company. The Company waspreviously issued a standby irrevocable Letter of Credit from theKey Bank, N.A., Cleveland, Ohio (formerly Society Bank), in theamount of fifty thousand ($50,000) dollars. The terms of theSociety Bank Letter of Credit required that, if utilized, theCompany would pledge as collateral a portion of its film andtelevision product library. If the Letter of Credit wereexercised, the resultant loan would be secured by a commensurateportion of the Company's film and television product library.The Society Bank terms also provided that the Company wouldcontinue to be able to sell or lease any portion of the productlibrary as long as it retained sufficient material to secure anyloans made as a result of the Letter of Credit.
The Company currently utilizes a one hundred thousand ($100,000)dollar primary line of credit with the Wells Fargo Bank ofCalifornia and Citibank, to accommodate its daily cash flow needsand occasionally uses its credit lines at other financialinstitutions and with its vendors and suppliers.
The Company's principal liquidity in the period ending March 31,2004, included cash of $15,304 and net accounts receivable of $34,000 and in period ending March 31, 2003, included cash of $38,764 and net accounts receivable of $106,478. The Company's liquidity position has remained sufficient enough to support on-going general administrative expense, pilot programs, strategic position, and the garnering of contracts, relationships and film and television product for addition to the Company's library, and the financing, packaging, development and production of two feature films and specialty television projects. Although the Company during 2002 and 2003 experienced revenue, unless the Company has an influx of additional capital, the Company will notbe able to accomplish its planned objectives and revenueprojections. Accordingly, the Company intends to resolve andprovide for its liquidity needs as well as provide for the neededcapital resources to expand its operations through a futureproposed public offering of its common shares to the public. Itis anticipated that such an offering will commence within thenext 24 months for an amount to be determined by the Company andunderwriter(s) if any. To meet the Company's interim liquidityand capital resources needs while the Company's contemplatedpublic offering is being prepared and examined, the Company ispresently investigating the possibilities of future loans and isconsidering future sales of unregistered common equity toaccredited investors under one or more exemptions that providefor the same. In the event a loan is obtained, one of the termsmay provide that the same be repaid from the proceeds derivedfrom the Company's contemplated public offering. A primary use ofpublic offering proceeds would be the further exploitation of theCompany's current completed product film and television library,participations in completed films, and the continued development,production and marketing/distribution of new film and televisionproduction opportunities. The Company continues to discussacquisitions and mergers with various interested parties.
The following table presents equity and cash flow data for theperiods indicated.
Three Months Ended March 31, 2004 2003 ----- -----
Accounts Receivable $ 34,000 $ 84,000Payables 12,833 15,124Income/Deficit (beforedepreciation & sales returns) (9,792) (10,434)Accumulated Earnings (deficit) (69,661) 13,575Cash 15,304 38,764
In 1997 and 1998, management revalued its inventory based onmanagement's receipt of commentary from the Securities andExchange Commission, with an additional appraisal of potentialresale value, worthiness as works of art, and potential licensingcapabilities, resulting in a reduction in management's estimateof a net realizable value in 1997 of $4,091,950 and in 1998 of$3,868,380. The results of the reevaluations effectuated in 1997and 1998 resulted in a substantial reduction in book value ofapproximately 51% for those items.
The Company expects its marketing operations to expandconsiderably over the next three years. The current inventoryand contracts acquired by the Company are now beginning to bemore vigorously exploited. As the Company's focus moves fromextensive accumulation of product and contracts in an ownershipcapacity to capital acquisition specifically for marketingpurposes using recently developed technologies. Although theCompany is conservative regarding its policy concerning the useof borrowed operating capital, it is now in a position to use itsreputation and contacts in the industry to leverage operatingfunds profitably.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS AND
MANAGEMENT'S STATEMENT REGARDING INTERIM PERIOD ADJUSTMENTS
The statements which are not historical facts contained in thisForm 10-QSB are "forward looking statements" within the meaningof Section 27A of the Securities Act of 1933, as amended, andSection 21E of the Securities Exchange Act of 1934, as amended,that involve risks and uncertainties. The words "anticipate","believes", "expect", "intend", "may" or similar expressions usedin this Form 10-QSB as they relate to the Company or itsManagement are generally intended to identify such forwardlooking statements. These risks and uncertainties contained inthis Form 10-QSB include but are not limited to, product demandand market acceptance risks, the effect of economic conditionsgenerally and retail/wholesale in the motion picture andtelevision industry and marketing conditions specifically, theimpact of competition, technological difficulties, capacity andsupply constraints or difficulties, the results of financingefforts, changes in consumer preferences and trends, the effectof the Company's accounting policies, weather conditions, acts ofGod, and other risks detailed in the Company's Security andExchange Commission filings. The Company's management has madeall the adjustments relative to the fiscal yearend statements andthe interim period herein, which in the opinion of management arenecessary in order to make the financial statements notmisleading.
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DaDog
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