1108730--5/29/2009--PUBLIC_MEDIA_WORKS

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{acquisition, growth, future}

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Our business requires a substantial investment of capital. The costs of producing and marketing feature films have steadily increased and may further increase in the future, which may make it more difficult for a film to generate a profit or compete against other films. Budget overruns may adversely affect our business. If We Exceed Our Budgets In Our Projects, We May Be Unable To Recoup Our Costs. Licensed distributors failure to promote our programs may adversely affect our business. We face additional risks due to our reliance on outsourced production studios for films and television shows we choose to produce ourselves. If our films and television shows are not commercially successful, we may not be able to generate sufficient revenue to fund our operations, and may be unable to continue as a going concern. In most cases our films will be subject to ratings restrictions and censorship that may result in ratings that may reduce distribution and revenue potential. Our success depends on the commercial success of films and television programs, which is unpredictable. The film industry is highly competitive and we are smaller and less diversified than many of our competitors. Others may assert intellectual property infringement claims against us. Our business involves risks of liability claims for media content, which could adversely affect our business, results of operations and financial condition. Our revenues and results of operations may fluctuate significantly. Accounting practices used in our industry may accentuate fluctuations in operating results. We require additional financing to sustain our operations and without it we may not be able to continue operations 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. Our financial statements have been prepared assuming that the Company will continue as a going concern We are an early stage company with a limited operating history and no significant revenues. We are in default under our debt obligations, and if we fail to restructure our outstanding indebtedness, the lenders may take actions that would have material adverse impacts on the Company. 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. Limitations on director and officer liability and indemnification of our officers and directors by us may discourage stockholders from bringing suit against a director. We are responsible for the indemnification of our officers and directors. Should our officers and/or directors require us to contribute to their defense, we may be required to spend significant amount of our capital. Our executive officers, directors and insider stockholders beneficially own or control approximately 51% of our outstanding common stock and options, which may limit your ability and the ability of our other stockholders, whether acting alone or together, to propose or direct the management or overall direction of our Company. The relative lack of public company experience of our management team may put us at a competitive disadvantage. Our internal controls over financial reporting may not be effective, which could have a significant and adverse effect on our business. We are dependent for our success on a few key executive officers. Our inability to retain those officers would impede our business plan and growth strategies, which would have a negative impact on our business and the value of your investment. Since our officers do not devote their full business time to our business, we may not be able to act on our business opportunities or respond to industry or market forces in a timely manner, which may reduce our competitiveness and, as a result, the viability of our business and operations. Our common 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. 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. 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. We may be unable to list our common stock on NASDAQ or on any securities exchange. Future sales of our equity securities could put downward selling pressure on our securities, and adversely affect the stock price.

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1108730--5/29/2009--PUBLIC_MEDIA_WORKS_INC