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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 2829, ~~2011~~ 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to to

Commission File No. 000-29901

PUBLIC MEDIA WORKS, INC.

(Exact name of registrant as specified in its charter)

Delaware		98-0220849
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2330 Marinship Way, Suite 300 Sausalito, California		94965
4000 Bridgeway, Ste. #401 Sausalito, CA 94965		94965
(Address of principal executive offices)		(Zip Code)

(415) ~~331-7700~~ 524-5967

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:		Name of each exchange on which registered:
None		None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant

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was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ¨ NO ¨ x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statement incorporated by ~~reference~~ reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of last business day of the registrant’s most recently completed second fiscal quarter as reported on the OTC Bulletin Board ($0.11 06 per share), was approximately $~~294~~2,~~363~~117,000. Shares of the registrant’s common stock held by each officer and director of the registrant and by each person or entity who is known to own beneficially 5 10% or more of the registrant’s outstanding common stock have been excluded for purposes of the foregoing calculation on the basis that such persons and entities may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of May 2731, ~~2011~~2012, the registrant had 3263,~~295~~315,~~294~~615 shares of its common stock issued and outstanding.

2Table of Contents


	Page

Part I		4

Item 1 Description of Business		4

Item 1A Risk Factors		6

Item 1B Unresolved Staff Comments		8

Item 2 Properties		8

Item 3 Legal Proceedings		8

Item 4 Mine Safety Disclosures		9

Part II		9

Item 5 Market for Common Equity, Related Stockholder Matters and Issuer Sales of Equity Securities		9

Item 6 Selected Financial Data and Supplementary Information		12

Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations		12

Item 7A Quantitative and Qualitative Disclosures About Market Risk		17

Item 8 Financial Statements and Supplementary Data		17

Item 9 Changes In and Disagreements with Accountants on Accounting and Financial Disclosure		17

Item 9A Controls and Procedures		17

Item 9B Other Information		19

Part III		19

Item 10 Directors, Executive Officers and Corporate Governance		19

Item 11 Executive Compensation		20

Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		21

Item 13 Certain Relationships and Related Transactions, and Director Independence		21

Item 14 Principal Accountant Fees and Services		22

Part IV		22

Item 15 Exhibits, Financial Statements and Reports on Form 8-K		22

Signatures		26

Consolidated Financial Statements		F-1

~~Table of Contents~~ 2

	Page
Part I		5
Item 1 Description of Business		5
Item 1A Risk Factors		8
Item 1B Unresolved Staff Comments		14
Item 2 Properties		14
Item 3 Legal Proceedings		14
Item 4 (Removed and Reserved)		14
Part II		14
Item 5 Market for Common Equity, Related Stockholder Matters and Issuer Sales of Equity Securities		14
Item 6 Selected Financial Data and Supplementary Information		18
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 7A Quantitative and Qualitative Disclosures About Market Risk		22
Item 8 Financial Statements and Supplementary Data		22
Item 9 Changes In and Disagreements with Accountants on Accounting and Financial Disclosure		22
Item 9A Controls and Procedures		22
Item 9B Other Information		24
Part III		24
Item 10 Directors, Executive Officers and Corporate Governance		24
Item 11 Executive Compensation		24
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		24
Item 13 Certain Relationships and Related Transactions, and Director Independence		24
Item 14 Principal Accountant Fees and Services		24
Part IV		24
Item 15 Exhibits, Financial Statements and Reports on Form 8-K		24
Signatures		27
Consolidated Financial Statements		F-1

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3SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

~~Table~~This Annual Report contains statements that involve expectations, plans or intentions (such as those relating to future business or financial results, new features or services, or management strategies). These statements are forward-looking and are subject to risks and uncertainties, so actual results may vary materially. You can identify these forward-looking statements by words such as “may,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of ~~Contents~~certain factors, including but not limited to those set forth under “Risk Factors” and elsewhere in this Annual Report on Form 10-K and other reports we file with the SEC.

~~SPECIAL~~The ~~NOTE~~Company ~~REGARDING~~cautions ~~FORWARD~~readers not to place undue reliance on any such forward-~~LOOKING~~looking ~~STATEMENTS~~statements, which speak only as of the date made. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

This ~~Annual~~report ~~Report~~should ~~contains~~be ~~statements~~read ~~that~~in ~~involve~~conjunction ~~expectations,~~with ~~plans~~the ~~or intentions (such as those relating to future business or~~ financial ~~results,~~ ~~new features or services, or management strategies). These~~ statements ~~are forward-looking~~ and ~~are~~the ~~subject~~related tonotes ~~risks~~contained and uncertainties, so actual results may vary materially. You can identify these forward-looking statements by words such as “may,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. Our actual results could differ materially from those anticipated in ~~these forward-looking statements as a result of certain factors, including but not limited to those set forth under “Risk Factors” and elsewhere in~~ this ~~Annual Report on Form 10-K and other reports we file with the SEC~~report.

The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. 3

~~This~~Table ~~report~~of ~~should be read in conjunction with the financial statements and the related notes contained in this report.~~ Contents

4PART I

~~Table~~ITEM of1. ~~Contents~~DESCRIPTION OF BUSINESS

~~PART~~Bankruptcy I Filing

~~ITEM 1~~On September 23, 2011, the Company filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (the “Chapter 11 Proceeding”) in the United States Bankruptcy Court for the Central District of California, Riverside Division (the "Bankruptcy Court"). ~~DESCRIPTION~~ The OFChapter ~~BUSINESS~~11 Case Number is: 6:11-bk-40137-MJ. The purpose in filing the Chapter 11 Case is to give the Company time to restructure its debt obligations to its secured and unsecured creditors. We intend to prepare a Disclosure Statement and a Plan of Reorganization that describes our plan to emerge from Chapter 11 as a viable company. We plan to file those documents with the Bankruptcy Court and submit them to all creditors for their approval with a view towards obtaining an Order from the Bankruptcy Court confirming our Plan of Reorganization so that we may successfully exit from Court protection. We remain committed to implementing a strategy to allow the Company to emerge from the Chapter 11 Proceeding. However, there can be no assurance regarding our ability to emerge from the Chapter 11 Proceeding. The uncertainty regarding these matters raises substantial doubt about our Company’s ability to continue as a going concern.

Overview

~~The~~Prior ~~Company~~to our entering into the Chapter 11 Proceeding, the Company and its wholly-owned subsidiary, EntertainmentXpress, Inc., a California corporation (“EntertainmentXpress”), ~~are~~ were engaged in the business of offering self-service kiosks which deliver DVD movies to consumers. We are no longer in this business.

~~Public~~Corporate Media Works, Inc. has historically been engaged in the development, production, marketing and distribution of film, music and television entertainment titles. The Company has an ownership interest in several film and television projects, but expects no revenue from these projects. As of May 4, 2010 with the acquisition of Entertainment Xpress, Inc., the Company has focused exclusively on its kiosk business and intends to continue this focus going forward. In March 2011, the Company installed its first 25 kiosks under the DBA of “Spot. The difference™”. History

~~In order~~Prior to ~~maintain~~May ~~clarity~~2010, the Company was historically engaged in ~~this~~the ~~report~~development, ~~references~~production, tomarketing ~~the~~and ~~business~~distribution of ~~the~~film, music and television entertainment titles. The Company’s has ~~subsidiary~~an ~~EntertainmentXpress~~ownership interest in several film and ~~references~~television toprojects. ~~the~~As ~~“Company,”~~of ~~“we~~May 4,” ~~“us”~~2010 ~~“our,”~~with ~~“Spot,”,~~the ~~Spot~~acquisition of Entertainment ~~Rentals~~Xpress,” ~~or Spot~~Inc., ~~The~~the ~~difference”~~Company ~~refer~~focused toexclusively ~~the~~on ~~combined~~its ~~businesses~~kiosk ofbusiness. ~~Public~~In ~~Media~~March ~~Works~~2011, ~~Inc.~~the ~~and~~Company ~~EntertainmentXpress~~installed ~~after~~its ~~May 4,~~first ~~2010~~25 kiosks under the DBA of “Spot. The difference™”.

The Company completed its share exchange of EntertainmentXpress ~~Acquisition~~on May 4, 2010. The Company owns 100% of the outstanding shares of EntertainmentXpress, which is a subsidiary of the Company. The EntertainmentXpress subsidiary is currently inactive. While our initial test marketing in mid-2010 was under the EntertainmentXpress brand, with the beta test of our new kiosks in March 2011, we began using the brand “Spot Rentals™” and “Spot. The difference™” tag line. In August 2011, the Company discontinued its kiosk operations due to having insufficient operating capital.

~~The Company completed its share exchange of EntertainmentXpress on May 4~~Historically, ~~2010.~~we ~~The~~were ~~Company~~able ~~owns~~to ~~100%~~raise ofa ~~the~~limited amount ~~outstanding shares~~ of ~~EntertainmentXpress,~~capital ~~which~~through isprivate aplacements ~~subsidiary~~ of ~~the Company. EntertainmentXpress subsidiary is currently inactive. While~~ our ~~initial~~equity ~~test marketing in mid-2010 was under the EntertainmentXpress brand~~stock, ~~with~~but ~~the~~we ~~beta~~are ~~test~~uncertain ofabout our ~~new~~continued ~~kiosks~~ability into ~~March~~raise ~~2011, we began be using the brand “Spot Rentals™” and “Spot~~funds privately. ~~The difference™” tag line.~~

~~PMW~~During ~~Business~~the ~~Description~~year ended February 29, 2012 and through the date of this report, our management has been analyzing various alternatives available to our Company to be able to emerge from the Chapter 11 Proceedings. We are focusing on potential merger/acquisition opportunities with businesses who desire to be owned by a public company. There can be no assurance, however, that we will be able to complete any merger or acquisition.

PMW is deploying self-service kiosks which deliver DVD movies to consumers under the trade name “Spot Rentals™” or “Spot. The difference™.” The kiosks provide consumers the ability to rent and purchase DVD movies and potentially other products. The Company plans to locate the kiosks immediately outside of, or in, grocery stores, convenience stores and other high-traffic, public venues. 4

~~Kiosks~~Table ~~have the effect~~ of condensing traditional brick and mortar video stores into a very small space capable of dispensing DVDs and other content. The kiosks are free standing and can be located indoors or outdoors. In order to operate they need power and internet connections. Contents

~~The~~At ~~Company~~this ~~believes~~stage, ~~consumer~~we ~~awareness~~can ~~has~~provide ~~increased~~no ~~over the~~assurance ~~last~~that ~~several~~we ~~years~~will asbe toable ~~the availability of DVDs and games which are immediately accessible in kiosks at many high-volume traffic locations. Many of the traditional brick and mortar based chains which consumers used~~ to ~~visit~~locate tocompatible ~~rent~~business ~~DVDs~~opportunities, ~~have either disappeared~~ or ~~consolidated~~that inany ~~recent~~additional ~~years.~~required ~~The~~financing ~~Company~~can ~~believes~~be itcompleted isin connection ~~positioned~~with ~~to be~~ a ~~direct~~combination ~~beneficiary~~or ofmerger ~~the~~with ~~shift~~another ~~from~~business ~~traditional retail stores to kiosks~~opportunity, ~~and~~or ~~believes~~whether the ~~use~~opportunity's ofoperations ~~new cutting edge delivery technology~~ will ~~appeal to~~be ~~consumers~~profitable. ~~The Company believes it is also well positioned to take advantage of the public acceptance of kiosk DVD rentals in the market place.~~

~~The~~We ~~newness~~remain ofcommitted ~~the~~to ~~kiosk~~implementing ~~platform~~our turnaround ~~technology,~~strategy ~~which~~while maintaining our company during the ~~Company~~chapter is11 ~~employing,~~restructuring ~~should~~process. ~~enable~~However, ~~the~~there ~~Company to~~can be ~~opportunistic~~no ~~and~~assurance regarding ~~take~~these ~~advantage~~matters. ofThere ~~technologies~~can ~~that~~be ~~did~~no ~~not~~assurance ~~exist~~that asour ~~recently~~operational ~~as eighteen~~and ~~months~~financial ~~ago.~~turnaround ~~For~~strategy ~~example,~~will ~~one unique~~be ~~feature~~successful ofor that the ~~Company’s~~DIP ~~kiosk~~Lenders ~~allows~~or ~~for~~ the ~~simultaneous~~Bankruptcy ~~rental~~Court ~~and~~will ~~return~~approve ofthe ~~DVDs,~~plan ~~reducing~~ultimately ~~wait~~proposed ~~time~~ by ~~customers~~our ~~making~~company aand ~~return,~~under asuch ~~major~~circumstances we ~~concern~~could ofbe ~~consumers.~~forced Into ~~the~~consider ~~future, when~~other ~~the physical~~alternatives ~~dispensing~~to ofmaximize ~~DVDs~~potential isrecovery ~~augmented~~for byour ~~over~~various ~~the~~creditor ~~air~~constituencies. ~~streaming~~The oruncertainty regarding ~~downloading~~these ofmatters ~~movies~~raises ~~and~~substantial ~~other~~doubt ~~content,~~about ~~the~~our ~~Company~~company’s ~~kiosks~~ability ~~have the capacity~~ to ~~provide~~continue ~~for~~as ~~the~~a ~~non-physical~~going ~~delivery of content~~concern.

~~The~~ Company’s ~~new~~Intellectual kiosks, which began being beta tested in March 2011, include a touch screen for ordering product and a 32 inch high definition flat screen monitor. Initially, the monitor will be used for advertising product available for rental and purchase. In the future, we expect to test third party advertising as a means of generating incremental revenue. We are also exploring the use of 3D LCD display monitors and expect to test these in the future. Property

5We do not own any patents. The Company does own and maintain the Internet domain names www.entxprs.com, www.publicmediaworks.com, www.spotrentals.com. PMW has also registered numerous Internet domain names for specific projects. PMW owns a service mark for “PublicFilmWorks” and has a license agreement to use the trademarks “Spot Rentals™” and “Spot. The difference™.” The Company has not filed applications to protect any other trade or service marks, and there can be no assurances the Company would receive such trade or service mark protection.

~~Table of Contents~~Employees

~~The~~We ~~Company~~currently ~~has~~have ~~entered~~no ~~into~~employees aother ~~collaboration~~than ~~agreement~~our ~~with~~sole ~~Signifi~~officer ~~Solutions, Inc.,~~ and ~~its sister company~~ ~~Spot Ventures, whereby the Company shall furnish new DVDs in exchange for reimbursement for the costs of these DVDs out of revenue and a 50% share of the remaining profits of the kiosks~~director. ~~Both~~We ~~Signifi~~do ~~and~~engage ~~Spot are located in Toronto~~consultants, ~~Canada.~~attorneys ~~As of February 28, 2011, Spot operates 6 kiosks in the Toronto metropolitan area~~ and ~~revenue~~accountants ~~has~~as ~~been minimal~~necessary. ~~The Company is currently evaluating if it wants to continue this arrangement.~~

~~Our~~Research ~~core business model focuses on responding to the demand of film~~ and television producers for access to consumers in real-time by offering self-service digital media through kiosks where consumers can rent or purchase movies and other digital media. Our goal is to create superior kiosk and digital network technologies. Development

We ~~are~~have ~~planning~~incurred ~~to install~~no ~~Spot~~research ~~DVD rental kiosks at high traffic consumer retail establishments, including grocery stores~~ and ~~convenience~~development ~~stores.~~expenditures ~~Our digital media kiosks supply the functionality of a traditional video rental store, yet typically occupy an area of~~over less than ten square feet. Consumers use a touch screen to select their DVD, swipe a valid credit or debit card, and receive their selection(s). The process is designed to be fast, efficient and fully automated with no membership fees. Our business plan is modeled after the ~~success~~last oftwo ~~other~~fiscal ~~publicly-traded kiosk rental companies, such as Coinstar’s (NasdaqGS: CSTR) redbox DVD rental business~~years.

WePurchase ~~plan to generate revenue primarily through fees charged to rent or purchase a DVD, and pay retailers a percentage~~ of ~~our~~Significant revenue. We charge flat rental fees per night and if the consumer chooses to keep the rental(s) for additional nights, the consumer will be charged for each additional night. The kiosks are equipped to accept payment by credit card and debit card, which allows us to charge for additional nights, or the failure to return a DVD. Equipment

~~Our~~We ~~kiosks~~do ~~are~~not ~~also~~intend ~~equipped with a flatscreen display that can display advertising and be tailored~~ to ~~specific~~purchase ~~venue~~any ~~promotions.~~significant Weequipment over ~~also~~the ~~may~~next ~~sell~~twelve ~~advertising space on our rental services kiosks and offer retail partner branded kiosks~~months.

AsPublicly ~~previously~~Available announced, neither the Company’s teaming agreement with the Asian American Convenience Store Association for the placement of DVD rental kiosks in convenience stores, nor the teaming agreement with Modular Conversions for the placement and financing of DVD rental kiosks in gas station convenience stores, has resulted in the placement or financing of any DVD rental kiosks. The Company’s business model has been refined over time, and we do not believe either of these agreements are necessary for the full execution of our business plan. Information

~~Company~~We ~~Intellectual~~meet ~~Property~~information reporting requirements of the Securities and Exchange Act of 1934 by filing, and furnishing to the Securities and Exchange Commission (“SEC”), reports including annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, as well as amendments thereto. These reports and related materials are available at the SEC website, www.sec.gov and the SEC’s Public Reference Room at 100 F Street, NE., Washington, DC 20549.

PMW owns and maintains the Internet domain names www.publicmediaworks.com, www.spotrentals.com as well as www.entertainmentxpress.com. PMW has also registered numerous Internet domain names for specific projects. PMW owns a service mark for “PublicFilmWorks” and has a license agreement to use the trademarks “Spot Rentals™” and “Spot. The difference™.” PMW may also protect various other words, names, symbols, and devices that are used with goods produced by PMW to distinguish them from those produced by others through the use of trademarks, and will identify and distinguish the source of several of its services through the use of service marks. These would include “Public Media Works” its logo, “Spot Rentals™” and “Spot, The difference™.” PMW has not filed applications to protect any other trade or service marks, and there can be no assurances PMW will receive such trade or service mark protection. 5

~~Market~~Table ~~and~~of ~~Competition~~ Contents

~~Competitors~~ITEM 1A inRISK the field are kiosk providers, such as redbox and NCR/Blockbuster Express, which essentially rent movie titles on DVD. Redbox has expressed the opinion that the kiosk DVD business is still in its nascent state. Redbox’s revenues for 2010 were $1.16 billion, an increase of 50% from 2009 revenue of $774 million. Redbox reported that it had installed 30,200 kiosks through December 2010, an increase of approximately 8,000 from year end 2009. NCR/Blockbuster has installed approximately 10,000 kiosks through 2010. FACTORS

6You should carefully consider the following risk factors, the other information included herein and the information included in our other reports and filings with the SEC. Our business, bankruptcy, financial condition, and the trading price of our common stock could be adversely affected by these and other risks.

~~Table~~BANKRUPTCY ofPROCEEDINGS ~~Contents~~RISK

~~Redbox’s~~The ~~current~~Company ~~strategy~~is currently operating under Chapter 11 of the Bankruptcy Code and it is touncertain ~~roll~~whether ~~out~~the ~~kiosks~~company ~~into~~will ~~large~~be ~~retailers~~able ~~such~~to ascontinue ~~Wal-Mart~~operating or whether holders of our common stock and ~~CVS~~other equity will receive any payment for their securities. ~~The~~On September 23, 2011 (the "Petition Date"), the Company ~~believes~~filed ~~this~~a ~~opens~~voluntary petition for relief under Chapter 11 of the ~~door~~Bankruptcy ~~for~~Code itwith the Bankruptcy Court. The petition was filed in order to ~~focus~~enable onthe ~~small~~Company ~~and~~to ~~medium~~pursue ~~sized~~reorganization ~~retail~~efforts ~~chains~~under Chapter 11 of the Bankruptcy Code. The ~~Beyond~~Company ~~redbox~~continues to operate its business as debtor-in-possession under the jurisdiction of the Bankruptcy Court and ~~Blockbuster~~in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. In general, ~~there~~as ~~are~~debtor-in-possession, the ~~estimated~~Company is authorized under Chapter 11 to becontinue ~~over~~to 1operate as an ongoing business,~~000~~ ~~small~~but ~~providers~~may not engage in transactions outside of ~~kiosks~~the ordinary course of business without the prior approval of the Bankruptcy Court. No assurance can be provided as to what values, if any, will be ascribed in ~~North~~the ~~America~~bankruptcy proceedings to the Company's prepetition liabilities, common stock and ~~Canada~~other securities. Based upon the status of the Company's plan of reorganization, it is uncertain whether holders of our securities will receive any payment in respect of such securities.

~~The~~Additionally, ~~other~~should ~~large~~we ~~competitor,~~be ~~Netflix,~~unable into ~~packaged~~comply with ~~media~~the ~~distribution,~~Chapter ~~does~~11 ~~not~~bankruptcy ~~provide~~requirements ~~their~~or ~~consumers~~put ~~with~~forth ~~instant~~a ~~gratification,~~Plan ~~instead~~of ~~requiring~~Reorganization within the ~~consumer~~ torequired ~~wait~~timeframes ~~for~~of ~~programming~~the ~~delivered~~Bankruptcy Court byrules, ~~mail.~~then ~~Netflix~~the ~~has~~bankruptcy could be converted to a ~~streaming~~Chapter ~~video~~7 ~~business~~liquidation ~~model~~proceeding in which isevent inthe Company shareholders would lose the ~~early~~entire ~~stages.~~value of their shares.

WeChanges in ~~intend~~our board of directors, management and stockholders should we emerge from bankruptcy may lead to significant changes in our ~~distinguish~~operations, ~~ourselves~~business plans and results. Should we be successful in emerging from Chapter 11, it is likely a new board of directors and management would be appointed and the ~~competition~~Company bywould ~~offering~~be in a ~~richer,~~new ~~faster~~line of business and ~~more~~have ~~compelling~~a ~~consumer~~new ~~experience~~stockholder base. WeThe ~~will~~new ~~offer~~board ~~distribution~~of ~~partner-branded kiosks~~directors, ~~implementing~~new management or the new stockholders would likely change the current operations or business plans of the Company. As a ~~fully~~result, ~~integrated~~when ~~solution~~reviewing ~~for~~the ~~in-store~~description ~~advertising~~of the Company’s business, the consolidated financial statements and financial data, and any forward-looking information included in ~~the~~this ~~future~~report, you should ~~offer~~consider ~~kiosks~~the ~~rich~~possibility inthat ~~multiple~~there ~~platforms~~may ~~such~~be assignificant ~~physical~~changes to the Company’s operations, business plans, results and ~~digital~~expectations following ~~content~~the Company’s emergence from bankruptcy.

~~Government~~Our common ~~Regulation~~stocks, warrants and ~~Self-Regulating~~options ~~Associations~~may be cancelled upon our emergence from bankruptcy. Any approved plan of reorganization may provide that our outstanding shares of common stock, warrants and options will be cancelled upon our emergence from bankruptcy and that the holders of our common stock, warrants and options will receive no distributions under the plan of reorganization. As a result, any investment in the Company is highly speculative. Accordingly, we urge that appropriate caution be exercised with respect to existing and future investments in any equity or debt securities of the Company.

~~Our~~FINANCIAL business will be subject to federal, state and local laws and government regulations, including laws relating to access to machines in public places, credit card and debit card transactions, consumer protection, consumer privacy and data protection. The application of existing laws or the enactment of new laws or regulations may materially impact the way we are required to conduct operations. The Company’s costs for compliance with environmental laws are negligible. RISKS

~~Employees~~We require additional financing to sustain our operations and emerge from Chapter 11 and without it we may not be able to continue operations. We have never earned a profit and we anticipate that we will continue to incur losses for the foreseeable future. We continue to operate on a negative cash flow basis. We will need to raise additional financing in order to emerge from our Chapter 11 Proceedings. Our inability to raise additional working capital at all or to raise it in a timely manner would negatively impact our ability to fund our operations or emerge from Chapter 11. If we raise additional funds through the issuance of equity securities, this may cause significant dilution of our common stock, and holders of the additional equity securities may have rights senior to those of the holders of our common stock. If we obtain additional financing by issuing debt securities, the terms of these securities could restrict or prevent us from paying dividends and could limit our flexibility in making business decisions.

AsWe ofhave ~~the~~a ~~date~~history of ~~this report~~losses, ~~the~~our auditors ~~Company~~have ~~employs~~stated 6that ~~individuals. The~~these ~~Company~~losses ~~considers~~raise ~~its~~substantial ~~relations~~doubt ~~with~~about ~~its~~our ~~employees~~ability to becontinue ~~good~~as a going concern and we expect to continue to operate at a loss for the foreseeable future. ~~The~~We have a history of continuing losses and negative cash flow ~~Company’s~~from ~~CEO~~operations. From our inception in March 2000 through February 29, ~~President~~2012, ~~and~~we ~~CFO~~had ~~have~~cumulative ~~employment~~net ~~agreements~~losses ~~which~~of ~~have~~$19,482,451 ~~been~~and we ~~previously~~had ~~filed~~net ~~with~~loss in the ~~Securities~~year ~~and~~ended ~~Exchange~~February 29, ~~Commission~~2012 of $6,636,238. We expect to continue to incur losses for the foreseeable future.

~~Seasonality~~Because of our history of continuing losses and our Bankruptcy, our auditors, in their report on our audited financial statements included elsewhere in this report, have stated that these losses raise substantial doubt about our ability to continue as a going concern. The going concern qualification from our auditors could have a negative impact on our future sales to customers, inhibit our ability to obtain financing terms from vendors and may adversely impact our ability to raise additional financing. Accordingly, we cannot assure you that we will ever be profitable. Whether we ever become profitable will depend on many factors, but principally on our ability to raise additional capital and to successfully market our products and services.

We believe we will experience seasonality in our revenue from renting DVD’s, with higher revenue in the summer months and lower revenue in September and October in part due to the beginning of the school year. As our business is dependent on new releases from the major movie and television studios any change in their release schedule will impact our revenue. 6

~~Manufacturing~~Our financial statements have been prepared assuming that the Company will continue as a going concern. The factors described above raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from this uncertainty. Our independent registered public accounting firm has included an explanatory paragraph expressing doubt about our ability to continue as a going concern in their audit reports for the fiscal years ended February 29, 2012 and February 28, 2011.

We ~~have~~cannot ~~entered~~assure ~~into~~you anthat ~~agreement~~we towill ~~secure~~be ~~our kiosks from Signifi Solutions (Signifi), located outside Toronto, Canada, for distribution of a custom~~able ~~manufactured~~to ~~kiosk~~generate ~~and~~sufficient ~~related~~revenue ~~software. We have customized Signifi’s kiosk~~ to ~~allow~~fund ~~simultaneous~~our ~~rental~~business. ~~and~~If ~~return~~we ascannot ~~well~~continue as ~~to accommodate~~ a 32going ~~inch monitor. Additionally~~concern, ~~the~~we ~~kiosk~~may isneed ~~fully~~to ~~compliant~~substantially ~~with the Americans with Disability Act.~~revise Weour ~~believe~~business ~~that~~plan ~~this~~or ~~outsourced~~cease ~~approach allows us to reduce operating expenses and capitalize on Signifi’s experience and economies of scale~~operations.

~~Incorporation~~We do not expect to pay dividends for the foreseeable future, and ~~History~~we may never pay dividends and, consequently, the only opportunity for investors to achieve a return on their investment is if a trading market develops and investors are able to sell their shares for a profit or if our business is sold at a price that enables investors to recognize a profit. We currently intend to retain any future earnings to support the development and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors after taking into account various factors, including but not limited to our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. In addition, our ability to pay dividends on our common stock may be limited by state law. Accordingly, we cannot assure investors any return on their investment, other than in connection with a sale of their shares or a sale of our business. At the present time there is a limited trading market for our shares. Therefore, holders of our securities may be unable to sell them. We cannot assure investors that an active trading market will develop or that any third party would offer to purchase our business on acceptable terms and at a price that would enable our investors to recognize a profit.

~~The~~CORPORATE ~~Company~~AND ~~was~~OTHER ~~incorporated~~RISKS in the State of Delaware on March 3, 2000 under the name “Burnam Management, Inc.” (“Burnam”) and registered its common stock with the Securities and Exchange Commission on March 9, 2000. From incorporation until August 30, 2003, Burnam did not have any operations or business plan and did not trade on any exchange or trading system. The original Public Media Works, Inc. (“PMW”) was a privately held company incorporated in the State of California on May 15, 2000. On August 29, 2003, Burnam entered into a Share Exchange Agreement to acquire PMW. The share exchange took effect on August 30, 2003. Upon the effective date of the merger, the Company changed its name from “Burnham Management, Inc.” to “Public Media Works, Inc.”

~~Publicly~~Limitations ~~Available~~on ~~Information~~director and officer liability and indemnification of our officers and directors by us may discourage stockholders from bringing suit against a director. The Company’s certificate of incorporation and bylaws provide, with certain exceptions as permitted by governing state law, that a director or officer shall not be personally liable to us or our stockholders for breach of fiduciary duty as a director, except for acts or omissions which involve intentional misconduct, fraud or knowing violation of law, or unlawful payments of dividends. These provisions may discourage stockholders from bringing suit against a director for breach of fiduciary duty and may reduce the likelihood of derivative litigation brought by stockholders on our behalf against a director. In addition, the Company’s certificate of incorporation and bylaws may provide for mandatory indemnification of directors and officers to the fullest extent permitted by governing state law.

We ~~meet~~are ~~information~~responsible ~~reporting~~for ~~requirements~~the indemnification of ~~the~~our ~~Securities~~officers and ~~Exchange~~directors. ~~Act~~Should ofour ~~1934~~officers byand/or ~~filing,~~directors ~~and~~require ~~furnishing~~us to ~~the~~contribute ~~Securities~~to ~~and~~their ~~Exchange Commission (“SEC”)~~defense, ~~reports~~we ~~including~~may ~~annual~~be ~~reports~~required to onspend ~~Form~~significant ~~10-K,~~amount ~~quarterly~~of ~~reports~~our oncapital. ~~Form~~Our ~~10-Q,~~bylaws ~~and~~provide ~~current~~for ~~reports~~the onindemnification ~~Form~~of ~~8-K~~our directors, asofficers, ~~well~~employees, and asagents, ~~amendments~~under ~~thereto.~~certain ~~These~~circumstances, ~~reports~~against attorney’s fees and ~~related~~other ~~materials~~expenses ~~are~~incurred ~~available~~by atthem ~~the~~in ~~SEC~~any ~~website,~~litigation to ~~www.sec.gov~~which ~~and~~they ~~the~~become ~~SEC’s~~a ~~Public~~party ~~Reference~~arising ~~Room~~from attheir ~~100~~association Fwith ~~Street,~~or ~~NE.,~~activities ~~Washington,~~on DCbehalf ~~20549.~~of Weour ~~make~~Company. ~~these~~This ~~reports~~indemnification ~~and~~policy could ~~related~~result ~~materials~~in ~~available~~substantial expenditures, aswhich ~~soon~~we asmay ~~reasonably~~be ~~practicable~~unable ~~after~~to werecoup. ~~electronically~~If ~~deliver~~these ~~such~~expenditures ~~materials~~are tosignificant, ~~the~~or involve issues ~~SEC,~~which ~~free~~result ofin ~~charge~~significant onliability ~~the~~for ~~“News~~our ~~and~~key ~~Events”~~personnel, ~~section~~we ofmay ~~our~~be ~~website,~~unable ~~www.spotrentals.com.~~to continue operating as a going concern.

7Our internal controls over financial reporting may not be effective, which could have a significant and adverse effect on our business. We are subject to various regulatory requirements, including the Sarbanes-Oxley Act of 2002. We, like all other public companies, must incur additional expenses and, to a lesser extent, diversion of our management’s time in our efforts to comply with Section 404 of the Sarbanes-Oxley Act of 2002 regarding internal controls over financial reporting. If, in the future, management identifies one or more material weaknesses, or our external auditors are unable to attest that our management’s report is fairly stated or to express an opinion on the effectiveness of our internal controls, this could result in a loss of investor confidence in our financial reports, have an adverse effect on our stock price and/or subject us to sanctions or investigation by regulatory authorities. Also, it may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional staff in order to develop and implement appropriate internal controls and reporting procedures.

~~Table~~CAPITAL ofMARKET ~~Contents~~RISKS

~~ITEM 1A~~Our ~~RISK~~common ~~FACTORS~~stock is thinly traded, so you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares. There is limited market activity in our stock and we are too small to attract the interest of many brokerage firms and analysts. We cannot give you any assurance that a broader or more active public trading market for our common stock will develop or be sustained. While we are trading on the OTC Bulletin Board, the trading volume we will develop may be limited by the fact that many major institutional investment funds, including mutual funds, as well as individual investors follow a policy of not investing in Bulletin Board stocks and certain major brokerage firms restrict their brokers from recommending Bulletin Board stocks because they are considered speculative, volatile and thinly traded.

~~You~~The ~~should~~market ~~carefully~~price ~~consider~~of ~~the~~our ~~following~~common ~~risk~~stock ~~factors,~~could be ~~the~~subject ~~other~~to ~~information~~wide ~~included~~fluctuations ~~herein~~in ~~and~~response ~~the~~to ~~information~~quarterly ~~included~~variations in our ~~other~~revenues ~~reports~~ and ~~filings~~ ~~with~~operating ~~the~~expenses, ~~SEC.~~announcements ~~Our~~of ~~business~~new products or services by us, ~~financial~~significant ~~condition~~sales of our common stock, ~~and~~including “short” sales, the ~~trading~~operating and stock price performance of ~~our~~other ~~common~~companies ~~stock~~that ~~could~~investors bemay ~~adversely~~deem ~~affected~~comparable byto ~~these~~us, and ~~other~~news ~~risks.~~reports relating to trends in our markets or general economic conditions.

~~BUSINESS RISKS~~ 7

~~Our~~The ~~business~~application isof ~~dependent~~the ~~upon~~“penny stock” rules to our ~~ability~~common tostock ~~secure~~could ~~contracts with~~limit ~~retailers~~the trading and liquidity of the common stock, adversely affect the market price of our ~~inability~~common stock and increase your transaction costs to ~~secure~~sell ~~contracts~~those orshares. As long as the ~~termination~~trading price of ~~contracts~~our ~~with~~common stock ~~one~~is orbelow ~~more~~$5 per share, the open-market trading of our ~~significant~~common ~~retailers~~stock ~~could~~will ~~seriously~~be ~~harm~~subject ~~our~~to ~~business~~the “penny stock” rules, unless ~~financial~~we ~~condition~~otherwise ~~and~~qualify ~~results~~for ofan ~~operations~~exemption from the “penny stock” definition. The ~~success~~“penny ofstock” ~~our business~~rules ~~depends~~impose inadditional ~~large~~sales ~~part~~practice requirements on ~~our~~certain ~~ability~~broker-dealers who sell securities to ~~secure~~persons other than established customers and ~~maintain~~accredited ~~contractual~~investors ~~relationships~~(generally those with ~~retailers~~assets in ~~high~~excess ~~traffic~~of ~~locations~~$1,000,000 ~~such~~or asannual ~~convenience~~income ~~stores~~exceeding ~~and~~$200,000 ~~grocery~~or ~~stores~~$300,000 together with their spouse). WeThese ~~are~~regulations, ~~only~~if ~~beginning~~they apply, require the delivery, prior to ~~secure~~any ~~concession~~transaction ~~rights~~involving ~~with~~a ~~retailers~~penny stock, of a disclosure schedule explaining the penny stock market and the associated risks. IfUnder these regulations, certain brokers who ~~retailers~~recommend ~~cancel~~such ~~our~~securities ~~concession~~to ~~rights,~~persons other than established customers or ifcertain weaccredited ~~are~~investors ~~unsuccessful~~must inmake ~~securing~~a ~~concession~~special ~~rights~~written suitability ~~with~~determination ~~additional~~regarding ~~retailers~~such a purchaser and receive such purchaser’s written agreement to a transaction prior to sale. These regulations may have the effect of limiting the trading activity of our ~~business~~common stock, ~~financial~~reducing ~~condition~~the liquidity of an investment in our common stock and ~~results~~increasing the transaction costs for sales and purchases of ~~operations~~our ~~will~~common ~~suffer.~~stock as compared to other securities.

WeThe ~~will~~stock ~~need~~market toin ~~secure~~general, ~~substantial~~and ~~capital~~the inmarket prices ~~order~~for topenny ~~finance~~stock ~~the~~companies ~~placement~~in ofparticular, ~~kiosks~~have ~~with~~experienced ~~retailers.~~volatility ~~Our~~that ~~business~~often ~~model~~has ~~requires~~been usunrelated to ~~purchase~~ the ~~kiosk~~operating ~~from~~performance of ~~our~~such ~~vendor before we place it with the retailer~~companies. IfThese webroad ~~are~~market ~~successful~~and inindustry ~~securing~~fluctuations ~~retail~~may ~~locations~~adversely weaffect ~~will~~the ~~need~~price ~~substantial~~of ~~additional~~our ~~capital~~stock, toregardless ~~procure~~of ~~additional~~our operating ~~digital media kiosks~~performance.

WeStockholders ~~depend~~should ~~upon~~be ~~third-party~~aware ~~manufacturers~~that, ~~for~~according to ~~key~~SEC ~~components~~Release No. 34-29093, the market for ~~our~~penny ~~rental~~stocks ~~kiosks.~~has Wesuffered ~~depend~~in onrecent ~~outside~~years ~~parties~~from topatterns ~~manufacture~~of ~~our~~fraud ~~digital media~~and ~~kiosks~~abuse. InSuch patterns ~~March~~include ~~2011,~~(1) control weof ~~installed~~the 25market ~~initial~~for ~~trial~~the ~~machines~~security ~~and~~by ~~intend~~one toor ~~continue~~a few broker-dealers that are often related to ~~expand~~the ~~our~~promoter or ~~installed~~issuer; ~~base~~(2) manipulation of ~~machines~~prices through prearranged matching of purchases and ~~equipment.~~sales ~~Such~~and ~~expansion~~false ~~may~~and bemisleading ~~limited~~press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by ~~the~~inexperienced ~~manufacturing~~sales ~~capacity~~persons; (4) excessive ofand ~~our~~undisclosed ~~third~~bid-~~party~~ask ~~manufacturer.~~differential ~~This~~and markups by selling broker-dealers; and (5) the wholesale dumping ~~third~~of the same securities by promoters and broker-~~party~~dealers ~~manufacturer~~after ~~may~~prices ~~not~~have bebeen ~~able~~manipulated to ~~meet~~a ~~our~~desired ~~manufacturing~~level, ~~needs~~along inwith athe ~~satisfactory~~resulting inevitable collapse of those prices and ~~timely~~with ~~manner~~consequent investor losses. IfOur ~~there~~management is anaware ~~unanticipated~~of ~~increase~~the abuses that have occurred historically in ~~demand~~the ~~for~~penny ~~digital~~stock ~~media~~market. ~~kiosks,~~Although we ~~may~~do benot ~~unable~~expect to ~~meet~~be ~~such~~in ~~demand~~a ~~due~~position to ~~manufacturing constraints.~~dictate Ifthe webehavior ~~are~~of ~~unable~~the tomarket ~~obtain~~or of ~~sufficient~~broker-dealers ~~quantities~~who ofparticipate ~~components~~in orthe tomarket, ~~locate~~management ~~alternative~~will ~~sources~~strive ofwithin ~~supply~~the onconfines aof ~~timely~~practical ~~basis,~~limitations weto ~~may~~prevent the ~~experience~~described ~~delays~~patterns infrom ~~installing~~being orestablished ~~maintaining~~with ~~digital~~respect ~~media~~to ~~kiosks,~~our ~~any~~securities. ofThe ~~which~~occurrence ~~could~~of ~~seriously~~these ~~harm our~~patterns ~~business,~~or ~~financial~~practices ~~condition~~could increase ~~and~~the ~~results~~volatility of ~~operations.~~our share price.

We ~~depend~~may ~~upon~~not ~~third-party~~be ~~service~~able ~~providers~~to ~~for~~attract ~~loading new DVD’s~~the ~~and~~attention ~~servicing~~of ~~our~~major ~~kiosks.~~brokerage Wefirms, ~~rely~~which oncould ~~third-party~~have ~~service~~a ~~providers~~material ~~for~~adverse ~~substantial~~impact ~~support~~on ~~and~~the ~~service~~market ~~efforts~~value ~~that~~of weour ~~currently~~common ~~do not provide directly~~stock. ~~In particular, we contract with third-party providers to arrange for loading and~~Security ~~unloading~~analysts ~~DVDs~~of ~~from~~major ~~our~~brokerage ~~kiosks,~~firms asmay ~~well~~not ~~as to~~ provide ~~limited~~coverage ~~servicing~~ of our ~~machines.~~common Westock ~~currently~~since ~~contract~~there ~~with~~is ano ~~provider~~incentive ~~for~~to ~~this~~brokerage ~~servicing.~~firms ~~We do not currently have, nor do we expect~~ to recommend ~~have~~the inpurchase ~~the~~of ~~foreseeable~~our ~~future,~~common ~~the~~stock. ~~internal~~The ~~capability to~~absence ~~provide~~of ~~back-up~~such ~~servicing~~coverage inlimits the ~~event~~likelihood ofthat aan ~~sudden~~active ~~disruption~~market inwill ~~service~~develop for ~~from~~our ~~servicer~~common stock. ~~Any~~It ~~failure~~will byalso uslikely tomake ~~maintain~~it ~~our~~more ~~existing~~difficult ~~servicing relationship or~~ to ~~establish~~attract new ~~relationships~~investors onat atimes ~~timely~~when ~~basis~~we orrequire onadditional ~~acceptable terms could harm our business, financial condition and results of operations~~capital.

~~There~~We ~~are~~may ~~many~~be ~~risks~~unable ~~related~~ to list our ~~rental~~common stock ~~services~~on ~~business~~NASDAQ ~~that~~or ~~may negatively~~on ~~impact~~any ~~our~~securities ~~business~~exchange. ~~The~~Although ~~home~~we ~~video~~may ~~industry~~apply isto ~~highly~~list ~~competitive~~our ~~with~~common ~~many~~stock ~~factors~~on ~~affecting~~NASDAQ ~~our~~or ~~ability~~the toNYSE ~~profitably~~Amex in ~~manage~~the ~~our~~future, ~~rental~~we ~~services~~cannot ~~business.~~assure Weyou ~~plan~~that towe ~~develop~~will abe ~~nationwide~~able ~~infrastructure~~to ofmeet ~~digital~~the ~~media~~initial ~~kiosks. The~~listing ~~home~~standards, ~~video~~including ~~distribution~~the ~~market~~minimum isper ~~rapidly~~share price ~~evolving~~and asminimum ~~new~~capitalization ~~technologies~~requirements, ~~and~~or ~~distribution~~that ~~channels~~we ~~are~~will ~~being~~be ~~developed~~able to ~~compete~~maintain ~~for~~a ~~market~~listing ~~share.~~of ~~Competitive~~our ~~distribution~~common ~~channels~~stock ~~include~~on ~~traditional~~either ~~specialty~~of ~~retailers~~those or any other trading venue. Until such time as ~~Blockbuster~~we qualify for listing on NASDAQ, ~~mail services~~the ~~such~~NYSE asAmex ~~Netflix~~or another trading venue, ~~pay~~our common stock will continue to trade on the OTC Bulletin Board or another over-~~per~~the-~~view~~counter ~~services~~quotation ~~through~~system, ~~cable~~or ~~companies~~on the “pink sheets,” where ~~and~~an ~~Internet~~investor ~~based~~may ~~media~~find ~~such~~it more difficult to dispose of shares or obtain accurate quotations as ~~YouTube~~to the market value of our common stock. ~~There~~In isaddition, norules ~~assurance~~promulgated ~~that~~by the ~~digital~~Commission ~~media~~impose ~~kiosk~~various ~~channel~~practice ~~will~~requirements ~~maintain~~on orbroker-dealers ~~achieve~~who ~~additional~~sell ~~market~~securities that ~~share~~fail ~~over~~to ~~the~~meet ~~long-term,~~certain criteria set forth in those rules to persons other than established customers and ifaccredited investors. itConsequently, ~~does~~these ~~not,~~rules may deter broker-dealers from recommending or selling our ~~business~~common stock, ~~operating~~which ~~results~~may ~~and~~further ~~financial~~affect ~~condition~~the liquidity ~~will~~of beour ~~materially~~common ~~and~~stock. ~~adversely~~It ~~affected.~~would also make it more difficult for us to raise additional capital.

WeFuture ~~face~~sales ~~competition~~of our equity securities ~~from~~could ~~much~~put ~~larger~~downward selling pressure on our securities, and ~~well-established~~adversely ~~companies~~affect the stock price. WeThere ~~face~~is ~~competition~~a ~~from~~risk ~~much~~that ~~larger~~this downward ~~and~~pressure ~~well-established~~may ~~companies.~~make ~~Our~~it ~~competition~~impossible isfor ~~not~~an ~~only~~investor ~~from~~to ~~other~~sell ~~independent~~his ~~digital~~securities ~~media~~at ~~rental~~any ~~service~~reasonable ~~providers~~price, ~~but~~if ~~also~~at ~~from~~all. ~~other~~Future ~~providers~~sales of substantial amounts of ~~movie~~ ~~and~~our ~~video~~equity ~~game~~securities ~~content,~~in ~~from~~the ~~traditional~~public ~~stores~~market, or the perception that such assales ~~Blockbuster~~could occur, tocould ~~other~~put downward ~~self-service~~selling ~~kiosks,~~pressure ~~such~~on asour ~~redbox~~securities, toand ~~online~~adversely affect the market price of our common stock.

8ITEM 1B UNRESOLVED STAFF COMMENTS

~~Table~~As ofa ~~Contents~~“smaller reporting company”, we are not required to provide the information required by this Item.

orITEM postal providers, such as Netflix, to other movie distribution rental channels, such as pay-per-view, video-on-demand, online streaming, premium television, basic cable, and network and syndicated television, many of whom may be more experienced in the business or have more resources than we do or otherwise compete with us in this segment of our business as described above2. All of these competitors have or may have greater financial resources, production, sales, marketing, engineering and other capabilities with which to develop, manufacture, market and sell their products, and more experience in research and development than we have. As a result, our competitors may have greater credibility with our existing and potential customers. Further, because most of our target market is already using rental services from one or more of our competitors, our success is dependent upon our ability to attract customers away from their existing providers. PROPERTIES

~~Payment~~We ofare ~~increased~~currently ~~service~~operating ~~fees~~from to4000 ~~retailers~~Bridgeway, ~~could~~Ste. ~~negatively~~#401, ~~affect~~Sausalito, CA ~~our business results~~94965. Our ~~We face~~office ~~ongoing~~space ~~pricing~~is ~~pressure~~provided ~~from~~without ~~our~~charge ~~retailers~~by ~~to increase~~ the ~~service~~sole ~~fees~~officer weand ~~pay~~director toof ~~them~~our ~~on rental services or to make other financial concessions to win or retain business~~company. IfWe wedo ~~are~~not ~~unable to respond effectively to ongoing pricing-related~~anticipate ~~pressures,~~that we ~~may~~will ~~fail~~require toany ~~win~~additional orpremises ~~retain certain accounts. An increase~~ in ~~service~~the ~~fees~~foreseeable ~~paid or other financial concessions made to our retailers could significantly increase our direct operating expenses in~~ future ~~periods and harm our business~~.

WeITEM ~~may experience delays in introducing services to the market and our services may contain defects which could seriously harm our results of operations~~3. ALEGAL key element of our business strategy is to provide differentiated service through delivery of a variety of media and the use of newer technologies. We may experience delays in introducing new or enhanced products or services to the market. Such delays, whether caused by factors such as unforeseen technology issues or otherwise, could negatively impact our sales revenue in the relevant period. In addition, we may terminate new product, service or enhancement development efforts prior to any introduction of a new product, service or enhancement. Any delays for new offerings currently under development or any product defect issues or product recalls could adversely affect the market acceptance of our products or services, our ability to compete effectively in the market, and our reputation, and therefore, could lead to decreased sales and could seriously harm our results of operations. PROCEEDINGS

IfWe weare docurrently not ~~manage~~involved ~~our~~in ~~DVD~~any ~~inventory~~litigation that ~~effectively,~~we ~~our~~believe ~~business, financial condition and results of operations~~ could behave a materially ~~and~~adverse ~~adversely~~effect ~~affected.~~on ~~A critical element of~~ our ~~rental services~~financial ~~business~~condition ~~model~~or isresults ~~to optimize our inventory~~ of ~~DVD titles and copy depth to achieve satisfactory availability rates to meet consumer demand while also maximizing margins~~operations. IfOther wethan dodescribed below, ~~not~~there ~~timely~~is ~~acquire~~no ~~sufficient titles~~action, ~~due to~~suit, ~~for example~~proceeding, ~~not~~ ~~correctly~~inquiry ~~anticipating~~or ~~demand,~~investigation ~~intentionally~~before ~~acquiring fewer copies than needed to fully satisfy demand~~ or ~~the~~by ~~lack~~any ~~of available titles~~court, wepublic ~~may not appropriately satisfy consumer demand~~board, ~~which~~government ~~could decrease consumer satisfaction and we could~~agency, ~~lose~~self-regulatory ~~consumers~~organization toor ~~competitors.~~body ~~Conversely~~pending or, ~~if we attempt~~ to ~~mitigate~~the ~~this~~knowledge ~~risk~~of ~~and~~the ~~acquire~~executive aofficers ~~larger number~~ of ~~copies~~our tocompany ~~achieve higher availability rates for select titles~~ or aany ~~wider range~~ of ~~titles,~~ our ~~inventory~~subsidiaries, threatened ~~utilization~~against ~~would~~or ~~become~~affecting ~~less efficient and~~ our ~~margins for rental services would be adversely affected. Our ability to accurately predict consumer demand as well as market factors~~company, ~~such as~~ our ~~ability~~common ~~to obtain satisfactory distribution arrangements~~stock, ~~may~~any ~~impact~~of our ~~ability~~subsidiaries ~~to timely~~or ~~acquire appropriate quantities~~ of ~~certain~~our ~~DVD~~company’s ~~titles. In addition, if we are unable to obtain~~ or ~~maintain favorable terms from~~ our ~~suppliers with respect to such matters as timely movie access, copy depth and product returns, among others, or~~company’s ifsubsidiaries’ ~~the~~officers ~~price of DVDs increases~~ or ~~decreases~~directors ~~generally~~in ortheir ~~for~~capacities ~~certain~~as ~~titles~~such, ~~our~~in ~~inventories~~which ~~may~~an ~~become~~adverse ~~unbalanced~~decision ~~and~~could ~~our~~have ~~margins~~a ~~may~~material ~~be adversely affected~~adverse effect.

DVD copyright holders (Major movies studios) may insist we delay release of new movies as they have with redbox and Blockbuster Express. The major movie studios have entered into agreements with both redbox and BlockbusterExpress whereby redbox and Blockbuster Express do not offer these studios movies until 28 days after the movies have been available for sale. We are not currently subject to this agreement. A delay in our ability to rent certain studios’ DVD titles pursuant to a delayed rental window may negatively affect consumer satisfaction and demand, and we could lose consumers to our competitors because of the timing of our inventory. This could have a material adverse effect on our business, financial condition and results of operations. 8

~~Our~~On ~~business can be adversely affected by severe weather~~September 23, ~~natural disasters and other events beyond our control~~2011, ~~such~~the asCompany filed ~~earthquakes,~~a ~~fires,~~voluntary ~~power~~petition ~~failures,~~for ~~telecommunication~~relief ~~loss~~under ~~and~~Chapter 11 ~~terrorist~~of ~~attacks.~~the AUnited ~~catastrophic~~States ~~event~~Bankruptcy ~~that~~Code ~~results~~ in the ~~destruction~~United orStates ~~disruption of any of our~~Bankruptcy ~~critical~~Court ~~business~~for ~~or information technology systems could harm our ability to conduct normal business operations and our operating results. For example,~~ the ~~Company’s~~Central ~~strategy~~District ~~is to place a group~~ of ~~kiosks in one geographic area to allow for more economical marketing and support efforts. The initial 25 kiosks are all in the Riverside,~~ California ~~area~~, ~~which~~Riverside isDivision ~~near~~(the ~~major~~"Bankruptcy ~~earthquake faults~~Court"). ~~Any~~The ~~disruptions, whether due to inadequate back-up or disaster recovery planning, failures of~~Chapter 11 Case ~~information~~Number ~~technology systems, interruptions in the communications network, or other factors, could seriously harm our business, financial condition and results of operations~~is: 6:11-bk-40137-MJ.

9The first meeting of creditors was held on October 31, 2011. Debtor is a publicly traded company. Its core business was the operation of video kiosks. In August 2011, Debtor ceased day-to-day operations because of software problems with its kiosks. This bankruptcy was filed shortly thereafter.

~~Table~~On or about November 22, 2011, Debtor filed a motion seeking to sell its assets. On November 30, 2011 the Court conducted a hearing on the Debtor's Motion to Sell. The Motion was granted and an Order authorizing the sale of ~~Contents~~assets to Signifi Solutions, Inc. was entered on December 20, 2011 with the proceeds being paid to consensual lien holders.

InSince ~~addition~~the sale of its assets, ~~our~~Debtor has ~~operational~~sought ~~and~~third ~~financial~~parties ~~performance~~in isorder to complete a ~~direct~~reverse ~~reflection~~merger. ofIn ~~consumer~~November, ~~use~~2011, ofDebtor ~~and~~reached ~~the ability~~an toagreement ~~operate~~with ~~and~~ELO ~~service~~Media ("ELO") ~~the~~regarding ~~DVD~~a ~~kiosks~~reverse ~~used~~merger inand ~~our~~started ~~business.~~to ~~Severe~~prepare ~~weather~~the necessary documents, ~~natural~~including ~~disasters~~a ~~and~~Share ~~other~~Exchange Agreement ~~events~~and ~~beyond~~a ~~our~~Disclosure ~~control~~Statement. ~~can,~~At ~~for~~a ~~extended~~hearing ~~periods~~on ofMay ~~time~~2, ~~significantly~~2012 ~~reduce~~on ~~consumer~~the ~~use~~United ofStates ~~our~~Trustee's ~~products~~Motion ~~and~~to ~~services~~Convert/Dismiss, Debtor asrepresented ~~well~~that ~~as interrupt~~ the ~~ability~~documents ofwere ~~our~~nearing ~~employees~~completion and ~~third-party~~that ~~providers~~Debtor toanticipated ~~operate~~filing ~~and~~its ~~service~~Disclosure ~~our~~Statement ~~equipment~~in the ~~and~~near ~~machines~~future. InThe ~~some cases~~Court, ~~severe~~at ~~weather,~~that ~~natural~~hearing ~~disasters~~set ~~and~~a ~~other~~hearing ~~events~~on ~~beyond~~the ~~our~~Disclosure ~~control~~Statement ~~may~~for ~~result~~July in25, ~~extensive~~2012 ~~damage~~at ~~to,~~1:30 p.m. On or ~~destruction~~about ofMay 24, ~~our~~2012, ~~infrastructure~~ELO ~~and~~advised ~~equipment,~~the ~~including~~Debtor ~~loss~~that ofit ~~machines~~had ~~used~~decided to ~~provide~~withdraw ~~our~~from ~~products~~the transaction and ~~services~~would not be proceeding with the Share Exchange Agreement. Since then, Debtor sought other companies with which ~~losses~~to ~~may~~merge, ~~not~~ultimately bereaching ~~fully~~a Memorandum ~~covered~~of byUnderstanding ~~insurance.~~with a Private Company on June 12, 2012.

~~Defects,~~Debtor ~~failures~~is ~~or security breaches~~ in ~~and~~the ~~inadequate upgrades~~ process of, ornegotiating ~~changes~~a ~~to,~~new ~~our~~Share ~~operating~~Exchange ~~systems~~Agreement ~~could~~with ~~harm~~a ~~our~~Private ~~business.~~Company ~~The operation of our DVD businesses depends on sophisticated software, hardware, computer networking~~ and ~~communication~~believes ~~services~~ that ~~may~~it ~~contain~~will ~~undetected~~be ~~errors~~in ora ~~may~~position ~~be subject~~ to ~~failures~~file ~~or complications. These errors, failures or complications may arise particularly when new, changed or~~its ~~enhanced~~Disclosure ~~products~~Statement orwithin ~~services~~approximately ~~are~~Thirty ~~added.~~(30) Future upgrades, improvements or changes that may be necessary to expand and maintain our business could result in delays or disruptions or may not be timely or appropriately made, any of which could seriously harm our operationsdays.

~~Further,~~ITEM ~~certain aspects of the operating systems relating to our business are outsourced to third-party providers, including internet connectivity~~4. ~~Accordingly,~~MINE ~~the~~SAFETY ~~effectiveness of these operating systems is, to a certain degree, dependent on the actions and decisions of third-party providers over whom we may have limited control.~~ DISCLOSURES

Events outside of our control, including the current economic environment could negatively affect, consumers’ use of our products and services. Our consumers’ use of our products is dependent on discretionary spending, which is affected by, among other things, economic and political conditions, consumer confidence, interest and tax rates, and financial and housing markets. With economic uncertainty affecting our potential consumers, we may be impacted by more conservative purchasing tendencies with fewer non-essential products and services purchases during the coming periods if the current economic environment continues. None

~~Further,~~PART our ability to obtain additional funding in the future, if and as needed, through equity issuances or loans, or otherwise meet our current obligations to third parties, could be adversely affected if the economic environment continues to be difficult. In addition, the ability of third parties to honor their obligations to us could be negatively impacted, as retailers, suppliers and other parties deal with the difficult economic environment. Finally, there may be consequences that will ultimately result from the current economic conditions that are not yet known, and any one or more of these unknown consequences (as well as those currently being experienced) could potentially have a material adverse effect on our financial condition, operating results and liquidity, as well as our business generally. II

WeMarket require additional financing to sustain our operations and without it we may not be able to continue operations. We have never earned a profit and we anticipate that we will continue to incur losses for the foreseeable future. We continue to operate on a negative cash flow basis. We will need to raise additional financing in order to have sufficient financial resources to fund our operations for the next 12 months. Such additional funds may not be available when required. Information

ToOur ~~date,~~Common weStock ~~have~~currently ~~financed~~trades ~~our~~on ~~operations through~~ the ~~sale~~OTC ofBulletin ~~stock~~Board under ~~and~~the ~~certain~~symbol ~~borrowings~~“PUBQE”. WeThe ~~expect~~following totable ~~continue~~sets toforth ~~depend~~the ~~upon~~high ~~outside~~and ~~financing~~low ~~to sustain~~closing ~~our~~bid ~~operations~~prices for atour ~~least~~Common ~~the~~Stock ~~next~~as reported 12on ~~months.~~the ~~Our~~OTC ~~ability~~Bulletin toBoard ~~obtain~~for ~~financing~~the ~~from~~last ~~third~~two ~~parties~~fiscal ~~will depend upon our perceived performance and market conditions~~years. ~~Our~~The ~~inability~~quotation tofor ~~raise~~the ~~additional~~Common ~~working~~Stock ~~capital~~traded aton ~~all~~the orOTC ~~to raise it in a~~Bulletin ~~timely~~Board ~~manner~~may ~~would~~reflect ~~negatively~~inter-dealer ~~impact our ability to fund our operations~~prices, towithout ~~generate~~retail ~~revenues~~mark-up, ~~and~~markdown ~~to otherwise execute our business plan, leading to the reduction~~ or ~~suspension~~commission ~~of our operations~~ and ~~ultimately~~may ~~forcing~~not usnecessarily torepresent ~~go out of business.~~actual transactions.

If we raise additional funds through the issuance of equity securities, this may cause significant dilution of our common stock, and holders of the additional equity securities may have rights senior to those of the holders of our common stock. If we obtain additional financing by issuing debt securities, the terms of these securities could restrict or prevent us from paying dividends and could limit our flexibility in making business decisions. 9

10Table of Contents


Public Media Works, Inc.	High Closing Bid		Low Closing Bid
FISCAL YEAR ENDING FEBRUARY 29, 2012
FIRST QUARTER (3/1/11 to 5/31/11)	$	0.73	$	0.44
SECOND QUARTER (6/1/11 to 8/31/11)	$	0.44	$	0.05
THIRD QUARTER (9/1/11 to 11/30/11)	$	0.05	$	0.00
FOURTH QUARTER (12/1/11 to 2/29/12)	$	0.01	$	0.00
FISCAL YEAR ENDING FEBRUARY 28, 2011
FIRST QUARTER (3/1/10 to 5/31/10)	$	1.80	$	0.18
SECOND QUARTER (6/1/10 to 8/31/10)	$	2.00	$	0.40
THIRD QUARTER (9/1/10 to 11/30/10)	$	3.90	$	1.00
FOURTH QUARTER (12/1/10 to 2/28/11)	$	1.03	$	0.38

We have a history of losses, our auditors have stated that these losses raise substantial doubt about our ability to continue as a going concern and we expect to continue to operate at a loss for the foreseeable future. We have a history of continuing losses and negative cash flow from operations. From our inception in March 2000 through February 28, 2010, we had cumulative net losses of $12,835,921 and we had net loss in the year ended February 28, 2010 of $7,676,352. We expect that our expenses may increase substantially as we continue to develop our products and services. In addition, as a public company our general and administrative expenses may increase significantly. As a result, we expect to continue to incur losses for the foreseeable future. Holders

~~Because~~As of ~~our~~June 1, ~~history of continuing losses~~2012, ~~our auditors~~63,315,615 inshares ~~their~~of ~~report on~~ our ~~audited~~common ~~financial statements included elsewhere in this report, have stated that these losses raise substantial doubt~~stock ~~about~~were ~~our~~issued ability to continue as a going concern. The going concern qualification from our auditors could have a negative impact on our future sales to customers, inhibit our ability to obtain financing terms from vendors and ~~may adversely impact our ability to raise additional financing. Accordingly~~outstanding, ~~we cannot assure you that we will ever be profitable. Whether we ever become profitable will depend on many factors, but principally on our ability to raise additional capital~~ and ~~to successfully~~held ~~market~~by ~~our~~approximately ~~products~~167 ~~and~~shareholders ~~services.~~of record.

~~Our~~Transfer financial statements have been prepared assuming that the Company will continue as a going concern. The factors described above raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from this uncertainty. Our independent registered public accounting firm has included an explanatory paragraph expressing doubt about our ability to continue as a going concern in their audit reports for the fiscal years ended February 28, 2011 and February 28, 2010. Agent

WeOur ~~cannot~~transfer ~~assure~~agent ~~you~~is ~~that~~Holladay weStock ~~will~~Transfer, be2939 ~~able~~North to67th Place, ~~generate~~Scottsdale, ~~sufficient~~Arizona ~~revenue to fund our business. If we cannot continue as a going concern~~85251, ~~we may~~telephone ~~need to substantially revise our business plan or cease operations~~(480) 481-3940.

We are an early stage company with a limited operating history and no significant revenues. We were formed in March 2000. From that time until May 2010, we engaged in the film and television production. We recorded only $230,875 in revenues since our date of inception in this business and have exited the business. We are just entering the DVD kiosk rental business. Our ability to implement a successful business plan remains unproven and no assurance can be given that we will ever generate sufficient revenues to sustain our business. We cannot assure that our future operations will be implemented successfully or that we will ever have profits. If we are unable to sustain our operations, we will be forced to cease operations entirely. Furthermore, we are experiencing the initial costs and uncertainties of a newly formed business, including additional expenditures, unforeseen costs and difficulties, complications, and delays, all of which must be resolved and/or paid without the benefit of a predictable revenue stream. These risks and uncertainties include the following: Dividends

•We ~~our~~have ~~business~~not ~~model~~paid ~~and~~any ~~strategy~~cash ~~are~~dividends ~~still~~on ~~evolving~~our common stock since our inception and ~~are~~do ~~continually~~not ~~being~~anticipate ~~reviewed~~or ~~and~~contemplate ~~revised;~~paying ~~and~~dividends in the foreseeable future.

•Securities weAuthorized ~~may~~for ~~not~~Issuance beunder ~~able~~Equity ~~to successfully implement our business model and strategy.~~Compensation Plans

WeOn ~~cannot~~November 12, be2007, ~~sure~~our ~~that~~board weof directors ~~will~~approved beour ~~successful~~2007 inEquity ~~meeting~~Incentive ~~these~~Plan ~~challenges~~which ~~and~~provides ~~addressing~~for ~~these~~the ~~risks~~issuance ~~and~~of ~~uncertainties~~up to 1,000,000 options to purchase shares of our common stock. IfOn weAugust 2, ~~are~~2010, ~~unable~~our toboard doof sodirectors approved our 2010 Equity Incentive Plan which initially provided for the issuance of up to 3,500,000 options to purchase shares of our common stock. On March 7, 2011, the board of directors ~~business~~approved ~~will~~increasing ~~not~~the beauthorized ~~successful~~shares under the plan to 6,000,000 options. The table below sets forth information as of February 28, 2011, with respect to compensation plans under which our common stock is authorized for issuance

We do not expect to pay dividends for the foreseeable future, and we may never pay dividends and, consequently, the only opportunity for investors to achieve a return on their investment is if a trading market develops and investors are able to sell their shares for a profit or if our business is sold at a price that enables investors to recognize a profit. We currently intend to retain any future earnings to support the development and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors after taking into account various factors, including but not limited to our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. In addition, our ability to pay dividends on our common stock may be limited by state law. Accordingly, we cannot assure investors any return on their investment, other than in connection with a sale of their shares or a sale of our business. At the present time there is a limited trading market for our shares. Therefore, holders of our securities may be unable to sell them. We cannot assure investors that an active trading market will develop or that any third party would offer to purchase our business on acceptable terms and at a price that would enable our investors to recognize a profit.

Number of securities to be

issued upon exercise of

outstanding options

Weighted-average exercise price of

outstanding options

Number of securities remaining available

for future issuance under equity

compensation plans

1,025,000

$0.83

5,975,000

11Recent Sales of Unregistered Securities

~~Table~~In February 2011, one holder of ~~Contents~~a stock option in the amount of 100,000 shares elected to exercise the stock option, using the cashless exercise feature of the option. The Company issued 68,750 shares of common stock. The shares of the Company’s common stock are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption there under. The shares were issued in reliance on the exemption from registration under Section 4(2) of the Act. The issuance of shares was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the issuance of shares.

We may not have the ability to pay our convertible notes when due. The Company has two notes due on June 30, 2013 totaling $776,244 in principal and interest, and has pledged all of its assets against one of the notes. The notes bear interest at the rates of 8 and 9% per annum with interest payable at maturity. The Company does not have sufficient capital to repay the notes as of the date of this report, and may not have sufficient capital to repay the notes when due. Additionally, the Company may be required to obtain the consent of the secured noteholder to subordinate his note as a condition of receiving additional financing, and the secured noteholder may not agree to such subordination. The Company’s inability to obtain subordination from the secured note holder, if required, may prevent the Company from obtaining additional financing and have a material adverse effect on the Company. Also, the Company’s inability to repay the notes when due would permit the noteholders to exercise remedies against the Company, including the secured parties’ rights in the assets of the Company, which would have a material adverse effect on the Company. 10

~~Conversion~~Table of our convertible notes into common stock could result in additional dilution to our stockholders. Upon satisfaction of certain conversion conditions (including conditions outside of our control, such as market price or trading price) and proper conversion of the Notes by a holder, we may be required to deliver shares of our common stock to a converting holder. The Notes are convertible at $4.00 per share, at the holder’s option. If shares of our common stock are issued due to conversion of some or all of the Notes, the ownership interests of existing stockholders would be diluted. Further, any sales in the public market of any shares of common stock issued upon conversion or hedging or arbitrage trading activity that develops due to the potential conversion of the Notes could adversely affect prevailing market prices of our common stock. Contents

~~CORPORATE~~From December 2010 through February 2011, the Company issued ~~AND~~82,000 ~~OTHER~~shares ~~RISKS~~of restricted common stock to five individuals serving as consultants to the Company. The shares of the Company’s common stock are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption there under. The shares were issued in reliance on the exemption from registration under Section 4(2) of the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the offering. The Company recorded consulting expense of $77,900 during the year ended February 28, 2011.

~~Limitations~~On onMay 23, ~~director~~2011, ~~and~~the ~~officer~~Company ~~liability~~entered ~~and~~into ~~indemnification~~an ofAgreement with ~~our~~George ~~officers~~Mainas, Mainas Development Corporation (collectively “Mainas”) and ~~directors~~Del byRey usManagement ~~may~~L.P. (“Del ~~discourage~~Rey”) ~~stockholders~~whereby ~~from~~Del ~~bringing~~Rey ~~suit~~purchased ~~against~~$250,000 aof ~~director~~the debt due the Company to Mainas. The Company’s ~~certificate~~agreed ofto ~~incorporation~~allow ~~and~~Del ~~bylaws~~Rey ~~provide,~~the ~~with~~option to ~~certain~~convert ~~exceptions~~this asdebt ~~permitted~~into by1,000,000 ~~governing~~shares ~~state~~of ~~law,~~common ~~that~~stock aand ~~director~~1,000,000 orwarrants ~~officer~~to ~~shall~~purchase ~~not~~common ~~be personally~~stock ~~liable~~of tothe usCompany orfor ~~our~~$0.40 per ~~stockholders~~share for ~~breach~~three years from the date of ~~fiduciary~~the ~~duty~~Agreement. asAlso, aon ~~director~~May 23, ~~except~~2011, ~~for~~Del ~~acts~~Rey ornotified ~~omissions~~the ~~which~~Company ~~involve~~that ~~intentional~~it ~~misconduct,~~was exercising ~~fraud~~this oroption ~~knowing~~to ~~violation~~convert. The shares of ~~law,~~Company orcommon ~~unlawful~~stock ~~payments~~will ofbe ~~dividends.~~issued ~~These~~without ~~provisions~~restriction ~~may discourage~~under ~~stockholders~~the ~~from~~Act ~~bringing~~under ~~suit~~an exemption ~~against~~provided apursuant ~~director~~to ~~for~~Rule ~~breach~~144 of ~~fiduciary~~the ~~duty~~Act. The warrants and ~~may~~shares ~~reduce~~of the ~~likelihood~~Company’s common stock which may be issued upon exercise of ~~derivative~~the ~~litigation~~warrants ~~brought~~are byrestricted ~~stockholders~~securities, onand ~~our~~may ~~behalf~~not ~~against~~be asold, ~~director.~~transferred Inor ~~addition~~otherwise disposed without registration under Act, or an exemption thereunder. The securities were offered and sold in reliance on the ~~Company’s~~exemption ~~certificate~~from registration under Section 4(2) of ~~incorporation~~the Act and/or ~~bylaws~~Rule ~~may~~506 ~~provide~~of ~~for~~Regulation ~~mandatory~~D ~~indemnification~~under ofthe ~~directors~~Act. The offering was not conducted in connection with a public offering, and ~~officers~~no topublic ~~the~~solicitation ~~fullest~~or ~~extent~~advertisement ~~permitted~~was made or relied upon by ~~governing~~the ~~state~~individual ~~law.~~in connection with the offering.

WeIn ~~are~~June ~~responsible~~2011, ~~for~~one ~~the~~consultant ~~indemnification~~made ofa ~~our~~cashless ~~officers~~exercise ~~and~~of ~~directors.~~a ~~Should~~stock option ~~our officers~~ and~~/or~~ ~~directors require us to contribute to their defense~~128,571 weshares ~~may~~were beissued. ~~required~~The toshares ~~spend significant amount~~ of ~~our capital. Our bylaws provide for~~ the ~~indemnification~~Company’s ofcommon ~~our~~stock ~~directors,~~are ~~officers,~~restricted ~~employees~~securities, and ~~agents,~~may ~~under~~not ~~certain circumstances~~be sold, ~~against~~transferred ~~attorney’s~~or ~~fees~~otherwise ~~and~~disposed ~~other~~without ~~expenses~~registration ~~incurred~~under bythe ~~them~~Act, inor ~~any~~an ~~litigation~~exemption tothereunder. ~~which they~~The ~~become~~securities awere ~~party~~offered and ~~arising~~sold ~~from~~in ~~their~~reliance ~~association~~on ~~with~~the orexemption ~~activities~~from onregistration ~~behalf~~under Section 4(2) of ~~our~~the ~~Company~~Act. The ~~This~~issuance ~~indemnification~~of ~~policy~~shares ~~could~~was ~~result~~not conducted in ~~substantial~~connection ~~expenditures,~~with ~~which~~a wepublic ~~may~~offering, beand ~~unable~~no topublic ~~recoup.~~solicitation Ifor ~~these~~advertisement ~~expenditures~~was ~~are~~made ~~significant,~~ or ~~involve issues~~relied ~~which~~upon ~~result~~by the individual in ~~significant~~connection ~~liability~~with ~~for~~the ~~our key personnel, we may be unable to continue operating as a going concern~~offering.

~~Our internal~~In ~~controls~~June ~~over financial reporting may not be effective~~2011, ~~which~~the ~~could~~Company ~~have~~issued ~~a significant and adverse effect on our business. We are subject to various regulatory requirements~~200,000 ~~including~~shares ~~the Sarbanes-Oxley Act~~ of ~~2002.~~common ~~We, like all~~stock ~~other public companies, must incur additional expenses and,~~ to a ~~lesser~~supplier. In ~~extent~~return, ~~diversion~~the ofsupplier ~~our~~agreed ~~management’s time in our efforts~~ to ~~comply~~give ~~with Section 404 of~~ the ~~Sarbanes-Oxley~~Company ~~Act~~a ofdiscount ~~2002~~on ~~regarding~~future ~~internal~~purchases ~~controls~~of ~~over financial reporting~~kiosks. ~~If,~~The inshares of the ~~future,~~Company’s ~~management~~common ~~identifies~~stock ~~one~~are orrestricted ~~more material weaknesses~~securities, orand ~~our~~may ~~external~~not ~~auditors~~be ~~are~~sold, ~~unable~~transferred toor ~~attest~~otherwise ~~that~~disposed ~~our~~without ~~management’s~~registration under ~~report~~the isAct, ~~fairly stated~~ or ~~to express~~ an ~~opinion~~exemption onthereunder. ~~the~~The ~~effectiveness~~securities ofwere ~~our~~offered ~~internal controls,~~and ~~this~~sold ~~could result~~ in areliance ~~loss of investor confidence in our financial reports, have an adverse effect~~ on ~~our~~the ~~stock~~exemption ~~price~~from ~~and/or~~registration under ~~subject~~Section 4(2) usof tothe ~~sanctions or investigation by regulatory authorities~~Act. The ~~Also,~~issuance itof ~~may~~shares bewas ~~time~~not ~~consuming,~~conducted ~~difficult~~in ~~and costly~~connection ~~for~~with usa topublic ~~develop~~offering, and ~~implement~~no public ~~the~~solicitation ~~internal~~or ~~controls~~advertisement ~~and~~was ~~reporting~~made ~~procedures~~or ~~required~~relied upon by the ~~Sarbanes-Oxley~~individual ~~Act. We may need to hire additional staff~~ in ~~order~~connection towith ~~develop~~the ~~and~~issuance ~~implement~~of ~~appropriate internal controls and reporting procedures~~shares.

12On August 2, 2011, the Company issued 600,000 shares to Salzwedel Financial Services for services to be rendered. The Company expensed this amount in the period ended November 30, 2011. The shares of the Company’s common stock are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Act, or an exemption thereunder. The securities were offered and sold in reliance on the exemption from registration under Section 4(2) of the Act. The issuance of shares was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the issuance of shares.

~~Table~~In August 2011, one creditor elected to convert $7,408 of ~~Contents~~accounts payable into 74,085 shares of common stock of the Company. The shares of the Company’s common stock are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Act, or an exemption thereunder. The securities were offered and sold in reliance on the exemption from registration under Section 4(2) of the Act. The issuance of shares was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the issuance of shares.

WeIn ~~are~~the ~~dependent~~quarter ~~for~~ending ~~our~~August ~~success~~31, on2011, athe ~~few~~Company ~~key~~executed common ~~executive~~stock ~~officers.~~agreements ~~Our~~with ~~inability~~five toaccredited ~~retain~~investors ~~those officers~~for ~~would~~$137,000 ~~impede~~in ~~our~~cash. ~~business~~The ~~plan~~accredited ~~and~~investors ~~growth~~received ~~strategies~~1,370,000 ~~which~~shares of ~~would~~common ~~have~~stock aand ~~negative~~one ~~impact~~investor onreceived ~~our~~750,000 ~~business~~warrants ~~and~~to ~~the~~purchase ~~value~~an ofadditional ~~your~~share ~~investment.~~of ~~Our success depends on~~ the ~~skills,~~Company ~~experience~~at ~~and~~$0.10 ~~performance~~within ~~of key members of~~three ~~our management team~~years. WeThese dosales ~~not~~triggered ~~have~~an ~~long~~anti-~~term~~dilution ~~employment~~clause ~~agreements~~in ~~with~~the ~~any~~aforementioned of$400,000 ~~the~~conversion ~~members~~ of ~~our~~debt ~~senior~~to ~~management~~equity ~~team.~~and ~~Each~~an ofadditional 2,121,750 ~~those~~shares ~~individuals~~of ~~may~~common ~~voluntarily~~stock ~~terminate~~were ~~his~~issued. ~~employment~~The ~~with~~shares of the Company’s atcommon ~~any~~stock ~~time~~are ~~upon~~restricted ~~short~~securities, ~~notice.~~and ~~Were~~may not webe ~~to lose~~sold, ~~one~~transferred or ~~more~~otherwise ofdisposed ~~these~~without ~~key~~registration ~~executive~~under ~~officers~~the Act, weor ~~would~~an beexemption ~~forced~~thereunder. toThe ~~expend~~securities ~~significant~~were offered ~~time~~ and ~~money~~sold in reliance on the ~~pursuit~~exemption offrom aregistration ~~replacement,~~under ~~which~~Section 4(2) ~~would~~of ~~result~~the inAct. The ~~both~~issuance aof ~~delay~~shares was innot ~~the~~conducted ~~implementation~~in ofconnection ~~our~~with ~~business~~a ~~plan~~public offering, and ~~the~~no ~~diversion~~public ofsolicitation ~~limited working~~or ~~capital.~~advertisement Wewas domade ~~not~~or ~~maintain~~relied aupon ~~key~~by the ~~man~~individual ~~insurance~~in ~~policy~~connection onwith ~~any~~the issuance of ~~our executive officers~~shares.

~~CAPITAL MARKET RISKS~~ 11

~~Our~~On ~~common~~January ~~stock~~23, ~~is thinly traded~~2012, sothe ~~you~~Company ~~may~~issued be25,000,000 ~~unable~~restricted shares to ~~sell~~an ataccredited orinvestor ~~near~~for ~~ask~~cash ~~prices or~~ at ~~all~~a ifprice ~~you~~of ~~need~~$0.002 toper ~~sell~~share ~~your~~and ~~shares to~~a ~~raise~~total ~~money~~purchase orprice ~~otherwise~~of ~~desire~~$50,000. toThe ~~liquidate your~~ shares. ~~There~~of isthe Company’s ~~limited~~common ~~market activity in our~~ stock ~~and we~~ are ~~too~~restricted ~~small~~securities, ~~to attract the interest of many brokerage firms~~ and ~~analysts.~~may Wenot ~~cannot~~be ~~give~~sold, ~~you~~transferred ~~any~~or ~~assurance~~otherwise ~~that~~disposed awithout ~~broader or~~registration ~~more~~under ~~active~~the ~~public~~Act, ~~trading~~or ~~market~~an ~~for~~exemption ~~our~~thereunder. ~~common~~The ~~stock~~securities ~~will~~were ~~develop~~offered orand besold ~~sustained.~~in ~~While~~reliance ~~we are trading~~ on the ~~OTC~~exemption ~~Bulletin~~from ~~Board,~~registration under ~~the~~Section 4(2) ~~trading~~of ~~volume we will develop may be limited by~~ the ~~fact~~Act. The ~~that~~offering ~~many~~was ~~major~~not ~~institutional~~conducted ~~investment~~in ~~funds, including~~connection ~~mutual~~with ~~funds, as well as individual investors follow~~ a ~~policy~~public ofoffering, ~~not investing in Bulletin Board stocks~~ and ~~certain~~no ~~major~~public ~~brokerage~~solicitation or ~~firms~~advertisement ~~restrict~~was ~~their~~made ~~brokers~~or ~~from~~relied ~~recommending~~upon ~~Bulletin~~by ~~Board~~the ~~stocks~~individual ~~because~~in ~~they~~connection ~~are~~with ~~considered speculative,~~the ~~volatile and thinly traded~~offering.

~~The~~Repurchases ~~market price~~ of ~~our~~Equity ~~common~~Securities ~~stock could be subject to wide fluctuations in response to quarterly variations in our revenues and operating expenses, announcements of new products or services~~ by ~~us, significant sales of our common stock, including “short” sales,~~ the ~~operating~~Company and ~~stock price performance of other companies that investors may deem comparable to us, and news reports relating to trends in our markets or general economic conditions.~~ Affiliates

The application of the “penny stock” rules to our common stock could limit the trading and liquidity of the common stock, adversely affect the market price of our common stock and increase your transaction costs to sell those shares. As long as the trading price of our common stock is below $5 per share, the open-market trading of our common stock will be subject to the “penny stock” rules, unless we otherwise qualify for an exemption from the “penny stock” definition. The “penny stock” rules impose additional sales practice requirements on certain broker-dealers who sell securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse). These regulations, if they apply, require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the associated risks. Under these regulations, certain brokers who recommend such securities to persons other than established customers or certain accredited investors must make a special written suitability determination regarding such a purchaser and receive such purchaser’s written agreement to a transaction prior to sale. These regulations may have the effect of limiting the trading activity of our common stock, reducing the liquidity of an investment in our common stock and increasing the transaction costs for sales and purchases of our common stock as compared to other securities. None

~~The~~ITEM ~~stock market in general, and the market prices for penny stock companies in particular, have experienced volatility that often has been unrelated to the operating performance of such companies~~6. ~~These~~SELECTED ~~broad~~FINANCIAL ~~market~~DATA ~~and~~AND ~~industry~~SUPPLEMENTARY ~~fluctuations may adversely affect the price of our stock, regardless of our operating performance.~~ INFORMATION

~~Stockholders~~As should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a ~~few~~smaller ~~broker-dealers~~reporting ~~that~~company are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we doare not ~~expect~~required to ~~be in a position to dictate the~~provide ~~behavior of~~ the ~~market~~information orrequired ofby ~~broker-dealers~~this ~~who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities~~item. ~~The occurrence of these patterns or practices could increase the volatility of our share price.~~

13ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Table~~The following discussion and analysis is intended as a review of ~~Contents~~significant factors affecting our financial condition and results of operations for the periods indicated. The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes thereto and other financial information contained elsewhere in this Form 10-K. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed in this report.

We may not be able to attract the attention of major brokerage firms, which could have a material adverse impact on the market value of our common stock. Security analysts of major brokerage firms may not provide coverage of our common stock since there is no incentive to brokerage firms to recommend the purchase of our common stock. The absence of such coverage limits the likelihood that an active market will develop for our common stock. It will also likely make it more difficult to attract new investors at times when we require additional capital. 12

WeTable may be unable to list our common stock on NASDAQ or on any securities exchange. Although we may apply to list our common stock on NASDAQ or the NYSE Amex in the future, we cannot assure you that we will be able to meet the initial listing standards, including the minimum per share price and minimum capitalization requirements, or that we will be able to maintain a listing of our common stock on either of those or any other trading venue. Until such time as we qualify for listing on NASDAQ, the NYSE Amex or another trading venue, our common stock will continue to trade on the OTC Bulletin Board or another over-the-counter quotation system, or on the “pink sheets,” where an investor may find it more difficult to dispose of shares or obtain accurate quotations as to the market value of our common stock. In addition, rules promulgated by the Commission impose various practice requirements on broker-dealers who sell securities that fail to meet certain criteria set forth in those rules to persons other than established customers and accredited investors. Consequently, these rules may deter broker-dealers from recommending or selling our common stock, which may further affect the liquidity of our common stock. It would also make it more difficult for us to raise additional capital. Contents

~~Future~~Proceedings ~~sales~~Under ofChapter our equity securities could put downward selling pressure on our securities, and adversely affect the stock price. There is a risk that this downward pressure may make it impossible for an investor to sell his securities at any reasonable price, if at all. Future sales of substantial amounts of our equity securities in the public market, or the perception that such sales could occur, could put downward selling pressure on our securities, and adversely affect the market price of our common stock. 11

~~ITEM~~The Company filed a voluntary petition on September 1B23, ~~UNRESOLVED~~2011 under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the ~~STAFF~~Central ~~COMMENTS~~District of California, Riverside Division (the “Bankruptcy Court”). We will continue to operate our business as "debtor-in-possession" under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and the order of the Court, as we devote renewed efforts to resolve our liquidity problems and develop a reorganization plan.

~~None~~Pursuant to the provisions of the Bankruptcy Code, we are not permitted to pay any claims or obligations which arose prior to the filing date (prepetition claims) unless specifically authorized by the Court or as may ultimately be provided in a plan of reorganization. Similarly, claimants may not enforce any claims against us that arose prior to the date of the filing. In addition, as a debtor-in-possession, we have the right, subject to the Court's approval, to assume or reject any executory contracts and unexpired leases in existence at the date of the filing. Parties having claims as a result of any such rejection may file claims with the Court which will be dealt with as part of the Chapter 11 case.

IIt is our intention to address all of our ~~TEM 2~~prepetition claims in a plan of reorganization in our Chapter 11 case. ~~PROPERTIES~~ At this juncture, it is impossible to predict with any degree of certainty how such a plan will treat such claims and the impact that our Chapter 11 cases and any reorganization plan will have on the trading market for our stock. Generally, under the provisions of the Bankruptcy Code, holders of equity interests may not participate under a plan of reorganization unless the claims of creditors are satisfied in full under the plan or unless creditors accept a reorganization plan which permits holders of equity interests to participate. The formulation and implementation of a plan of reorganization in the Chapter 11 cases could take a significant period of time.

The ~~Company~~Chapter ~~subleases~~11 ~~3040~~case ~~square~~is ~~feet~~in ofgood ~~class~~standing with Athe ~~office~~court ~~space.~~having ~~The~~filed ~~monthly~~all ~~rent~~required isMonthly ~~$7,448~~Operating Reports along with its Statement of Liability Insurance. The ~~lease~~case is ~~expires~~presently onunder ~~April 30,~~no ~~2012~~threat of being converted or liquidated under a chapter 7. The ~~space~~court ishas ~~located~~set ata ~~2330~~tentative ~~Marinship~~time ~~Way,~~period ~~Suite~~for ~~300,~~filing the ~~Sausalito,~~Company’s ~~California~~Disclosure ~~94965,~~Statement and isPlan inof ~~good~~Reorganization ~~condition.~~by InJune ~~March 2011~~19, 2012; however the Company ~~began~~presently ~~sub-leasing~~anticipates that ait ~~portion~~may ofmove ~~this~~to ~~space~~voluntarily tocontinue anthat ~~unrelated~~date ~~company~~so that it might timely complete its Reorganization Plan. The Company anticipates that should it file its Motion for $2Continuance,~~500~~ ~~per month.~~it will be successful.

~~ITEM 3~~In November, 2011, Debtor reached an agreement with ELO Media ("ELO") regarding a reverse merger and started to prepare the necessary documents, including a Share Exchange Agreement and a Disclosure Statement. ~~LEGAL~~ ~~PROCEEDINGS~~At a hearing on May 2, 2012 on the United States Trustee's Motion to Convert/Dismiss, Debtor represented that the documents were nearing completion and that Debtor anticipated filing its Disclosure Statement in the near future. The Court, at that hearing set a hearing on the Disclosure Statement for July 25, 2012 at 1:30 p.m. On or about May 24, 2012, ELO advised the Debtor that it had decided to withdraw from the transaction and would not be proceeding with the Share Exchange Agreement. Since then, Debtor sought other companies with which to merge, ultimately reaching a Memorandum of Understanding with a Private Company on June 12, 2012.

WeDebtor ~~are~~is ~~not~~in the process of negotiating a ~~party~~new toShare ~~any~~Exchange ~~legal~~Agreement ~~proceedings~~with asa ofPrivate ~~the~~Company ~~date~~and ofbelieves ~~this~~that ~~report.~~it will be in a position to file its Disclosure Statement within approximately Thirty (30) days.

~~I TEM 4.~~Results ~~(REMOVED~~of ~~AND RESERVED)~~ Operations

~~PART~~Fiscal IIYear Ended February 29, 2012, Compared to Fiscal Year Ended February 28, 2011

~~ITEM 5. MARKET~~We ~~FOR~~presently ~~COMMON~~have ~~EQUITY,~~no ~~RELATED~~operations ~~STOCKHOLDER~~but ~~MATTERS~~our plan ~~AND~~of ~~ISSUER~~operation ~~SALES~~is OFto ~~EQUITY~~identify ~~SECURITIES~~and merge with a potential merger candidate/candidates to create new shareholder value and reestablish the Company going forward.

~~Market~~In ~~Information~~fiscal 2012, the Company entered the start-up phase of operation and generated $39,116 in revenue. Revenue in fiscal 2012 came principally from 25 kiosks placed in operation in March 2011 and going through beta testing. The Company was using a newly manufactured kiosk and operating software. As the Company was unable to raise additional equity to continue operating the kiosks, in early September, 2011, the Company removed the kiosks and placed them in storage until they were sold on November 30, 2011. The remainder of revenue during periods came from a joint venture in Canada. No future revenue is expected from this joint venture.

~~Our~~The ~~Common~~Company’s ~~Stock currently~~revenues ~~trades~~for on the ~~OTC~~fiscal year ~~Bulletin~~ended ~~Board~~February 28, ~~under~~2011 ~~the~~was ~~symbol “PUBM~~$7,139.~~OB”.~~ ~~The~~Revenue ~~following~~in ~~table~~fiscal ~~sets~~2011 ~~forth~~came ~~the~~from ~~high~~an ~~and~~unsuccessful ~~low~~early ~~closing~~test ~~bid~~of ~~prices~~kiosks ~~for~~in ~~our~~Pizza ~~Common~~Hut restaurants ~~Stock~~and astwo ~~reported~~months onof ~~the~~revenue ~~OTC~~from ~~Bulletin~~our ~~Board~~Canadian ~~for the last two fiscal years~~venture. The ~~quotation~~ ~~for~~restaurant ~~the~~did ~~Common~~not ~~Stock~~have ~~traded on~~ the ~~OTC~~required ~~Bulletin~~foot ~~Board~~traffic ~~may~~to ~~reflect~~generate the ~~inter-dealer~~number ~~prices,~~of ~~without~~rentals ~~retail~~required ~~mark-up,~~to ~~markdown~~make orthe ~~commission~~kiosks ~~and may not necessarily represent actual transactions~~profitable.

14 13

~~Table~~In fiscal 2012, the Company’s cost of ~~Contents~~revenue (direct operating expenses) was $169,604, compared to $7,077 in fiscal 2011. The increase in the direct operating expenses is a direct result of placing the kiosks in operations. Direct operating expenses principally include: amortization of our DVD and Blu-Ray movie inventory; commissions or fees to retailers; credit card fees and field operations support, such as loading and cleaning the kiosks and monitoring the kiosks. In addition, in fiscal 2012, the Company wrote off $16,117 of prepaid support due to its removing the kiosks from retail locations.

Public Media Works, Inc.	High ClosingBid		Low ClosingBid
FISCAL YEAR ENDING FEBRUARY 28, 2011
FIRST QUARTER (3/1/10 to 5/31/10)	$	1.80	$	.18
SECOND QUARTER (6/1/10 to 8/31/10)	$	2.00	$	.40
THIRD QUARTER (9/1/10 to 11/30/10)	$	3.90	$	1.00
FOURTH QUARTER (12/1/10 to 2/28/11)	$	1.03	$	.38
FISCAL YEAR ENDING FEBRUARY 28, 2009
FIRST QUARTER (3/1/09 to 5/31/09)	$	.29	$	.19
SECOND QUARTER (6/1/09 to 8/31/09)	$	.25	$	.11
THIRD QUARTER (9/1/09 to 11/30/09)	$	.55	$	.25
FOURTH QUARTER (12/1/09 to 2/28/09)	$	.55	$	.02

Operating expenses in fiscal 2012 amounted to $4,539,867 which consisted primarily of $3,563,034 non-cash charges related to issuance of stock, restricted stock and stock options to officers and consultants. General and administrative expenses decreased significantly compared to fiscal 2011 due to entering into bankruptcy proceedings on September 23, 2011, accordingly departure of all employees and discontinuing our operating activities.

~~Holders~~Operating expenses in fiscal 2011 amounted to $7,567,046 due to new management after the share exchange agreement and the resulting operational expansion as we geared up to enter the kiosk-based DVD rental business. Included in operating expenses is $5,738,653 of stock compensation expense, related to restricted stock grants to employees and consultants, stock issuances to settle disputes with both vendors and former employees and employee and consultant stock option grants. An additional $735,190 was spent on outside consultants including legal fees $306,330, investor relations specialists $70,000 and other outside consultant in marketing, sales and finance $317,703.

AsOther ofexpenses ~~May 11~~amounted to $1,976,175 and $109,368 for fiscal 2012 and 2011, 32respectively,~~295,294~~ ~~shares~~other ofassets ~~our~~increased ~~common~~significantly ~~stock~~in ~~were~~fiscal ~~issued~~2012 ~~and~~due ~~outstanding~~to mainly the loss recorded on conversion of convertible debt to equity of $1,478,693 and ~~held~~an byimpairment ~~approximately~~charge ~~625~~related ~~shareholders~~to assets that were disposed in November 2011 of ~~record~~$370,077. No such costs were recorded in fiscal 2011.

~~Transfer~~Liquidity ~~Agent~~and Capital Resources

~~Our~~In ~~transfer~~September 2011, the Company decided ~~agent~~to iscease ~~Holladay~~operating ~~Stock~~the ~~Transfer~~kiosks and place the kiosks in a safe warehouse location while it reorganized under a voluntary bankruptcy filing (Chapter 11). The Company is seeking $150,000 ~~2939~~to ~~North~~allow ~~67th~~it ~~Place~~to operate under the protection of the U.S. bankruptcy laws while it converts most of its non-secured debt, ~~Scottsdale~~including accounts payable, ~~Arizona~~to ~~85251~~equity as well as renegotiating its agreements with its secured creditor. Finally, ~~telephone~~it ~~(480) 481-3940~~will need to raise additional equity to continue to fund its operations beyond the three to four months it believes it will take it to go through the bankruptcy process. However, there can be no assurance as to whether, when, or upon what terms the Company will be able to consummate any additional financing.

~~Dividends~~ Contractual Obligations

WeAs ~~have~~a ~~not~~“smaller ~~paid~~reporting ~~any~~company”, ~~cash~~we ~~dividends~~are ~~on our common stock since our inception and do~~ not ~~anticipate~~required to orprovide ~~contemplate~~tabular ~~paying~~disclosure ~~dividends in the foreseeable future~~obligations.

~~Securities Authorized for Issuance under Equity Compensation Plans~~ 14

OnTable ~~November 12, 2007, our board~~ of directors approved our 2007 Equity Incentive Plan which provides for the issuance of up to 1,000,000 options to purchase shares of our common stock. The 2007 Equity Incentive Plan has been approved by our board of directors. On August 2, 2010, our board of directors approved our 2010 Equity Incentive Plan which initially provided for the issuance of up to 3,500,000 options to purchase shares of our common stock. On March 7, 2011, the board of directors approved increasing the authorized shares under the plan to 6,000,000 options. Although the 2010 Equity Incentive Plan has been approved by our board of directors, our stockholders will be asked to approve the 2010 Plan at our next shareholder meeting scheduled for June 6, 2011. The table below sets forth information as of February 28, 2011, with respect to compensation plans under which our common stock is authorized for issuance Contents

Number of securities to be issued upon exercise of outstanding options		Weighted-average exercise price of outstanding options		Number of securities remaining available for future issuance under equity compensation plans
4,005,000		$.99		3,095,000

Off-Balance Sheet Arrangements

~~Recent~~We ~~Sales~~do not have any significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our balance sheet, changes in financial condition, revenues or expenses, results of ~~Unregistered~~operations, liquidity, capital expenditures or capital resources that are material ~~Securities~~to investors.

~~Between~~Going ~~June 7,~~Concern ~~2010~~ and ~~August 3,~~Liquidity 2010, the Company executed a series of common stock and warrant agreements with accredited investors for $59,500 in cash. The accredited investors received 59,500 shares of restricted common stock and 59,500 warrants to purchase additional shares of the Company’s common stock at $1.25 per share. The warrants have a term of 1 year. As of February 28, 2011, the accredited investors held 59,500 warrants. The warrants and shares of the Company’s common stock are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Act, or an exemption thereunder. The securities were offered and sold in reliance on the exemption from registration under Section 4(2) of the Act and/or Rule 506 of Regulation D under the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the offering. Matters

~~Between~~On ~~August 9,~~September ~~2010 and August 31~~23, ~~2010~~2011, the Company ~~executed~~filed for aprotection ~~series~~under Chapter 11 of ~~common~~the ~~stock~~Bankruptcy Code and ~~warrant~~as ~~agreements~~such, ~~with~~the ~~accredited~~accompanying ~~investors~~consolidated ~~for~~financial ~~$301,000~~statements inhave ~~cash.~~been prepared ~~The~~under ~~accredited~~the ~~investors~~assumption ~~received 430,000~~that ~~shares~~the ofCompany ~~common~~will ~~stock~~continue ~~and~~as ~~430,000~~a ~~warrants~~going toconcern, ~~purchase~~which ~~additional~~contemplates ~~shares~~the realization of assets and the ~~Company’s~~satisfaction ~~common~~of ~~stock~~liabilities atduring ~~$0.70~~the ~~per~~normal ~~share.~~course ~~The~~of ~~warrants~~business. ~~have~~Historically, athe ~~term~~Company ofhas 3incurred ~~years.~~significant Aslosses, and ofhas ~~February 28,~~not ~~2011,~~demonstrated the ~~accredited~~ability ~~investors~~to ~~held~~generate ~~420,000 warrants.~~sufficient ~~The~~cash ~~warrants~~flows from operations to satisfy its liabilities and ~~shares~~sustain ofoperations. Our ~~the~~independent ~~Company’s~~registered ~~common~~public ~~stock~~accounting ~~are~~firm ~~restricted~~reported ~~securities,~~for 2012 and ~~may~~2011 ~~not~~that bethese ~~sold,~~factors ~~transferred~~create orsubstantial ~~otherwise~~doubt ~~disposed~~as ~~without~~to the ~~registration~~Company’s ~~under~~ability ~~the~~to ~~Act,~~continue oras ana ~~exemption~~ going concern.

Table of Contents

~~thereunder.~~Use ~~The securities were offered and sold in reliance on the exemption from registration under Section 4(2)~~ of ~~the~~Estimates ~~Act~~ and~~/or~~ ~~Rule~~Critical ~~506~~Accounting of Regulation D under the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the offering. Policies

OnThe ~~July 15,~~preparation ~~2010,~~of ~~the~~our ~~Company~~financial ~~issued~~statements requires amanagement ~~total~~to ofmake ~~300,000~~estimates ~~shares~~and ofassumptions ~~common~~that ~~stock~~affect toreported ~~Richard~~amounts ~~Waxman~~of ~~(150,000~~assets ~~shares)~~and liabilities and ~~Imran~~the ~~Sayeed~~disclosure of ~~(150,000~~contingent ~~shares)~~assets asand ~~part~~liabilities at the date of athe ~~negotiated~~financial ~~settlement~~statements ~~agreement.~~and ~~The Company~~the ~~recorded~~reported ~~$102,690~~amounts inof ~~compensation~~revenues ~~expense~~and inexpenses during the ~~year~~reporting ~~ended~~period. ~~February 28~~On an ongoing basis, ~~2011.~~management ~~The~~evaluates ~~shares~~its ofestimates ~~the~~and ~~Company’s~~assumptions, ~~Common~~including ~~Stock~~those ~~are~~related ~~restricted~~to film ~~shares~~development costs, ~~and~~income ~~may~~taxes, ~~not~~long belived ~~sold~~asset valuation, ~~transferred~~revenue orrecognition ~~otherwise~~and ~~disposed~~stock ~~without~~based ~~registration~~compensation. ~~under the~~Management ~~Securities~~bases ~~Act~~its orestimates anand ~~exemption~~judgments ~~there~~on ~~under.~~historical ~~The~~experience ~~shares~~ of ~~Company~~operations ~~common~~and ~~stock~~on ~~were~~various ~~issued~~other infactors ~~reliance~~that onare ~~the~~believed ~~exemption~~to ~~from~~be ~~registration~~ reasonable under ~~Section 4(2)~~the ofcircumstances, the ~~Act.~~results ~~The~~of ~~issuance~~which ofform ~~shares~~the ~~was~~basis ~~not~~for ~~conducted~~making injudgments ~~connection~~about ~~with~~the acarrying ~~public offering,~~value ~~and~~of noassets ~~public~~and ~~solicitation~~liabilities that orare ~~advertisement~~not ~~was~~readily ~~made~~apparent orfrom ~~relied~~other ~~upon~~sources. byActual ~~the~~results ~~individuals~~may indiffer ~~connection~~from ~~with~~these ~~the~~estimates ~~issuance~~under ofdifferent ~~shares.~~assumptions or conditions

OnManagement ~~September 1,~~believes ~~2010,~~ the ~~Company~~most ~~issued~~critical ~~211~~accounting policies,~~540~~ ~~shares of restricted Company common stock to Mr. Corbin Bernsen in full payment for services~~among ~~rendered.~~others, ~~The~~will ~~shares~~affect ofits ~~the~~more ~~Company’s~~significant ~~common~~judgments ~~stock were restricted securities,~~ and ~~may~~estimates ~~not~~used bein ~~sold, transferred or otherwise disposed without registration under~~ the ~~Securities~~preparation ~~Act~~of orour anfinancial ~~exemption~~statements ~~there~~are ~~under. The shares were issued~~ discussed in ~~reliance on~~Note ~~the exemption from registration under Section 4(~~2) of the ~~Act.~~audited ~~The~~consolidated ~~issuance~~financial ~~of stock was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the consultant in connection with the offering~~statements. ~~During the year ended February 28, 2011, the Company recorded consulting expense of $253,848 related to this Agreement.~~

From September 22, 2010 through September 30, 2010, the Company sold 951,429 shares of restricted Company common stock to 9 accredited investors. In connection with the issuance of common stock, the Company also issued warrants to purchase 926,429 shares of restricted common stock at $.70 per share and 5,000 shares at $1.00 per share for a term of 3 years, and issued warrants to purchase 20,000 shares of restricted common stock at $1.00 per share for a term of 1 year. The investors receiving the 931,429 shares and 946,429 warrants with a $.70 exercise price were granted piggyback registration rights for the shares of common stock and shares underlying the warrants. The aggregate consideration received by the Company from the sale of securities included $649,500 in cash and $22,500 in cancellation of the Company’s payment obligation under a teaming agreement. The warrants and shares of the Company’s common stock are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Act, or an exemption thereunder. The securities were offered and sold in reliance on the exemption from registration under Section 4(2) of the Act and/or Rule 506 of Regulation D under the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the offering. 16

OnTable ~~September 27, 2010, in connection with the Company entering into a consulting agreement with Joseph Abrams, the Company issued 900,000 shares~~ of restricted Company common stock to Mr. Abrams or his assignees. The consulting agreement provides that the Company may repurchase 300,000 of the shares of Company common stock for a total purchase price of $15 if the consulting agreement is terminated by the Company on or before December 15, 2010, and may repurchase 300,000 shares of Company common stock for a total purchase price of $15 if the consulting agreement is terminated by the Company on or before March 15, 2011. The shares of the Company’s common stock were restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption there under. The shares were issued in reliance on the exemption from registration under Section 4(2) of the Act. The issuance of stock was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the consultant in connection with the offering. During the year ended February 28, 2011, the Company recorded consulting expense of $730,325 related to this Agreement. Contents

InITEM ~~October 2010, one holder of a warrant in the amount of $10,000 shares elected to exercise the warrant, and paid $10,000 to the Company~~7A. ~~The~~QUANTITATIVE ~~shares~~AND ~~of the~~QUALITATIVE ~~Company’s~~DISCLOSURES ~~common~~ABOUT ~~stock~~MARKET are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption there under. The shares were issued in reliance on the exemption from registration under Section 4(2) of the Act. RISK

~~Effective~~As ~~October 12,~~a ~~2010,~~smaller ~~the~~reporting ~~Company~~company ~~issued~~we ~~20,000~~are ~~shares~~not ofrequired ~~restricted Company common stock~~ to one individual serving as consultant to the Company. The shares of the Company’s Common Stock were restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or anprovide ~~exemption there under. The shares of Company common stock were offered and sold in reliance on~~ the ~~exemption~~disclosure ~~from~~required ~~registration~~by ~~under~~this ~~Section 4(2) of the Act~~Item. ~~The Company recorded consulting expenses of $34,000 during the year ended February 28, 2011.~~

16ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

~~Table~~See of“Financial ~~Contents~~Statements” beginning on page F-1.

OnITEM ~~October 18, 2010, the Company appointed Ed Roffman as the Chief Financial Officer of the Company~~9. ~~In connection~~CHANGES ~~with~~IN ~~Mr. Roffman’s~~AND ~~appointment,~~DISAGREEMENTS ~~the~~WITH ~~Company~~ACCOUNTANTS ~~entered~~ON ~~into~~ACCOUNTING anAND ~~employment~~FINANCIAL agreement with him pursuant to which he received 180,000 shares of Company common stock with a Company right to repurchase such shares for $.01 a share which right shall elapse at the rate of 15,000 shares per month for a period of 12 months. The shares of the common stock were restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Act or an exemption therein. The shares of common stock were offered and sold within the exemption from registration under Section 4(2) of the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by Mr. Roffman in connection with the issuance. The Company recorded $118,415 in compensation expense for the year ended February 28, 2011. DISCLOSURE

~~On October 26, 2010, the Company issued 15,000 shares of restricted Company common stock to DVD Kiosk Solutions as part of a settlement of a dispute~~None. The shares of the common stock were restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption therein. The shares of common stock were offered and sold within the exemption from registration under Section 4(2) of the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by DVD Kiosk Solutions in connection with the issuance. The Company recorded $29,850 in expense for the year ended February 28, 2011.

OnITEM ~~November 22, 2010, the Company appointed Gregory Waring as President and Chief Operating Officer of the Company~~9A. InCONTROLS ~~connection~~AND with Mr. Waring’s appointment, the Company entered into an employment agreement with him pursuant to which he received 250,000 shares of Company common stock with a Company right to repurchase such shares for $.01 a share which right shall elapse at the rate of 20,833 shares per month for a period of 12 months. The shares of the common stock were restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption therein. The shares of common stock were offered and sold within the exemption from registration under Section 4(2) of the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by Mr. Waring in connection with the issuance. The Company recorded $92,349 in compensation expense for the year ended February 28, 2011. PROCEDURES

OnEvaluation ~~November 24, 2010, the Company issued 375,000 shares to Mr. Mark Smith, a former Chief Financial Officer~~ of ~~the~~Disclosure ~~Company,~~Controls ~~in connection with a settlement agreement with the Company. The shares of the common stock were restricted shares,~~ and ~~may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption therein~~Procedures. The shares of common stock were offered and sold within the exemption from registration under Section 4(2) of the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by Mr. Smith in connection with the issuance. The Company recorded $412,500 in compensation expense for the year ended February 28, 2011.

~~From~~Our ~~December 13,~~disclosure ~~2010~~controls ~~through~~and ~~February 28,~~procedures are ~~2011,~~designed ~~the~~to ~~Company~~provide ~~sold~~reasonable ~~4,700,400~~assurances ~~shares~~that ofmaterial ~~restricted~~information ~~Company~~related ~~common stock~~ to 34our ~~accredited~~Company ~~investors~~is ~~for~~recorded, ~~a total of $1~~processed,~~175,100.~~ ~~In connection with~~summarized ~~the~~and ~~issuance~~reported ofwithin ~~common stock,~~ the ~~Company~~time ~~also~~periods ~~issued~~specified ~~warrants~~in ~~to purchase 4,700,400 shares of restricted common stock at $1.00 per share for a term of 3 years. In addition,~~ the ~~Company~~SEC ~~agreed~~rules ~~to convert $524,490.50 of debt (including accounts payable, as well as ling-term debt~~ and ~~related accrued interest) on the same terms issuing 2~~forms,~~097,962~~ ~~shares~~ and ~~warrants.~~that ~~The~~such ~~investors~~information ~~were~~is ~~granted~~accumulated ~~piggyback registration rights for the shares of common stock~~ and ~~shares underlying the warrants. The~~communicated ~~warrants~~to ~~and~~our ~~shares of the Company’s common stock are restricted securities~~management, ~~and~~including ~~may~~our ~~not~~Chief beExecutive ~~sold~~Officer, ~~transferred~~who oris ~~otherwise~~also ~~disposed~~our ~~without~~Chief ~~registration~~Financial ~~under~~Officer, ~~the~~as ~~Act~~appropriate, orto anallow ~~exemption~~timely decisions ~~thereunder.~~regarding ~~The~~required ~~securities~~disclosure. ~~were~~Our ~~offered~~Chief ~~and~~Executive ~~sold~~Officer, inwho ~~reliance on~~is ~~the~~also ~~exemption~~our ~~from~~Chief ~~registration~~Financial ~~under~~Officer, ~~Section 4(2)~~has ofdetermined ~~the~~that as ~~Act and/or Rule 506~~ of ~~Regulation~~February 29, D2012, ~~under~~our ~~the~~disclosure ~~Act. The~~controls ~~offering~~were ~~was~~ not ~~conducted~~effective infor ~~connection~~the ~~with~~reasons adiscussed ~~public~~below ~~offering,~~related ~~and~~to nomaterial ~~public solicitation or advertisement was made or~~weaknesses ~~relied~~in ~~upon~~our byinternal ~~the~~control ~~individual~~over infinancial ~~connection with the offering~~reporting.

In February 2011, one holder of a stock option in the amount of 100,000 shares elected to exercise the stock option, using the cashless exercise feature of the option. The Company issued 68,750 shares of common stock. The shares of the CompanyManagement’s ~~common~~Report ~~stock are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption there under. The shares were issued in reliance~~ on ~~the~~Internal ~~exemption~~Control ~~from~~Over ~~registration under Section 4(2) of the Act.~~ Financial Reporting

17Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

~~Table~~1. pertain to the maintenance of ~~Contents~~records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

~~From~~2. ~~December~~provide ~~through~~reasonable ~~February~~assurance ~~2011,~~that ~~the~~transactions ~~Company~~are ~~issued~~recorded ~~82,000 shares of restricted common stock to five individuals serving~~ as ~~consultants~~necessary to ~~the~~permit ~~Company.~~preparation ~~The shares~~ of ~~the~~financial ~~Company’s~~statements ~~common~~in ~~stock~~accordance ~~are~~with ~~restricted~~U.S. ~~securities,~~generally ~~and~~accepted ~~may~~accounting ~~not be sold~~principles, ~~transferred~~and orthat ~~otherwise~~our ~~disposed~~receipts ~~without~~and ~~registration~~expenditures ~~under~~are ~~the~~being ~~Securities~~made ~~Act~~only ~~or an exemption there under. The shares were issued~~ in ~~reliance~~accordance onwith the ~~exemption~~authorization ~~from registration under Section 4(2)~~ of ~~the~~our ~~Act.~~management ~~The~~and ~~Company~~directors; ~~recorded consulting expense of $77,900 during the year ended February 28, 2011.~~ and

~~On May 23, 2011, the Company entered into an Agreement with George Mainas, Mainas Development Corporation (collectively “Mainas”) and Del Rey Management L~~3.P. ~~(“Del~~provide ~~Rey”)~~reasonable ~~whereby~~assurance ~~Del~~regarding ~~Rey~~prevention ~~purchased~~or ~~$250,000~~timely ofdetection ~~the debt due the Company to Mainas. The Company agreed to allow Del Rey the option to convert this debt into 1,000,000 shares~~ of ~~common~~unauthorized ~~stock and 1~~acquisition,~~000,000~~ ~~warrants~~use toor ~~purchase~~disposition ~~common stock~~ of ~~the~~our ~~Company~~assets ~~for $0.40 per share for three years from the date of the Agreement. Also, on May 23, 2011, Del Rey notified the Company~~ that itcould ~~was~~have ~~exercising~~a ~~this~~material ~~option~~effect to convert. The shares of Company common stock will be issued without restriction under the Act under an exemption provided pursuant to Rule 144 of the Act. The warrants and shares of the Company’s common stock which may be issued upon exercise of the warrants are restricted securities, and may not be sold, transferred or otherwise disposed without registration under Act, or an exemption thereunder. The securities were offered and sold in reliance on the ~~exemption~~financial ~~from registration under Section 4(2) of the Act and/or Rule 506 of Regulation D under the Act~~statements. ~~The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the offering.~~

~~Repurchases~~Because of ~~Equity~~its ~~Securities~~inherent bylimitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the ~~Company~~risk ~~and~~that ~~Affiliates~~controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~None~~Management assessed the effectiveness of our internal control over financial reporting as of February 28, 2012. In making this assessment, management used the framework set forth in the report entitled Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system,

~~ITEM 6. SELECTED FINANCIAL DATA AND SUPPLEMENTARY INFORMATION~~ 17

AsTable aof ~~smaller reporting company we are not required to provide the information required by this item.~~ Contents

~~ITEM~~including (i) 7the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. ~~MANAGEMENT~~Based on that assessment under such criteria, management concluded that the Company’Ss ~~DISCUSSION~~internal ~~AND~~control ~~ANALYSIS~~over OFfinancial ~~FINANCIAL~~reporting ~~CONDITION~~was ~~AND~~not ~~RESULTS~~effective OFas ~~OPERATIONS~~of February 29, 2012 due to control deficiencies that constituted material weaknesses.

~~The~~We ~~following~~did ~~discussion~~not ~~and~~include ~~analysis~~an isattestation ~~intended~~report asfrom ~~a review of significant factors affecting~~ our ~~financial~~registered public ~~condition~~accounting ~~and~~firm ~~results~~regarding ofinternal ~~operations~~control ~~for~~over ~~the periods~~financial ~~indicated~~reporting. ~~The~~ ~~discussion~~Management’s ~~should~~report bewas ~~read~~not insubject ~~conjunction~~to ~~with~~attestation by our ~~consolidated~~registered ~~financial~~public ~~statements~~accounting ~~and~~firm ~~the~~pursuant ~~notes presented herein. See “ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.” below. In addition~~ to ~~historical~~ ~~information,~~ the ~~following~~temporary ~~Management’s~~rules ~~Discussion and Analysis~~ of ~~Financial~~the ~~Condition~~SEC ~~and Results of Operations contains forward-looking statements~~ that ~~involve~~permit ~~risks~~the ~~and~~company ~~uncertainties. Our~~to ~~actual~~provide ~~results~~only ~~could differ~~management’s ~~significantly from those anticipated in these forward-looking statements as a result of certain factors discussed in this~~ report. ~~See “Forward-Looking Statements” above.~~

~~Overview~~Identified Material Weaknesses

~~The~~A ~~Company~~material ~~and~~weakness ~~its~~is ~~wholly-owned~~a ~~subsidiary~~deficiency, ~~EntertainmentXpress~~or a combination of deficiencies, in ~~Inc.~~internal control over financial reporting, such that there is a ~~California~~ ~~corporation~~reasonable ~~(“EntertainmentXpress”),~~possibility ~~are~~that ~~engaged~~a inmaterial misstatement of the ~~business~~Company’s annual ofor ~~offering~~interim ~~self-service~~financial ~~Kiosks~~statements ~~which~~will ~~deliver~~not ~~DVD~~be ~~movies~~prevented toor ~~consumers~~detected on a timely basis. Management identified the following internal control deficiencies, which it deemed material weaknesses during its assessment of our internal control over financial reporting as of February 29, 2012:

~~Public Media Works, Inc~~1. ~~has~~Management ~~historically been engaged~~ in ~~the~~assessing ~~development,~~its ~~production,~~internal ~~marketing~~controls and ~~distribution~~procedures offor ~~film,~~fiscal ~~music~~2012 ~~and~~identified ~~television~~a ~~entertainment~~lack ~~titles.~~of ~~The~~sufficient ~~Company~~segregation ~~has~~of anduties, ~~ownership~~particularly ~~interest~~ in ~~several~~cash ~~film~~disbursements. ~~and~~Specifically, ~~television~~this ~~projects~~material ~~which~~weakness ~~are~~is ~~currently~~such inthat ~~various~~the ~~stages~~design ofover ~~development. As of May 4, 2010 with~~ the ~~acquisition~~areas of ~~Entertainment~~cash ~~Xpress,~~disbursements ~~Inc.,~~relies ~~the~~primarily ~~Company~~on ~~has~~detective ~~focused~~controls ~~exclusively~~and oncould ~~its~~be ~~kiosk~~strengthened ~~business~~by ~~and~~adding ~~intends~~preventative controls to ~~continue~~ ~~this~~properly ~~focus~~safeguard ~~going~~company ~~forward~~assets.

2. In ~~order~~conjunction towith ~~maintain clarity in this report, references to~~ the ~~business~~lack of ~~the~~segregation ~~Company’s~~of ~~subsidiary EntertainmentXpress will be indicated as “EntertainmentXpress”; and references to the “Company~~duties,” “we,” ~~“us”~~did ornot ~~“our”~~institute ~~refer~~specific toanti-fraud ~~the combined businesses of Public Media Works, Inc~~controls. ~~and EntertainmentXpress after May 4, 2010.~~

18In conclusion, our Chief Executive Officer, who is also our Chief Financial Officer, concluded that we did not maintain effective internal control over financial reporting as of February 29, 2012.

~~Table~~Management’s ofRemediation ~~Contents~~Initiatives

~~Results~~Our plan to remediate those material weaknesses remaining as of ~~Operations~~February 29, 2012 will depend on the outcome of our Bankruptcy filing.

~~The~~Changes ~~Company’s revenues for the fiscal years ended February 28, 2011 and February 28, 2010 were $7,139 and $50,000, respectively. Revenue~~ in ~~fiscal~~Controls year 2010, came from a one-time payment for consulting services whereby the Company agreed to assist the third party with its desired investment in a media company. Fiscal 2011 revenue came from an unsuccessful early test of kiosks in Pizza Hut restaurants and two months of revenue from our Canadian venture. The restaurant did not have the required foot traffic to generate the number of rentals required to make the kiosks profitable. In the future, we plan to focus our efforts on higher traffic locations in North America such as grocery stores and convenience stores. Procedures

The Company’s operating expenses for the fiscal year ended February 28, 2011 were 7,561,857 as compared to $75,399 for the fiscal year ending February 28, 2010. This increase in operating expenses is attributed to new management after the share exchange agreement and the resulting operational expansion as we geared up to enter the kiosk-based DVD rental business. Included in operating expenses is $5,738,653 of stock compensation expense, related to restricted stock grants to employees and consultants, stock issuances to settle disputes with both vendors and former employees and employee and consultant stock option grants. An additional $735,190 was spent on outside consultants including legal fees $306,330, investor relations specialists $70,000 and other outside consultant in marketing, sales and finance $317,703. 18

AsTable ~~a result~~ of ~~the above, the Company had a net loss of $7,676,352 for the fiscal year ended February 28, 2011, compared to a net loss of $108,435 for the fiscal year ended February 28, 2010.~~ Contents

~~The~~There ~~Company~~were ~~reported~~no asignificant ~~cumulative~~changes ~~net~~made ~~loss~~in ofour ~~$12,835,921~~internal ~~from inception~~controls ~~through~~over financial reporting during the quarter ended February 2829, ~~2011.~~2012 that have materially affected or are reasonably likely to materially affect these controls.

~~Liquidity~~ITEM ~~and~~9B. ~~Capital~~OTHER ~~Resources~~ INFORMATION

~~The Company’s net cash used by operating activities increased from $49,761 for the fiscal year ended February 28, 2010 to $1,545,546 for the fiscal year ended February 28, 2011~~None. This increase is due to costs preparing to expand our business relating to the 25 kiosks to be placed into operation in March 2011. In this regard during the year, the company expanded from four part-time consultants to six employees augmented by marketing and investor relations consultants. We also placed deposits on twenty-five kiosks totaling $394,206.

WePART ~~owe $855,185 in a series of notes to various third parties affiliated with the Company though share ownership.~~ III

WeITEM ~~do not currently have unused credit facilities available to us~~10. ~~To date~~DIRECTORS, ~~the~~EXECUTIVE ~~Company~~OFFICERS ~~has~~AND ~~funded~~CORPORATE its operations primarily through the issuance of common stock in exchange for cash and services, as well as through secured and unsecured notes payable to stockholders and third parties. There can be no assurances that the Company will be able to continue to sell its equity or borrow money to fund its operations. GOVERNANCE

~~Commitments~~Our directors are elected by our shareholders to a term of one year and to serve until his or her successor is duly elected and qualified, or until his death, resignation or removal. Each of our officers is appointed by our board of directors to a term of one year and serves until his successor is duly elected and qualified, or until his death, resignation or removal from office.

AsOur bylaws provide that the number of ~~February 28,~~directors ~~2011~~which ~~the~~shall ~~Company~~constitute ~~has~~our ~~aggregate~~whole ~~outstanding~~board ~~notes~~of ~~payable~~directors ~~and~~shall ~~accrued~~not ~~interest~~be ~~balances~~less than one or more than five. The number of ~~approximately~~directors ~~$855,185,~~is determined by resolution of our board of directors or by our shareholders at our annual meeting. Set ~~under~~forth below are the ~~following~~directors ~~obligations:~~and officers of the Company as of June 1, 2012:

1. On August 30, 2000, the Company and George Mainas, a member of the Board of Directors of the Company and a shareholder, entered into a promissory note bearing interest at 8% per annum. As of February 28, 2010, the Company had an outstanding balance of $465,409 under the promissory note, including accrued interest.

Name	Age	Position

Martin W. Greenwald	70	Chief Executive Officer, Secretary and Chairman of the Board of Directors
Bryan Subotnick	47	Director

2Martin W. OnGreenwald was appointed as our Chairman of the Board, Chief Executive Officer and Secretary on August 192, ~~2004~~2010. Mr. Greenwald was appointed to our Board of Directors as of May 26, ~~the~~2010. ~~Company~~Mr. Greenwald ~~entered~~served ~~into~~as aChairman ~~line~~of the Board of ~~credit~~Image ~~with~~Entertainment, Inc., ~~Mainas~~a ~~Development~~NASDAQ ~~Corporation~~listed company, ~~which~~from isfounding ~~wholly-owned~~the bycompany ~~George~~in ~~Mainas~~1981 until January 2010. From ~~The~~1981 until 2008, Mr. Greenwald ~~non-revolving~~also ~~line~~served as CEO and President of ~~credit~~Image ~~has~~Entertainment. aFrom ~~maximum~~1985 ~~draw-down~~to of1997, Mr. Greenwald and his management team grew Image into the largest laserdisc production and distribution company in the United States with an estimated 40% market share and revenues consistently exceeding $~~250~~100,000,000 ~~bears~~per ~~interest~~year. During ofthat 9%same ~~annually~~period of time, ~~does~~Mr. Greenwald ~~not~~oversaw ~~maintain~~the anacquisition of ~~outstanding~~content, ~~balance~~negotiating ~~limitation.~~Image’s ~~The~~exclusive ~~outstanding~~content ~~balance~~agreements onwith ~~this~~studios ~~account~~such as Disney, Fox, Warner, MGM and a host of other ~~February~~major content suppliers. 28Image’s facilities at that time included a California corporate office with approximately 100 employees and a 60,000 ~~2011~~square ~~was~~foot ~~$310~~warehouse and distribution center located in Las Vegas,~~835~~ Nevada. Beginning in 1996, Mr. Greenwald revamped Image’s operation to focus on DVD content acquisition, production and distribution. Since 1996, Image became recognized as the largest independent DVD company in North America with an exclusive library of over 4,000 titles, including ~~accrued~~broadcast, digital, ~~interest~~and VOD rights to many of these titles. Mr. Greenwald resigned from Image in 2010 as that company underwent a change of control.

3Mr. InSubotnick ~~July~~has ~~2008,~~been a director of the Company ~~entered~~since ~~into~~March 25, 2011. Mr. Subotnick has served as the Chief Executive Officer and President of NYCe pLAy, LLC, a ~~promissory~~Los ~~obligation~~Angeles based technology company that develops, markets and sells smartphone applications, since the founding of the company in 2010. Since 2004, Mr. Subotnick has also been an active investor in a variety of investments including a telecommunications service provider and several internet start-ups in the entertainment, advertising and medical industries. From 1995 to ~~George~~2004, ~~Mainas~~Mr. Subotnick was Executive Vice President of Big City Radio, a Los Angeles based owner of radio stations, where he helped grow the company from 4 regional stations to ~~borrow~~16 national stations and to become listed on the American Stock Exchange. While at Big City Radio, Mr. Subotnick managed many aspects of company operations, including acquisitions, programming, budgeting and client relations, and assisted in raising over $4233 million in the company’s IPO and $174 million in a public debt offering. From 1994 to 1995,~~000~~ ~~bearing~~Mr. ~~interest~~Subotnick atwas Vice President and General Counsel of Papamarkou & Company, an SEC registered asset management ~~7% per~~company ~~annum~~based in New York, New York. Mr. Subotnick was a founder and general partner of Shanker & Subotnick, a law firm which concentrated on entertainment law. Mr. Subotnick was a Kings County Assistant District Attorney in New York, New York from 1991 to 1992, and worked in the prestigious Bear Stearns & Company bond trading and sales program from 1986 to 1988. Mr. Subotnick received his Bachelor of Science in Finance from Syracuse University, and his Juris Doctor from the Brooklyn Law School.

~~Effective~~There ~~August 14,~~are ~~2009,~~no ~~the Company executed a Loan Modification and Security Agreement (the “Loan~~family ~~Agreement”)~~relationships ~~with~~among ~~George~~members ~~Mainas~~of ~~and~~our ~~Mainas~~management Development Corporation, a corporation wholly-owned by George Mainas, pursuant to which George Mainas and Mainas Development Corporation agreed to extend the repayment date for the Company’s outstanding loan obligations to them described above until Decemberor ~~31,~~our ~~2009,~~Board ~~in consideration~~ of ~~the Company granting a security interest in the Company’s assets to secure repayment of the loan obligations~~Directors. ~~The description of the terms of the Loan Agreement is qualified by reference to the complete~~

19Leadership Structure

~~Table~~The chairman of ~~Contents~~our board of directors also serves as our chief executive officer. Our board of directors does not have a lead independent director. Our board of directors has determined that its leadership structure is appropriate and effective. Our board of directors believes that having a single individual serve as both chairman and chief executive officer provides clear leadership, accountability and promotes strategic development and execution as our company executes our strategy as a more communications-focused enterprise. Our board of directors also believes that there is a high degree of transparency among directors and company management.

copy of the agreement which is filed as an exhibit to the Company’s Form 8-K filed with the SEC on August 18, 2009 and incorporated herein by reference. Effective December 30, 2009, George Mainas and Mainas Development Corporation agreed to extend the repayment period to February 28, 2010 under the Loan Agreement. On May 4, 2010, in connection with the closing of the Share Exchange Agreement, George Mainas and Mainas Development Agreement entered into an Amendment to the Loan Agreement pursuant to which the parties agreed as follows: (i) the maturity date of all loan obligations under the Loan Agreement shall be extended until June 30, 2013 (the “Maturity Date”); (ii) all principal and accrued interest under the Loan Agreement may be converted into shares of Company common stock at the election of the Mainas parties at any time upon written notice to the Company at a price of $4.00 per share; and (iii) all principal and accrued interest under the Loan Agreement shall automatically convert into shares of Company common stock in the event that the 10 day trailing VWAP (volume weighted average price) for the Company’s common stock (as quoted on Company’s principal trading market) shall exceed $4.00 per share at any time prior to the Maturity Date. On October 12, 2010, the Company agreed to a modification of the repayment terms to provide that (iii) above be modified as follows: the Company may provide 10 days prior written notice to the Mainas parties of its election to repay at any time prior to the Maturity Date (June 30, 2013), during which ten day period the Mainas parties’ may elect to take repayment or convert the debt at $4.00 per share. 19

InNomination ~~February 2011, Mr. Mainas converted the 7% Note ($42,000) and its accrued interest($29,665), plus $270,363~~ of ~~accrued~~Directors interest on the 8% Note, plus $62,277 of monies due him for company expenses he paid for or a total of $404,305 into units of common stock and warrants at $0.25 per unit (1,617,220 units). One unit consists of one share of common stock and one warrant to purchase a share of common stock at $0.25 per share for three years.

~~4. June~~There ~~2010,~~have ~~the~~not ~~Company~~been ~~entered~~any ~~into~~changes ato ~~promissory note with Mr. Steve Davis which bears interest at 7% per annum. The maturity date under~~ the ~~promissory note is June 30, 2013 (the~~ ~~“Maturity~~procedures ~~Date”),~~by ~~all~~which ~~principal~~shareholders ~~and accrued interest under the promissory note~~ may berecommend ~~converted~~nominees ~~into shares of Company common stock at the election of the holder at any time upon written notice~~ to the Company at a price of $4.00 per share, and all principal and accrued interest under the promissory note shall automatically convert into shares of Company common stock in the event that the 10 day trailing VWAP (volume weighted average price) for the Company’s ~~common~~board ~~stock~~of ~~shall exceed $4~~directors.~~00 per share at any time prior to the Maturity Date.~~

5.Code ~~On August 31, 2010, the Company entered into a settlement agreement with Niesar Vestal, LLP for all outstanding obligations. The agreement calls for a series~~ of ~~cash~~Ethics payments totaling $45,000 over 12 months plus a convertible note for $50,000. $25,000 of the short-term note has been paid, with the remainder in short-term debt. The long-term note has a maturity date of June 30, 2012 and accrues interest at 10%. The terms of the debt agreement provide for all principal and accrued interest to be converted into shares of common stock at $1.50 per share at any time within the term of the note. All principal and accrued interest under the note shall automatically convert into shares of common stock in the event that the 30 day trailing volume weighted average price for the stock exceeds $2.00 per share at any time after June 1, 2011 and prior to the maturity date.

The ~~proceeds~~Company ~~from~~has ~~these~~adopted ~~notes~~a ~~and~~Code ~~the line~~ of ~~credit~~Business Ethics ~~were~~and ~~used~~Conduct ~~to meet~~ (the ~~general~~"Ethics ~~working~~Code") ~~capital~~that ~~needs~~applies ofto the ~~Company.~~every ~~Increases~~officer inof ~~expenses~~and ordirector ~~delays in product development or failure~~ to ~~achieve~~the ~~our~~Company. The ~~sales~~Ethics ~~projections~~Code ~~may~~is ~~adversely~~attached ~~impact~~as ~~our~~an ~~cash~~exhibit ~~position and may require us~~ to ~~seek~~its ~~additional~~Form ~~financing.~~10-KSB ~~There can~~filed bewith nothe ~~assurance~~Commission ~~that such financing will be available~~ on ~~acceptable terms~~August 18, ~~or at all~~2004. WeThe doCode ~~not~~is ~~have~~also available ~~any~~free ~~arrangements~~of ~~with~~charge ~~any~~upon ~~bank~~request ~~or financial institution~~ to ~~secure~~the ~~additional~~Company ~~financing~~at ~~and~~4000 ~~there~~Bridgeway, ~~can~~Ste. be#401, ~~no assurance that any such arrangements~~Sausalito, if ~~required~~California ~~or otherwise sought~~94965, ~~would~~Attn: beMartin ~~available on terms deemed to be commercially acceptable and in our best interests~~W. Greenwald.

~~Off-Balance Sheet~~Audit ~~Arrangements~~Committee and Financial Report

WeOur doCompany does not ~~have~~currently ~~any off-balance sheet arrangements that~~ have oran ~~are~~audit ~~reasonably~~committee, ~~likely~~audit committee tocharter ~~have a current~~ or ~~future~~“audit ~~effect on~~committee ~~our balance sheet, changes in~~ financial ~~condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors~~expert. ”

~~Going~~Audit ~~Concern~~Committee ~~and~~Pre-Approval ~~Liquidity~~Policies ~~Matters~~

~~The~~We ~~accompanying~~have ~~financial~~not ~~statements~~yet ofappointed ~~the~~an ~~Company have~~audit ~~been~~committee, ~~prepared~~and ~~under~~our ~~the~~board of ~~assumption~~directors ~~that~~currently weacts ~~will continue~~ as aour ~~going~~audit ~~concern~~committee. The ~~Such~~Board ~~assumption~~of ~~contemplates~~Directors ~~the~~has ~~realization~~approved all of ~~assets~~the fees paid and ~~the~~identified herein ~~satisfaction~~to ofthe ~~liabilities~~Company’s principal accountant.

20Compensation Committee

~~Table~~The ofCompany ~~Contents~~does not currently have a compensation committee.

inCompliance ~~the~~with ~~normal~~Section ~~course of business. As shown in the accompanying financial statements, the Company incurred~~ 16(a) ~~net loss~~ of ~~$7,676,351 during year ended February 28, 2011, and has incurred net cash outflows from operating activities during~~ the ~~years ended February 28, 2011 and February 28, 2010 of approximately $1,545,546 and $49,761, respectively. Our independent registered public accounting firm reported for 2011 and 2010 that~~ ~~these~~Exchange ~~factors~~Act ~~create substantial doubt as to the Company’s ability to continue as a going concern.~~

AsBased solely upon a review of Forms 3, 4 and 5 furnished to the ~~date~~Company pursuant to Section 16(a)-3e of ~~this~~the ~~report~~Exchange Act, weour ~~are~~Company noted no delinquencies for the fiscal ~~testing~~year ~~our~~ending ~~first~~February 2529, ~~kiosks~~2012 inor ~~Riverside~~through ~~County~~the ~~California.~~date ~~The~~of ~~kiosks~~this ~~have~~file, ~~not~~except ~~yet~~for ~~been~~the ~~deployed~~following ~~long~~which ~~enough~~were tofiled ~~evaluate~~late: ~~whether~~the ~~they~~Form ~~will~~4 befiled by ~~successful~~Gregory inWaring ~~generating~~on ~~sufficient~~March ~~revenue~~11, to2011; ~~prove~~the ~~out~~Form 4 filed by Garrett Cecchini on March 14, 2011; and the ~~business~~Form ~~model.~~4 filed by Joseph Merhi on March 16, 2011.

~~The~~Shareholder ~~Company’s~~Communications ~~continuation~~with ~~as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely~~the ~~basis,~~Board ~~to obtain additional financing as may be required, and ultimately to attain profitability. We will need to obtain additional financing through the sale~~ of ~~equity~~Directors securities and / or the issuance of debt, if needed. There can be no assurance that such financing will be available on acceptable terms, or at all. The financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

~~Use~~The Board of ~~Estimates~~Directors ~~and~~has ~~Critical~~not ~~Accounting~~established a ~~Policies~~formal process for shareholders to send communications to its members. Any shareholder may send a communication to any member of the Board of Directors, in care of the Company’s address or in care of the address shown in the table of beneficial ownership on this page. If a communication is sent to the Company’s address, the Company will forward any such communication to the relevant member of the Board of Directors.

~~Management~~ITEM ~~believes the following critical accounting policies, among others, will affect its more significant judgments and estimates used in the preparation of our financial statements~~11. EXECUTIVE COMPENSATION

Both this Management’s Discussion and Analysis and our Plan of Operation discuss our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.


Name and Position	Fiscal Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards(1) ($)		Non-equity Incentive Comp ($)		Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)

Martin Greenwald (2)(6)		2012		0		0		0		0		0		0		0	$	0
Chief Executive Officer/Director		2011		0		0		1,000,000		500,000		0		0		0	$	1,500,000
Greg P Waring (3)		2012		105,750		0		0		0		0		0		0	$	105,750
Former Chief Operating Officer/President		2011		33,000		8,450		312,500		312,500		0		0		0	$	666,450
Ed Roffman (4)		2012		72,500		0		0		0		0		0		0	$	72,500
Former Chief Financial Officer		2011		34,000		0		342,000		189,000		0		0		0		565,000
Garrett Cecchini (5)		2012		0		0		0		0		0		0		0	$	0
Former Chief Executive Officer/Director		2011		0		0		0		0		0		0		0		0

Bryan Subotnick (6)		2012		0		0		0		0		0		0		0	$	0
Director		2011		0		0		0		0		0		0		0		0

(1) The ~~preparation of our financial statements requires management to make estimates and assumptions that affect reported~~ amounts ofin ~~assets~~this ~~and~~column ~~liabilities~~represent ~~and~~ the ~~disclosure~~aggregate ofgrant ~~contingent~~date ~~assets~~fair ~~and~~values ~~liabilities~~of at the ~~date~~stock ofoption ~~the~~awards ~~financial~~granted ~~statements~~to ~~and~~ the ~~reported~~executive ~~amounts~~in offiscal ~~revenues~~year ~~and~~ended ~~expenses~~February ~~during the reporting period. On an ongoing basis~~29, ~~management~~2012 ~~evaluates its estimates~~ and ~~assumptions,~~February ~~including those related to film development costs~~28, ~~income taxes~~2011, ~~long~~respectively ~~lived~~in ~~asset~~accordance ~~valuation,~~with ~~revenue recognition and~~ stock ~~based~~ compensation. Management bases its estimates and judgments on historical experience of operations and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sourcesaccounting. ~~Actual results may differ from these estimates under different assumptions or conditions.~~

Revenue Recognition. The Company recognizes net revenue from DVD movie rentals on a ratable basis during the term of a consumer’s rental transaction. Revenue from a direct sale out of the kiosk of previously rented movies is recognized at the time of sale. On rental transactions for which the related DVDs have not yet been returned to the kiosk at month-end, revenue is recognized with a corresponding receivable recorded in the balance sheet, net of a reserve for potentially uncollectible amounts. We record revenue net of refunds and applicable sales taxes collected from consumers. The Company had minimal revenues from DVD movie rentals during the year. 20

Inventory. Inventory is comprised of our DVD rental library and merchandise inventories held for resale. Inventory, which is considered finished goods, is stated at the lower of cost or market. DVD library is capitalized and amortized to estimated salvage value (sales value of used DVDs) on a straight-line basis to direct operating expense over the average estimated usage periods of the DVDs which is typically four months. The cost of inventory includes the cost purchasing DVDs and to a lesser extent, the labor, overhead and freight in stocking the DVDs rental inventory.

(2)	Mr. Greenwald was named Chief Executive Officer and Chairman of the Board for Directors on August 2, 2010 with no cash compensation. In conjunction with this, he was granted 1,000,000 shares of restricted stock which he earns 83,333 per month. In March 2011, the Board of Directors, accelerated the vesting on these shares. Mr. Greenwald was also granted stock options for 500,000 shares with an original exercise price of $1.02 per share and vesting over twelve months. In March 2011, the Board of Directors accelerated the vesting on these options and reduced the exercise price to $0.55 per share.
(3)	Mr. Waring was named President and Chief Operating Officer on November 18, 2010. In addition, Mr. Waring has deferred $8,000 which was paid in fiscal 2012. Mr. Waring was granted 250,000 shares of restricted stock. This stock has a repurchase right which decreases by 8.33% per month over his first year of employment. Mr. Waring also was granted stock options for 250,000 with an original exercise price of $1.25 per share. The exercise price was reduced in March 2011 to $0.55 per share.
(4)	Mr. Roffman was named Chief Financial Officer on October 18, 2010. In addition, Mr. Roffman has deferred $7,000 which was paid in fiscal 2012. Mr. Roffman was granted 250,000 shares of restricted stock. This stock has a repurchase right which decreases by 8.33% per month over his first year of employment. Mr. Roffman also was granted stock options for 180,000 with an original exercise price of $1.05 per share. The exercise price was reduced in March 2011 to $0.55 per share.
(5)	At February 28, 2011, Mr. Cecchini was owed $30,000 in compensation. In March 2011, the Company and Mr. Cecchini agreed to convert this into 120,000 share of restricted stock and a warrant to purchase 120,000 shares of stock at $0.25 per share. Mr. Cecchini resigned as Chief Executive Officer on August 2, 1010 and as a director on March 7, 2011.
(6)	Mr. Greenwald and Mr. Subotnick have been diligently working in excess of the past year as the CEO and active Director of PMW without monetary compensation of any type. It is agreed and understood by both parties and PMW that they will accept compensation in the form of free trading shares only, resulting if and when PMW achieves a successful reorganization as a result of their efforts.

~~Stock-Based~~ITEM ~~Compensation~~12. ~~Generally,~~SECURITY ~~all~~OWNERSHIP ~~forms~~OF ofCERTAIN ~~share-based~~BENEFICIAL ~~payments,~~OWNERS ~~including~~AND ~~stock~~MANAGEMENT ~~option~~AND ~~grants,~~RELATED ~~restricted~~STOCKHOLDER ~~stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest~~MATTERS. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments are recorded in operating expenses in the consolidated statement of operations.

21The following table sets forth as of June 1, 2012, information regarding the beneficial ownership of our common stock with respect to (i) our officers and directors; (ii) by all directors and executive officers as a group; and (iii) all persons which the Company, pursuant to filings with the Securities and Exchange Commission (the “SEC”) and our stock transfer record by each person or group known by our management to own more than 5% of the outstanding shares of our common stock. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a “beneficial owner” of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within sixty (60) days, such as our warrants or options to purchase shares of our common stock. . Each percentage is based upon, the total number of shares outstanding at June 1, 2012, which was 63,315,615, and the total number of shares beneficially owned and held by each individual at June 1, 2012, plus the number of shares that such individual has the right to acquire within 60 days of June 1, 2012. Unless otherwise noted, each person has sole voting and investment power over the shares indicated below subject to applicable community property law.


Name and Address of Beneficial Owner ⁽¹⁾	Amount and Nature of Beneficial Ownership			Percentage of Class Beneficially Owned
Officers and Directors
Martin W. Greenwald		2,083,333	(2)		3.29	%
5% Shareholders

Stuart Subotnick 810 Seventh Avenue—29 ^thFloor New York, New York 10019		27,800,000	(3)		43.90	%

~~Please~~(1) ~~see~~Unless ~~the~~otherwise ~~section~~noted, ~~entitled~~the ~~“Use~~address ofis ~~Estimates”~~c/o ~~contained~~4000 inBridgeway, ~~“Note~~Ste. ~~2—Summary~~#401 ~~of Significant~~Sausalito, ~~Accounting~~CA ~~Policies” to our financial statements commencing on page F-7~~94965.

~~Recent~~(2) ~~Accounting~~Includes ~~Pronouncements~~1,000,000 shares issuable upon exercise of options exercisable within 60 days of June 1, 2012.

~~Please~~(3) ~~see~~Includes ~~the~~1,400,000 ~~sections~~shares ~~entitled~~issuable ~~“Recent~~upon ~~Accounting~~exercise ~~Pronouncements” contained in “Note 2—Summary~~ of ~~Significant~~warrants ~~Accounting Policies”~~exercisable towithin ~~our~~60 ~~financial~~days ~~statements~~of ~~commencing~~June on1, ~~page F-7~~2012.

AsRelated aParty ~~smaller~~Transactions ~~reporting~~. ~~company~~Our Company weclosely ~~are~~reviews ~~not~~transactions ~~required~~between the Company and persons or entities considered to ~~provide~~be ~~the~~related ~~disclosure~~parties ~~required~~(collectively “related byparties”). Our Company considers entities to be related parties where an executive officer, director or a 5% or more beneficial owner of our common stock (or an immediate family member of these persons) has a direct or indirect material interest. Transactions of this ~~Item~~nature require the approval of our management and our Board of Directors. We believe such transactions were at terms comparable to those we could have obtained from unaffiliated third parties. Since March 1, 2011, we have not had any transactions in which any of our related parties had or will have a direct or indirect material interest, nor are any such transactions currently proposed, except as noted below:

~~ITEM 8.~~On March ~~FINANCIAL~~7, ~~STATEMENTS~~2011, ~~AND~~the ~~SUPPLEMENTARY~~Company ~~DATA~~agreed to the conversion of $404,305 of debt payable to George Mainas into 1,617,220 shares of Company common stock and warrants to purchase 1,617,220 shares of Company common stock for $.25 per share for a term of three years. The amount of $30,000 of the debt payable which was converted into shares of Company common stock was derived from consulting fees accrued from the Company during the fiscal year ended February 28, 2011.

~~See “Financial Statements” beginning on page F-1.~~ 21

~~ITEM 9~~On March 7, 2011, the Company agreed to the conversion of $31,285 of debt payable to Garrett Cecchini into 125,140 shares of Company common stock and warrants to purchase 125,140 shares of Company common stock for $.25 ~~CHANGES~~per INshare ~~AND~~for ~~DISAGREEMENTS~~a ~~WITH~~term ~~ACCOUNTANTS~~of ONthree ~~ACCOUNTING~~years. ~~AND~~The ~~FINANCIAL~~amount ~~DISCLOSURE~~of $30,000 of the debt payable which was converted into shares of Company common stock was derived from consulting fees accrued from the Company during the fiscal year ended February 28, 2011.

~~None~~On May 23, 2011, the Company entered into an Agreement with George Mainas, Mainas Development Corporation (collectively “Mainas”) and Del Rey Management L.P. (“Del Rey”) whereby Del Rey purchased $250,000 of the debt due the Company to Mainas. The Company agreed to allow Del Rey the option to convert this debt into 1,000,000 shares of common stock and 1,000,000 warrants to purchase common stock of the Company for $0.40 per share for three years from the date of the Agreement. Also, on May 23, 2011, Del Rey notified the Company that it was exercising this option to convert. The shares of Company common stock will be issued without restriction under the Act under an exemption provided pursuant to Rule 144 of the Act. The warrants and shares of the Company’s common stock which may be issued upon exercise of the warrants are restricted securities, and may not be sold, transferred or otherwise disposed without registration under Act, or an exemption thereunder. The securities were offered and sold in reliance on the exemption from registration under Section 4(2) of the Act and/or Rule 506 of Regulation D under the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the offering.

~~ITEM 9A~~On January 23, 2012, the Company issued 25,000,000 restricted shares to Stuart Subotnick for cash at a price of $0. ~~CONTROLS~~002 ~~AND~~per ~~PROCEDURES~~share and a total purchase price of $50,000.

~~Evaluation~~Parent ofCompanies. ~~Disclosure~~We ~~Controls~~do ~~and~~not ~~Procedures.~~have a parent company.

~~Our~~Director ~~disclosure~~Independence controls and procedures are designed to provide reasonable assurances that material information related to our Company is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer have determined that as of February 28, 2011, our disclosure controls were not effective for the reasons discussed below related to material weaknesses in our internal control over financial reporting.

~~Management’s~~Martin ~~Report~~Greenwald onand Bryan ~~Internal~~Subotnick ~~Control~~are ~~Over~~not ~~Financial~~considered ~~Reporting~~to be an independent director under the NASDAQ listing standards.

~~Our~~ITEM ~~management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act~~14. ~~Our~~PRINCIPAL ~~internal~~ACCOUNTANT ~~control~~FEES ~~over~~AND financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: SERVICES

1.Anton & ~~pertain~~Chia, toLLP ~~the~~has ~~maintenance~~been ofour ~~records~~independent ~~that~~registered public inaccounting ~~reasonable~~firm ~~detail~~since ~~accurately~~September 30, 2009 and ~~fairly~~was ~~reflect~~our ~~the~~independent ~~transactions~~registered ~~and~~public ~~dispositions~~accounting offirm ~~our~~for ~~assets;~~the fiscal year ended February 29, 2012.

2.For ~~provide~~purposes ~~reasonable assurance that transactions are recorded as necessary to permit preparation~~ of ~~financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with~~ the ~~authorization~~tables ~~of our management and directors; and~~below:

3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.


Audit Fees		include fees and expenses for professional services rendered for the audits of our annual financial statements for the applicable year and for the review of the financial statements included in our quarterly reports on Form 10-Q for the applicable year.

Audit-Related Fees		consist of fees billed for assurance and related services that are related to the performance of the audit or review

~~Because~~ of ~~its~~our ~~inherent~~financial ~~limitations,~~statements ~~internal~~and ~~control~~are ~~over~~not ~~financial~~reported ~~reporting~~as ~~may~~audit ~~not~~fees. ~~prevent~~Tax ~~or detect~~Fees ~~misstatements.~~consist ~~Also,~~of ~~projections~~preparation of ~~any~~our ~~evaluation~~federal and state tax returns, review of ~~effectiveness~~quarterly toestimated ~~future~~payments, ~~periods~~and ~~are~~consultation ~~subject~~concerning totax ~~the~~compliance ~~risk~~issues. ~~that~~All ~~controls~~Other ~~may~~Fees ~~become~~include ~~inadequate~~any ~~because~~fees offor ~~changes~~services innot ~~conditions,~~covered orabove. ~~that~~Fees ~~the~~noted ~~degree~~for ofboth ~~compliance~~annual periods primarily represent fees associated with informal assessment of our internal controls and assisting us in the ~~policies~~preparation or ~~procedures~~ ~~may~~correspondence ~~deteriorate.~~to the SEC.

~~Management~~The ~~assessed~~following ~~the~~table ~~effectiveness~~sets offorth ~~our~~the ~~internal~~aggregate ~~control~~fees ~~over~~billed ~~financial~~for services ~~reporting~~in asfiscal ofyear ended February 2829, ~~2011.~~ In2012 ~~making~~by ~~this assessment, management used the framework set forth in the report entitled~~Anton ~~Internal~~& ~~Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission~~Chia, ~~or COSO. The COSO framework summarizes each of the components of a company’s internal control system,~~ LLP:

Audit Fees	$	50,336
Audit Related Fees	$	-
Tax Fees	$	-
All Other Fees	$	-
Total	$	50,336

~~Table~~The offollowing ~~Contents~~table sets forth the aggregate fees billed for services in fiscal year ended February 28, 2011 by Anton & Chia, LLP:

including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on that assessment under such criteria, management concluded that the Company’s internal control over financial reporting was not effective as of February 28, 2011 due to control deficiencies that constituted material weaknesses.

Audit Fees	$	39,400
Audit Related Fees	$	-
Tax Fees	$	-
All Other Fees	$	-
Total	$	39,400

WePART did not include an attestation report from our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the temporary rules of the SEC that permit the company to provide only management’s report. IV

~~Identified~~ITEM ~~Material~~15. ~~Weaknesses~~EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K.

~~A material weakness is~~ (a) ~~deficiency,~~Documents orfiled aas ~~combination~~part of ~~deficiencies,~~this in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management identified the following internal control deficiencies, which it deemed material weaknesses during its assessment of our internal control over financial reporting as of February 28, 2011Report:

1. Management in assessing its internal controls and procedures for fiscal 2011 identified a lack of sufficient segregation of duties, particularly in cash disbursements. Specifically, this material weakness is such that the design over the areas of cash disbursements relies primarily on detective controls and could be strengthened by adding preventative controls to properly safeguard company assets.22

2.(1) ~~Management~~Financial ~~has~~Statements—all ~~identified~~consolidated financial astatements ~~lack~~ of ~~sufficient personnel in~~ the ~~accounting function due to the limited resources of the~~ Company with appropriate skills, training and experience to perform the review of the Company with appropriate skills, training and experience to perform the review processes to ensure the complete and proper application of generally accepted accounting principles, particularly as itset ~~relates~~forth tounder ~~taxes~~Item 8, ~~recording~~on ~~and~~page ~~accuracy~~F-1 of ~~accounts payable and accruals, valuation of share based payments, and other equity transactions. Specifically,~~ this material weakness lead to segregation of duties issues and resulted in audit adjustments to the annual consolidated financial statements and revisions to related disclosures, including tax reporting, share based payments, accounts payable and accruals and other equity transactionsReport.

In(2) ~~conclusion,~~Financial ~~our~~Statement ~~Chief~~Schedules— As ~~Executive~~a ~~Officer~~smaller ~~and~~reporting ~~Chief~~company ~~Financial Officer concluded that~~ we ~~did~~are not ~~maintain~~required ~~effective~~to ~~internal~~provide ~~control~~the ~~over~~information ~~financial reporting~~required asby ofthis ~~February 28, 2011~~item.

~~Management’s~~(3) ~~Remediation Initiatives~~ Exhibits

~~The Company is in the process of developing and implementing remediation plans to address its material weaknesses.~~ 23

~~Management~~Table ~~has~~of ~~identified specific remedial actions to address the material weaknesses described above:~~ Contents

1. Improve the effectiveness of the accounting group by continuing to augment existing Company resources with additional consultants or employees to improve segregation procedures and to assist in the analysis and recording of complex accounting transactions and preparation of tax disclosures. The Company plans to mitigate the segregation of duties issues by hiring additional personnel in the accounting department once the Company is generating sufficient revenue, or has raised significant additional working capital.


Exhibit No.		Description
2.1		Exchange Agreement dated as of March 24, 2010 by and among the Company, EntertainmentXpress, Inc. and certain shareholders of EntertainmentXpress, Inc. (1)

2.2		Amended and Restated Share Exchange Agreement dated as of April 23, 2010 by and among the Company, EntertainmentXpress, Inc. and certain shareholders of EntertainmentXpress, Inc. (14)

3.1		Certificate of Incorporation (2)

3.2		Certificate of Amendment of Certificate of Incorporation (3)

3.3		Bylaws (4)

3.4		Amended Bylaws (5)

3.5		Certificate of Amendment of Certificate of Incorporation (6)

10.1		Promissory Note with George Mainas dated August 30, 2000 (7)

10.2		Memorialized Agreement between the Company and Mr. George Mainas dated December 31, 2003 (7)

10.3		Agreement and letter of credit between the Company and George Mainas dated August 18, 2004 (5)

10.5		2007 Equity Incentive Plan (8)

10.9		Loan Modification and Security Agreement dated August 14, 2009(9)

10.11		Debt Conversion Agreement dated January 12, 2010 (11)

10.13		Amendment to Loan Modification and Security Agreement dated May 4, 2010 (11)

10.19		2010 Equity Incentive Plan (12)

10.22		Collaboration Agreement with Signifi Solutions, Inc. and Spot Venture Distribution, Inc. dated November 8, 2010 (13)

10.23		Subscription Agreement with George Mainas dated January 10, 2011(13)

10.24		Warrant Agreement with George Mainas dated January 20, 2011(13)

10.26		Amendment to Master Purchase Agreement with Signifi Solutions, Inc. dated March 7, 2011 (14)

14.1		Code of Business Conduct and Ethics adopted June 16, 2004 (10)

~~2. Improve segregation procedures by strengthening cross approval of various functions including cash disbursements and quarterly internal audit procedures where appropriate.~~24

~~Due~~Table ~~to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections~~ of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Contents

Changes in Controls and Procedures

21		Listing of Subsidiaries (15)

31		Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as amended, by Chief Executive Officer and Chief Financial Officer (15)

32.1		Certification pursuant to 18 U.S.C. §1350 by Chief Executive & Financial Officer (15)

(1)	Incorporated by reference from the Company’s report on Form 8-K filed on March 24, 2010
(2)	Incorporated by reference from the Company’s report on Form 8-K filed on October 20, 2008.
(3)	Incorporated by reference from the Company’s Form 8-K filed on September 8, 2003.
(4)	Incorporated by reference from the Company’s Form 10-SB filed on March 9, 2000.
(5)	Incorporated by reference from Amendment No. 3 to the Company’s Form SB-2 filed September 1, 2004.
(6)	Incorporated by reference from the Company’s report on Form 8-K filed on June 22, 2007.
(7)	Incorporated by reference from Amendment No. 2 to the Company’s Form SB-2 filed June 29, 2004.
(8)	Incorporated by reference from the Company’s report on Form 8-K filed on November 16, 2007.
(9)	Incorporated by reference from the Company’s report on Form 8-K filed on August 18, 2009.
(10)	Incorporated by reference from the Company’s Form 10K-SB filed on August 18, 2004.
(11)	Incorporated by reference from the Company’s Form 10K- filed on May 10, 2010.
(12)	Incorporated by reference from the Company’s Form 10Q filed on October 18, 2010
(13)	Incorporated by reference from the Company’s Form 10Q filed on January 14, 2011
(14)	Incorporated by reference from the Company’s Form 8-K filed on March 11,2011
(15)	Attached as an exhibit to this report.

~~Table of Contents~~25

~~There~~Table ~~were~~of no significant changes made in our internal controls over financial reporting during the quarter ended February 28, 2011 that have materially affected or are reasonably likely to materially affect these controls. Contents

~~ITEM 9B. OTHER INFORMATION~~ SIGNATURES

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

On May 23, 2011, the Company entered into an Agreement with George Mainas, Mainas Development Corporation (collectively “Mainas”) and Del Rey Management L.P. (“Del Rey”) whereby Del Rey purchased $250,000 of the debt due the Company to Mainas. The Company agreed to allow Del Rey the option to convert this debt into 1,000,000 shares of common stock and 1,000,000 warrants to purchase common stock of the Company for $0.40 per share for three years from the date of the Agreement. Also, on May 23, 2011, Del Rey notified the Company that it was exercising this option to convert. The shares of Company common stock will be issued without restriction under the Act under an exemption provided pursuant to Rule 144 of the Act. The warrants and shares of the Company’s common stock which may be issued upon exercise of the warrants are restricted securities, and may not be sold, transferred or otherwise disposed without registration under Act, or an exemption thereunder. The securities were offered and sold in reliance on the exemption from registration under Section 4(2) of the Act and/or Rule 506 of Regulation D under the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the offering.


	Public Media Works, Inc.
	(Registrant)

Date: June 28, 2012	/s/ Martin W. Greenwald
	By:	Martin W. Greenwald
	Title:	Chief Executive & Chief Financial Officer

~~Departure~~POWER ofOF ~~Directors or Principal Officers; Election of Directors; Appointment of Principal Officers~~ ATTORNEY

OnKNOW ~~March 7,~~ALL ~~2011~~MEN BY THESE PRESENTS, ~~Garrett~~that ~~Cecchini~~each of ~~resigned~~the asundersigned, being a ~~Director~~director or officer of ~~the~~Public ~~Company.~~Media OnWorks, ~~March 25~~Inc., ~~2011~~a Delaware corporation, Mrhereby constitutes and appoints Martin W. ~~Bryan~~ ~~Subotnick~~Greenwald ~~was~~acting ~~elected~~individually, byas ~~the~~his ~~board~~ true and lawful attorney-in-fact and agent, with full power of ~~directors~~substitution and re-substitution, for him and in his name, place and stead in any and all capacities, to asign ~~position~~any and all amendments to this annual report on Form 10-K and to file the ~~board~~same, with all exhibits thereto and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents, and each of ~~directors.~~them, full power and authority to do and perform each and every act and thing requisite and necessary to be done that such annual report and its amendments shall comply with the Securities Act, and the applicable rules and regulations adopted or issued pursuant thereto, as fully and to all intents and purposes as he or she might or could do

~~PART III~~ 26

~~ITEM 10. DIRECTORS,~~Table ~~EXECUTIVE~~of ~~OFFICERS AND CORPORATE GOVERNANCE~~ Contents

~~Information~~in ~~required~~person, byhereby ~~Part~~ratifying ~~III~~and ~~under~~confirming ~~Item 10~~all ~~has~~that ~~been~~said ~~included~~ attorneys-in-fact and ~~our~~agents, ~~Proxy~~or ~~Statement~~any ~~for~~of ~~the~~them ~~2011~~or ~~Annual~~their ~~Meeting~~substitute ofor ~~Stockholders~~re-substitute, ~~which~~may ~~was~~lawfully ~~filed with~~do ~~the~~or ~~SEC~~cause onto ~~April~~be ~~14,~~done ~~2011, and is incorporated herein~~ by ~~reference.~~virtue hereof.

~~ITEM 11. EXECUTIVE~~In accordance with the Exchange Act, this ~~COMPENSATION~~report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

Information required by Part III under Item 11 has been included in our Proxy Statement for the 2011 Annual Meeting of Stockholders, which was filed with the SEC on April 14, 2011, and is incorporated herein by reference.

/s/ Martin W. Greenwald

Martin W. Greenwald

Chief Executive & Financial Officer,

Director

June 28, 2012

s/ Bryan Subotnick

Bryan Subotnick

Director

June 28, 2012

~~ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.~~ 27

~~Information~~Table ~~required by Part III under Item 12 has been included in our Proxy Statement for the 2011 Annual Meeting~~ of ~~Stockholders, which was filed with the SEC on April 14, 2011, and is incorporated herein by reference.~~ Contents

~~ITEM 13. CERTAIN~~PUBLIC ~~RELATIONSHIPS~~MEDIA ~~AND RELATED TRANSACTIONS~~WORKS, ~~AND DIRECTOR INDEPENDENCE~~ INC.

~~Information required by Part III under Item 13 has been included~~ (Debtor-in ~~our Proxy Statement for the 2011 Annual Meeting of Stockholders, which was filed with the SEC on April 14, 2011, and is incorporated herein by reference.~~ -Possession)

~~ITEM 14. PRINCIPAL~~INDEX ~~ACCOUNTANT~~TO ~~FEES~~FINANCIAL ~~AND SERVICES~~ STATEMENTS

Information required by Part III under Item 14 has been included in our Proxy Statement for the 2011 Annual Meeting of Stockholders, which was filed with the SEC on April14, 2011, and is incorporated herein by reference.


	Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets		F-2
Consolidated Statements of Operations		F-3
Consolidated Statements of changes in Stockholders’ Equity (Deficit)		F-4
Consolidated Statements of Cash Flows		F-5
Notes to Consolidated Financial Statements		F-6

~~PART~~Table IVof Contents

~~ITEM 15. EXHIBITS,~~REPORT ~~FINANCIAL~~OF ~~STATEMENTS~~INDEPENDENT ~~AND~~REGISTERED ~~REPORTS~~PUBLIC ACCOUNTING ~~ON FORM 8-K.~~ FIRM

~~(a)~~The ~~Documents~~Board ~~filed as part~~ of ~~this~~Directors ~~Report:~~and Stockholders of

~~(1)~~Public ~~Financial~~Media ~~Statements—all consolidated financial statements of the Company as set forth under Item 8~~Works, ~~on page F-1 of this Report~~Inc. (Debtor-in-Possession)

We have audited the accompanying consolidated balance sheets of Public Media Works, Inc. (2the “Company”) ~~Financial~~as ~~Statement~~of ~~Schedules—~~February 29, As2012 aand ~~smaller~~February ~~reporting~~28, ~~company~~2011, weand the ~~are~~related ~~not~~consolidated ~~required~~statements toof ~~provide~~operations, ~~the~~stockholders’ ~~information~~equity ~~required~~(deficit) byand ~~this~~cash flows for each of the years then ~~item~~ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (3United States). Those ~~Exhibits~~standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

24In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Public Media Works, Inc. as of February 29, 2012 and February 28, 2011, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

~~Table~~The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred significant recurring net losses and negative cash flows from operations through February 29, 2012, it has an accumulated deficit of ~~Contents~~$19,482,451. In addition, on September 23, 2011, the Company filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans as to these matters are described in Note 2. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Exhibit No.		Description
2.1		Exchange Agreement dated as of March 24, 2010 by and among the Company, EntertainmentXpress, Inc. and certain shareholders of EntertainmentXpress, Inc. (1)
2.2		Amended and Restated Share Exchange Agreement dated as of April 23, 2010 by and among the Company, EntertainmentXpress, Inc. and certain shareholders of EntertainmentXpress, Inc. (14)
3.1		Certificate of Incorporation (2)
3.2		Certificate of Amendment of Certificate of Incorporation (3)
3.3		Bylaws (4)
3.4		Amended Bylaws (5)
3.5		Certificate of Amendment of Certificate of Incorporation (6)
10.1		Promissory Note with George Mainas dated August 30, 2000 (7)
10.2		Memorialized Agreement between the Company and Mr. George Mainas dated December 31, 2003 (7)
10.3		Agreement and letter of credit between the Company and George Mainas dated August 18, 2004 (5)
10.5		2007 Equity Incentive Plan (8)
10.9		Loan Modification and Security Agreement dated August 14, 2009(9)
10.11		Debt Conversion Agreement dated January 12, 2010 (11)
10.13		Amendment to Loan Modification and Security Agreement dated May 4, 2010 (11)
10.14		Sublease Agreement with Camp Counselors USA dated May 1, 2010 (11)
10.15		Collaboration Agreement with 3D Medicast, Inc. dated July 5, 2010 (12)
10.16		Independent Consulting Agreement with Salzwedel Financial Communications, Inc. (13)
10.17		Teaming Agreement with Modular Conversions, LLC dated August 12, 2010 (14)
10.18		Employment Agreement with Martin W. Greenwald dated October 12, 2010 (14)
10.19		2010 Equity Incentive Plan (14)
10.20		Employment Agreement with Gregory Waring dated November 22, 2010(15)
10.21		Employment Agreement with Ed Roffman dated October 18, 2010(15)
10.22		Collaboration Agreement with Signifi Solutions, Inc. and Spot Venture Distribution, Inc. dated November 8, 2010 (15)
10.23		Subscription Agreement with George Mainas dated January 10, 2011(15)
10.24		Warrant Agreement with George Mainas dated January 20, 2011(15)
10.25		Mutual Termination of Collaboration Agreement with 3D Mediacast, Inc. dated January 12, 2011 (15)
10.26		Amendment to Master Purchase Agreement with Signifi Solutions, Inc. dated March 7, 2011 (16)
14.1		Code of Business Conduct and Ethics adopted June 16, 2004 (10)

ANTON & CHIA, LLP

25Newport Beach, California

~~Table~~June 20, ~~of Contents~~2012

21		Listing of Subsidiaries (17)
31.1		Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as amended, by Chief Executive Officer (17)
31.2		Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as amended, by Chief Financial Officer (17)
32.1		Certification pursuant to 18 U.S.C. §1350 by Chief Executive Officer (17)
32.2		Certification pursuant to 18 U.S.C. §1350 by Chief Financial Officer (17)

F-1

~~(1)~~Table ~~Incorporated~~of ~~by reference from the Company’s report on Form 8-K filed on March 24, 2010~~Contents

~~(2)~~PUBLIC ~~Incorporated~~MEDIA ~~by reference from the Company’s report on Form 8-K filed on October 20~~WORKS, ~~2008~~INC.

(~~3) Incorporated by reference from the Company’s Form 8~~Debtor-~~K filed on September 8, 2003.~~in-Possession)

~~(4)~~Consolidated ~~Incorporated by reference from the Company’s Form 10-SB filed on March 9, 2000.~~Balance Sheets

(5) Incorporated by reference from Amendment No. 3 to the Company’s Form SB-2 filed September 1, 2004.

	February 29,			February 28,
	2012			2011
Assets
Current assets:
Cash	$	-		$	385,888
Accounts receivable, net		-			6,561
Inventory		-			61,564
Prepaid expenses and other assets		2,000			346,728
Total current assets		2,000			800,741
Deposits on kiosks		-			394,206
Other assets		-			11,485
Total assets	$	2,000		$	1,206,432
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accrued liabilities-post petition	$	19,002		$	-
Convertible note-post petition		50,000			-
Total liabilities not subject to compromise		69,002			-
Liabilities subject to compromise		1,032,254			1,167,837
Total liabilities		1,101,256			1,167,837
Stockholders’ equity (deficit)
Common stock $0.0001 par value, 125,000,000 shares
authorized 63,315,615 and 30,208,459 issued and
outstanding as of February 29, 2012 and February 28,
2011, respectively		6,332			3,021
Additional paid-in capital		18,376,863			12,901,495
Subscriptions receivable		-			(30,000	)
Accumulated deficit		(19,482,451	)		(12,835,921	)
Total stockholders’ equity (deficit)		(1,099,256	)		38,595
Total liabilities and stockholders’ equity (deficit)	$	2,000		$	1,206,432

~~(6)~~The ~~Incorporated~~accompanying bynotes ~~reference~~are ~~from~~an ~~the~~integral ~~Company’s~~part of ~~report~~these onconsolidated ~~Form~~financial ~~8-K filed on June 22, 2007~~statements.

~~(7) Incorporated by reference from Amendment No. 2 to the Company’s Form SB~~F-2 ~~filed June 29, 2004.~~

~~(8)~~Table ~~Incorporated~~of ~~by reference from the Company’s report on Form 8-K filed on November 16, 2007.~~Contents

~~(9)~~PUBLIC ~~Incorporated~~MEDIA ~~by reference from the Company’s report on Form 8-K filed on August 18~~WORKS, ~~2009~~INC.

(~~10) Incorporated by reference from the Company’s Form 10K~~Debtor-~~SB filed on August 18, 2004.~~in-Possession)

~~(11)~~Consolidated ~~Incorporated~~Statements of ~~by reference from the Company’s Form 10K- filed on May 10, 2010.~~Operations

~~(12)~~For ~~Incorporated by reference from~~ the ~~Company’s~~years ~~Form 8-K filed on July 15~~ended, ~~2010~~

(13) Incorporated by reference from the Company’s Form 8-K filed on August 5, 2010

	February 29,			February 28,
	2012			2011
Revenue	$	39,116		$	7,139
Cost of revenue		169,604			7,077
Gross profit (loss)		(130,488	)		62
Operating expenses
Depreciation		48,996			5,188
General and administrative expenses		4,490,871			7,561,858
Total operating expenses		4,539,867			7,567,046
Loss from operations		(4,670,355	)		(7,566,984	)
Other expenses:
Interest, net		52,487			85,662
Loss on conversion of debt to equity		1,478,693			-
Loss on sale of assets		71,370			23,706
Impairment on equipment		370,077			-
Other expense		3,548			-
Total other expenses		1,976,175			109,368

Loss before income taxes		(6,646,530	)		(7,676,352	)
Provision for income taxes		-			-
Net loss	$	(6,646,530	)	$	(7,676,352	)

Net loss per common share – basic and diluted	$	(0.17	)	$	(0.36	)

Weighted average number of shares – basic and diluted		38,914,623			21,594,114

~~(14)~~The ~~Incorporated~~accompanying bynotes ~~reference~~are ~~from~~an ~~the~~integral ~~Company’s~~part of ~~Form~~these ~~10Q~~consolidated ~~filed~~financial ~~on October 18, 2010~~statements.

~~(15) Incorporated by reference from the Company’s Form 10Q filed on January 14, 2011~~F-3

~~(16)~~Table ~~Incorporated~~of ~~by reference from the Company’s Form 8-K filed on March 11,2011~~Contents

~~(17)~~PUBLIC ~~Attached~~MEDIA asWORKS, ~~an exhibit to this report~~INC.

26 (Debtor-in-Possession)

~~Table~~STATEMENTS ofOF ~~Contents~~STOCKHOLDERS’ EQUITY (DEFICIT)

~~SIGNATURES~~FOR THE YEARS ENDED FEBRUARY 29, 2012 AND FEBRUARY 28, 2011

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

							Additional
	Common Stock						Paid-in			Subscription			Accumulated
	Shares			Amount			Capital			Receivable			Deficit			Total
Balance - February 28, 2010		5,886,440		$	588		$	4,036,228					$	(5,159,569	)	$	(1,122,753	)

Issuance of shares to acquire EntertainmentXpress		13,685,773			1,369			(1,369	)		-			-			-
Shares cancelled		(3,250,000	)		(325	)		325			-			-			-
Shares sold for cash		6,176,329			618			2,241,105			-			-			2,241,723
Shares issued for conversion of note principal, interest and payables		2,545,962			255			836,326			-			-			836,581
Shares issued for exercise of stock option		68,750			7			(7	)		-			-			-
Shares issued for exercise of stock warrant		10,000			1			9,999			-			-			10,000
Shares issued for consulting services rendered		3,863,540			386			2,850,178			-			-			2,850,564
Shares issued to employees for services rendered		1,221,665			122			1,202,594			-			-			1,202,716
Subscriptions receivable		-			-			-			(30,000	)		-			(30,000	)
Warrants issued for cash		-			-			173,770			-			-			173,770
Share-based compensation in connection with stock option grants		-			-			1,552,346			-			-			1,552,346
Net loss		-			-			-			-			(7,676,352	)		(7,676,352	)
Balance - February 28, 2011		30,208,459			3,021			12,901,495			(30,000	)		(12,835,921	)		38,595

Stock issued for cash		26,611,915			2,661			263,339			-			-			266,000
Stock issued for services		2,570,835			257			842,868			-			-			843,125
Stock issued upon conversion of debt		3,795,835			380			1,712,295			-			-			1,712,675
Stock issued upon exercise of options		128,571			13			(13	)		-			-			-
Subscribed stock issued		-			-			-			30,000			-			30,000
Share based compensation (option and warrants)		-			-			2,631,879			-			-			2,631,879
BCF related to convertible note		-			-			25,000			-			-			25,000
Net loss		-			-			-			-			(6,646,530	)		(6,646,530	)
Balance - February 29, 2012		63,315,615		$	6,332		$	18,376,863		$	-		$	(19,482,451	)	$	(1,099,256	)

	Public Media Works, Inc.
	(Registrant)
Date: June 3, 2011	/s/ Martin W. Greenwald
	By:	Martin W. Greenwald
	Title:	Chief Executive Officer

The accompanying notes are an integral part of these consolidated financial statements.

~~POWER OF ATTORNEY~~ F-4

~~KNOW~~Table ~~ALL MEN BY THESE PRESENTS, that each~~ of the undersigned, being a director or officer of Public Media Works, Inc., a Delaware corporation, hereby constitutes and appoints Garrett Cecchini and Mark Smith acting individually, as his true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him and in his name, place and stead in any and all capacities, to sign any and all amendments to this annual report on Form 10-K and to file the same, with all exhibits thereto and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done that such annual report and its amendments shall comply with the Securities Act, and the applicable rules and regulations adopted or issued pursuant thereto, as fully and to all intents and purposes as he or she might or could do Contents

27PUBLIC MEDIA WORKS, INC.

~~Table of Contents~~(Debtor-in-Possession)

inConsolidated ~~person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any~~ Statements of ~~them~~Cash ~~or their substitute or re-substitute, may lawfully do or cause to be done by virtue hereof.~~ Flows

InFor ~~accordance with~~ the ~~Exchange~~Years ~~Act~~ended, ~~this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.~~

/s/ Martin W. Greenwald Martin W. Greenwald			Chief Executive Officer, Director			June 3, 2011
	February 29, 2012			February 28, 2011
/s/ Ed Roffman Ed Roffman			Chief Financial Officer			June 3, 2011
OPERATING ACTIVITIES:
/s/ Bryan Subotnick Bryan Subotnick			Director			June 3, 2011
Net loss	$	(6,646,530	)	$	(7,676,352	)
/s/ Joseph Merhi Joseph Merhi			Director			June 3, 2011
Adjustments to reconcile net loss to cash used in operating activities:
/s/ Edward Frumkes Edward Frumkes			Director			June 3, 2011
Depreciation		48,996			5,188
Amortization		110,551			-
Impairment of equipment		370,077			-
Interest expense accrued but unpaid on convertible of debt		27,488			85,662
Share based compensation		3,563,034			5,463,485
Warrants issued for services		11,086			315,002
Loss on disposal of assets		71,370			23,706
Loss on conversion of debt to equity		1,478,693			46,550
Bad debt expense		7,794			-
Debt discount		25,000			-
Changes in operating assets and liabilities:
Accounts receivable		(1,233	)		(6,561	)
Prepaid expenses and other assets		35,111			(30,061	)
Inventory		(94,728	)		(85,270	)
Other assets		9,731			(11,485	)
Payables and accrued liabilities-post petition		19,002			-
Accounts payable and accrued expenses and accrued interest		228,502			323,241
Net cash used in operating activities		(736,056	)		(1,546,895	)
INVESTING ACTIVITIES:
Deposit on Kiosk		-			(394,206	)
Purchase of equipment		(199,742	)		(49,482	)
Net cash used in investing activities		(199,742	)		(443,688	)
FINANCING ACTIVITIES:
Issuance of common stock for cash		266,000			2,251,723
Subscriptions receivable		30,000			(30,000	)
Due to stockholders		166,000			(15,074	)
Payments on note payable		(27,090	)		-
Convertible note-post petition		50,000			-
Equipment contributed to settle debt		-			20,355
Notes payable-short term		65,000			16,423
Proceeds from notes payable to stockholders		-			133,000
Net cash provided by financing activities		549,910			2,376,427
Net increase (decrease) in cash		(385,888	)		385,844
Cash - beginning of period		385,888			44
Cash - end of period	$	-		$	385,888
SUPPLEMENTAL DISCLOSURES OF NON CASH FINANCING ACTIVITIES
Common stock issued upon reverse merger	$	-		$	1,369
Conversion of accounts payable to convertible promissory note	$	-		$	75,000
Cancellation of common shares	$	-		$	(325	)
Common stock issued for consulting services	$	468,125		$	2,850,564
Common stock issued to directors, officers and advisors	$	275,000		$	1,202,716
Conversion of notes payable and interest to equity	$	791,408		$	475,028
Common stock issued as prepayment on kiosks	$	100,000		$	-
Sale of assets to pay down secured note	$	145,000		$	-

28The accompanying notes are an integral part of these consolidated financial statements.

~~Table of Contents~~F-5

~~PUBLIC~~Table ~~MEDIA~~of ~~WORKS, INC.~~ Contents

~~INDEX~~PUBLIC TOMEDIA ~~FINANCIAL STATEMENTS~~ WORKS, INC.

	Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets		F-2
Consolidated Statements of Operations		F-3
Consolidated Statements of changes in Stockholders’ Equity (Deficit)		F-4
Consolidated Statements of Cash Flows		F-5
Notes to Consolidated Financial Statements		F-7

(Debtor-in-Possession)

~~Table~~NOTES ofTO ~~Contents~~CONSOLIDATED FINANCIAL STATEMENTS

~~REPORT~~February OF29, ~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~ 2012

~~The~~1. ~~Board~~Description of ~~Directors and Stockholders~~ Business

Public Media Works, Inc. (formerly Burnam Management, Inc.) was incorporated under the laws of the State of Delaware on March 3, 2000. The Company was originally engaged in the development, production, marketing and distribution of film, music and television entertainment media. On August 30, 2003, the Company entered into a share exchange agreement with EntertainmentXpress, Inc., a private company formed to pursue opportunities in the film/TV and entertainment industry. The share exchange agreement is essentially a reverse merger with Public Media Works, Inc., the surviving company.

WeOn ~~have audited~~September 23, 2011, the ~~accompanying~~Company ~~consolidated~~filed a ~~balance~~voluntary ~~sheets~~petition for relief under Chapter 11 of ~~Public~~the ~~Media~~United ~~Works,~~States ~~Inc.~~Bankruptcy Code (the “~~Company~~Chapter 11 Proceeding”) in asthe ofUnited ~~February 28,~~States ~~2011~~Bankruptcy ~~and~~Court ~~2010,~~for ~~and~~ the ~~related~~Central ~~consolidated~~District ~~statements~~ of ~~operations~~California, ~~stockholders’~~Riverside ~~equity~~Division (~~deficit)~~the ~~and~~"Bankruptcy ~~cash~~Court"). ~~flows~~The ~~for~~Chapter ~~each~~11 ofCase Number is: 6:11-bk-40137-MJ. The purpose in filing the ~~years~~Chapter ~~ended~~11 ~~February 28,~~Case ~~2011~~is to give the Company time to restructure its debt obligations to its secured and ~~2010~~unsecured creditors. ~~These~~ ~~financial~~We ~~statements~~intend ~~are~~to prepare a Disclosure Statement and a Plan of Reorganization that describes our plan to emerge from Chapter 11 as a viable company. We plan to file those documents with the ~~responsibility~~Bankruptcy Court and submit them to all creditors for their approval with a view towards obtaining an Order from the Bankruptcy Court confirming our Plan of Reorganization so that we may successfully exit from Court protection. We remain committed to implementing a strategy to allow the Company’s ~~management~~to emerge from the Chapter 11 Proceeding. ~~Our~~ ~~responsibility~~However, isthere can be no assurance regarding our ability to ~~express~~emerge from anthe ~~opinion~~Chapter on11 Proceeding. The uncertainty regarding these ~~financial~~matters ~~statements~~raises ~~based~~substantial ondoubt about our Company’s ability ~~audits.~~to continue as a going concern.

WeReverse ~~conducted~~Merger ~~our audits in accordance with the standards of the Public Company~~ Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

InOn ~~our~~March 24, ~~opinion~~2010, the ~~consolidated~~Company ~~financial~~entered into ~~statements~~a ~~referred~~share toexchange ~~above~~agreement ~~present~~with ~~fairly~~EntertainmentXpress, inInc., ~~all~~a ~~material~~California corporation (“EntXpress”) and certain ~~respects,~~shareholders of EntXpress (the ~~financial~~“EntXpress ~~position~~Sellers”) ofwhich ~~Public~~owned ~~Media~~more ~~Works,~~than ~~Inc.~~50% asof the outstanding stock of ~~February~~EntXpress. On April 2823, ~~2011~~2010, ~~and~~the ~~2010~~Company, ~~and~~EntXpress Sellers holding 100% of the ~~results~~outstanding stock of ~~its~~Entertainment ~~operations~~Xpress entered into an amended and ~~its~~restated ~~cash~~share ~~flows~~exchange ~~for~~agreement ~~each~~(the of“Share Exchange Agreement”). The closing under the ~~years~~Share ~~ended~~Exchange Agreement ~~February~~occurred on May 284, ~~2011~~2010. ~~and~~Under ~~2010~~the terms of the Share Exchange Agreement, inthe ~~conformity~~Company ~~with~~acquired ~~accounting~~EntXpress by obtaining ~~principles~~100% ~~generally~~of ~~accepted~~its outstanding stock and in exchange, the ~~United~~Company ~~States~~issued to EntXpress Sellers, 13,685,773 shares of ~~America.~~the Company’s stock.

~~The~~Basis accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred significant recurring net losses and negative cash flows from operations through February 28, 2011, it has an accumulated deficit of $12,835,921. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans as to these matters are described in Note 2. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Presentation

~~/s/~~The ~~ANTON &~~accompanying ~~CHIA,~~consolidated ~~LLP~~financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America.

~~Newport~~Proceedings ~~Beach,~~Under ~~California~~Chapter 11

~~May~~The Company filed a voluntary petition on September 3123, 2011 under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the Central District of California, Riverside Division (the “Bankruptcy Court”). We will continue to operate our business as "debtor-in-possession" under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and the order of the Court, as we devote renewed efforts to resolve our liquidity problems and develop a reorganization plan.

FPursuant to the provisions of the Bankruptcy Code, we are not permitted to pay any claims or obligations which arose prior to the filing date (prepetition claims) unless specifically authorized by the Court or as may ultimately be provided in a plan of reorganization. Similarly, claimants may not enforce any claims against us that arose prior to the date of the filing. In addition, as a debtor-1in-possession, we have the right, subject to the Court's approval, to assume or reject any executory contracts and unexpired leases in existence at the date of the filing. Parties having claims as a result of any such rejection may file claims with the Court which will be dealt with as part of the Chapter 11 case.

~~Table~~It is our intention to address all of ~~Contents~~our prepetition claims in a plan of reorganization in our Chapter 11 case. At this juncture, it is impossible to predict with any degree of certainty how such a plan will treat such claims and the impact that our Chapter 11 cases and any reorganization plan will have on the trading market for our stock. Generally, under the provisions of the Bankruptcy Code, holders of equity interests may not participate under a plan of reorganization unless the claims of creditors are satisfied in full under the plan or unless creditors accept a reorganization plan which permits holders of equity interests to participate. The formulation and implementation of a plan of reorganization in the Chapter 11 cases could take a significant period of time.

~~PUBLIC~~The ~~MEDIA~~Chapter ~~WORKS~~11 case is in good standing with the court having filed all required Monthly Operating Reports along with its Statement of Liability Insurance. The case is presently under no threat of being converted or liquidated under a Chapter 7. The court has set a tentative time period for filing the Company’s Disclosure Statement and Plan of Reorganization by June 19, ~~INC~~2012; however the Company presently anticipates that it may move to voluntarily continue that date so that it might timely complete its Reorganization Plan. The Company anticipates that should it file its Motion for Continuance, it will be successful.

~~Consolidated Balance Sheets~~ F-6

	February 28,2011			February 28,2010
Assets
Current assets:
Cash	$	385,888		$	44
Accounts receivable, net		6,561			—
Inventory		61,564
Deposits, other		2,500
Prepaid expenses		344,228			—
Total current assets		800,741			44
Deposits on kiosks		394,206			—
Other assets		11,485			—
Total assets	$	1,206,432		$	44
Liabilities and Stockholders’ Equity(Deficit)
Current liabilities:
Accounts payable and accrued expenses	$	271,562		$	47,260
Due to stockholders		14,000			29,074
Note payable		27,090			10,667
Total current liabilities		312,652			87,001
Notes payable and accrued interest to stockholders and a related party		855,185			1,035,796
Total liabilities		1,167,837			1,122,797
Stockholders’ equity (deficit)
Common stock $0.0001 par value, 100,000,000 shares authorized 30,208,459 and 5,886,440 issued and outstanding as of February 28, 2011 and 2010, respectively		3,021			588
Additional paid-in capital		12,901,495			4,036,228
Subscriptions receivable		(30,000	)		—
Accumulated deficit		(12,835,921	)		(5,159,569	)
Total stockholders’ equity (deficit)		38,595			(1,122,753	)
Total liabilities and stockholders’ equity	$	1,206,432		$	44

2. Summary of Significant Accounting Policies

~~The~~Principles ~~accompanying notes are an integral part~~ of ~~these consolidated financial statements.~~ Consolidation

FThe accompanying consolidated financial statements include the accounts of Public Media Works, Inc. and its wholly-2owned subsidiary, EntertainmentXpress, Inc. (Collectively, the “Company”). All intercompany accounts and transactions have been eliminated in consolidation.

~~Table~~The consolidated financial statements as of ~~Contents~~February 29, 2012 and for the twelve months then ended were prepared in accordance with ASC 852 “reorganizations”, which does not change the application of US GAAP with respect to the preparation of our financial statements. As such, the financial statements for the twelve months ended February 29, 2012 reflect the estimated realizable values of our assets and estimated fair value of our liabilities, and are therefore not comparable to the financial statements for the twelve months ended February 28, 2011. As part of the Chapter 11 filing, we anticipate the development and implementation of a plan of reorganization to restructure our debt obligations and business operations. Confirmation of a plan of reorganization would likely materially alter the classifications and amounts reported in our consolidated financial statements. In addition, prepetition obligations that may be impacted by the Chapter 11 reorganization process have been classified on the Consolidated Balance Sheet in liabilities subject to compromise. These liabilities are reported at the amounts expected to be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts.

~~PUBLIC~~Use ~~MEDIA~~of ~~WORKS, INC.~~ Estimates

~~Consolidated~~The ~~Statements~~preparation of ~~Operations~~consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~For~~Going ~~the~~Concern ~~year~~and ~~ended~~Liquidity ~~February 28,~~ Matters

	2011			2010
Revenue	$	7,139		$	50,000
Cost of Goods Sold		7,077			25,000
Gross Profit		62			25,000
Expenses
General and administrative expenses		6,828,768			24,940
Professional fees		733,090			50,459
Total operating expenses		7,561,858			75,399
Operating loss		(7,561,796	)		(50,399	)
Other expenses
Interest expense, net		(85,662	)		(58,036	)
Depreciation expense		(5,188	)		—
Loss on disposal of assets		(23,706	)		—
Total other expenses		(114,556	)		(58,036	)
Loss before income taxes		(7,676,352	)		(108,435	)
Provision for income taxes		—			—
Net loss	$	(7,676,352	)	$	(108,435	)
Net loss per common share – basic and diluted	$	(0.36	)	$	(.02	)
Weighted average number of shares outstanding – basic and diluted		21,594,114			5,353,632

On September 23, 2011, the Company filed for protection under Chapter 11 of the Bankruptcy Code and as such, the accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. Historically, the Company has incurred significant losses, and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations.

The accompanying ~~notes~~consolidated ~~are~~financial statements anhave ~~integral~~been ~~part~~prepared ofassuming ~~these~~that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The consolidated financial statements. do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

~~F-3~~Management may seek to raise additional working capital through various financing sources subject to bankruptcy court approval, including the sale of the Company’s equity and debt securities, which may not be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to continue our business as desired.

~~Table of Contents~~F-7

~~PUBLIC~~Table ~~MEDIA~~of ~~WORKS, INC.~~ Contents

~~STATEMENTS~~PUBLIC OFMEDIA ~~STOCKHOLDERS’~~WORKS, ~~EQUITY (DEFICIT)~~ INC.

~~FOR THE YEARS ENDED FEBRUARY 28, 2011 AND FEBRUARY 28, 2010~~ (Debtor-in-Possession)

	Common Stock						AdditionalPaid-inCapital			Subscriptionreceivable			AccumulatedDeficit			Total
	Shares			Amount
Balance – February 28, 2009		5,211,440		$	521		$	3,969,295					$	(5,051,134	)	$	(1,081,318	)
Shares sold for cash		75,000			7			14,993									15,000
Shares issued for services rendered		100,000			10			1,990									2,000
Shares issued for conversion of note principal and interest		500,000			50			49,950									50,000
Net loss														(108,435	)		(108,435	)
Balance – February 28, 2010		5,886,440			588			4,036,228						(5,159,569	)		(1,122,753	)
Issuance of shares to acquire EntertainmentXpress		13,685,773			1,369			(1,369	)								—
Shares cancelled		(3,250,000	)		(325	)		325									—
Shares sold for cash		6,176,329			618			2,241,105									2,241,723
Shares issued for conversion of note principal, interest and payables		2,545,962			255			836,326									836,581
Shares issued for exercise of stock option		68,750			7			(7	)								—
Shares issued for exercise of stock warrant		10,000			1			9,999									10,000
Shares issued for consulting services rendered		3,863,540			386			2,850,178									2,850,564
Shares issued to employees for services rendered		1,221,665			122			1,202,594									1,202,716
Subscriptions receivable											(30,000	)					(30,000	)
Warrants issued for cash								173,770									173,770
Share-based compensation in connection with stock option grants								1,552,346									1,552,346
Net loss														(7,676,352	)		(7,676,352	)
Balance – February 28, 2011		30,208,459		$	3,021		$	12,901,495			(30,000	)	$	(12,835,921	)	$	38,595

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~The~~February ~~accompanying~~29, ~~notes are an integral part of these consolidated financial statements.~~ 2012

~~F-4~~ 2. Summary of Significant Accounting Policies (Continued)

~~Table~~Cash ofand ~~Contents~~Cash Equivalents

~~PUBLIC~~Cash ~~MEDIA~~equivalents ~~WORKS,~~are ~~INC~~comprised of certain highly liquid investments with maturities of three months or less when purchased. The Company maintains its cash in bank deposit accounts which at times may exceed federally insured limits. The Company did not have any cash equivalents outstanding as of February 29, 2012 and February 28, 2011.

~~Consolidated~~The ~~Statements~~Company minimizes credit risk associated with cash by periodically evaluating the credit quality of ~~Cash~~its ~~Flows~~primary financial institution. At February 29, 2012 and February 28, 2011, the balances exceeded the federally insured limit by $0 and $135,888, respectively.

~~For the Year ended February 28,~~ Inventory

	2011			2010
OPERATING ACTIVITIES:
Net loss	$	(7,676,352	)	$	(108,435	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation		5,188			279
Impairment of film development costs		—			25,000
Interest expense accrued but unpaid on convertible debt		85,662
Share based compensation		5,463,485			2,000
Shares issued for services		315,002
Loss on conversion of debt to equity		46,550			—
Changes in operating assets and liabilities:
Accounts receivable		(6,561	)		—
Inventory		(61,564	)		—
Deposits		(2,500	)		—
Prepaid expenses		(27,561	)		2,140
Other assets		(11,485	)		—
Accounts payable, accrued expenses and accrued interest		323,241			29,255
Due to stockholders		(15,074	)
Note payable		16,423			—
Net cash used in operating activities		(1,545,546	)		(49,761	)
INVESTING ACTIVITIES:
Deposits on kiosks		(394,206	)		—
Purchase of equipment		(49,482	)		—
Net cash used in investing activities		(443,688	)		—
FINANCING ACTIVITIES:
Issuance of common stock for cash		2,251,723			—
Subscriptions receivable		(30,000	)		—
Proceeds from convertible debt		133,000			48,593
Equipment contributed to settle debt		20,355			—
Net cash provided by financing activities		2,375,078			48,593
Net increase (decrease) in cash		385,844			(1,168	)
Cash – beginning of period		44			1,212
Cash – end of period	$	385,888		$	44
SUPPLEMENTAL DISCLOSURES OF NON CASH FINANCING ACTIVITIES
Common stock issued upon reverse merger	$	1,369		$	—
Cancellation of common shares	$	(325	)	$	—

Inventory was mainly comprised of our DVD and Blu-ray rental library and merchandise inventories held for rental and resale. Inventory, mainly consisted of finished goods, was stated at the lower of cost or market. Our DVD and Blu-ray library was capitalized and amortized to estimated salvage value (sales value of used DVDs and Blu-ray discs) on a straight-line basis to direct operating expense over the average estimated high usage periods of the DVDs and Blu-rays which is typically four months. Inventory also included a small amount of DVD cases and radio frequency identification devices (RFID tags). Due to our removing our kiosks from operation and the filing of the bankruptcy petition, the Company wrote all inventories down to its estimated net realizable value and took a charge of approximately $26,000. On November 22, 2011, the bankruptcy court approved the sale of majority of the Company’s assets and accordingly on November 30, 2011, the Company executed the Asset Purchase Agreement whereby majority of Company’s assets including its inventory were sold for an amount of $145,000.

~~F-5~~ Equipment

~~Table~~At February 28, 2011, equipment is stated at cost, less accumulated depreciation. Due to the filing of ~~Contents~~the bankruptcy petition, at November 30, 2011, the Company wrote all equipment down to its estimated net realizable value and in the twelve months ended February 29, 2012, the Company recorded an impairment expense of approximately $370,000.

Conversion of accounts payable to convertible promissory notes	$	75,000	$	—
Common stock issued for consulting services	$	2,850,564	$	—
Common stock issued to officers	$	790,216	$	—
Settlement of officer’s salaries through issuance of common stock	$	412,500	$	15,000
Settlement of outstanding rent through issuance of note agreement	$	—	$	10,667
Conversion of accounts payable to equity	$	315,002	$	—
Conversion of notes payables and interest to equity	$	475,028	$	50,000

Expenditures for maintenance and repairs were charged to expense as incurred. Included in the cost of the kiosk is the cost to deliver and install the kiosk as well as applicable sales tax. Items of property and equipment with costs greater than $1,000 were capitalized and depreciated on a straight-line basis over the estimated useful lives, as follows:

The accompanying notes are an integral part of these consolidated financial statements.

Description		Estimated Useful Life
Office equipment and furniture		2 to 5 years
Kiosks		5 years

~~F-6~~ Revenue Recognition

~~Table~~The Company recognized net revenue from DVD movie rentals on a ratable basis during the term of ~~Contents~~a consumer’s rental transaction. Revenue from a direct sale out of the kiosk of previously rented movies is recognized at the time of sale. On rental transactions for which the related DVDs have not yet been returned to the kiosk at month-end, revenue is recognized with a corresponding receivable recorded in the balance sheet, net of a reserve for potentially uncollectible amounts. We record revenue net of refunds and applicable sales taxes collected from consumers. The Company had minimal revenues from DVD movie rentals during the years.

~~PUBLIC MEDIA WORKS, INC.~~ F-8

~~NOTES~~Table TOof ~~CONSOLIDATED FINANCIAL STATEMENTS~~ Contents

~~February 28,~~PUBLIC ~~2011~~MEDIA WORKS, INC.

~~1. Description of Business~~ (Debtor-in-Possession)

~~Public~~NOTES ~~Media Works,~~TO ~~Inc.~~CONSOLIDATED ~~(formerly~~FINANCIAL Burnam Management, Inc.) was incorporated under the laws of the State of Delaware on March 3, 2000. The Company was originally engaged in the development, production, marketing and distribution of film, music and television entertainment media. On August 30, 2003, the Company entered into a share exchange agreement with EntertainmentXpress, Inc., a private company formed to pursue opportunities in the film/TV and entertainment industry. The share exchange agreement is essentially a reverse merger with Public Media Works, Inc., the surviving company. STATEMENTS

~~Reverse~~February ~~Merger~~29, ~~Accounting~~ 2012

~~On March 24, 2010, the Company entered into a share exchange agreement with EntertainmentXpress, Inc~~2., aSummary ~~California corporation (“EntXpress”) and certain shareholders~~ of ~~EntXpress~~Significant ~~(the~~Accounting ~~“EntXpress~~Policies Sellers”) which owned more than 50% of the outstanding stock of EntXpress. On April 23, 2010, the Company, EntXpress Sellers holding 100% of the outstanding stock of Entertainment Xpress entered into an amended and restated share exchange agreement (~~the “Share Exchange Agreement”~~Continued). The closing under the Share Exchange Agreement occurred on May 4, 2010. Under the terms of the Share Exchange Agreement, the Company acquired EntXpress by obtaining 100% of its outstanding stock and in exchange, the Company issued to EntXpress Sellers, 13,685,773 shares of the Company’s stock.

~~Basis~~Share-Based ofPayment ~~Presentation~~ Arrangements

~~The~~Generally, all forms of share-based payments, ~~accompanying~~including ~~financial~~stock ~~statements~~option ~~have~~grants, ~~been~~restricted ~~prepared~~stock ingrants ~~accordance~~and ~~with~~stock ~~generally~~appreciation ~~accepted~~rights ~~accounting~~are ~~principles~~measured ~~(“GAAP”)~~at astheir ~~promulgated~~fair invalue on the ~~United~~awards’ grant ~~States~~date, based on the estimated number of ~~America~~awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expenses resulting from share-based payments are recorded in operating expenses in the consolidated statement of operations.

~~The~~Net ~~accompanying~~Loss ~~consolidated~~per ~~financial~~Common ~~statements~~Share ~~include~~– ~~the~~Basic ~~accounts of Public Media Works, Inc.~~ and ~~its wholly-owned subsidiary, EntertainmentXpress, Inc. All intercompany accounts and transactions have been eliminated in consolidation.~~ Diluted

2Net loss per common share – basic and diluted is computed based on the weighted average number of shares outstanding for the period. ~~Summary~~Diluted net loss per common share is computed by dividing net loss by the weighted average shares outstanding assuming all dilutive potential common shares were issued. As of ~~Significant~~February ~~Accounting~~29, ~~Policies~~2012 and February 28, 2011, the Company had 11,595,791 and 8,497,291 warrants outstanding, respectively. As of February 29, 2012 and February 28, 2011, the Company had 1,025,000 and 4,005,000 stock options outstanding, respectively. Neither was included in the net loss per common share due to the options and warrants being anti-dilutive. Additionally, there were no adjustments to net loss to determine net loss available to common stockholders. As such, basic and diluted net loss per common share equals net loss, as reported, divided by the weighted average common shares outstanding for the respective periods.

~~Use of Estimates~~ F-9

~~The~~Table ~~preparation~~ of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Contents

~~Going~~PUBLIC ~~Concern~~MEDIA ~~and~~WORKS, ~~Liquidity Matters~~ INC.

The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. Historically, the Company has incurred significant losses, and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations. (Debtor-in-Possession)

~~The~~NOTES ~~Company’s~~TO ~~continuation~~CONSOLIDATED asFINANCIAL a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitability. There can be no assurance that the Company will be able to obtain any additional financing, or that any such financing will be available on acceptable terms. The consolidated financial statements do not include any adjustment that might be necessary should we be unable to continue as a going concern. Management’s plans include raising additional capital and securing contracts to place DVD Kiosk machines in various retail outlets to generate cash flows and revenues for the Company. In addition, Company management will continue to review the development of its DVD rental and sales business. STATEMENTS

~~F-7~~ February 29, 2012

~~Table~~2. Summary of ~~Contents~~Significant Accounting Policies (Continued)

~~PUBLIC~~Recent ~~MEDIA~~Issued ~~WORKS,~~and ~~INC.~~Adopted Accounting Pronouncements

~~NOTES~~Adopted ~~TO CONSOLIDATED FINANCIAL STATEMENTS~~ -

~~February~~In 28May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. Under the amendments of this ASU will result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. This ASU is effective during interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material impact to our consolidated financial statements.

2.Not ~~Summary~~Adopted ~~of Significant Accounting Policies (Continued)~~ -

~~Cash~~In December 2011, the FASB issued ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and ~~Cash~~Liabilities. ~~Equivalents~~The amendments in this update require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. This update will enhance disclosures required by U.S. GAAP by requiring improved information about financial instruments and derivative instruments. The requirements of this update are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Entities should provide the disclosures required retrospectively for all comparative periods presented. We are currently evaluating the impact of adopting ASU 2011-11 on the consolidated financial statements.

~~Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when purchased~~3. ~~The~~Proceedings ~~Company~~Under ~~maintains~~Chapter ~~its~~11 ~~cash in bank deposit accounts which at times may exceed federally insured limits. The Company did not have any cash equivalents outstanding as~~ of ~~February 28,~~the ~~2011~~Bankruptcy ~~and 2010.~~ Code

~~The~~On September 23, 2011 (the "Petition Date"), the Company filed ~~minimizes~~a ~~credit~~voluntary petition ~~risk~~for ~~associated~~relief under Chapter 11 of the Bankruptcy Code with ~~cash~~the byBankruptcy Court. The petition ~~periodically~~was ~~evaluating~~filed in order to enable the ~~credit~~Company ~~quality~~to pursue reorganization efforts under Chapter 11 of the Bankruptcy Code. The Company continues to operate its ~~primary~~business ~~financial~~as ~~institution.~~debtor-in-possession ~~The~~under ~~balance~~the atjurisdiction of ~~times~~the Bankruptcy Court and ~~may~~in accordance with ~~exceed~~the applicable ~~federally~~provisions of ~~insured~~the Bankruptcy Code and orders of ~~limits~~the Bankruptcy Court. In Atgeneral, ~~February 28~~as debtor-in-possession, the ~~2011~~Company ~~and~~is ~~2010~~authorized under Chapter 11 to continue to operate as an ongoing business, ~~the~~but ~~balance~~may ~~exceeded~~not ~~the~~engage in transactions outside ~~federally~~of ~~insured~~the ~~limit~~ordinary bycourse ~~$135,888~~of ~~and~~business ~~$0,~~without ~~respectively.~~the prior approval of the Bankruptcy Court.

~~Accounts~~No ~~Receivable~~assurance can be provided as to what values, if any, will be ascribed in the bankruptcy proceedings to the Company's prepetition liabilities, common stock and ~~Allowance~~other securities. Based ~~for~~upon ~~Doubtful~~the ~~Accounts~~status of the Company's plan of reorganization, it is uncertain whether holders of our securities will receive any payment in respect of such securities.

~~Accounts~~Subject ~~receivable~~to ~~are~~certain ~~reported~~exceptions atunder ~~realizable~~the Bankruptcy ~~value~~Code, ~~net~~the ofBankruptcy ~~allowances~~Filing ~~for~~automatically ~~doubtful accounts~~enjoins, ~~which~~or isstays, ~~estimated~~the ~~and~~continuation ~~recorded~~of inany ~~the~~judicial ~~period~~or ~~the~~administrative ~~related~~proceedings ~~revenue~~or isother ~~recorded.~~actions ~~The~~against the Company ~~has~~or aits ~~standardized~~property ~~approach~~ to ~~estimate~~recover ~~and~~on, ~~review~~collect ~~the~~or ~~collectability~~secure ~~of its receivables based on~~ a ~~number~~claim ofarising ~~factors,~~prior ~~including~~to the ~~period~~Petition ~~they have been outstanding~~Date. ~~Historical collection and payer reimbursement~~ ~~experience~~Thus, ~~is an integral part of the estimation process related to allowances~~ for ~~doubtful accounts. In addition~~example, creditor actions ~~the~~to ~~Company~~obtain possession ~~regularly assesses the state~~ of ~~its~~property ~~billing~~from ~~operations~~the ~~in order~~ Company, or to ~~identify issues~~create, perfect ~~which may impact the collectability of these receivables~~ or ~~reserve~~enforce ~~estimates.~~any ~~Revisions~~lien toagainst the ~~allowances~~property ~~for~~of ~~doubtful~~the ~~accounts~~Company, or ~~estimates are recorded as an adjustment~~ to ~~bad~~collect ~~debt~~on ~~expense.~~or ~~Receivables deemed uncollectible are charged against the allowance for doubtful accounts at the~~otherwise ~~time~~exercise ~~such~~rights ~~receivables~~or ~~are~~remedies ~~written-off.~~with ~~Recoveries~~respect ofto ~~receivables~~a ~~previously~~Prepetition claim ~~written-off~~ are ~~recorded~~enjoined asunless ~~credits~~and tountil the ~~allowance~~Bankruptcy ~~for~~Court ~~doubtful accounts. There were no recoveries during the year ended February 28, 2011. There was no bad debt~~lifts ~~expense for~~ the ~~years~~automatic ~~ended February 28, 2011 or 2011~~stay.

~~Inventory~~In order to successfully exit Chapter 11 bankruptcy, the Company will need to propose, and obtain Bankruptcy Court confirmation of, a plan of reorganization that satisfies the requirements of the Bankruptcy Code. A plan of reorganization would, among other things, resolve the Debtors' prepetition obligations, set forth the revised capital structure of the newly reorganized entity, and provide for corporate governance subsequent to exit from bankruptcy.

~~Inventory~~Under issection ~~comprised~~365 of ~~our~~the ~~DVD~~Bankruptcy ~~rental~~Code, the ~~library~~Company ~~and~~may ~~merchandise~~assume, ~~inventories~~assume ~~held~~and ~~for~~assign, ~~resale.~~or ~~Inventory,~~reject ~~which~~executory iscontracts ~~considered~~and ~~finished~~unexpired ~~goods~~leases, isincluding ~~stated~~real atproperty ~~the~~and ~~lower~~equipment leases, ofsubject ~~cost~~to orthe ~~market.~~approval ~~DVD~~of ~~library~~the ~~is capitalized~~Bankruptcy Court and ~~amortized~~certain toother ~~estimated~~conditions. ~~salvage~~Rejection ~~value~~constitutes ~~(sales~~a ~~value~~court-authorized breach of ~~used~~the ~~DVDs)~~lease onor acontract ~~straight-line~~in ~~basis~~question toand, ~~direct~~subject ~~operating~~to ~~expense~~certain ~~over~~exceptions, relieves the ~~average~~Company ~~estimated~~of ~~high~~its ~~usage~~future ~~periods~~obligations under ofsuch ~~the~~lease ~~DVDs~~or ~~which~~contract isbut ~~typically~~creates ~~four~~a ~~months.~~deemed ~~The~~prepetition ~~cost~~claim offor ~~inventory includes~~damages ~~the~~caused ~~cost~~by ofsuch ~~materials~~breach ~~and~~or torejection. aParties ~~lesser~~whose contracts ~~extent,~~or ~~the~~leases ~~labor,~~are ~~overhead~~rejected ~~and~~may ~~freight~~file inclaims ~~stocking~~against the ~~DVD~~Company ~~rental~~for ~~inventory~~damages.

~~Equipment~~ F-10

~~Equipment~~The isCompany ~~stated~~sold atsubstantially ~~cost~~all of its assets effective November 30, ~~less~~2011 ~~accumulated~~and ~~depreciation.~~the ~~Expenditures~~currently proposed plan of reorganization restricts the Company's management to liquidating the Company's assets and making distributions on allowed claims until all allowed claims are satisfied and reserves are established for ~~maintenance~~disputed claims. When and ~~repairs~~if all allowed claims are ~~charged~~satisfied or fully reserved for, it is not known at this time whether the Company will commence new business opportunities or liquidate, and the mechanism for making this determination has yet to ~~expense~~be established. The ability of the Company to continue as a going concern is dependent upon, among other things, (i) acquiring assets; (ii) the ~~incurred.~~ability ~~Included~~of inthe Company to generate cash from operations; (iii) the ~~cost~~ability of the ~~kiosk~~Company isto maintain adequate cash on hand; (iv) the ~~cost~~ability of the Company to ~~deliver~~obtain confirmation of and ~~install~~to consummate a plan of reorganization under the ~~kiosk~~Bankruptcy Code; and, (v) the cost, duration and outcome of the reorganization process. Uncertainty as ~~well~~to the outcome of these factors raises substantial doubt about the Company’s ability to continue as ~~applicable~~a ~~sales~~going ~~tax~~concern. ~~Items~~The Company is currently evaluating various courses of action ~~property~~to ~~and~~address ~~equipment~~the ~~with~~operational ~~costs~~issues ~~greater~~it ~~than~~is ~~$1,000~~facing. ~~are~~There ~~capitalized~~can ~~and~~be ~~depreciated~~no onassurance athat ~~straight-line~~any ~~basis~~of ~~over~~these efforts will be successful. The accompanying financial statements do not include any adjustments that might result should the ~~estimated~~Company ~~useful~~be ~~lives,~~unable to continue as ~~follows:~~a going concern.

Description		Estimated Useful Life
Office equipment and furniture		2 to 5 years
Kiosks		5 years

As a result of the Bankruptcy Filing, realization of assets and liquidation of liabilities are subject to uncertainty. While operating as a debtor-in-possession under the protection of Chapter 11, and subject to Bankruptcy Court approval or otherwise as permitted in the normal course of business, the Company may sell or otherwise dispose of assets and liquidate or settle liabilities for amounts other than those reflected in the financial statements. No adjustments to liabilities were recognized during the twelve months ended February 29, 2012.

~~Revenue~~Further, ~~Recognition~~a plan of reorganization could materially change the amounts and classifications reported in our financial statements. Our historical financial statements do not give effect to any adjustments to the carrying value of assets or amounts of liabilities that might be necessary as a consequence of confirmation of a plan of reorganization.

~~The~~Under ~~Company~~the ~~recognizes~~priority ~~net~~scheme ~~revenue~~established ~~from~~by the ~~DVD~~Bankruptcy ~~movie~~Code, ~~rentals~~unless oncreditors aagree ~~ratable~~otherwise, ~~basis~~post-petition ~~during~~liabilities ~~the~~and ~~term~~prepetition ofliabilities amust ~~consumer’s~~be ~~rental~~satisfied or ~~transaction.~~reserved ~~Revenue~~for ~~from~~in ~~a direct~~full ~~sale~~before ~~out~~shareholders of the ~~kiosk~~Company ofare ~~previously~~entitled ~~rented~~to ~~movies~~receive isany ~~recognized~~distribution ator ~~the~~retain ~~time~~any property under a plan of ~~sale~~reorganization. The Onultimate ~~rental~~recovery, ~~transactions~~if ~~for~~any, ~~which~~to ~~the~~creditors ~~related~~and ~~DVDs~~shareholders ~~have~~of the Company will not ~~yet~~be ~~been~~determined until ~~returned~~confirmation toand ~~the~~consummation ~~kiosk~~of ata ~~month-end,~~plan ~~revenue~~of isreorganization. No ~~recognized~~assurance ~~with~~can abe ~~corresponding~~given ~~receivable~~as to what values, if any, ~~recorded~~will be ascribed in the ~~balance~~Bankruptcy ~~sheet,~~to ~~net~~each of athese ~~reserve~~constituencies ~~for~~or ~~potentially~~what ~~uncollectible~~types or amounts. Weof ~~record~~distributions, ~~revenue~~if ~~net~~any, ofthey ~~refunds~~would receive. Accordingly, ~~and~~the ~~applicable~~Company ~~sales~~urges ~~taxes~~that ~~collected~~extreme ~~from~~caution ~~consumers.~~be ~~The~~exercised ~~Company~~with ~~had~~respect ~~minimal~~to ~~revenues~~existing ~~from~~and ~~DVD~~future ~~movie~~investments in ~~rentals~~any ~~during~~of the ~~year~~Company's liabilities and/or securities.

~~Fair~~Reorganization ~~Value of Financial Measurements~~ Items

~~The~~Reorganization ~~fair~~items ~~value~~represent ~~accounting~~the ~~guidance~~direct and ~~defines~~incremental ~~fair~~costs ~~value~~related asto “the ~~price~~Company’s ~~that~~Chapter ~~would~~11 becase, ~~received~~such toas ~~sell~~professional anfees ~~asset~~incurred, ornet ~~paid~~of tointerest ~~transfer~~income earned aon ~~liability~~accumulated cash, if any, during the Chapter 11 process. These restructuring activities may result in anadditional charges ~~orderly~~and ~~transaction~~other ~~between~~adjustments ~~market~~for ~~participants~~expected atallowed claims (including claims that have been allowed by the Court) and other reorganization items that could be material to the ~~measurement~~Company’s ~~date.”~~financial ~~The~~position ~~definition~~or isresults of operations in any given period.

~~F-8~~ 4. Prepaid Expenses and Other Assets

~~Table~~Prepaid expenses principally consisted of ~~Contents~~deferred costs related to stock compensation to vendors where stock has been issued for services to be rendered in the future. Stock is subject to repurchase if services are not rendered.

PUBLIC MEDIA WORKS, INC.

	February 29, 2012		February 28, 2011
Investor relations fees	$	—	$	316,667
Deposits		—		2,500
Insurance		—		4,182
Rent		—		8,621
Legal retainer		—		5,983
Other		2,000		8,775
Total prepaid expenses and deposits	$	2,000	$	346,728

~~NOTES~~The TOCompany ~~CONSOLIDATED~~had ~~FINANCIAL~~a ~~STATEMENTS~~four to eight week lead time between when it orders a kiosk and when it is delivered for deployment. Upon order and again prior to shipment, the Company had to make partial payment for the cost of the kiosk. As the manufacturer retains ownership until the kiosk is deployed, these up-front payments were treated as deposits until the kiosks are received. As of February 29, 2012, the Company had no kiosks on order compared to 25 at February 28, 2011.

~~February~~5. ~~28,~~Equipment ~~2011~~and Asset Purchase Agreement

2On November 22, 2011, the bankruptcy court approved the sale of majority of the Company’s assets and accordingly on November 30, 2011, the Company executed the Asset Purchase Agreement whereby majority of the Company’s assets including its inventory were sold for an amount of $145,000 to an unrelated party. ~~Summary~~Accordingly, as of ~~Significant~~February ~~Accounting~~29, ~~Policies~~2012 ~~(Continued)~~and February 28, 2011, the Company did not have any assets in place. In relation to the Asset Purchase Agreement, the Company recorded approximately $71,000 as loss on sale of assets.

Depreciation expense for the twelve months ~~based~~ended onFebruary an29, ~~exit~~2012 ~~price~~and ~~rather~~February ~~than~~28, an2011 ~~entry~~amounted ~~price~~to $48,996 ~~regardless~~and of$5,188, ~~whether~~respectively. During the ~~entity~~twelve ~~plans~~months toended ~~hold~~February 29, or2012, ~~sell~~and right before the ~~asset.~~consummation ~~This~~of ~~guidance~~the ~~also~~Asset ~~establishes~~Purchase aAgreement, ~~fair~~the ~~value~~Company ~~hierarchy~~wrote toits ~~prioritize~~equipment ~~inputs used~~down into ~~measuring~~estimated net ~~fair~~realizable value asand ~~follows:~~recorded an impairment expense of approximately $370,000.

~~• Level 1: Observable inputs such as quoted prices in active markets;~~F-11

•Table ~~Level~~of ~~2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and~~Contents

•PUBLIC ~~Level~~MEDIA ~~3: Unobservable inputs in which there is little or no market data~~WORKS, ~~which require the reporting entity to develop its own assumptions~~INC.

~~Financial Instruments~~ (Debtor-in-Possession)

~~The~~NOTES ~~estimated~~TO ~~fair~~CONSOLIDATED ~~values~~FINANCIAL ~~of our financial assets and liabilities that are recognized at fair value on a recurring basis, using available market information and other observable data are as follows:~~ STATEMENTS

	February 28, 2011								February 28, 2010
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	QuotedPrices inActiveMarkets orIdenticalAssets		SignificantOtherObservableInputs		SignificantUnobservableInput				QuotedPrices inActiveMarkets orIdenticalAssets		SignificantOtherObservableInputs		SignificantUnobservableInput
Assets:
Cash	$	385,888	$	—	$	—	$	385,888	$	44	$	—	$	—	$	44
Total assets	$	385,888	$	—	$	—	$	385,888	$	44	$	—	$	—	$	44
Liabilities:
Due to stockholders	$	—	$	14,000	$	—	$	14,000	$	—	$	29,074	$	—	$	29,074
Note payable		—	$	27,090		—	$	27,090		—	$	10,667		—	$	10,667
Accrued interest and notes payable to stockholders and a related party			$	855,185			$	855,185			$	1,035,796			$	1,035,796
Total liabilities	$	—	$	896,275	$	—	$	896,275	$	—	$	1,075,537	$	—	$	1,075,537

February 29, 2012

~~The~~6. ~~carrying~~Liabilities ~~amounts~~Subject ~~of the Company’s short-term financial instruments, including accounts receivable, prepaid expenses, inventory, deposits, accounts payable and accrued liabilities, approximate fair value due~~ to ~~the short term maturities.~~ Compromise

~~Share-Based~~Liabilities ~~Payment~~subject ~~Arrangements~~to compromise at February 29, 2012 and February 28, 2011 include the following pre-petition liabilities:

Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments are recorded in operating expenses in the consolidated statement of operations.

	February 29,		February 28,
	2012		2011
Accounts payable and accrued liabilities	$	448,531	$	271,562
Due to stockholders		180,000		14,000
Note payable		65,000		27,090
8% Note to George Mainas/Mainas Development Corporation		48,687		465,409
9% Line of Credit to George Mainas/Mainas Development Corporation		207,307		310,835
7% Note payable to Steve Davis		27,423		26,441
10% Note due to Niesar Vestal, LLP		55,306		52,500
Total liabilities subject to compromise	$	1,032,254	$	1,167,837

~~Net~~On ~~Loss~~November ~~per~~30, ~~Common~~2011 ~~Share~~and –in ~~Basic~~relation to the Asset Purchase Agreement mentioned above, the court approved the sale of majority of the Company’s assets and ~~Diluted~~concurrently using the funds from the sale to partially pay down the 8% Note to George Mainas which was the only secured note. Accordingly, the balance of this note was re-classified to liabilities subject to compromise as no more assets are available to satisfy the secured credit obligation.

~~Net loss per common share – basic and diluted is computed based on the weighted average number of shares outstanding for the period~~7. ~~Diluted~~Convertible net loss per common share is computed by dividing net loss by the weighted average shares outstanding assuming all dilutive potential common shares were issued. As of February 28, 2011 and 2010, the Company had 8,497,291 and no warrants outstanding, respectively. As of February 28, 2011 and 2010, the Company had 4,005,000 and 600,000 stock options, respectively, that were not included in the net loss per common share due to the options and warrants being antiNote-~~dilutive.~~Post Additionally, there were no adjustments to net loss to determine net loss available to common stockholders. As such, basic and diluted net loss per common share equals net loss, as reported, divided by the weighted average common shares outstanding for the respective periods. Petition

F-During the twelve months ended February 29, 2012, the Company issued two unsecured convertible notes for a total amount of $50,000 (first note was dated November 9, 2011 for $25,000 and second note was dated December 14, 2011 for an amount of $25,000) and bears interest at 8% per year. The term of the notes is one year from the date where the Company obtains the Bankruptcy Court approval for the financing; the Company obtained such approval on November 22, 2011. The outstanding principal and interest on these notes are convertible at any time on or after the date of Bankruptcy Court approval into Company’s shares of common stock on the basis of five (5) shares for each $0.01. In accordance with the applicable guidance in GAAP, the Company recorded a beneficial conversion feature (BCF) for an amount of $25,000 on date of issuance. The BCF amount was calculated as the difference between the market price and conversion price on date of issuance and was charged to operations on such date.

~~Table of Contents~~F-12

~~PUBLIC~~Table ~~MEDIA~~of ~~WORKS, INC.~~ Contents

~~NOTES~~PUBLIC TOMEDIA ~~CONSOLIDATED~~WORKS, ~~FINANCIAL STATEMENTS~~ INC.

~~February 28, 2011~~ (Debtor-in-Possession)

2.NOTES ~~Summary~~TO ofCONSOLIDATED ~~Significant~~FINANCIAL ~~Accounting Policies (Continued)~~ STATEMENTS

~~Recent~~February ~~Issued~~29, ~~and Adopted Accounting Pronouncements~~ 2012

~~In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No~~8. ~~2010-19 (“ASU 2010-19”),~~ New and Enhanced Disclosures about Fair Value Measurements. ASU 2010-06 provides amendments to FASB ASC 820-10 that requires new fair value disclosures and clarifies existing fair value disclosures required under FASB ASC 820-10. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after DecemberCommon 15, 2009, except for certain disclosures about purchases, sales, issuances, and settlements in the roll forward activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of the new provisions within ASU 2010-06 did not have a material impact on our consolidated financial position, results of operations, cash flows, or disclosures. Stock

3On April 23, 2010, the Company issued 150,000 shares to Bespoke Growth Partners an investor relations consulting firm in exchange for services to be provided by the firm. ~~Deposits~~The Company onrecorded ~~kiosks~~$148,500 in compensation expense in the year ended February 28, 2011 as the agreement has been terminated.

~~The~~On ~~Company~~May ~~has~~4, a2010, ~~four~~as tothe ~~eight~~result ~~week~~of ~~lead time between when it~~completing ~~orders~~the aacquisition ~~kiosk~~of ~~and~~Entertainment ~~when~~Express, ~~it is delivered for deployment~~Inc. ~~Upon order and again prior to shipment~~(“EntertainmentXpress”), the Company ~~must~~issued ~~make~~13,685,753 ~~partial~~shares ~~payment~~of ~~for~~common stock ~~the~~as ~~cost~~defined ofin ~~the~~that ~~kiosk.~~certain AsAmended ~~the~~and ~~manufacturer~~Restated ~~retains~~Exchange ~~ownership~~Agreement, ~~until~~dated ~~the~~as ~~kiosk~~of isApril ~~deployed~~23, ~~these~~2010 ~~up-front payments~~by ~~are~~and ~~treated~~among asthe ~~deposits~~Company ~~until~~and EntertainmentXpress ~~the~~with ~~kiosks~~a ~~are~~stated ~~received.~~exchange Asratio of ~~February 28,~~one ~~2011,~~Company ~~the~~share ~~Company~~for ~~had~~every 25one ~~kiosks~~EntertainmentXpress onshare, ~~order~~pursuant ~~scheduled~~to ~~for~~the terms ~~deployment~~and conditions set forth in ~~March~~the ~~2011~~agreement.

On May 4, 2010, and concurrently with executing the acquisition of Entertainment Express, the Company executed a debt conversion agreement with an accredited investor for cash of $133,000, which was converted into 133,000 shares of the Company’s common stock priced at $1.00 ~~Prepaid~~per ~~expenses~~share, which was converted on the same day into common stock. The debt agreement also provided the accredited investor for each common share received upon conversion, a warrant to purchase an additional share of the Company’s common stock at $1.25 within 1 year, unless called sooner. The Company has the right to call the warrants if the Company’s trading price is at least $2.25 for 7 days or more. If called, the warrants must be exercised within the 10 days or they will expire. The Company recorded interest expense related to the issuance of these warrants in the amount of $166,079. The Company recorded a loss on the conversion of debt of $46,550.

~~Prepaid~~On ~~expenses~~May ~~principally~~6, ~~consists~~2010, ofthe ~~capitalized~~Company ~~costs~~issued ~~related~~100,000 shares to ~~stock~~ ~~compensation~~Company todirectors ~~vendors~~and ~~where~~advisors ~~stock~~for ~~has~~services ~~been~~rendered ~~issued~~as ~~for~~follows: ~~services~~20,000 shares to beJoseph ~~rendered~~Merhi; in20,000 ~~the~~shares ~~future.~~to ~~Stock~~Al isHayes; 20,000 ~~subject~~shares to ~~repurchase~~Edward ifFrumkes; ~~services~~20,000 ~~are~~shares ~~not~~to ~~rendered~~Corbin Bernsen; and 20,000 shares to Elie Samaha. ~~Assuming~~The ~~all~~Company ~~required~~recorded ~~services~~$125,000 in ~~are~~compensation ~~rendered~~expense in the year ended February 28, ~~these~~2011 ~~capitalized~~as ~~costs~~the ~~will~~grants bewere ~~amortized within~~for ~~twelve~~past ~~months.~~services and vested immediately to the holder.

	2011		2010
Investor relations fees	$	316,667	$	—
Insurance		4,182		—
Rent		8,621		—
Legal retainer		5,983		—
Other		8,775		—
Balance February 28, 2011	$	344,228	$	—

On May 6, 2010, the Company issued 600,000 shares to the Capital Communications Group pursuant to an investor relations consulting agreement dated March 12, 2010. The Company recorded $164,384 in compensation expense in the year ended February 28, 2011 and the remaining expense of $585,616 will be amortized over the remaining year of the contract.

5On May 6, 2010, after completion of the EntertainmentXpress acquisition, the Company cancelled 3,376,984 outstanding shares of common stock as follows: 1,100,000 shares issued to Geoffrey Mulligan & Penny Wright Mulligan; 350,000 shares issued to Interven Capital; 175,000 shares issued to Janice Bittaglia; 1,526,984 shares issued to Larry Gitlin; and 225,000 shares issued to Mark Smith. ~~Equipment~~The outstanding shares of common stock were cancelled pursuant to contractual agreements between the individuals and the Company.

~~The~~On May 25, 2010, the Company ~~had~~executed a nocommon ~~equipment~~stock asand ofwarrant ~~February 28~~agreement with an accredited investor for $35,000 ~~2011~~in cash. The accredited investor received 35,000 common stock and ~~2010~~35,000 warrants to purchase an additional share of the Company at $1.25 within 1 year.

~~Depreciation~~On ~~expense for the year ended February~~May 2826, ~~2011 and~~ 2010 ~~amounted to $5~~,~~188~~ ~~and $279, respectively. During~~ the ~~year~~Company ~~ended~~then ~~February 28,~~re-issued ~~2011~~126,984 ~~the Company gave up ownership and~~common ~~possession~~shares ~~of two kiosks with a net book value of $20,355 in partial settlement of monies owed~~ to aLarry ~~third party~~Gitlin.

6Between June 7, 2010 and August 3, 2010, the Company executed a series of common stock and warrant agreements with accredited investors for $59,500 in cash. ~~Short-term~~The ~~Notes~~accredited ~~Payable~~investors toreceived ~~Stockholders~~59,500 shares of common stock and ~~Other~~59,500 ~~Obligations~~warrants to purchase additional shares of the Company’s common stock at $1.25 per share. The warrants have a term of 1 year.

~~The~~On ~~Company~~July 15, ~~has~~2010, ~~outstanding~~the ~~current~~Company ~~liabilities~~issued a ~~due~~total ~~to stockholders as~~ of ~~February 28~~300, ~~2011~~000 ~~and~~shares ~~February 28,~~of ~~2010,~~common instock ~~the~~to ~~amount~~Richard ofWaxman ~~$14~~(150,000 shares) and ~~$29,074,~~Imran ~~respectively.~~Sayeed ~~Amounts~~(150,000 ~~owed~~shares) toas ~~stockholders~~part of ~~the~~a ~~Company~~settlement agreement. ~~represent~~The ~~operating expenses paid on the~~ Company’s ~~behalf~~recorded ~~and~~$102,690 ~~consulting~~in ~~fees.~~compensation ~~These~~ expense ~~reimbursements~~for ~~are interest~~the ~~free~~year ~~and~~ended ~~due~~February on28, ~~demand~~2011.

~~The~~On August 2, 2010, the Company ~~has~~issued 800,000 ~~short-term~~shares ~~notes~~of ~~payable~~common ~~and~~stock ~~accrued~~to ~~interest~~Salzwedel ofFinancial ~~$27,090~~Communications ~~and~~pursuant ~~$10,667~~to asan ofinvestor ~~February 28, 2011~~relations ~~and~~consulting ~~February~~agreement dated August 282, 2010~~, respectively~~. The ~~February 28,~~Investor ~~2011balance~~Relations ~~consists~~Agreement ofis for a ~~non-interest~~term ~~bearing~~of ~~note~~six tomonths ~~Niesar~~(unless ~~Vestal~~earlier terminated), ~~LLP~~and inprovides for the ~~amount~~Company’s issuance of ~~$25~~800,000, ~~and~~shares aof restricted common stock and $10,000 per month in compensation expense during the term of the contract. On February 2,~~090~~ ~~balance~~1011, ~~owed~~the toAgreement ~~Imperial~~was ~~Credit~~extended for an additional six months and the Company’s ~~D&O~~issued ~~insurance.~~an ~~The~~additional ~~financing~~1,000,000 ~~arrangement~~shares ~~with~~of ~~Imperial~~common ~~Credit~~stock ~~accrues~~to ~~interest~~Salzwedel atFinancial ~~9% per~~Communications. ~~annum~~The ~~and~~Company ~~matures~~recorded $503,311 in ~~three~~compensation expense ~~months.~~for the year ended February 28, 2011.

~~F-10~~On August 2, 2010 the Company agreed to issue up to 1,000,000 shares of restricted common stock to Martin W. Greenwald, pursuant to his employment agreement dated August 2, 2010 to serve as the Company’s Chief Executive Officer. The shares of the common stock are restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption therein. Shares are earned and issued monthly on the anniversary date (second day of each month) of his Agreement. The shares of common stock were offered and sold within the exemption from registration under Section 4(2) of the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by Mr. Greenwald in connection with the issuance. As of February 29, 2012, 416,665 shares have been issued and the Company recorded $579,452 in compensation expense for the year ended February 28, 2011. In March 2011, the Board of Directors accelerated the vesting on the remaining 583,335 shares.

~~Table of Contents~~F-13

~~PUBLIC~~Between ~~MEDIA~~August 9, ~~WORKS~~2010 and August 31, 2010, ~~INC~~the Company executed a series of common stock and warrant agreements with accredited investors for $301,000 in cash. The accredited investors received 430,000 shares of common stock and 430,000 warrants to purchase additional shares of the Company’s common stock at $0.70 per share. The warrants have a term of 3 years. During the year ended February 28, 2011, one investor exercised a warrant for 10,000 shares.

~~NOTES~~On TOAugust 12, ~~CONSOLIDATED~~2010, ~~FINANCIAL~~the ~~STATEMENTS~~Company entered into a Teaming Agreement with Modular Conversions, LLC, pursuant to which the parties agreed to work together to place DVD movie and game kiosks and 3D screens into convenience stores which may be built-out by Modular Conversions, LLC. The Teaming Agreement is for a term of ten years. In connection with the Teaming Agreement, the Company agreed to issue warrants to purchase up to 700,000 shares of common stock at an exercise price of $1.10 per share for a term of 5 years to Modular Conversions, LLC. 100,000 warrants vested upon execution of the agreement and the remaining 600,000 warrants will be issued upon the placement of Company kiosks and 3D screens under the terms of the Teaming Agreement. The warrants and shares of the common stock underlying the warrants are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption there under. The warrants were offered and sold in reliance on the exemption from registration under Section 4(2) of the Act. The issuance of warrants was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by Modular Conversions, LLC in connection with the offering. The Company recorded $103,890 expense as related to the warrants for the year ended February 28, 2011. The Company and 3DMC agreed to mutually terminate the Collaboration Agreement effective January 12, 2011.

~~February 28, 2011~~ F-14

7.Table ~~Long-term~~of ~~Notes Payable and Accrued Interest~~ Contents

AtPUBLIC ~~February 28,~~MEDIA ~~2011~~WORKS, ~~long-term notes payable and accrued interest consists of the following:~~ INC.

	Principal		Interest		Total
8% Note to George Mainas	$	449,222	$	16,187	$	465,409
9% Line of Credit to George Mainas		201,274		109,561		310,835
7% Note payable to Steve Davis		25,000		1,441		26,441
10% Note due to Niesar Vestal, LLP		50,000		2,500		52,500
Total Long-term notes payable and accrued interest	$	725,496	$	129,689	$	855,185

(Debtor-in-Possession)

AtNOTES ~~February 28,~~TO ~~2010,~~CONSOLIDATED ~~long-term~~FINANCIAL ~~notes payable and accrued interest consists of the following:~~ STATEMENTS

	Principal		Interest		Total
7% Note to George Mainas	$	42,000	$	26,725	$	68,725
8% Note to George Mainas		449,222		225,330		674,552
9% Line of Credit to George Mainas		201,274		91,245		292,519
Total Long-term notes payable and accrued interest	$	692,496	$	343,300	$	1,035,796

February 29, 2012

~~On August 30, 2000, the Company and George Mainas, a member of the Board of Directors of the Company and a stockholder, entered into a promissory note bearing interest at~~ 8~~% per annum~~. Common Stock (Continued)

On ~~August~~September 191, ~~2004~~2010, the Company issued ~~obtained $250~~211,~~000~~540 ~~unsecured~~shares ~~line~~ of ~~credit~~restricted ~~from~~Company ~~Mainas~~common ~~Development~~stock ~~Corporation~~to (aMr. Corbin ~~company~~Bernsen ~~owned~~in byexchange ~~George~~for ~~Mainas,~~services arendered. ~~stockholder~~The ~~and director~~ shares of the Company)’s tocommon stock are restricted securities, and may not be ~~drawn~~sold, ~~down~~transferred ~~upon~~or asotherwise ~~needed~~disposed ~~with~~without registration under the Securities Act or an ~~interest~~exemption ~~rate~~there ofunder. 9%The shares were issued in reliance on the exemption from registration under Section ~~per~~4(2) ~~annum~~of the Act. The ~~interest~~issuance ~~has~~of ~~accrued~~stock was not conducted in connection with a public offering, and ~~remains~~no ~~unpaid~~public solicitation or advertisement was made or relied upon by the consultant in connection with the offering. During the year ended February 28, 2011, the Company recorded consulting expense of $253,848 related to this Agreement.

~~During~~From ~~July~~September 22, ~~2008~~2010 through September 30, 2010, the Company sold 951,429 shares of restricted Company common stock to 9 accredited investors. In connection with the issuance of common stock, the Company also issued warrants to purchase 926,429 shares of restricted common stock at $.70 per share and ~~George~~5,000 shares ~~Mainas~~at $1.00 per share for a term of 3 years, and issued warrants to purchase 20,000 shares of restricted common stock at $1.00 per share for a ~~member~~term of 1 year. The investors receiving the ~~Board~~931,429 ofshares ~~Directors~~and 931,429 warrants with a $.70 exercise price were granted piggyback registration rights for the shares of common stock and shares underlying the warrants. The aggregate consideration received by the Company from the sale of securities included $649,500 in cash and $22,500 in cancellation of the Company’s payment obligation under a ~~stockholder~~teaming agreement. The warrants and shares of the Company’s common stock are restricted securities, and ~~entered~~may ~~into~~not abe sold, transferred or otherwise disposed without registration under the Securities Act of 1933, as amended (the “Act”), ~~promissory~~or ~~note~~an ~~bearing~~exemption ~~interest~~thereunder. atThe 7%securities were offered and sold in reliance on the exemption from registration under Section ~~per~~4(2) of ~~annum~~the Act and/or Rule 506 of Regulation D under the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the offering.

~~Effective~~On ~~August~~September 1427, ~~2009~~2010, ~~the~~in ~~Company executed a Loan Modification and Security~~connection ~~Agreement~~with (the ~~“Loan~~Company ~~Agreement”)~~entering ~~with~~into ~~George Mainas and Mainas Development Corporation,~~ a ~~corporation~~consulting ~~wholly-owned~~agreement bywith ~~George~~Joseph ~~Mainas~~Abrams, ~~pursuant~~the toCompany ~~which George Mainas and Mainas Development Corporation~~ agreed to ~~extend~~issue ~~the~~900,000 ~~repayment~~shares ~~date~~of ~~for~~restricted ~~the~~ Company’s ~~outstanding~~common ~~loan~~stock ~~obligations~~ to ~~them described above until December~~Mr. ~~31,~~Abrams ~~2009,~~or inhis ~~consideration~~assignees. ofThe ~~the~~consulting ~~Company~~agreement ~~granting~~provides athat ~~security interest in~~ the Company’s ~~assets~~may torepurchase ~~secure repayment of the loan obligations~~300, ~~which~~000 ~~repayment~~of ~~date was subsequently extended to February 28, 2010. On May 4, 2010, in connection with~~ the ~~closing~~shares of ~~the~~Company ~~Share~~common ~~Exchange~~stock ~~Agreement,~~for ~~George~~a ~~Mainas~~total ~~and~~purchase ~~Mainas~~price ~~Development~~of ~~Agreement~~$15 ~~entered~~if ~~into an Amendment to~~ the ~~Loan~~consulting ~~Agreement pursuant~~agreement tois ~~which~~terminated ~~the~~by ~~parties agreed as follows: (i)~~ the ~~maturity~~Company on ~~date~~or ofbefore ~~all loan obligations under the Loan Agreement shall be extended until June~~December 3015, ~~2013~~2010, ~~(the “Maturity Date”); (ii) all principal~~ and ~~accrued interest under the Loan Agreement~~ may berepurchase ~~converted~~300,000 ~~into~~ shares of ~~the~~ Company’s common stock atfor ~~the~~a ~~election~~total ofpurchase ~~Secured Party at any time upon written notice to the Company at a~~ price of $~~4.00~~15 if ~~per~~the ~~share;~~consulting ~~and~~agreement ~~(iii) all~~is ~~principal~~terminated ~~and~~by ~~accrued interest under~~ the ~~Loan~~Company ~~Agreement~~on ~~shall~~or ~~automatically~~before ~~convert~~March 15, ~~into~~2011. The shares of the Company’s common stock inare ~~the~~restricted ~~event~~securities, ~~that~~and ~~the~~may 10not ~~day~~be ~~trailing~~sold, ~~VWAP~~transferred ~~(volume~~or ~~weighted~~otherwise ~~average~~disposed ~~price)~~without ~~for~~registration ~~the~~under ~~Company’s common stock (as quoted on~~ the ~~Company’s~~Securities ~~principal~~Act ~~trading~~or ~~market)~~an ~~shall~~exemption ~~exceed~~there $4under.00 ~~per~~The ~~share~~shares atwere ~~any~~issued ~~time~~in ~~prior~~reliance toon the ~~Maturity~~exemption ~~Date.~~from ~~Effective~~registration ~~October~~under Section ~~12,~~4(2) of ~~2010,~~ the ~~Board~~Act. ~~approved~~The ~~the~~issuance ~~Company,~~of ~~George~~stock ~~Mainas~~was ~~and~~not ~~Mainas~~conducted ~~Development~~in ~~Corporation~~connection ~~entering~~with ~~into~~a anpublic ~~amendment~~offering, toand ~~the~~no ~~Loan Agreement~~public tosolicitation ~~provide~~or ~~that~~advertisement was ~~the~~made ~~repayment~~or ~~terms~~relied ~~described~~upon inby ~~(iii) above~~the ~~shall~~consultant bein ~~replaced~~connection with ~~terms providing that~~ the ~~Company~~offering. ~~may~~During ~~provide 10 days prior written notice to~~ the ~~borrowers~~year ofended ~~its~~February ~~election~~28, to2011, ~~repay at any time prior to~~ the ~~Maturity~~Company ~~Date~~recorded ~~during~~consulting ~~which~~expense ~~ten~~of ~~day period the borrowers may elect to take repayment or convert the debt at~~ $~~4.00 per share~~730,325 orrelated ~~repay~~to ~~the~~this ~~debt on the Maturity Date~~Agreement.

InEffective ~~February~~October 12, ~~2011~~2010, ~~Mr. Mainas converted~~ the 7%Company issued ~~Note $42~~20,000 ~~and~~shares ~~its~~of ~~accrued~~restricted ~~interest~~Company ~~$29,665,~~common ~~plus~~stock ~~$270,363~~to ofone ~~accrued~~individual ~~interest~~serving onas ~~the~~consultant 8%to ~~Note,~~the ~~plus~~Company. ~~$62,277~~The shares of ~~monies~~the Company’s ~~due~~Common ~~him~~Stock ~~for~~are ~~company~~restricted ~~expenses~~shares, ~~he paid~~and ~~for~~may ornot abe ~~total of $404~~sold,~~305~~ ~~into~~transferred ~~units~~or ofotherwise ~~common~~disposed ~~stock~~without ~~and~~registration under ~~warrants~~the atSecurities ~~$0.25~~Act ~~per~~or ~~unit~~an ~~(1,617,220~~exemption ~~units)~~there under. ~~One~~The ~~unit~~shares ~~consists~~ of ~~one~~Company ~~share of~~ common stock were offered and ~~one~~sold ~~warrant~~in toreliance ~~purchase~~on athe exemption ~~share~~from registration under Section 4(2) of ~~common~~the ~~stock~~Act. atThe Company recorded consulting expenses of $~~0.25~~34,000 ~~per~~during ~~share~~the year ~~for~~ended ~~three~~February ~~years~~28, 2011.

~~The~~On ~~promissory~~October 18, ~~note~~2010, tothe Company appointed Ed Roffman as the Chief Financial Officer of the Company. In connection with Mr. ~~Steve~~Roffman’s ~~Davis~~appointment, ~~bears~~the ~~interest~~Company agreed atto 7%enter into an employment agreement with him pursuant to which he will receive 180,000 shares of Company common stock to with a Company right to repurchase such shares for $.01 a share which right shall elapse at the rate of 15,000 shares per ~~annum~~month for a period of 12 months. The ~~maturity~~shares ~~date~~of the common stock are restricted shares, and may not be sold, transferred or otherwise disposed without registration under the ~~promissory~~Securities ~~note~~Act isor ~~June 30,~~an exemption therein. The shares of common stock were offered and sold ~~2013~~within (the ~~“Maturity~~exemption ~~Date”~~from registration under Section 4(2), ~~all~~of ~~principal~~the Act. The offering was not conducted in connection with a public offering, and ~~accrued~~no ~~interest~~public ~~under~~solicitation or advertisement was made or relied upon by Mr. Roffman in connection with the issuance. ~~promissory~~The ~~note~~Company ~~may~~recorded be$118,415 in compensation expense for the year ended February 28, 2011.

F-11 15

Table of Contents

PUBLIC MEDIA WORKS, INC.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~ (Debtor-in-Possession)

~~February~~NOTES ~~28,~~TO ~~2011~~CONSOLIDATED FINANCIAL STATEMENTS

7.February ~~Long-term~~29, ~~Notes Payable and Accrued Interest (Continued)~~ 2012

~~converted into shares of Company common stock at the election of the holder at any time upon written notice to the Company at a price of $4~~8.00 ~~per~~Common ~~share,~~Stock ~~and all principal and accrued interest under the promissory note shall automatically convert into shares of Company common stock in the event that the 10 day trailing VWAP~~ (~~volume weighted average price~~Continued) ~~for the Company’s common stock shall exceed $4.00 per share at any time prior to the Maturity Date.~~

On ~~August~~October 3126, 2010, the Company ~~entered~~issued ~~into~~15,000 ashares of ~~settlement~~restricted ~~agreement~~Company ~~with~~common ~~Niesar~~stock ~~Vestal,~~to ~~LLP~~DVD ~~for~~Kiosk ~~all~~Solutions ~~outstanding obligations.~~as ~~The~~part ~~agreement~~of ~~calls for~~ a ~~series~~settlement of ~~cash payments totaling $45,000 over 12 months plus~~ a ~~convertible note for $50,000~~dispute. ~~$10,000~~The shares of the ~~short-term~~common ~~note~~stock are ~~has~~restricted ~~been paid~~shares, ~~with~~and ~~the~~may ~~remainder~~not inbe ~~short-term~~sold, ~~debt.~~transferred ~~The~~or ~~long-term~~otherwise ~~note~~disposed ~~has~~without ~~a maturity~~registration ~~date~~under ofthe ~~June 30,~~Securities ~~2012~~Act ~~and~~or an ~~accrues~~exemption ~~interest at 10%~~therein. The ~~terms of the debt agreement provide for all principal and accrued interest to be converted into~~ shares of common stock atwere ~~$1.50~~offered ~~per~~and ~~share~~sold atwithin ~~any~~the ~~time~~exemption ~~within~~from ~~the~~registration ~~term~~under Section 4(2) of the ~~note~~Act. ~~All~~ The ~~principal~~offering ~~and~~was ~~accrued~~not ~~interest~~conducted ~~under the note shall automatically convert into shares of common stock~~ in ~~the~~connection ~~event~~with ~~that~~a ~~the~~public 30offering, ~~day~~and ~~trailing~~no ~~volume~~public ~~weighted~~solicitation ~~average~~or ~~price~~advertisement was ~~for~~made ~~the~~or ~~stock~~relied ~~exceeds~~upon ~~$2.00~~by ~~per~~DVD ~~share~~Kiosk atSolutions ~~any~~in ~~time~~connection ~~after~~with ~~June 1, 2011 and prior to~~ the ~~maturity date~~issuance. The Company recorded a$29,850 ~~loss~~in onexpense for the year ~~conversion~~ended ofFebruary ~~debt of approximately $31~~28,~~627.~~ 2011.

8On November 22, 2010, the Company appointed Gregory Waring as President and Chief Operating Officer of the Company. ~~Common~~In ~~Stock~~connection with Mr. Waring’s appointment, the Company agreed to enter into an employment agreement with him pursuant to which he will receive 250,000 shares of Company common stock with a Company right to repurchase such shares for $.01 a share which right shall elapse at the rate of 20,833 shares per month for a period of 12 months. The shares of the common stock are restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption therein. The shares of common stock were offered and sold within the exemption from registration under Section 4(2) of the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by Mr. Waring in connection with the issuance. The Company recorded $92,349 in compensation expense for the year ended February 28, 2011.

On ~~April~~November 1724, ~~2009~~2010, ~~$15~~the Company issued 375,000 ofshares ~~accrued~~to ~~salary~~Mr. Mark ~~recorded~~Smith, asthe former Chief Financial Officer of ~~February 28~~the Company, ~~2009~~pursuant ~~for~~to the ~~CEO~~terms of a settlement agreement. The shares of the ~~Company~~common ~~was~~stock ~~converted~~are ~~into 75~~restricted shares,~~000~~ and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption therein. The shares of common stock atwere $0offered and sold within the exemption from registration under Section 4(2) of the Act.20 The ~~per~~offering ~~share~~was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by Mr. Smith in connection with the issuance. The Company recorded $412,500 in compensation expense for the year ended February 28, 2011.

OnFrom ~~January~~December 1213, 2010 through February 28, 2011, the Company ~~issued~~sold 4,700,400 shares of restricted Company common stock to 34 accredited investors for a total of $1,175,100. In connection with the issuance of common stock,~~000~~ the Company also issued warrants to purchase 4,700,400 shares of restricted common stock at $0.0225 per share for a term of 3 years. In addition, the Company agreed to ~~its~~convert $524,491 of debt (including accounts ~~former~~payable, ~~Chief~~as ~~Operating~~well ~~Officer~~as ling-term debt and related accrued interest) on the same terms issuing 2,097,962 shares and warrants. The investors were granted piggyback registration rights for the shares of common stock and shares underlying the warrants. The warrants and shares of the Company’s common stock are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Securities Act of 1933, as amended (the “Act”), or an exemption thereunder. The securities were offered and sold in reliance on the exemption from registration under Section 4(2) of the Act and/or Rule 506 of Regulation D under the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the offering.

OnIn ~~January 12~~February 2011, ~~2010~~one holder of a stock option in the amount of 100,000 shares elected to exercise the stock option, using the cashless exercise feature of the option. The Company issued ~~500~~68,~~000~~750 shares atof $0common stock.10 ~~per~~The ~~share~~shares toof ~~its~~the ~~majority~~Company’s ~~shareholder~~common instock are restricted securities, and ~~exchange~~may ~~for~~not ~~$50~~be sold,~~000~~ ~~owed~~transferred toor ~~this~~otherwise ~~shareholder~~disposed without registration under the Securities Act or an exemption there under. The shares were issued in reliance on the exemption from registration under Section 4(2) of the Act.

OnFrom ~~April 23,~~December ~~2010~~through February 2011, the Company issued ~~150~~82,000 shares of restricted common stock to ~~Bespoke~~five ~~Growth~~individuals ~~Partners~~serving anas consultants to the Company. The shares of ~~investor~~the ~~relations~~Company’s ~~consulting~~common ~~firm~~stock inare ~~exchange~~restricted ~~for~~securities, ~~services~~and tomay not be ~~provided~~sold, bytransferred or otherwise disposed without registration under the ~~firm~~Securities Act or an exemption there under. The ~~Company~~shares ~~recorded~~were ~~$148,500~~issued in ~~compensation~~reliance ~~expense~~on in the ~~year~~exemption ~~ended~~from ~~May~~registration under Section ~~31,~~4(2) ~~2010~~of the Act. The Company recorded consulting expense of $77,900 asduring the ~~agreement~~year ~~has~~ended ~~been~~February ~~terminated.~~28, 2011.

On May 4, 2010, as the result of completing the acquisition of Entertainment Express, Inc. (“EntertainmentXpress”), the Company issued 13,685,755 shares of common stock as defined in that certain Amended and Restated Exchange Agreement, dated as of April 23, 2010 by and among the Company and EntertainmentXpress with a stated exchange ratio of one Company share for every one EntertainmentXpress share, pursuant to the terms and conditions set forth in the agreement. F-16

OnTable ~~May 4, 2010, and concurrently with executing the acquisition~~ of Entertainment Express, the Company executed a debt conversion agreement with an accredited investor for cash of $133,000, which was converted into 133,000 shares of the Company’s common stock priced at $1.00 per share, which was converted on the same day into common stock. The debt agreement also provided the accredited investor for each common share received upon conversion, a warrant to purchase an additional share of the Company’s common stock at $1.25 within 1 year, unless called sooner. The Company has the right to call the warrants if the Company’s trading price is at least $2.25 for 7 days or more. If called, the warrants must be exercised within the 10 days or they will expire. As of February 28, 2011, the accredited investor held 133,000 warrants related to the debt conversion agreement. The Company recorded a loss on the conversion of debt of approximately $46,550. Contents

OnPUBLIC ~~May 6,~~MEDIA ~~2010~~WORKS, the Company issued 100,000 shares to Company directors and advisors for services rendered as follows: 20,000 shares to Joseph Merhi; 20,000 shares to Al Hayes; 20,000 shares to Edward Frumkes; 20,000 shares to Corbin Bernsen; and 20,000 shares to Elie SamahaINC. ~~The Company recorded $125,000 in compensation expense in the year ended February 28, 2011 as the grants were for past services and vested immediately to the holder.~~

~~On May 6, 2010, the Company issued 600,000 shares to the Capital Communications Group pursuant to an investor relations consulting agreement dated March 12, 2010. The Company recorded $750,000~~ (Debtor-in ~~compensation expense in the year ended February 28, 2011.~~ -Possession)

~~F-12~~ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Table~~February of29, ~~Contents~~2012

~~PUBLIC~~8. ~~MEDIA~~Common ~~WORKS,~~Stock ~~INC.~~ (Continued)

~~NOTES~~On TOMarch ~~CONSOLIDATED~~7, ~~FINANCIAL~~2011, ~~STATEMENTS~~the board of directors accelerated the vesting on 583,335 shares due Martin W. Greenwald, CEO and Chairman under an employment agreement between Mr. Greenwald and the Company. The Board also authorized an additional 500,000 fully vested shares to be issued to Mr. Greenwald. The Company recorded $695,646 in expense related to these issuances in the nine months ended November 30, 2011.

~~February~~On 28March 7, 2011, the Company issued 687,500 shares to four consultants for services rendered. The Company recorded $378,125 in consulting expense in the year ended February 29, 2012 as the grants were for past services and vested immediately to the holder.

8On March 7, 2011, the Company executed a common stock and warrant agreement with an accredited investor for $79,000 in cash. ~~Common~~The ~~Stock~~accredited ~~(Continued)~~investor received 316,000 common stock and 316,000 warrants to purchase an additional share of the Company at $0.40 within three years. As of February 29, 2012, the accredited investor held 316,000 warrants related to this purchase.

OnIn May 6, ~~2010,~~and ~~after~~June ~~completion of the EntertainmentXpress acquisition~~2011, the Company ~~cancelled~~agreed ~~3,376,984~~to ~~outstanding~~convert ~~shares~~$400,000 of ~~common~~long-term ~~stock~~debt asand ~~follows:~~related interest by issuing 1,~~100~~600,000 common shares ~~issued~~and ~~to Geoffrey Mulligan & Penny Wright Mulligan; 350~~1,600,000 ~~shares~~warrants. ~~issued~~The toinvestors were ~~Interven~~granted ~~Capital;~~piggyback ~~175,000~~registration ~~shares~~rights ~~issued~~for tothe ~~Janice Bittaglia; 1,526,984~~ shares ~~issued~~of ~~to Larry~~common ~~Gitlin;~~stock and ~~225,000~~ shares ~~issued~~underlying tothe ~~Mark Smith~~warrants. The ~~outstanding~~ shares of the Company’s common stock ~~were~~are ~~cancelled~~freely ~~pursuant~~trading tosecurities, ~~contractual~~under ~~agreements~~SEC ~~between~~Rule ~~the~~144. ~~individuals~~The warrants have a life of three years and ~~the~~are convertible ~~Company~~at $0.40 per share.

OnIn ~~May 25,~~June ~~2010~~2011, ~~the~~one ~~Company~~consultant ~~executed~~made a ~~common stock and warrant agreement with an accredited investor for $35,000 in cash. The accredited investor received 35,000 common stock and 35,000 warrants to~~cashless ~~purchase~~exercise ~~an additional share~~ of ~~the~~a ~~Company~~stock atoption ~~$1.25~~and ~~within 1 year. As of February 28~~128,571 ~~2011,~~shares ~~the~~were ~~accredited investor held 35,000 warrants related to the debt conversion agreement~~issued.

OnIn ~~May 26,~~June ~~2010~~2011, the Company ~~then re-~~issued ~~126~~200,~~984~~000 shares of common ~~shares~~stock to ~~Larry~~a ~~Gitlin~~supplier. In return, the supplier agreed to give the Company a discount on future purchases of kiosks.

~~Between June 7,~~On ~~2010 and~~ August 3 2, ~~2010~~2011, the Company ~~executed~~issued ~~a series of common stock and warrant agreements with accredited investors for $59~~600,~~500 in cash. The accredited investors received 59,500~~ 000 shares ofto ~~common~~Salzwedel ~~stock~~Financial ~~and~~Services ~~59,500~~for ~~warrants~~services to ~~purchase~~ ~~additional~~be ~~shares of the Company’s common stock at $1~~rendered.25 ~~per share.~~ The ~~warrants~~Company ~~have~~expensed athis ~~term~~amount ofin 1the year. Asended of February 28 29, ~~2011, the accredited investors held 59,500 warrants~~2012.

OnIn ~~July 15,~~August ~~2010~~2011, ~~the~~one ~~Company~~creditor ~~issued~~elected ato convert ~~total of 300~~$7,~~000~~408 ~~shares~~ of ~~common~~accounts ~~stock~~payable tointo ~~Richard Waxman (150~~74,~~000~~085 shares) ~~and~~of ~~Imran~~common ~~Sayeed~~stock ~~(150,000 shares) as part~~ of ~~a settlement agreement. The Company recorded $102,690 in compensation expense for~~ the ~~year ended February 28, 2011~~Company.

~~On August 2,~~In ~~2010,~~ the ~~Company~~quarter ~~issued~~ending ~~800~~August 31,~~000~~ ~~shares~~2011, the ofCompany executed common stock toagreements ~~Salzwedel~~with ~~Financial~~five ~~Communications~~accredited ~~pursuant~~investors tofor ~~an investor relations consulting agreement dated August 2~~$137,000 ~~2010~~in cash. The ~~Investor~~accredited ~~Relations~~investors ~~Agreement is for a term of six~~received ~~months (unless earlier terminated)~~1, ~~and provides for the Company’s issuance of 800~~370,000 shares of ~~restricted~~ common stock and ~~$10,000~~one ~~per~~investor ~~month~~received in750,000 ~~compensation~~warrants ~~expense~~to ~~during~~purchase ~~the~~an ~~term~~additional share of the ~~contract.~~Company Onat ~~February 2,~~$0.10 within ~~1011,~~three ~~the~~years. ~~Agreement~~These ~~was extended~~sales ~~for~~triggered an ~~additional~~anti-dilution ~~six~~clause ~~months~~in ~~and~~ the ~~Company~~aforementioned ~~issued an additional 1~~$400,000~~,000~~ ~~shares~~conversion of ~~common~~debt ~~stock~~ to ~~Salzwedel~~equity ~~Financial~~and an ~~Communications.~~additional ~~The Company recorded $503~~2,~~311~~121,750 inshares ~~compensation~~of ~~expense~~common ~~for~~stock ~~the~~were ~~year ended February 28, 2011~~issued.

On ~~August 2~~January 23, ~~2010~~2012, the Company ~~agreed to issue up to 1~~issued 25,000,000 ~~shares of~~ restricted ~~common~~shares ~~stock~~ to ~~Martin~~Stuart W.Subotnick ~~Greenwald,~~for ~~pursuant~~cash toat ~~his employment~~a ~~agreement~~price ~~dated August 2, 2010 to serve as the Company’s Chief Executive Officer. The shares~~ of ~~the common stock are restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption therein~~$0.002 ~~Shares~~per ~~are~~share ~~earned~~ and issued monthly on the anniversary date (second day of each month) of his Agreement. The shares of common stock were offered and sold within the exemption from registration under Section 4(2) of the Act. The offering was not conducted in connection with a ~~public~~total ~~offering,~~purchase ~~and~~price ~~no public solicitation or advertisement was made or relied upon by Mr. Greenwald in connection with the issuance. As~~ of ~~February 28, 2011, 416,665 shares have been issued and the Company recorded~~ $~~579~~50,~~452 in compensation expense for the year ended February 28, 2011~~000. ~~In March 2011, the Board of Directors accelerated the vesting on the remaining 583,335 shares.~~

Between August 9, 2010 and August 31, 2010, the Company executed a series of common stock and warrant agreements with accredited investors for $301,000 in cash. The accredited investors received 430,000 shares of common stock and 430,000 warrants to purchase additional shares of the Company’s common stock at $0.70 per share. The warrants have a term of 3 years. During the year ended February 28, 2011, one investor exercised a warrant for 10,000 shares. As of February 28, 2011, the accredited investors held 420,000 warrants. F-17

OnTable August 12, 2010, the Company entered into a Teaming Agreement with Modular Conversions, LLC, pursuant to which the parties agreed to work together to place DVD movie and game kiosks and 3D screens into convenience stores which may be built-out by Modular Conversions, LLC. The Teaming Agreement is for a term of ten years. In connection with the Teaming Agreement, the Company agreed to issue warrants to purchase up to 700,000 shares of common stock at an exercise price of $1.10 per share for a term of 5 years to Modular Conversions, LLC. 100,000 warrants vested upon execution of the agreement and the remaining 600,000 warrants will be issued upon the placement of Company kiosks and 3D screens under the terms of the Teaming Agreement. The warrants and shares of the common stock underlying the warrants are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption there under. The warrants were offered and sold in reliance on the exemption from registration under Section 4(2) of the Act. The issuance of warrants was not Contents

~~F-13~~ PUBLIC MEDIA WORKS, INC.

~~Table of Contents~~(Debtor-in-Possession)

~~PUBLIC~~NOTES ~~MEDIA~~TO ~~WORKS,~~CONSOLIDATED ~~INC.~~FINANCIAL STATEMENTS

~~NOTES~~February TO29, ~~CONSOLIDATED FINANCIAL STATEMENTS~~ 2012

~~February~~9. ~~28,~~Share ~~2011~~Based Compensation

~~8. Common~~ Stock ~~(Continued)~~ Options

The Company has 2007 and 2010 Equity Incentive ~~conducted~~Plans. The 2007 Equity Incentive Plan, which permits the grant of awards in ~~connection~~the ~~with~~form aof ~~public~~incentive ~~offering~~stock options, nonstatutory stock options, stock appreciation rights, stock awards and nostock ~~public~~units ~~solicitation~~to orits ~~advertisement~~key ~~was~~employees ~~made~~for orup ~~relied~~to ~~upon~~1 bymillion ~~Modular~~shares ~~Conversions,~~of ~~LLC~~common instock. The ~~connection~~Company ~~with~~believes that such awards promote the ~~offering.~~long-term ~~The~~success of the Company ~~recorded~~ ~~$103,890~~and ~~expense~~the ascreation ~~related~~of stockholder value by offering key employees an opportunity to ~~the~~acquire ~~warrants~~a ~~for~~proprietary interest in the ~~year~~success ~~ended~~of ~~February 28~~the Company, ~~2011.~~or ~~The~~to ~~Company~~increase such interest, and to ~~3DMC~~encourage ~~agreed~~such key employees to ~~mutually~~continue ~~terminate~~to provide services to the ~~Collaboration~~Company ~~Agreement~~and ~~effective~~to ~~January 12,~~attract ~~2011~~new individuals with outstanding qualifications. Awards are generally granted with an exercise price that approximates the market price of the Company’s common stock at the date of grant.

OnThe ~~September 1,~~fair ~~2010,~~value ~~the~~of ~~Company~~each ~~issued~~option ~~211,540~~award ~~shares~~is estimated ofon ~~restricted~~the ~~Company~~date ~~common~~of ~~stock~~grant tousing ~~Mr. Corbin~~the ~~Bernsen~~Black-Scholes inoption ~~exchange~~valuation ~~for~~model ~~services rendered.~~that ~~The~~uses ~~shares~~the ofassumptions noted in the ~~Company’s~~following table. ~~common~~Because ~~stock~~the ~~are~~Black-Scholes ~~restricted~~option ~~securities,~~valuation ~~and~~model ~~may~~incorporate ~~not~~ranges beof ~~sold,~~assumptions ~~transferred~~for orinputs, ~~otherwise~~those ~~disposed~~ranges ~~without~~are ~~registration~~disclosed. Expected ~~under~~volatilities ~~the~~are ~~Securities~~based ~~Act~~on orhistorical anvolatilities ~~exemption~~of ~~there~~the ~~under~~Company’s stock. The ~~shares~~Company ~~were~~uses ~~issued~~historical indata ~~reliance~~to estimate onoption ~~the~~exercise ~~exemption~~and ~~from~~employee ~~registration~~termination ~~under~~within ~~Section 4(2) of~~ the ~~Act~~valuation model. The ~~issuance~~expected term of ~~stock~~options ~~was~~granted ~~not~~is ~~conducted~~derived infrom ~~connection~~estimates and ~~with~~represents athe ~~public~~period ~~offering,~~of ~~and~~time nothat ~~public~~options ~~solicitation~~granted orare ~~advertisement~~expected ~~was~~to ~~made~~be oroutstanding. ~~relied~~The ~~upon~~risk-free byrate ~~the~~for ~~consultant~~periods inwithin ~~connection~~the ~~with~~contractual ~~the~~life ~~offering.~~of ~~During~~ the ~~year~~option ~~ended~~is ~~February 28,~~based ~~2011,~~on the ~~Company~~U.S. ~~recorded~~Treasury ~~consulting~~yield ~~expense~~curve ofin ~~$253,848~~effect ~~related~~at tothe ~~this~~time ~~Agreement.~~of grant.

From September 22, 2010 through September 30, 2010, the Company sold 951,429 shares of restricted Company common stock to 9 accredited investors. In connection with the issuance of common stock, the Company also issued warrants to purchase 926,429 shares of restricted common stock at $.70 per share and 5,000 shares at $1.00 per share for a term of 3 years, and issued warrants to purchase 20,000 shares of restricted common stock at $1.00 per share for a term of 1 year. The investors receiving the 931,429 shares and 931,429 warrants with a $.70 exercise price were granted piggyback registration rights for the shares of common stock and shares underlying the warrants. The aggregate consideration received by the Company from the sale of securities included $649,500 in cash and $22,500 in cancellation of the Company’s payment obligation under a teaming agreement. The warrants and shares of the Company’s common stock are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Securities Act of 1933, as amended (the “Act”), or an exemption thereunder. The securities were offered and sold in reliance on the exemption from registration under Section 4(2) of the Act and/or Rule 506 of Regulation D under the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the individual in connection with the offering.


	February 29, 2012			February 28, 2011
Expected Volatility		70	%		1,570	%
Expected dividends		0	%		0	%
Expected terms (in years)	1 to 3				5
Risk-free rate	0.25% to 1.22		%		1.48-1.98	%
Forfeiture rate		20	%		0	%

~~On September~~A ~~27, 2010, in connection with the Company entering into a consulting agreement with Joseph Abrams, the Company agreed to issue 900,000 shares~~ summary of ~~restricted Company common stock to Mr.~~ ~~Abrams or his assignees. The consulting agreement provides that the Company may repurchase 300,000~~ option activity as of ~~the shares of Company common stock for a total purchase price of $15 if the consulting agreement is terminated by the Company on or before December~~ 15February 29, ~~2010,~~2012 and ~~may~~February ~~repurchase 300~~28,~~000~~ ~~shares of Company common stock for a total purchase price of $15 if the consulting agreement is terminated by the Company on or before March 15,~~ 2011~~. The shares of the Company’s common stock are restricted securities~~, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption there under. The shares were issued in reliance on the exemption from registration under Section ~~4(2) of~~ changes during the Act. The issuance of stock was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the consultant in connection with the offering. During the year years then ended ~~February~~ ~~28, 2011, the Company recorded consulting expense of $730,325 related to this Agreement.~~ is presented below:

Effective October 12, 2010, the Company issued 20,000 shares of restricted Company common stock to one individual serving as consultant to the Company. The shares of the Company’s Common Stock are restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption there under. The shares of Company common stock were offered and sold in reliance on the exemption from registration under Section 4(2) of the Act. The Company recorded consulting expenses of $34,000 during the year ended February 28, 2011.

				Weighted-		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Options			Price		Life (Years)		Value
Outstanding at February, 2011		4,005,000		$	0.99		3.67	$	205,000
Granted		3,015,000			0.55		4.00		—
Exercised		(200,000	)		0.10		—		—
Forfeited or expired		(5,795,000	)		0.96		—		—
Outstanding at February 29, 2012		1,025,000			0.83		3.72		—
Exercisable at February 29, 2012		1,025,000		$	0.83		3.72		—

On October 18, 2010, the Company appointed Ed Roffman as the Chief Financial Officer of the Company. In connection with Mr. Roffman’s appointment, the Company agreed to enter into an employment agreement with him pursuant to which he will receive 180,000 shares of Company common stock to with a Company right to repurchase such shares for $.01 a share which right shall elapse at the rate of 15,000 shares per month for a period of 12 months. The shares of the common stock are restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption therein. The shares of common stock were offered and sold within the exemption from registration under Section 4(2) of the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon

	Options			Weighted- Average Exercise Price		Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at February 28, 2010		600,000		$	0.20		2.09	$	205,000
Granted		4,072,000		$	1.16		——	$	—
Exercised		(100,000	)	$	0.25		—	$	—
Forfeited or expired		(567,000	)	$	1.20		—	$	—

Outstanding at February 28, 2011		4,005,000		$	0.99		3.67	$	205,000

Exercisable at February 28, 2011		2,370,918		$	0.89		3.16	$	205,000

F-14 18

Table of Contents

PUBLIC MEDIA WORKS, INC.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~ (Debtor-in-Possession)

~~February~~NOTES ~~28,~~TO ~~2011~~CONSOLIDATED FINANCIAL STATEMENTS

8.February ~~Common~~29, ~~Stock (Continued)~~ 2012

~~by Mr~~9. ~~Roffman~~ inShare ~~connection~~Based ~~with~~Compensation ~~the issuance. The Company recorded $118,415 in compensation expense for the year ended February 28, 2011.~~ (Continued)

OnOne ~~October 26,~~option ~~2010,~~grant ~~the~~for ~~Company issued 15~~100,000 shares ofwas exercised ~~restricted~~(cashless) ~~Company~~during ~~common~~the ~~stock~~year toended ~~DVD~~February ~~Kiosk~~28, ~~Solutions as part of a settlement of a dispute~~2011. ~~The~~During ~~shares of~~ the ~~common~~twelve ~~stock~~months ~~are~~ended ~~restricted~~February ~~shares~~29, ~~and~~2012, ~~may not be sold~~128,571 ~~transferred or otherwise disposed without registration under the Securities Act or an exemption therein. The~~ shares ~~of common stock~~ were ~~offered~~issued ~~and sold within the exemption from registration under Section 4(2) of the Act. The offering was not conducted~~ in connection with ~~a public offering, and no public solicitation or advertisement was made or relied upon by DVD Kiosk Solutions in connection with~~ the ~~issuance.~~cashless ~~The~~exercise ~~Company~~of ~~recorded $29~~200,~~850~~000 ~~in expense for the year ended February 28, 2011~~options.

OnThere ~~November 22,~~was ~~2010,~~no ~~the~~unvested ~~Company appointed~~compensation ~~Gregory Waring~~ as ~~President and Chief Operating Officer~~ of February ~~the~~29, ~~Company~~2012. InDuring ~~connection with Mr. Waring’s appointment,~~ the ~~Company~~twelve ~~agreed~~months toended ~~enter~~February ~~into~~29, ~~an employment agreement with him pursuant to which~~2012, ~~he will receive 250~~3,015,000 ~~shares~~ ofstock ~~Company~~options ~~common~~were ~~stock~~granted. ~~with~~The a Company ~~right~~has recorded ~~to repurchase such shares for $.01~~ a ~~share~~stock ~~which~~option ~~right~~expense ~~shall elapse at the rate~~ of 20$1,~~833~~058,745 ~~shares~~in ~~per~~twelve ~~month for a period of 12~~ months. ~~The~~ended ~~shares~~February ~~of the common stock are restricted shares~~29, ~~and may not be sold~~2012, in ~~transferred~~general orand ~~otherwise~~administrative ~~disposed~~expenses. Due ~~without~~to ~~registration under~~ the ~~Securities~~Company ~~Act~~filing orfor anbankruptcy ~~exemption~~and ~~therein.~~termination ~~The shares~~ of ~~common~~almost ~~stock~~all ~~were~~employees, ~~offered~~an ~~and~~additional ~~sold~~4,345,000 ~~within~~option ~~the~~were ~~exemption~~forfeited during ~~from registration under Section 4(2) of~~ the ~~Act. The~~ ~~offering~~quarter ~~was~~ended ~~not~~November ~~conducted in connection with a public offering~~30, ~~and~~2011 nowhich ~~public~~represent ~~solicitation~~the ornumber ~~advertisement~~of ~~was~~options ~~made~~that orwere ~~relied~~not ~~upon~~exercised bywithin ~~Mr. Waring~~90 indays ~~connection~~of ~~with~~termination for the ~~issuance.~~respective ~~The~~employees, ~~Company~~total ~~recorded~~number ~~$92,349~~of inoptions ~~compensation expense~~forfeited ~~for~~during ~~the~~fiscal ~~year~~2012 ~~ended~~was ~~February 28~~5, ~~2011~~795,000.

On November 24, 2010, the Company issued 375,000 shares to Mr. Mark Smith, the former Chief Financial Officer of the Company, pursuant to the terms of a settlement agreement. The shares of the common stock are restricted shares, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption therein. The shares of common stock were offered and sold within the exemption from registration under Section 4(2) of the Act. The offering was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by Mr. Smith in connection with the issuance. The Company recorded $412,500 in compensation expense for the year ended February 28, 2011. Warrants

~~From~~The ~~December 13,~~fair ~~2010~~value ~~through February 28, 2011, the Company sold 4,700,400 shares~~ of ~~restricted~~each ~~Company~~warrant ~~common~~is ~~stock to 34 accredited~~estimated ~~investors~~on ~~for a total of $1,175,100. In connection with~~ the ~~issuance~~date of ~~common~~grant ~~stock,~~using the ~~Company~~Black-Scholes ~~also~~valuation ~~issued~~model ~~warrants~~that touses ~~purchase~~the ~~4,700,400~~assumptions ~~shares~~noted ofin ~~restricted~~the ~~common~~following ~~stock at $0~~table.25 ~~per~~Because ~~share for a term of 3 years. In addition,~~ the Black-Scholes ~~Company~~valuation ~~agreed to~~model ~~convert~~incorporates ~~$524,491~~ranges of ~~debt~~assumptions ~~(including~~for ~~accounts payable~~inputs, asthose ~~well~~ranges asare ~~ling-term~~disclosed. ~~debt~~Expected ~~and~~volatilities are ~~related~~based ~~accrued interest)~~ on ~~the~~historical ~~same~~volatilities ~~terms~~of ~~issuing~~the ~~2,097,962~~Company’s ~~shares~~common ~~and warrants~~stock. The ~~investors~~Company ~~were~~uses ~~granted~~historical ~~piggyback~~data ~~registration~~to ~~rights~~estimate ~~for~~option ~~the shares of~~exercise ~~common~~and ~~stock~~employee termination and ~~shares~~forfeiture ~~underlying~~rates within the ~~warrants~~valuation model. The ~~warrants~~expected ~~and~~term ~~shares~~ of ~~the~~warrants ~~Company’s~~granted ~~common~~is ~~stock~~derived ~~are~~from estimates ~~restricted securities,~~ and ~~may~~represents ~~not be sold, transferred or otherwise disposed without registration under~~ the ~~Securities~~period ~~Act~~ of ~~1933,~~time ~~as amended~~that ~~(the~~warrants ~~“Act”),~~granted orare anexpected ~~exemption~~to ~~thereunder~~be outstanding. The ~~securities~~risk-free ~~were~~rate ~~offered~~for ~~and~~periods within ~~sold in reliance on~~ the ~~exemption~~contractual ~~from~~life ~~registration under Section 4(2)~~ of the ~~Act~~warrant ~~and/or~~is ~~Rule~~based ~~506~~on ~~of Regulation D under~~ the ~~Act~~U. ~~The~~S. ~~offering~~Treasury ~~was not~~yield ~~conducted~~curve in ~~connection~~effect ~~with~~at ~~a public offering, and no public solicitation or advertisement was made or relied upon by~~ the ~~individual~~time inof ~~connection with the offering~~grant.

In February 2011, one holder of a stock option in the amount of 100,000 shares elected to exercise the stock option, using the cashless exercise feature of the option. The Company issued 68,750 shares of common stock. The shares of the Company’s common stock are restricted securities, and may not be sold, transferred or otherwise disposed without registration under the Securities Act or an exemption there under. The shares were issued in reliance on the exemption from registration under Section 4(2) of the Act.


	February 29, 2012			February 28, 2011
Expected Volatility		70	%		1,560	%
Expected dividends		0	%		0	%
Expected terms (in years)	3.0				3.0
Risk-free rate	0.79		%		1.42	%
Forfeiture rate		20	%		0	%

~~From~~A ~~December~~summary ~~through February 2011, the Company issued 82,000 shares~~ of ~~restricted~~warrant ~~common~~activity ~~stock to five individuals serving~~ as ~~consultants to the Company. The shares~~ of February ~~the Company’s common stock are restricted securities~~29, 2012 and ~~may~~February ~~not be sold~~28, transferred or otherwise disposed without registration under the Securities Act or an exemption there under. The shares were issued in reliance on the exemption from registration under Section 4(2) of the Act. The Company recorded consulting expense of $772011,~~900~~ and changes during the ~~year~~ years then ended ~~February~~ ~~28, 2011.~~ is presented below:

F-15

	Warrants			Weighted- Average Exercise Price		Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at February 28, 2011		8,497,291		$	0.36		2.81	$	2,379,427
Granted		3,316,000		$	0.26		2.59		—
Exercised		—		$	—		—		—
Forfeited or expired		(217,500	)	$	1.25		—		—
Outstanding at February 29, 2012		11,595,791		$	0.32		1.93		—
Exercisable at February 29, 2012		11,595,791		$	0.32		1.93		—

	Warrants			Weighted- Average Exercise Price		Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at February 28, 2010		—		$	—		—	$	—
Granted		9,107,291		$	0.41		—		—
Exercised		(10,000	)	$	1.00		—		—
Forfeited or expired		(600,000	)	$	1.10		—		—
Outstanding at February 28, 2011		8,497,291		$	0.36		2.81	$	2,379,427
Exercisable at February 28, 2011		8,497,291		$	0.36		2.81	$	2,379,427

~~PUBLIC MEDIA WORKS, INC.~~ F-19

~~NOTES~~There TOwere ~~CONSOLIDATED~~no ~~FINANCIAL~~warrants ~~STATEMENTS~~exercised during the year ended February 29, 2012. There were no unvested warrants as of February 29, 2012. During the year ended February 29, 2012, the Company issued 3,316,000 warrants to six investors at an average exercise price $0.26.

~~February~~10. ~~28,~~Income ~~2011~~ Taxes

9The Company has commenced analyzing filing positions in all of the federal and state jurisdictions (California) where it is required to file income tax returns, as well as all open tax years in these jurisdictions. ~~Share~~The ~~Based~~last ~~Compensation~~tax return filed by the Company was for the year ended February 28, 2007.

~~Stock~~Due ~~options~~to the existence of a full valuation allowance against deferred tax assets, future changes in our unrecognized tax benefits will not impact the Company’s effective tax rate.

~~The~~As ~~Company~~a ~~has 2007 and 2010 Equity Incentive Plans. The 2007 Equity Incentive Plan~~corporation, ~~which permits~~ the ~~grant~~Company ofis ~~awards~~primarily subject into ~~the~~U.S. ~~form~~federal ~~of incentive stock options, nonstatutory stock options, stock appreciation rights, stock awards~~ and ~~stock~~state ~~units~~income ~~to its key employees for up to 1 million shares of common stock~~tax. The Company’s ~~2010~~policy ~~Equity Incentive Plan, which~~ is ~~not~~to ~~yet~~recognize ~~stockholder-approved,~~interest ~~permits the grant of awards in the form of incentive stock options, nonstatutory stock options, stock appreciation rights, stock awards~~ and ~~stock~~penalties ~~units~~related to ~~its key~~income ~~employees~~tax ~~for~~matters upin toincome 3tax expense.~~5 million~~ ~~shares~~As of ~~common~~February ~~stock.~~29, On2012 ~~March 7~~and February 28, 2011, the ~~Board of Directors elected to increase the number of shares which can be issued under the plan to 6 million. The~~ Company ~~believes~~had ~~that~~no ~~such~~accruals ~~awards~~for ~~promote the long-term success of the Company and the creation of stockholder value by offering key employees an opportunity to acquire a proprietary~~ interest ~~in the success of the Company,~~ or ~~to increase such interest, and to encourage such key employees to~~penalties ~~continue~~related to ~~provide~~income ~~services~~tax ~~to the Company and to attract new individuals with outstanding qualifications~~matters. ~~Awards are generally granted with an exercise price that approximates the market price of the Company’s common stock at the date of grant.~~

~~The fair value of each option award is estimated on the date of grant using the Black~~F-Scholes option valuation model that uses the assumptions noted in the following table. Because the Black-Scholes option valuation model incorporates ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on historical volatilities of the Company’s common stock. The Company uses historical data to estimate option exercise and employee termination and forfeiture rates within the valuation model. The expected term of options granted is derived from estimates and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. 20

	February 28,2011			February 28,2010
Expected volatility		1,560% - 1,580	%		314.73	%
Expected dividends		—			—
Expected terms (in years)		5			1-2
Risk-free rate		1.48 – 1.98	%		1.42
Forfeiture rate		0	%		0	%

Table of Contents

APUBLIC ~~summary~~MEDIA ~~of option activity for the year ended February 28~~WORKS, ~~2011 and 2010 is presented below:~~ INC.

	Options			Weighted-AverageExercisePrice		AverageRemainingContractualLife (Years)		AggregateIntrinsicValue
Outstanding at February 28, 2010		600,000		$	0.20		2.09	$	205,000
Granted		4,072,000		$	1.16			$	—
Exercised		(100,000	)	$	0.25			$	—
Forfeited or expired		(567,000	)	$	1.20			$	—
Outstanding at February 28, 2011		4,005,000		$	0.99		3.67	$	205,000
Exercisable at February 28, 2011		2,370,918		$	0.89		3.16	$	205,000
	Options			Weighted-AverageExercisePrice		AverageRemainingContractualLife (Years)		AggregateIntrinsicValue
Outstanding at February 28, 2009		800,000		$	0.21		3.09	$	—
Granted		—		$	—		—	$	—
Exercised		—		$	—		—	$	—
Forfeited or expired		(200,000	)	$	—		—	$	—
Outstanding at February 28, 2010		600,000		$	0.20		2.09		—
Exercisable at February 28, 2010		600,000		$	0.20		2.09	$	—

(Debtor-in-Possession)

~~F-16~~ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Table~~February of29, ~~Contents~~2012

~~PUBLIC~~10. ~~MEDIA~~Income ~~WORKS,~~Taxes ~~INC.~~ (Continued)

~~NOTES~~The TOprovision ~~CONSOLIDATED~~for ~~FINANCIAL~~income ~~STATEMENTS~~tax consists of the following components at February 29, 2012 and February 28, 2011:

February 28, 2011


		2012		2011
Current:
Federal income taxes	$	—	$	—
State income taxes		—
Deferred		—		—

	$	—	$	—

9.The ~~Share~~following ~~Based~~reconciles ~~Compensation~~income ~~(Continued)~~taxes reported in the financial statements to taxes that would be obtained by applying regular tax rates to income before taxes:

One option grant for 100,000 shares was exercised (cashless) during the year ended February 28, 1011. There were no options exercised during the year ended February 28, 2010. The net number of shares issued was 68,750. Company has recorded a stock option expense of $1,552,346 in year ended February 28, 2011 in general and administrative expenses. The Company has an additional $1,855,904 to expense in future periods for unvested stock options.


	2012			2011
Expected tax benefit using regular rates	$	2,658,612		$	3,070,540
State minimum tax		—			—
Valuation allowance		(2,658,612	)		(3,070,540	)
Tax Provision	$	—		$	—

~~Warrants~~As a result of the implementation of certain provisions of ASC 740, Income Taxes, (formerly FIN 48, Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No. 109) , the Company performed an analysis of its previous tax filings and determined that there were no positions taken that it considered uncertain. Therefore, there was no provision for uncertain tax positions for the years ended February 29, 2012 and February 28, 2011. Future changes in uncertain tax positions are not expected to have an impact on the effective tax rate due to the existence of the valuation allowance. The Company will continue to classify income tax penalties and interest, if any, as part of interest and other expenses in its statements of operations. The Company has incurred no interest or penalties as of February 29, 2012 and February 28, 2011.

~~The fair value of each warrant is estimated on the date of grant using the Black-Scholes valuation model that uses the assumptions noted in the following table~~11. ~~Because~~Subsequent the Black-Scholes valuation model incorporates ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on historical volatilities of the Company’s common stock. The Company uses historical data to estimate option exercise and employee termination and forfeiture rates within the valuation model. The expected term of warrants granted is derived from estimates and represents the period of time that warrants granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the warrant is based on the U.S. Treasury yield curve in effect at the time of grant. Events

	February 28,2011
Expected volatility		1,560	%
Expected dividends		—
Expected terms (in years)		3
Risk-free rate		1.42
Forfeiture rate		0	%

In November, 2011, Debtor reached an agreement with ELO Media ("ELO") regarding a reverse merger and started to prepare the necessary documents, including a Share Exchange Agreement and a Disclosure Statement. At a hearing on May 2, 2012 on the United States Trustee's Motion to Convert/Dismiss, Debtor represented that the documents were nearing completion and that Debtor anticipated filing its Disclosure Statement in the near future. The Court, at that hearing set a hearing on the Disclosure Statement for July 25, 2012 at 1:30 p.m. On or about May 24, 2012, ELO advised the Debtor that it had decided to withdraw from the transaction and would not be proceeding with the Share Exchange Agreement. Since then, Debtor sought other companies with which to merge, ultimately reaching a Memorandum of Understanding with a Private Company on June 12, 2012.

ADebtor ~~summary~~is in the process of ~~warrant~~negotiating a ~~activity~~new ~~for~~Share ~~the~~Exchange ~~year~~Agreement ~~ended February 28,~~with ~~2011,~~a isPrivate ~~presented~~Company ~~below:~~and believes that it will be in a position to file its Disclosure Statement within approximately Thirty (30) days.

	Warrants			Weighted-AverageExercisePrice		AverageRemainingContractualLife (Years)		AggregateIntrinsicValue
Outstanding at February 28, 2010		—			—		—		—
Granted		9,107,291		$	0.41				—
Exercised		(10,000	)	$	1.00				—
Forfeited or expired		(600,000	)	$	1.10				—
Outstanding at February 28, 2011		8,497,291		$	0.36		2.81	$	2,379,427
Exercisable at February 28, 2011		8,497,291		$	0.36		2.81	$	2,379,427

F-21

10. Income Taxes

The Company has commenced analyzing filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions.

Due to the existence of a full valuation allowance against deferred tax assets, future changes in our unrecognized tax benefits will not impact the Company’s effective tax rate.

The Company has not filed federal or state tax returns for its fiscal years ended February 28, 2008 through 2011. The Company does not believe it will owe any federal or state taxes and had no accruals for interest or penalties related to income tax matters.

At February 28, 2011 and February 28, 2010, the Company had net deferred tax assets of approximately $3,070,540 and $46,286. Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize these assets, a full valuation has been established to offset the net deferred tax asset. Additionally, the future utilization of the company’s net operating loss carry forwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that may have occurred previously or that could occur in the future. The Company has not yet determined whether such an ownership change has occurred. Until this

F-17

PUBLIC MEDIA WORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2011

10. Income Taxes (Continued)

analysis has been completed the Company has removed the deferred tax assets associated with these carry forwards from its deferred tax asset schedule and has recorded a corresponding decrease to their valuation allowance.

The provision for income tax consists of the following components at February 28, 2011 and February 29, 2010:

	2010		2010
Current:
Federal income taxes	$	—	$	—
State income taxes		—
Deferred		—		—
	$	—	$	—

The following reconciles income taxes reported in the financial statements to taxes that would be obtained by applying regular tax rates to income before taxes:

	2011			2010
Expected tax benefit using regular rates	$	(3,070,540	)	$	(46,286	)
State minimum tax		—			—
Valuation allowance		3,070,540			46,286
Tax Provision	$	—		$	—

As a result of the implementation of certain provisions of ASC 740, Income Taxes, (formerly FIN 48, Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No. 109) , the Company performed an analysis of its previous tax filings and determined that there were no positions taken that it considered uncertain. Therefore, there was no provision for uncertain tax positions for the years ended February 28, 2011 and February 28, 2010. Future changes in uncertain tax positions are not expected to have an impact on the effective tax rate due to the existence of the valuation allowance. The Company will continue to classify income tax penalties and interest, if any, as part of interest and other expenses in its statements of operations. The Company has incurred no interest or penalties as of February 28, 2011 and February 28, 2010.

11. Commitments and Contingencies

The Company entered into a financing agreement with Imperial Credit Corp. in which it financed the Company’s Directors and Officers insurance payable in the amount of $18,820. The obligation is repayable in monthly installments of $2,173 over 9 months.

Effective May 6, 2010, the Company entered into a new lease for 3,040 square feet of office space located at 2330 Marinship Way, #300, Sausalito, California 94965. The term of the lease is 23.5 months commencing May 15, 2010 and the monthly rent is $7,448.

On August 31, 2010, the Company entered into a settlement agreement with Niesar Vestal, LLP for all outstanding obligations. The agreement calls for a series of cash payments totaling $45,000 over 12 months plus a convertible note for $50,000. The note has a maturity date of June 30, 2012 and accrues interest at 10%. The terms of the debt agreement provide for all principal and accrued interest to be converted into shares of common stock at $1.50 per share at any time within the term of the note. All principal and accrued interest under the note shall automatically convert into shares of common stock in the event that the 30 day trailing volume weighted average price for the stock exceeds $2.00 per share at any time after June 1, 2011 and prior to the maturity date.

In November 2010, the Company signed an agreement with Spot Ventures, whereby, effective December 1, 2010, it has an interest in the profits from all kiosks under Spot’s control. The Agreement calls for the Company to provide DVDs for inclusion in kiosks and to pay certain operating expenses of the kiosks, excluding the cost of the kiosk itself. In exchange for this, the Company shall be reimbursed for the cost of the DVDs and the operating expenses out of the revenue from the kiosks and then receive 50% of any profits from the kiosks.

12. Subsequent Events

F-18

PUBLIC MEDIA WORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2011

12. Subsequent Events (Continued)

In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through May 31, 2011, the date the consolidated financial statements were available to be issued.

F-19

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller Reporting Company

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