U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-K
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2008
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission File No.
000-50892
Hangman Productions, Inc.
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(Name of Small Business Issuer as specified in its charter)
UTAH 87-0638511
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(State or other jurisdiction of (Employer I.D. No.)
organization)
1338 S FOOTHILL DR. #200
SALT LAKE CITY, UT 84108
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(Address of Principal Executive Office)
Issuer's Telephone Number, including Area Code: (801) 649-3519
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par
value $0.01
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|
Check whether the issuer is not required to file reports pursuant to Section 13
or 15 (d) of the Exchange Act . Yes |_| No |X|
Check whether the issuer (1) 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 period that the registrant 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 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 statements
incorporated by 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:
Large accelerated filer [ ] Accelerated filed [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |_| No |X|
State issuer's revenue for its most recent fiscal year: $3,694
The market value of the voting stock held by non-affiliates is $46,875,
based on 187,500 shares held by non-affiliates. These computations are based
upon the bid price of $.25 for the common stock of the Company on the OTC
Bulletin Board of the Financial Industry Regulatory Authority, Inc. ("FINRA") on
February 5, 2009. As of February 5, 2009, the registrant had 1,490,000 shares of
common stock outstanding.
Documents incorporated by reference: None
Transitional Small Business Disclosure Format: Yes |_| No |X|
1
Table of Contents
PART I............................................................................................................................3
ITEM 1. BUSINESS........................................................................................................3
ITEM 1A. RISK FACTORS....................................................................................................6
ITEM 2: PROPERTIES......................................................................................................9
ITEM 3: LEGAL PROCEEDINGS...............................................................................................9
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............................................................9
PART II..........................................................................................................................10
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES...10
ITEM 6: SELECTED FINANCIAL DATA........................................................................................10
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION...........................11
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....................................................13
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA....................................................................14
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS..................................................................27
ITEM 9A: CONTROLS AND PROCEDURES........................................................................................27
ITEM 9B: OTHER INFORMATION..............................................................................................27
PART III.........................................................................................................................28
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE........................................................28
ITEM 11. EXECUTIVE COMPENSATION.........................................................................................30
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.................31
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE......................................32
ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES.........................................................................32
ITEM 15: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.....................................................................33
SIGNATURES.......................................................................................................................33
2
PART I
FORWARD LOOKING STATEMENTS
In this report, references to "Hangman Productions," the "Company," "we,"
"us," and "our" refer to Hangman Productions, Inc.
This annual report contains certain forward-looking statements and for this
purpose any statements contained in this annual report that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or comparable terminology are intended to
identify forward-looking statements. These statements by their nature involve
substantial risks and uncertainties, and actual results may differ materially
depending on a variety of factors, many of which are not within our control.
These factors include but are not limited to economic conditions generally and
in the markets in which Hangman Productions may participate, competition within
Hangman Productions' chosen industry, technological advances and failure by us
to successfully develop business relationships.
Item 1. BUSINESS
HISTORICAL DEVELOPMENTS
Hangman Productions, Inc. a Utah corporation (the "Company," "Hangman,"
"we," "us" and words of similar import), was organized under the laws of the
State of Utah on August 16, 1999, under the name "BBC2, Inc." Following the
Company's organization the Company conducted an offering of its common stock
pursuant to Rule 506 of Regulation D of the Securities and Exchange Commission,
and applicable provisions of Rule 144-14-25s of the Utah Division of Securities.
On December 19, 2001, the Company changed its name to Hangman Productions, Inc.,
to more accurately reflect the Company's participation in the film production
industry.
The Company's operations during the year ended December 31, 2008, resulted
in $3,694 in revenue. The Company's cost of revenue for the year ended December
31, 2008, was $3,250 and general and administrative expenses were $30,687,
resulting in an operating loss of ($30,243), and a net loss from continuing
operations of ($34,878) after accounting for interest expenses, franchise taxes,
and excluding discontinued operations. Including the loss from discontinued
operations of ($11,162) the Company incurred a net loss of ($46,040).
The independent auditor's report issued in connection with the audited
financial statements of the Company for the period ended December 31, 2008,
expresses "substantial doubt about its ability to continue as a going concern,"
due to the Company's accumulated losses, minimal assets, negative working
capital, and still developing operations.
BUSINESS OPERATIONS
Hangman is involved in the film production and management industry, focused
on seeking out undiscovered screenwriters, and developing a pipeline between
talented screenwriters and the Hollywood film-making community. The Company is
not only dedicated to developing relationships with the screenwriting community,
but also developing relationships within the film and entertainment industry.
The Company believes its two-fold approach will help bridge the gap between
screenwriters ("content providers") and production companies and film studios.
However, Hangman's first objective is to build relationships with screenwriters
to enable the Company to access the screenwriters' library of content. Supply of
content will be generated and developed through screenplay contests hosted by
the Company.
3
SCREENPLAY CONTESTS
For the past few years the Company has been focused on seeking out
undiscovered screenwriters through its screenplay contest, the
ScreenplayShootout! The Company completed the third edition of the
ScreenplayShootout! in August, 2008. The Company is excited to continue
providing opportunities for emerging screenwriters and developing our
relationships within both the screenwriting and the film-making community.
Hangman will continue hosting the ScreenplayShootout! screenplay contests
throughout the next twelve months. The Company's management believes the Company
can generate significant revenue through contest submission fees and sponsor
participation. Sponsor participation includes companies who will advertise on
Hangman's web properties and other promotional outlets, targeting the Company's
participant demographic. The Company is seeking to secure a sponsor prior to
commencing its next screenplay contest. Regardless if the Company obtains a
sponsor the Company will commence a contest by June, 2009. The Company's
marketing campaign for the upcoming contest will include advertising with
Filmmakers.com, ScreenwritersUtopia.com, and MovieBytes.com and/or similar
screenplay related websites. Hangman will also implement a targeted email
campaign to former contest's participants as well as other interested parties
within the screenwriting community.
Hangman planned to develop additional contests to supplement the
ScreenplayShootout! However the Company has decided at this time that it is in
the Company's best interest to focus on further developing the
ScreenplayShootout! and focus on securing sponsors for the ScreenplayShootout!
The ScreenplayShootout! welcomes submissions from all genres, and the Company
has determined that it may attract more sponsors, who are looking to target the
overall screenwriter audience, with the ScreenplayShootout!
For further information on the Company's operations see See Part II, Item
7. Plan of Operation.
DISTRIBUTION METHODS OF PRODUCTS AND SERVICES
The Company seeks to attract and develop talent and enable access to
content through its screenplay contests activities. Participants of the
screenplay contests will be able to access the contests via the Company's
websites. Hangman has developed websites for its contests, and markets these
websites through internet banner advertisements, screenplay directory sites, and
printed publications. The Company has also created a print advertisement
campaign to target the film making and entertainment industry and promote its
contests. Advertisements are primarily targeted during the Company's contests.
COMPETITIVE BUSINESS CONDITIONS AND THE COMPANY'S POSITION IN THE INDUSTRY
The film production and management industry is highly competitive.
Competition ranges from start-up production companies, like Hangman, to billion
dollar, multi-national conglomerations. It is the Company's plan to position
itself within the industry as a supplier of content to the industry's larger
participants, who will use the content to develop a variety of media programs;
however, the Company is not currently providing content to any company.
The Company's ability to obtain access to content is driven by the
Company's ability to attract new and undiscovered talent. The Company is using
its contest-based platform to develop relationships with the writer community
and develop marketable content. The Company sponsored contests face numerous
competitors. Many of the competitors have similar web-based contests that offer
cash prizes and are affiliated with larger, well-known production companies. The
Company's ScreenplayShootout! is targeted for a broad audience. The contest is
open to all genres and has minimal requirements. The entry fee is priced within
the median range of other contests. The cash prizes are also within the median
range of other contests. Hangman believes that its success relies on the
Company's ability to build brand awareness within the writer community and
establish a strong network with a variety of management and production
companies.
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
Currently the Company's financial success relies on the success of its
contests. Currently the Company's only customers are the contest entrants. The
Company hopes to attract additional customers by obtaining sponsors for its
screenplay contests.
PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS
OR LABOR CONTRACTS
Other than possibly applying for a trademark on the Company's name, Hangman
Productions, Inc., and the Company's screenplay contest the ScreenplayShootout!,
the Company does not foresee filing any applications for patents or licenses.
The Company also does not plan to execute any franchises, concession or royalty
agreements or labor contracts.
4
EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE BUSINESS
The integrated disclosure system for small business issuers adopted by the
SEC in Release No. 34-30968 and effective as of August 13, 1992, substantially
modified the information and financial requirements of a "Small Business
Issuer," defined to be an issuer that has revenues of less than $25 million; is
a U.S. or Canadian issuer; is not an investment company; and if a majority-owned
subsidiary, the parent is also a small business issuer; provided, however, an
entity is not a small business issuer if it has a public float (the aggregate
market value of the issuer's outstanding securities held by non-affiliates) of
$25 million or more. We are now considered to be a "smaller reporting company,
effective February 4, 2008, when the SEC abolished Regulation SB.
We are also subject to the Sarbanes-Oxley Act of 2002. This Act creates a
strong and independent accounting oversight board to oversee the conduct of
auditors, of public companies and to strengthen auditor independence. It also
requires steps to enhance the direct responsibility of senior members of
management for financial reporting and for the quality of financial disclosures
made by public companies; establishes clear statutory rules to limit, and to
expose to public view, possible conflicts of interest affecting securities
analysts; creates guidelines for audit committee members' appointment, and
compensation and oversight of the work of public companies' auditors; prohibits
certain insider trading during pension fund blackout periods; and establishes a
federal crime of securities fraud, among other provisions.
Section 14(a) of the Exchange Act requires all companies with securities
registered pursuant to Section 12(g) of the Exchange Act to comply with the
rules and regulations of the SEC regarding proxy solicitations, as outlined in
Regulation 14-A. Matters submitted to our stockholders at a special or annual
meeting thereof or pursuant to a written consent will require us to provide our
stockholders with the information outlined in Schedules 14-A or 14-C of
Regulation 14; preliminary copies of this information must be submitted to the
SEC at least 10 days prior to the date that definitive copies of this
information are forwarded to our stockholders.
We are also required to file annual reports on Form 10-K and quarterly
reports on Form 10-Q with the Securities Exchange Commission on a regular basis,
and will be required to timely disclose certain material events (e.g., changes
in corporate control; acquisitions or dispositions of a significant amount of
assets other than in the ordinary course of business; and bankruptcy) in a
Current Report on Form 8-K.
RESEARCH AND DEVELOPMENT COSTS DURING THE LAST TWO FISCAL YEARS
None; not applicable
COST AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS
None; not applicable.
NUMBER OF TOTAL EMPLOYEES AND NUMBER OF FULL TIME EMPLOYEES
Other than the Company's three executive officers and directors the Company
has no employees. Effective as of April 1, 2006, the Company's officers and
directors resolved to suspend the payment of salaries until the Company
generates positive operating cash flow. Salaries will be reinstated once the
Company generates positive operating cash flow on a quarterly basis, at which
time Mr. James Doolin will receive $1,000 per month, Mr. Shane Thueson will
receive $500 per month, and Mr. John Winchester will receive $100 per month.
REPORTS TO SECURITY HOLDERS
You may read and copy any materials that we file with the SEC at the SEC's
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may
also find all of the reports that we have filed electronically with the SEC at
their internet site www.sec.gov
5
ITEM 1A. RISK FACTORS
The Company's business operations are highly speculative and involve
substantial risks. Only investors who can bear the risk of losing their entire
investment should consider buying our shares. Some of the risk factors that you
should consider are the following:
EXECUTIVE OFFICERS HAVE NO LONG-TERM EXPERIENCE WITHIN THE FILM AND
ENTERTAINMENT INDUSTRY
The Company's officers have no specific experience in the film production
industry. This lack of experience may make it more difficult to establish the
contacts and relationships necessary to successfully execute on the Company's
business strategy.
COMPETITION FROM PROVIDERS OF SIMILAR PRODUCTS AND SERVICES COULD
MATERIALLY ADVERSELY AFFECT OUR REVENUES AND FINANCIAL CONDITION
The industry in which the Company competes is a rapidly evolving, highly
competitive and fragmented market , which is based on consumer preferences and
requires substantial human and capital resources. We expect competition to
intensify in the future. There can be no assurance that we will be able to
compete effectively. We believe that the main competitive factors in the
entertainment and film production industries include effective marketing and
sales, brand recognition, product quality, product placement and availability,
niche marketing and segmentation and value propositions. Many of our competitors
are established, profitable and have strong attributes in many, most or all of
these areas. They may be able to leverage their existing relationships to offer
alternative products or services at more attractive pricing or with better
market acceptance. Other companies may also enter our markets with better
products or services, greater financial and human resources and/or greater brand
recognition. Competitors may continue to improve or expand current products and
introduce new products. We may also have to rely on strategic partnerships for
critical branding and relationship leverage, which partnerships may or may not
be available or sufficient. We cannot assure that we will have sufficient
resources to make these investments or that we will be able to make the advances
necessary to be competitive. Increased competition may result in price
reductions, reduced gross margin and loss of market share. Failure to compete
successfully against current or future competitors could have a material adverse
effect on the Company's business, operating results and financial condition.
THE ENTERTAINMENT AND FILM PRODUCTION INDUSTIRES HAVE RELATIVELY LOW
BARRIERS TO ENTRY AND THE COMPANY MAY FACE SIGNIFICANT COMPETITION
There are relatively low barriers to entry into the Company's industry.
Because firms such as the Company rely on the skill, knowledge and relationships
of their personnel and their ability to market their products and services and
create brand awareness, they have no patented technology that would preclude or
inhibit competitors from entering their markets. The Company started with
limited capital and anyone interested in entering the Company's business could
also start with limited capital. In addition, any large or small management,
production or film studio that seeks to obtain original screenplays could
initiate a contest like the Company's or attract content through numerous of
other channels. One of the most common channels for Company's like Hangman to
attract content is by having an open submission policy, whereby anyone wanting
to submit material can mail their submission directly to a management,
production or film studio for no fee.
The Company is likely to face additional competition from new entrants into
the market in the future because there are relatively low barriers to entry.
There can be no assurance that existing or future competitors will not develop
or offer services that provide significant performance, price, creative or other
advantages over those offered by the Company, which could have a material
adverse effect on its business, financial condition, results of operations and
prospects.
EXECUTIVE OFFICERS AND MAJORITY SHAREHOLDERS MAINTAIN SIGNIFICANT CONTROL
OVER THE COMPANY AND ITS ASSETS
Hangman's executive officers maintain control over the Company's board of
directors and also control the Company's business operations and policies. In
addition, four shareholders, excluding the Company's executive officers, control
76.1% of the Company's issued and outstanding common stock. Furthermore, the
Doolin Family owns 69.5% of the Company's outstanding shares. Management
believes that this constitutes a controlling interest in the Company. As a
result, these majority shareholders will be able to exercise significant
influence over all matters requiring stockholder approval, including the
election of directors and approval of significant corporate transactions. Such
concentration of ownership may also have the effect of delaying or preventing a
change in control of the Company. See Part II, Item 11.
6
WE MAY REQUIRE ADDITIONAL FUNDS TO ACHIEVE OUR CURRENT BUSINESS STRATEGY
AND OUR INABILITIY TO OBTAIN ADDITIONAL FINANCING COULD CAUSE US TO CEASE
OUR BUSINESS OPERATIONS
We may need to raise additional funds through public or private debt or
sale of equity to achieve our current business strategy. Such financing may not
be available when needed. Even if such financing is available, it may be on
terms that are materially adverse to your interests with respect to dilution of
book value, dividend preferences, liquidation preferences, or other terms. We
anticipate requiring additional funds in order to fully implement our business
plan to significantly expand our operations. We may not be able to obtain
financing if and when it is needed on terms we deem acceptable.
Over the next twelve months the Company's management will advance the
Company monies not to exceed $40,000, as loans to the Company. The loan will be
on terms no less favorable to the Company than would be available from a
commercial lender in an arm's length transaction. The loan from the Company's
management will provide the Company with enough cash resources to meet its
presently anticipated working capital and capital expenditure requirements for
the next 12 months. Beyond the next 12 months the Company's future liquidity and
capital requirements will depend upon the success of its business and the
ability of the Company to generate profits from these operations. If the
Company's operations are not able to generate sufficient income and additional
monies are needed beyond the next twelve months, it will be up to the Company's
management to raise additional monies.
If we are unable to obtain financing on reasonable terms, we could be
forced to delay, scale back or eliminate certain activities and development
programs. In addition, such inability to obtain financing on reasonable terms
could have a material negative effect on our business, operating results, or
financial condition to such extent that we are forced to restructure, file for
bankruptcy, sell assets or cease operations, any of which could put your
investment dollars at significant risk.
FUTURE DEBT FINANCING MAY INVOLVE RESTRICTIVE COVENANTS THAT MAY LIMIT THE
COMPANY'S OPERATING FLEXIBILITY
Furthermore, a debt financing transaction, if available, may involve
restrictive covenants, which may limit the Company's operating flexibility with
respect to certain business matters. If additional funds are raised through debt
financing, the debt holders may require the Company to make certain agreements,
covenants, which could limit or prohibit the Company from taking specific
actions, such as establishing a limit on further debt; a limit on dividends,
limit on sale of assets, or specific collateral requirements. Furthermore, if
the Company raises funds through debt financing, and the Company would also
become subject to interest and principal payment obligations.
IT IS LIKELY THAT ADDITIONAL SHARES OF OUR STOCK WILL BE ISSUED IN THE
NORMAL COURSE OF OUR BUSINESS DEVELOPMENT, WHICH WILL RESULT IN A DILUTIVE
AFFECT ON OUR EXISTING SHAREHOLDERS
We will issue additional stock as required to raise additional working
capital in order to secure intellectual properties, undertake new projects,
recruit and retain an effective management team, compensate our officers and
directors, engage industry consultants and for other business development
activities.
THE COMPANY MAY EXPERIENCE FLUCTUATIONS IN OPERATING RESULTS;
The Company's operating results are likely to fluctuate in the future as a
result of a variety of factors. Some of these factors may include economic
conditions, the amount and timing of the receipt of new business; timing of the
Company's screenplay contests; the success of the Company's screenplay contests
and the revenue generated from such contests, the marketability of the Company's
film projects, capital expenditures and other costs relating to the expansion of
operations; the ability of the Company to develop contacts and establish a
network within the entertainment production and management industry; the cost of
advertising and related media. Due to all of the foregoing factors, the
Company's operating results in any given quarter may fall below expectations. In
such an event, any future trading price of the Company's common stock would
likely be materially and adversely affected.
AUDITOR'S OPINION EXPRESSES DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE
AS A "GOING CONCERN"
The report of independent registered public accounting firm, issued in
connection with the audited financial statements of the Company for the period
ended December 31, 2008, expresses "substantial doubt about its ability to
continue as a going concern," due to the Company's status as a development stage
company and its lack of significant operations. If the Company is unable to
develop its operations, the Company may have to cease to exist, which would be
detrimental to the value of the Company's common stock. The Company can make no
assurances that its business operations will develop and provide the Company
with significant cash to continue operations.
7
THE COMPANY IS UNLIKELY TO PAY DIVIDENDS
It is unlikely that the Company will pay dividends on its common stock,
resulting in an investor's only return on an investment in the Company's common
stock is the appreciation of the per share price. The Company can make no
assurances that the Company's common stock will ever appreciate.
RISKS OF "PENNY STOCK"
Our common stock may be deemed to be "penny stock" as that term is defined
in Rule 3a51-1 of the SEC. Penny stocks are stocks (i) with a price of less than
five dollars per share; (ii) that are not traded on a "recognized" national
exchange; (iii) whose prices are not quoted on the NASDAQ automated quotation
system (NASDAQ- listed stocks must still meet requirement (i) above); or (iv) in
issuers with net tangible assets less than $2,000,000 (if the issuer has been in
continuous operation for at least three years); or $5,000,000 (if in continuous
operation for less than three years); or with average revenues of less than
$6,000,000 for the last three years.
Section 15(g) of the Exchange Act and Rule 15g-2 of the SEC require broker
dealers dealing in penny stocks to provide potential investors with a document
disclosing the risks of penny stocks and to obtain a manually signed and dated
written receipt of the document before effecting any transaction in a penny
stock for the investor's account. Potential investors in our common stock are
urged to obtain and read such disclosure carefully before purchasing any shares
that are deemed to be "penny stock."
Moreover, Rule 15g-9 of the SEC requires broker dealers in penny stocks to
approve the account of any investor for transactions in such stocks before
selling any "penny stock" to that investor. This procedure requires the
broker-dealer to (i) obtain from the investor information concerning his, her or
its financial situation, investment experience and investment objectives; (ii)
reasonably determine, based on that information, that transactions in penny
stocks are suitable for the investor, and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks of
penny stock transactions; (iii) provide the investor with a written statement
setting forth the basis on which the broker-dealer made the determination in
(ii) above; and (iv) receive a signed and dated copy of such statement from the
investor, confirming that it accurately reflects the investor's financial
situation, investment experience and investment objectives. Compliance with
these requirements may make it more difficult for investors in our common stock
to resell their shares to third parties or to otherwise dispose of them.
NO ASSURANCE CAN BE GIVEN THAT ANY MARKET FOR THE COMPANY'S COMMON STOCK
WILL DEVELOP OR BE MAINTAINED AND IF A MARKET DEVELOPS THE SALE OF
"UNREGISTERED" AND "RESTRICTED" SHARES BY MEMBERS OR MANAGEMENT MAY HAVE AN
ADVERSE EFFECT ON THE MARKET FOR THESE SHARES
Prior to the Company's organization, the Company authorized and
subsequently issued 400,000 shares of common stock to four individuals pursuant
to a Pre-organization Subscription Agreement. The shares were issued for cash at
$0.01 per share for a total of $4,000.
Following the Company's organization, it conducted an offering of 320,000
shares of common stock at a price of $0.05 per share. This offering was
conducted under Rule 506 of Regulation D of the Securities and Exchange
Commission, and applicable provisions of Rule 144-14-25s of the Utah Division of
Securities, which provides for sales of securities by public solicitation to
"accredited" and "sophisticated" investors. The offering was subsequently closed
December 20, 1999, with the Company having received gross proceeds of $16,000.
On January 13, 2004, the Company completed another offering. The Company
offered 20,000 shares of common stock at a price of $0.05 per share. This
offering was conducted under Rule 504 of Regulation D of the Securities and
Exchange Commission, and the applicable provisions of Rule 144-14-25s of the
Utah Division of Securities. This offering was subsequently closed February 1,
2004, with the Company having sold a total of 20,000 shares to approximately 20
individuals, and having received gross proceeds of $1,000.
In March 2006, the Company issued 750,000 shares of unregistered,
restricted common stock to officers of the Company in exchange for forgiveness
of $37,500 in accrued salaries owed to them. The shares were valued at $.05 per
share based on the company's most recent trading activity in January of 2004.
8
No assurance can be given that any market for the Company's common stock
will be maintained. If a public market ever develops in the future, the sale of
"unregistered" and "restricted" shares of common stock pursuant to Rule 144 of
the Securities and Exchange Commission by members of management or others may
have a substantial adverse impact on any such market. The following table
discloses the date that the Company's issued shares of common stock are
available for resale:
Date Number of Aggregate
Name Acquired Shares Consideration
---- -------- --------- -------------
JAMES P. DOOLIN* 08/99 50,000 $ 500
ALYCIA D. ANTHONY* 08/99 25,000 $ 250
RICHARD R. ANTHONY* 08/99 25,000 $ 250
MICHAEL J. DOOLIN* 08/99 300,000 $ 3,000
PURCHASERS UNDER 12/99 320,000 $ 16,000
RULE 506 OFFERING**
PURCHASERS UNDER 01/04 20,000 $ 1,000
RULE 504 OFFERING***
SHARES ISSUED IN 03/06 750,000 $ 37,500
EXCHANGE FOR FORGIVENESS
OF DEBT ****
* The 400,000 shares that the Company issued in September, 1999, are
eligible for resale pursuant to Rule 144 of the Securities and Exchange
Commission. These persons have satisfied the "holding period" under Rule
144.
** The 320,000 shares that the Company issued in December, 1999, in
connection with the Offering are eligible for resale in compliance with
Rule 144(k) of the Securities and Exchange Commission. These persons have
satisfied the "holding period" under Rule 144.
*** The 20,000 shares that the Company issued in January 13, 2004, in
connection with the Offering are eligible for resale in compliance with
Rule 144(k) of the Securities and Exchange Commission. These persons have
satisfied the "holding period" under Rule 144.
**** The 750,000 shares that the Company issued March 2006, for forgiveness
of debt in accrued salaries are eligible for resale in compliance with Rule
144(k) of the Securities and Exchange Commission. These persons have
satisfied the "holding period" under Rule 144.
Item 2. PROPERTIES
Hangman's executive officer currently provides office space, use of
telephone lines and computer systems to the Company. As of November 1, 2006, the
Company began recording a charge for these expenses of $300 per quarter. The
Company used an allocation method of these expenses estimated by the Company.
The Company estimates that if these expenses were recorded on a stand-alone
basis the Company would incur $300 per quarter in expenses. In addition, the
Company leases a mail box for approximately $150 per year.
Item 3. LEGAL PROCEEDINGS
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
We have not submitted a matter to a vote of our shareholders during the
year ended December 31, 2008.
9
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
MARKET INFORMATION
The Company shares are traded on the OTC Bulletin Board, the symbol is
HGMP. The Company shares have been quoted on the OTC Bulletin Board since
October 19, 2005. The following quotes are through the most recent year end:
CLOSING BID CLOSING ASK
HIGH LOW HIGH LOW
JAN 1, 2008 $.45 $.45 $10.00 $10.00
THRU
DEC 31, 2008 $.25 $.25 $10.00 $10.00
HOLDERS
The number of record holders of the Company's common stock, as of the date
of this Report, is approximately 63.
DIVIDENDS
The Company has not declared any cash dividends with respect to its common
stock and does not intend to declare dividends in the foreseeable future. The
future dividend policy of the Company cannot be ascertained with any certainty.
There are no material restrictions limiting, or that are likely to limit, the
Company's ability to pay dividends on its common stock.
SALES OF "UNREGISTERED AND "RESTRICTED"
SECURITIES OVER THE PAST THREE YEARS
In March 2006, the Company issued 750,000 shares of unregistered,
restricted common stock to officers of the Company in exchange for forgiveness
of $37,500 in accrued salaries owed to them. The shares were valued at $.05 per
share based on the company's most recent trading activity in January of 2004.
There have been no other sales of the Company's unregistered securities.
Item 6. SELECTED FINANCIAL DATA
The following chart summarizes our financial statements for the years ended
December 31, 2008, and should be read in conjunction with the financial
statements, and notes thereto, included with this report at Part II, Item 8,
below.
December 31, 2008
==================
SUMMARY OF BALANCE SHEET
Cash and cash equivalents $ 9,380
Property & Equipment(net) 0
Total assets 9,380
Total liabilities 58,334
Accumulated deficit (166,851)
Total stockholders' deficit (48,954)
SUMMARY OF OPERATING RESULTS
Revenue -
Net loss before taxes (34,756)
Provision for income taxes (122)
Net loss (46,040)
Net Loss per share (0.03)
10
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
When used in this report, the words "may," "will," "expect," "anticipate,"
"continue," "estimate," "project," "intend," and similar expressions are
intended to identify forward-looking statements within the meaning of Section
27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act
of 1934 regarding events, conditions, and financial trends that may affect the
Hangman Productions' future plans of operations, business strategy, operating
results, and financial position. Persons reviewing this report are cautioned
that any forward-looking statements are not guarantees of future performance and
are subject to risks and uncertainties and that actual results may differ
materially from those included within the forward-looking statements as a result
of various factors. Such factors are discussed further below under "Trends and
Uncertainties", and also include general economic factors and conditions that
may directly or indirectly impact our financial condition or results of
operations.
PLAN OF OPERATIONS
The Company's plan of operations for the next 12 months is to continue with
its current efforts in the screenplay competition arena. Hangman has been
involved in the film production and management industry, primarily focused on
seeking out undiscovered screenwriters, and developing a pipeline between
talented screenwriters and the Hollywood film-making community. Hangman will
seek to continue providing opportunities for emerging screenwriters and
developing our relationships within both the screenwriting and the film-making
community. Hangman is seeking to increase its exposure within the screenplay
contest community based on the continued growth of the Company's
ScreenplayShootout!
Hangman will continue hosting screenplay contests in 2009, with its next
ScreenplayShootout! to commence by June, 2009. The Company's management is
hopeful that the Company can generate significant revenue through contest
submission fees and sponsor participation. Sponsor participation includes
companies who will advertise on our web properties and other promotional
materials, targeting our participant demographic.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
OPERATING RESULTS - OVERVIEW
The year ended December 31, 2008 resulted in a net loss from continuing
operations of ($34,878.) Including the loss from discontinued operations of
($11,162) the Company incurred a net loss of ($46,040). The year ended December
31, 2007, resulted in a net loss from continuing operations of ($19,751).
Including the loss from discontinued operations of ($21,148) the Company
incurred a net loss of ($40,899).
The basic loss per share for the year 2008 was ($0.03) which was inline
with the loss per share of ($0.03) for the year ended 2007. Details of changes
in revenues and expenses can be found below.
11
OPERATING RESULTS REVENUES
Revenues for the fiscal year ended December 31, 2008, were $3,694 compared
to $0 for the year ended December 31, 2007. The Company's screenplay contest
commenced at the end of 2007 and therefore did not generate revenue prior to the
end of the 2007 fiscal year. The Company generated $3,694 in revenue for the
year ended December 31, 2008. As mentioned above, the increase in revenue for
the year ended 2008 compared to the year ended 2007 was a result of the timing
of the Company's screenplay contests.
OPERATING RESULTS COST OF SALES
Cost of sales for the twelve-month period ended December 31, 2008, were
$3,250. In comparison, the cost of sales for the fiscal year ended 2007 was $0.
The difference between the two comparable periods was due to the timing of the
Company's screenplay contests, as previously discussed.
OPERATING RESULTS OPERATING EXPENSES
Operating expense for the twelve-month period ended December 31, 2008,
increased by $13,683 to $30,687 as compared to $17,005 for the year ended
December 31, 2007. The increase can be attributed to an increase in the
Company's accounting and legal expenses related to the sale of the Company's
subsidiary, 4th Grade Films, Inc.
OPERATING RESULTS INTEREST EXPENSES
Interest expenses for the year ended December 31, 2008, increased $1,780 to
$4,523 as compared to $2,743 for the year ended December 31, 2007. The Company's
notes payable accrued interest throughout the entire year ended 2008. For the
year ended 2007 the Company maintained a lower notes payable balance throughout
the beginning of the period. Therefore, the Company incurred greater interest
expenses in 2008 compared with 2007 because outstanding notes payable balances
increased throughout 2007 and did not reach balances similar to 2008 until the
later part of 2007.
LIQUIDITY AND CAPITAL RESOURCES
Balance Sheet Information:
The following information is a summary of our balance sheet as of December 31,
2008:
Summary Balance Sheet as of December 31, 2008
==============================================
Total Current Assets $ 9,380
Total Assets 9,380
Total Liabilities 58,334
Accumulated Deficit (166,851)
Total Stockholders' Deficit (48,954)
As of December 31, 2008 our total current assets were $9,380 and consisted
of cash and cash equivalents.
Because the Company has accumulated losses since inception, has minimal
assets, and has no sales activity the Company's auditor believes that these
factors raise substantial doubt about the Company's ability to continue as a
going concern. With monies that the Company's management has agreed to advance
the Company and its existing cash balance of $9,380, as of December 31, 2008,
the Company deems that it has adequate resources for the Company's planned
operations for the next 12 months.
12
Management anticipates average monthly expenditures to range between $1,000
and $1,500 per month. Management is unable to forecast the revenue that its
current contest will generate, but given the fact that the Company's management
has agreed to advance the Company monies not to exceed $40,000, the Company
should have sufficient funds to continue to operate over the next twelve months.
If the Company needs funds in excess of $40,000, it will be up to the Company's
management to raise such monies. These funds may be raised as either debt or
equity, but management does not have any plans or relationships currently in
place to raise such funds. There can be no assurance that such additional
funding, if needed, will be available on terms acceptable to the Company, or at
all.
The Company's ability to continue as a going concern is dependent on
management's ability to generate revenue and to manage the Company's expenses.
Management will continue to seek to exploit opportunities to enhance the value
of the Company and its profitability.
FUNDING THROUGH PRIVATE PLACEMENTS
The Company has completed the following three transactions to finance its
formation and operations:
1) In August of 1999, the Company authorized and subsequently issued
400,000 shares of common stock to four individuals pursuant to a Pre-
organization Subscription Agreement. The shares were issued for cash at
$0.01 per share for a total of $4,000.
2) In September of 1999, the Company offered 320,000 shares of
"unregistered" and "restricted" shares of common stock to "accredited" or
"sophisticated" investors at $0.05 per share. These shares were issued for
cash in December of 1999.
3) In January of 2004, the Company offered 20,000 shares of "unregistered"
and "restricted" shares of common stock to "accredited" or "sophisticated"
investors at $0.05 per share. These shares were issued for cash in February
of 2004.
4) In March of 2006, the Company issued 750,000 shares of unregistered,
restricted common stock to officers of the Company in exchange for
forgiveness of $37,500 in accrued salaries owed to them. The shares were
valued at $.05 per share based on the company's most recent trading
activity in January of 2004.
FUNDING FUTURE ACQUISITIONS AND OPERATIONS
Our ability to fund our operations and acquisitions is discussed above
under "Plan of Operations."
OFF-BALANCE SHEET ARRANGEMENTS
None.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
13
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
PART F/S
Hangman Productions, Inc.
[A Development Stage Company]
Financial Statements and Report of
Independent Registered Public Accounting Firm
December 31, 2008
14
Hangman Productions, Inc.
[A Development Stage Company]
TABLE OF CONTENTS
Page
Report of Independent Registered Public Accounting Firm 16
Balance Sheets - December 31, 2008 and 2007 17
Statements of Operations for the Years Ended December 31, 2008 and 18
2007 and for the period from inception [August 11, 1999] through
December 31, 2008.
Statement of Stockholders' Deficit for the period from inception 19
[August 11, 1999] through December 31, 2008.
Statements of Cash Flows for the Years Ended December 31, 2008 and 20
2007 and for the period from inception [August 11, 1999] through
December 31, 2008.
Notes to the Financial Statements 21 - 26
15
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
Hangman Productions, Inc.
We have audited the accompanying balance sheets of Hangman Productions,
Inc. [a development stage company] as of December 31, 2008 and 2007, and the
related statements of operations, stockholders' deficit, and cash flows for the
years ended December 31, 2008 and 2007 and for the period from inception [August
11, 1999] through December 31, 2008. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company has
determined that it is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purposes of expressing an opinion on the effectiveness of the Company's
internal controls 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Hangman Productions, Inc. (a
development stage company) as of December 31, 2008 and 2007, and the results of
their operations and their cash flows for the years ended December 31, 2008 and
2007 and for the period from inception [August 11, 1999] through December 31,
2008 in conformity with accounting principles generally accepted in the United
States of America.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has accumulated losses, minimal assets,
negative working capital, and is still developing its planned principal
operations. These factors raise substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/S/ MANTYLA MCREYNOLDS LLC
Mantyla McReynolds, LLC
Salt Lake City, Utah
February 24, 2009
16
Hangman Productions, Inc.
[A Development Stage Company]
BALANCE SHEETS
December 31, 2008 and 2007
12/31/2008 12/31/2007
---------------- ----------------
[Audited] [Audited]
ASSETS
Assets
Current Assets
Cash $ 9,380 $ 12,461
Prepaid Expenses - 684
---------------- ----------------
Total Current Assets 9,380 13,145
Non-Current Assets
Film Costs - 77,448
---------------- ----------------
Total Non-Current Assets - 77,448
---------------- ----------------
Total Assets $ 9,380 $ 90,593
================ ================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities
Current Liabilities
Accounts Payable $ 14,447 $ 10,990
Franchise Taxes Payable 100 100
Accrued Interest - Related Party 981 981
Accrued Director Compensation 2,379 3,013
---------------- ----------------
Total Current Liabilities 17,907 15,084
Long Term Liabilities
Note Payable - Shareholders $ 40,427 $ 46,020
---------------- ----------------
Total Long Term Liabilities 40,427 46,020
---------------- ----------------
Total Liabilities $ 58,334 $ 61,104
Noncontrolling Interest 90,000
Stockholders' Deficit
Common Stock, $.01 par value;
50,000,000 shares authorized;
1,490,000 shares issued and outstanding 14,900 14,900
Paid-in Capital 102,997 45,400
Deficit Accumulated during the development
stage (166,851) (120,811)
---------------- ----------------
Total Stockholders' Deficit (48,954) (60,511)
---------------- ----------------
Total Liabilities and Stockholders' Deficit $ 9,380 $ 90,593
================ ================
See accompanying notes to financial statements
17
Hangman Productions, Inc.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
For the years ended December 31, 2008 and 2007 and for the
period from Inception [August 11, 1999] through December 31, 2008
Since Inception
through
December, 31
2008 2007 2008
----------- ----------- ------------
Revenues $ 3,694 $ - $ 20,203
Cost of Sales 3,250 - 9,000
----------- ----------- ------------
Gross Margin 444 - 11,203
General and Administrative Expenses 30,687 17,005 136,338
----------- ----------- ------------
Operating Loss (30,243) (17,005) (125,135)
Interest Income 10 - 43
Interest Expense (4,523) (2,743) (8,469)
----------- ----------- ------------
Net Loss Before Income Taxes (34,756) (19,748) (133,561)
Provision for Income Taxes 122 3 880
Net Loss from Continuing Operations (34,878) (19,751) (134,441)
----------- ----------- ------------
Discontinued Operations:
Loss from discontinued operations,
net of tax (11,162) (21,148) (32,410)
----------- ----------- ------------
Loss from Discontinued Operations (11,162) (21,148) (32,410)
Net Income/(Loss) $ (46,040) $ (40,899) $(166,851)
=========== =========== ============
Income/(Loss) Per Share from
Continuing Operations $ (0.02) $ (0.01) $ (0.14)
=========== =========== ============
Income/(Loss) Per Share from
Discontinued Operations $ (0.01) $ (0.01) $ (0.03)
=========== =========== ============
Income/(Loss) Per Share $ (0.03) $ (0.03) $ (0.18)
=========== =========== ============
Weighted Average Shares Outstanding 1,490,000 1,490,000 943,414
=========== =========== ============
See accompanying notes to financial statements
18
Hangman Productions, Inc.
[A Development Stage Company]
STATEMENTS OF STOCKHOLDERS' EQUITY/DEFICIT
For the period from Inception [August 11, 1999]
through December 31, 2008
Additional Net
Common Common Paid-in Accumulated Stockholders
Shares Stock Capital Deficit Equity/Deficit
Balance, August 11, 1999
(Inception) - $ - $ - $ - $ -
Issued stock to Officers for cash,
September 16, 1999, at
$0.01/shares 400,000 4,000 - - 4,000
Issued stock to shareholders for
cash, December 11, 1999, at
$0.05/share 37,500 375 1,500 - 1,875
Issued stock to shareholders for
cash, December 20, 1999, at
$0.05/share 14,000 140 560 - 700
Issued stock to shareholders for
cash, December 27, 1999, at
$0.05/share 268,500 2,685 10,740 - 13,425
Net loss for the Year Ended
December 31, 1999 - - - (411) (411)
------------ ------------ ------------ ------------ ------------
Balance, December 31, 1999 720,000 7,200 12,800 (411) 19,589
Net loss for the year Ended
December 31, 2000 - - - (4,478) (4,478)
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2000 720,000 7,200 12,800 (4,889) 15,111
Net loss for the year Ended
December 31, 2001 - - - (557) (557)
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2001 720,000 7,200 12,800 (5,446) 14,554
Net loss for the year Ended
December 31, 2002 - - - (2,139) (2,139)
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2002 720,000 7,200 12,800 (7,585) 12,415
Net loss for the year Ended
December 31, 2003 - - - (1,757) (1,757)
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2003 720,000 7,200 12,800 (9,342) 10,658
Issued stock to investors for cash,
January 4, 2004 at $0.05/share 20,000 200 800 - 1,000
Net loss for the year Ended
December 31, 2004 - - - (22,147) (22,147)
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2004 740,000 7,400 13,600 (31,489) (10,489)
Net loss for the year Ended
December 31, 2005 - - - (28,508) (28,508)
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2005 740,000 $ 7,400 $ 13,600 $ (59,997) $ (38,997)
Issued stock for forgiveness of
debt, March 31, 2006 750,000 $ 7,500 $ 30,000 - $ 37,500
Contributed shared expenses from
shareholder - $ - $ 600 $ 600
Net loss for the year Ended
December 31, 2006 - - - (19,915) (19,915)
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2006 1,490,000 $ 14,900 44,200 (79,912) (20,812)
Contributed shared expenses from
shareholder - - 1,200 - 1,200
Net loss for the year Ended
December 31, 2007 - - - (40,899) (40,899)
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2007 1,490,000 $ 14,900 $ 45,400 (120,811) $ (60,511)
------------ ------------ ------------ ------------ ------------
Sale of Subsidiary - - 56,997 - 56,997
Contributed shared expenses from
Shareholder - - 600 - 600
Net loss for the year Ended
December 31, 2008 - - - (46,040) (46,040)
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2008 1,490,000 $ 14,900 $102,997 (166,851) $ (48,954)
============ ============ ============ ============ ============
See accompanying notes to financial statements
19
Hangman Productions, Inc.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
For the years ended December 31, 2008 and 2007 and for the
period from Inception [August 11, 1999] through December 31, 2008
Since Inception
through
December, 31
2008 2007 2008
---------- ----------- -----------
Cash Flows from Operating Activities
Net Income/(Loss) $ (46,040) $ (40,899) $ (166,851)
Loss from Discontinued Operations 11,162 21,148 32,410
---------- ----------- -----------
Loss from Continuing Operations (34,878) (19,751) (134,441)
Adjustments to reconcile net loss to net cash
From Operating Activities:
Non-cash contributed by shareholder 600 1,200 2,400
(Increase)/Decrease in prepaid expenses 684 (684) -
Increase / (Decrease) accounts payable 7,415 816 14,447
Increase/(Decrease) in franchise taxes payable - 100
Increase / (Decrease) in salaries payable/director comp. 115 110 39,879
Increase / (Decrease) in accrued interest - related party 4,407 2,591 6,408
---------- ----------- -----------
Net Cash from Continuing Operations (21,657) (15,718) (71,207)
Net Cash from Discontinued Operations (26,224) (93,889) (120,213)
---------- ----------- -----------
Net Cash From Operating Activities (47,881) (109,607) (191,420)
Cash Flows from Investing Activities
Net Cash from Continuing Investing Activities - - -
Net Cash from Discontinued Investing Activities 29,800 - 29,800
---------- ----------- -----------
Net Cash from Investing Activities 29,800 - 29,800
Cash Flows from Financing Activities
Proceeds from Loans from Shareholders - 32,000 49,000
Repayment on Loans from Shareholders (10,000) - (14,000)
Issued Stock for Cash - - 21,000
---------- ----------- -----------
Net Cash from Continuing Financing Activities (10,000) 32,000 56,000
Net Cash from Discontinued Financing Activities 25,000 90,000 115,000
---------- ----------- -----------
Net Cash from Investing Activities 15,000 122,000 171,000
Net Increase / (Decrease) in Cash (3,081) 12,393 9,380
Beginning Cash Balance 12,461 68 -
---------- ----------- -----------
Ending Cash Balance $ 9,380 $12,461 $ 9,380
========== =========== ===========
Supplemental Schedule of Cash Flow Activities
Cash paid for
Interest $ - $ - $ -
Income taxes $ - $ - $ 884
Stock issued for accrued liabilities $ - $ - $37,500
Gain from disposal of subsidiary booked to APIC $56,997 $ - $56,997
See accompanying notes to financial statements
20
Hangman Productions, Inc.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2008
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization
Hangman Productions, Inc. (Company) was incorporated under the laws of
the State of Utah in August, 1999 as BBC2, Inc. The purpose for which
this corporation is organized is to engage in any lawful act or
activity for which corporations may be organized under the Utah
Revised Business Corporation Act. In November of 1999, the Company
changed its name to Hangman Productions, Inc., in anticipation of
seeking production opportunities in the film industry. The Company is
considered to be in the development stage.
The financial statements of the Company have been prepared in
accordance with U.S. generally accepted accounting principles. The
following summarizes the more significant of such policies:
(b) Income Taxes
The Company applies the provisions of Statement of Financial
Accounting Standards No. 109 [the Statement], Accounting for Income
Taxes. The Statement requires an asset and liability approach for
financial accounting and reporting for income taxes, and the
recognition of deferred tax assets and liabilities for the temporary
differences between the financial reporting basis and tax basis of the
Company's assets and liabilities at enacted tax rates expected to be
in effect when such amounts are realized or settled. A valuation
allowance is provided if, based on the weight of available evidence,
it is more likely than not that some portion or all of the deferred
tax assets will not be realized.
In July 2006, the FASB issued Interpretation No. 48 (FIN No. 48),
"Accounting for Uncertainty in Income Taxes." This interpretation
requires recognition and measurement of uncertain income tax positions
using a "more-likely-than-not" approach. FIN No. 48 is effective for
fiscal years beginning after December 15, 2006. The Company adopted
FIN 48 at the beginning of fiscal year 2007 with no material impact on
its financial statements.
(c) Net Loss Per Common Share
In accordance with SFAS No. 128, "Earnings per Share," loss per common
share is based on the weighted-average number of common shares
outstanding. Diluted loss per share is computed using weighted average
number of common shares plus dilutive common share equivalents
outstanding during the period using the treasury stock method. There
are no common stock equivalents outstanding, thus, basic and diluted
loss per share calculations are the same.
(d) Statement of Cash Flows
For purposes of the statements of cash flows, the Company considers
cash on deposit in the bank to be cash. The Company had $9,380 cash at
December 31, 2008.
(e) Use of Estimates in Preparation of Financial Statements
The preparation of financial statements in conformity with U.S.
generally accepted accounting principles 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 financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(f) Revenue Recognition
The Company recognizes revenues in accordance with the Securities and
Exchange Commission, Staff Accounting Bulletin (SAB) number 104,
"Revenue Recognition." SAB 104 clarifies application of U.S. generally
accepted accounting principles to revenue transactions. Revenue is
recognized as earned once a contest is complete and a winner has been
determined. Uncollected, earned revenue is recorded in accounts
receivable. Billed amounts deemed to be uncollectible are charged to
bad debt expense. Revenue collected in advance is recorded as a
liability until the earnings process is complete.
21
Hangman Productions, Inc.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2008
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
[continued]
(g) Advertising
Advertising Costs are expensed as incurred. The total advertising
expense for the year ended December 31, 2008 and 2007 was $1,470 and
$0, respectively.
(h) Impact of New Accounting Standards
In September 2006, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). In
February 2008, the FASB issued FASB Staff Position (FSP) No. FAS
157-2, which delays by one year the effective date of SFAS No. 157 for
certain types of non-financial assets and non-financial liabilities.
As a result, SFAS 157 became effective for financial statements issued
for fiscal years beginning after November 15, 2007, or the Company's
fiscal year beginning January 1, 2008, for financial assets and
liabilities carried at fair value on a recurring basis, and on January
1, 2009, for non-recurring non-financial assets and liabilities that
are recognized or disclosed at fair value. The Company adopted SFAS
No. 157 on January 1, 2008 for financial assets and liabilities
carried at fair value on a recurring basis, with no material impact on
its financial statements. The Company is currently determining what
impact the application of SFAS 157 on January 1, 2009 for
non-recurring non-financial assets and liabilities that are recognized
or disclosed at fair value will have on its financial statements.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities - Including an
amendment of SFAS 11" ("SFAS 159"). SFAS 159 permits a company to
voluntarily elect to use fair value, instead of historic or original
cost, to account for certain financial assets and liabilities. The
fair value option is designated on an item-by-item basis, is
irrevocable and requires that changes in fair value in subsequent
periods be recognized in earnings in the period of change. We adopted
SFAS 159 on January 1, 2008. The adoption had no impact on our
Financial Statements as we did not make a fair value election for any
additional financial assets and liabilities. Any election to use the
fair value method for future eligible transactions will be made on a
case-by-case and instrument-by-instrument basis.
In December 2007, the FASB issued SFAS No. 141 (revised 2007),
"Business Combinations" ("SFAS 141R"). Under SFAS 141R, an entity is
required to recognize the assets acquired, liabilities assumed,
contractual contingencies, and contingent consideration at their fair
value on the acquisition date. It further requires that
acquisition-related costs be recognized separately from the
acquisition and expensed as incurred, restructuring costs generally be
expensed in periods subsequent to the acquisition date and changes in
accounting for deferred tax asset valuation allowances and acquired
income tax uncertainties after the measurement period impact income
tax expense. In addition, acquired in-process research and development
is capitalized as an intangible asset and amortized over its estimated
useful life. The adoption of SFAS 141R will change the Company's
accounting treatment for business combinations on a prospective basis
beginning in the first quarter of fiscal year 2009.
In December 2007, the FASB issued SFAS No. 160, "Noncontrolling
Interests in Consolidated Financial Statements - an amendment of
Accounting Research Bulletin No. 51" ("SFAS 160"), which establishes
accounting and reporting standards for ownership interests in
subsidiaries held by parties other than the parent, the amount of
consolidated net income attributable to the parent and to the
noncontrolling interest, changes in a parent's ownership interest, and
the valuation of retained noncontrolling equity investments when a
subsidiary is deconsolidated. SFAS 160 also establishes disclosure
requirements that clearly identify and distinguish between the
interests of the parent and the interests of the noncontrolling
owners. SFAS 160 is effective for fiscal years beginning after
December 15, 2008. The Company does not expect that the adoption of
SFAS 160 will have a significant impact on its Financial Statements.
22
Hangman Productions, Inc.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2008
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
[continued]
In March 2008, the FASB issued SFAS No. 161, "Disclosures about
Derivative Instruments and Hedging Activities - an amendment of FASB
Statement No. 133" ("SFAS 161"), which requires enhanced disclosures
about an entity's derivative and hedging activities and thereby
improves the transparency of financial reporting. SFAS 161 is
effective for fiscal years beginning after November 15, 2008. We are
currently evaluating the impact of SFAS 161 on our Condensed
Consolidated Financial Statements.
In May 2008, the FASB issued SFAS No. 163, Accounting for Financial
Guarantee Insurance Contracts - an interpretation of FASB Statement
No. 60 ("SFAS 163"). SFAS 163 clarifies how Statement 60 applies to
financial guarantee insurance contracts, including the recognition and
measurement of premium revenue and claim liabilities. This Statement
also requires expanded disclosures about financial guarantee insurance
contracts. SFAS 163 is effective for fiscal years beginning on or
after December 15, 2008, and interim periods within those fiscal
years. The Company does not expect that the adoption of SFAS 163 will
have a material impact on its financial statements.
The Company has reviewed all other recently issued, but not yet
adopted, accounting standards in order to determine their effects, if
any, on its condensed consolidated financial statements. Based on that
review, the Company believes that none of these pronouncements will
have a significant effect on its current or future consolidated
financial statements.
NOTE 2 LIQUIDITY/GOING CONCERN
The Company has accumulated losses from inception through December 31,
2008 of ($166,851), has minimal assets, and has negative working
capital. These factors raise substantial doubt about the Company's
ability to continue as a going concern. These factors may have
potential adverse effects on the Company including the ceasing of
operations. Management plans include developing film production
opportunities or finding a well capitalized merger candidate to
commence operations. If management is unsuccessful in these efforts,
discontinuance of operations is possible. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
NOTE 3 INCOME TAXES
Below is a summary of deferred tax asset calculations on net operating
loss carry forward amounts. A valuation allowance is provided when it
is more likely than not that some portion of the deferred tax asset
will not be realized. The provision for income tax represents the
minimum franchise tax due to the State of Utah for the current year.
Loss carry forward amounts expire at various times through 2028.
Deferred tax assets recognized for net operating loss carry forwards
total $0, net of a valuation allowance of $21,816, as detailed below.
Balance Tax Rate
Deferred Tax Asset -------------- --------------- ------------
Federal loss carryforward (expires through 2027) $ 109,305 $ 16,396 15%
State loss carryforward (expires through 2017) $ 108,405 $ 5,420 5%
---------------
Gross deferred tax asset $ 21,816
Valuation Allowance $ (21,816)
---------------
Net deferred tax asset -
The allowance has increased $2,047 from the $19,769 allowance balance
as of December 31, 2007. The income/franchise tax payable at December
31, 2008 of $100 is the minimum tax due to the State of Utah for 2008.
A reconciliation between income taxes at statutory tax rates (20%) and
the actual income tax provision for continuing operations as of
December 31, 2008 follows:
Expected provision (based on statutory rate) $ (6,951)
Effect of:
Franchise tax deduction $ (16)
Increase / (decrease) in valuation allowance $ 2,047
Related party gain $ 4,920
Penalties $ 22
State Minimum tax $ 100
---------------
Total actual provision $ 122
===============
23
Hangman Productions, Inc.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2008
INCOME TAXES (continued)
Net operating loss carryforwards expire in various years through 2027
as follows.
Year Amount Expiration
-------------- --------------- ------------
2008 $ 10,258 2028
2007 $ 19,651 2027
2006 $ 19,914 2026
2005 $ 28,388 2025
2004 $ 21,897 2020
2003 $ 1,757 2021
2002 $ 2,139 2022
2001 $ 557 2023
2000 $ 4,744 2024
---------------
$ 109,305
===============
Uncertain Tax Positions
The Company adopted the provisions of FIN 48 on January 1, 2007. As a
result of this adoption, we have not made any adjustments to deferred
tax assets or liabilities. We did not identify any material uncertain
tax positions of the Company on returns that have been filed or that
will be filed. The Company has not had operations and is carrying a
large Net Operating Loss as disclosed above. Since it is not thought
that this Net Operating Loss will ever produce a tax benefit, even if
examined by taxing authorities and disallowed entirely, there would be
no effect on the financial statements.
A reconciliation of our unrecognized tax benefits for 2008 is
presented in the table below:
Balance as of January 1, 2008
Additions based on tax positions related to the current year $ -
Additions based on tax positions related to prior year -
Reductions for tax positions of prior years -
Reductions due to expiration of statute of limitations -
Settlements with taxing authorities -
Balance as of December 31, 2008 $ -
The Company has filed income tax returns in the US. All years prior to
2004 are closed by expiration of the statute of limitations. The tax
year ended December 31, 2005, will close by expiration of the statute
of limitations on April 5, 2009. The years ended December 31, 2006,
2007, and 2008 are open for examination.
NOTE 4 EQUITY
In August of 1999, the Company authorized and subsequently issued
400,000 shares of common stock to four individuals pursuant to a Pre-
organization Subscription Agreement. The shares were issued for cash
at $0.01 per share for a total of $4,000.
In September of 1999, the Company offered 320,000 shares of
"unregistered" and "restricted" shares of common stock to "accredited"
or "sophisticated" investors at $0.05 per share. These shares were
issued for cash in December of 1999.
In January of 2004, the Company offered 20,000 shares of
"unregistered" and "restricted" shares of common stock to "accredited"
or "sophisticated" investors at $0.05 per share. These shares were
issued for cash in February of 2004.
In March of 2006, the Company issued 750,000 shares of unregistered,
restricted common stock to officers of the Company in exchange for
forgiveness of $37,500 in accrued salaries owed to them. The shares
were valued at $.05 per share based on the company's most recent
trading activity in January of 2004.
24
Hangman Productions, Inc.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2007
NOTE 5 OFFICER COMPENSATION EXPENSES / RELATED PARTY TRANSACTIONS
On April 1, 2006, the Company's Board of Directors resolved to suspend
officer and director salaries until the Company generates positive
operating cash flows. Should operations produce positive cash flow,
compensation will resume with one officer receiving $1,000 per month,
another receiving $500 per month, and the third receiving $100 per
month.
As of December 31, 2008, James Doolin, the Company's President and
director, had loaned the Company a total of $25,116 on an unsecured
debenture. The Note accrues interest at 10% per annum and matures on
December 31, 2012. As of December 31, 2008, the outstanding note
payable to the shareholder was $29,456, which includes $4,340 in
accrued interest. For the fiscal year ended December 31, 2008 the
Company accrued interest of $2,777 on the note.
As of December 31, 2008 a shareholder had loaned the Company a total
of $8,500 on an unsecured debenture. The Note accrues interest at 10%
per annum and matures on December 31, 2012. As of December 31, 2008,
the outstanding note payable to the shareholder was $10,971, which
includes $2,471 in accrued interest. For the fiscal year ended
December 31, 2008 the Company accrued interest of $1,630 on the note.
As of December 31, 2008, approximately 68% of the Company's issued and
outstanding common stock were controlled by one family giving them
effective power to control the vote on substantially all significant
matters without the approval of other stockholders.
During the year ended December 31, 2008 the Company's officer provided
office space, telephone service, and computer usage to the Company.
Management has estimated a percentage of usage of the resources to
calculate and record the expenses and believes this estimate to be
reasonable. Any difference between this estimate and the cost of
resources if procured on a stand alone basis is considered immaterial.
The amount allocated and expensed for the year ended December 31, 2008
equates to $1,200, of which $600 was paid in Cash and $600 was
contributed by a shareholder.
During the year ended December 31, 2008 legal services were provided
by a shareholder. The total expense incurred for these services was
$4,823 for the year.
25
Hangman Productions, Inc.
[A Development Stage Company]
Notes to the Financial Statements
December 31, 2008
NOTE 6 CONCENTRATIONS
The Company depends significantly on funding from a single shareholder
to meet it obligations and maintain filing status. If funds from this
shareholder were no longer available, the Company may experience
significant adverse affects including the need to cease operations.
The company derives revenues from a single service. If this service
were to become unmarketable for any reason, the Company may experience
significant adverse affects.
NOTE 7 DISCONTINUED OPERATIONS
On June 1, 2008, Hangman sold its entire interest in 4th Grade Films,
Inc., 745,000 common shares of stock, at $0.04 per share for an
aggregate price of $29,800, to Michael Doolin, the father of James
Doolin, the President and a director of the Company. Hangman's total
investment in the shares of common stock of 4th Grade was
approximately $5,200. Due to the related party nature of the
transaction, no gain was recognized and additional paid in capital was
increased by $56,997. The results of operations of 4th Grade have been
retroactively restated as discontinued operations.
26
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A(T). CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Our management, with the
participation of our Chief Executive Officer and Chief Financial Officer,
evaluated the effectiveness of our disclosure controls and procedures as of the
end of the period covered by this report. Based on that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures, as of the end of the period covered by this report were
effective such that the information required to be disclosed by us in reports
filed under the Exchange Act is (i) recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms and (ii)
accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding disclosure. A controls system cannot provide absolute assurance,
however, that the objectives of the controls system are met, and no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within a company have been detected.
Management's Annual Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act). Our internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance of achieving
their control objectives.
Our management, with the participation of our Chief Executive Officer and
Chief Financial Officer evaluated the effectiveness of our internal control over
financial reporting as of December 31, 2008. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO") in Internal Control Integrated
Framework. Based on this evaluation, our management, with the participation of
the President and Secretary/Treasurer, concluded that, as of December 31, 2008,
our internal control over financial reporting was effective.
This Annual Report does not include an attestation report of our registered
public accounting firm regarding internal controls over financial reporting.
Management's report was not subject to attestation by our independent registered
public accounting firm pursuant to the temporary rules of the Securities and
Exchange Commission that permit the Company to provide only management's report
in this Annual Report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
27
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
IDENTIFICATION OF OFFICERS AND DIRECTORS
Our executive officers and directors and their respective ages, positions
and biographical information are set forth below.
James P. Doolin, President and a director, is 32 years of age. Mr. Doolin
graduated from the University of Utah, in Salt Lake City. He graduated with a
bachelor of science, finance degree. After completion of his undergraduate Mr.
Doolin was employed by Jenson Services, Inc., a merger and acquisition
consulting firm, from 1998 until entering graduate school in 2001. After
graduation from Pepperdine's Graziadio School of Business, Mr. Doolin worked as
an associate at an Investment Banking firm in Southern California. For the past
four years, Mr. Doolin has been a financial consultant to development stage
businesses and public corporations. In addition Mr. Doolin was an officer and
director of Wasatch Web Advisors, Inc. In October, 2003, Wasatch Web Advisors,
Inc. became Raser Technologies, Inc., at which time Mr. Doolin resigned. Mr.
Doolin was also an officer and director of Cole, Inc. Cole, Inc., became Reflect
Scientific, Inc. in December, 2003, at which time Mr. Doolin resigned. Mr.
Doolin was also an officer and director of The Autoline Group, Inc., which
became GeNOsys, Inc., in August, 2005, at which time Mr. Doolin resigned. Mr.
Doolin is currently the President and director of 4th Grade Films, Inc. Mr.
Doolin is also an officer and director of Left Lane Imports, Inc., which is not
a reporting entity at this time.
Shane E. Thueson, Vice President and a director, is 32 years of age. Mr.
Thueson attended, but did not graduate from Brigham Young University, where he
studied history. Mr. Thueson worked for a entertainment management production
company, Benderspink Management and Productions, in Hollywood, California, from
2001 through 2002. Mr. Thueson was also employed as the Marketing Programs
Manager for an internet technology company based in Orem, Utah. Mr. Thueson
resigned as the Marketing Programs manager in March, 2005, to become a full-time
screeplay writer. For the past five years Mr. Thueson has developed and written
numerous original screenplays. In addition to being the Vice President of
Hangman Productions, Inc., a reporting entity, Mr. Thueson was also an officer
and director of Cole, Inc. In December, 2003, Cole Inc., changed its name to
Reflect Scientific, Inc., at which time Mr. Thueson resigned.
John K. Winchester, Secretary and director, is 33 years of age. Mr.
Winchester graduated from the University of Utah, in Salt Lake City. He
graduated with a bachelor of science, communication degree. Mr. Winchester
served as the district merchandising coordinator for Sony Computer Entertainment
America, Inc., from 2000 through 2004. Mr. Winchester has managed an
environmental irrigation company based in Sandy, Utah, since 2004.
SIGNIFICANT EMPLOYEES
Other than James P. Doolin, Shane E. Thueson, and John K. Winchester the
Company has no employees.
TERM OF OFFICE
The term of office for our directors is one year, or until a successor is
elected and qualified at the Company's annual meeting of shareholders, subject
to ratification by the shareholders. The term of office for each officer is one
year or until a successor is elected and qualified and is subject to removal by
the Board.
FAMILY RELATIONSHIPS
None, not applicable;
28
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Our common shares are registered under the Securities and Exchange Act of
1934 and therefore our officers, directors and holders of more than 10% of our
outstanding shares are subject to the provisions of Section 16(a) which requires
them to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of common stock and our other
equity securities. Officers, directors and greater than ten-percent beneficial
owners are required by SEC regulations to furnish us with copies of all Section
16(a) reports they file. Based solely upon a review of the copies of such forms
furnished to us during the fiscal year ended December 31, 2008, the following
were filed, but not timely:
Name Type Filed
- ------------------------------------------------- ----------- ------------------
- ------------------------------------------------- ----------- ------------------
James Doolin Form 3 September 30, 2004
Michael J. Doolin Form 3 September 30, 2004
Sharlene Doolin Form 3 September 30, 2004
Quad D Partnership Form 3 September 30, 2004
CODE OF ETHICS
We have adopted a code of ethics for our principal executive and financial
officers.
NO INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
During the past five years, no director, officer, promoter or control
person:
- has filed a petition under federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer
appointed by a court for the business or property of such person, or any
partnership in which he was a general partner at or within two years before
the time of such filing, or any corporation or business association of
which he was an executive officer at or within two years before the time of
such filing;
- was convicted in a criminal proceeding or named subject of a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
- was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him or her from or otherwise limiting
his/her involvement in any type of business, securities or banking
activities;
- was found by a court of competent jurisdiction in a civil action, by the
Securities and Exchange Commission or the Commodity Futures Trading
Commission, to have violated any federal or state securities law, and the
judgment in such civil action or finding by the Securities and Exchange
Commission has not been subsequently reversed, suspended, or vacated.
CORPORATE GOVERNANCE
Nominating Committee
We have not established a Nominating Committee because, due to our
development of operations and the fact that we only have three directors and
executive officers, we believe that we are able to effectively manage the issues
normally considered by a Nominating Committee. Following the entry into any
business or the completion of any acquisition, merger or reorganization, a
further review of this issue will no doubt be necessitated and undertaken by new
management.
If we do establish a Nominating Committee, we will disclose this change to
our procedures in recommending nominees to our board of directors.
29
Audit Committee
We have not established an Audit Committee because, due to our development
of operations and the fact that we only have three directors and executive
officers, we believe that we are able to effectively manage the issues normally
considered by an audit committee. Following the entry into any business or the
completion of any acquisition, merger or reorganization, a further review of
this issue will no doubt be necessitated and undertaken by new management
ITEM 11. EXECUTIVE COMPENSATION
ALL COMPENSATION
The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
- -----------------------------------------------------------------
James P. 12-31-06 $0 0 0 0 0 0 0
Doolin, 12-31-07 $0 0 0 0 0 0 0
Director, 12-31-08 $0 0 0 0 0 0 0
President
Shane E. 12-31-06 $0 0 0 0 0 0 0
Thueson, 12-31-07 $0 0 0 0 0 0 0
Director, 12-31-08 $0 0 0 0 0 0 0
Vice
President
John K. 12-31-06 $0 0 0 0 0 0 0
Winchester 12-31-07 $0 0 0 0 0 0 0
Director, 12-31-08 $0 0 0 0 0 0 0
Secretary
No deferred compensation or long-term incentive plan awards were issued or
granted to the Company's management during the year ended December 31, 2008. No
employee, director, or executive officer have been granted any option or stock
appreciation rights; accordingly, no tables relating to such items have been
included within this Item.
COMPENSATION OF DIRECTORS
Executive compensation was paid to the Company's officers and directors
related to services performed for the Company's operations and managing the
Company's strategic development. On April 1, 2006, the Company's Board of
Directors resolved to suspend officer and director salaries until the Company
generates positive operating cash flows. Should operations produce positive cash
flow, compensation will resume with 1 officer receiving $1,000 per month and
another receiving $500 per month, and the third receiving $100 per month.
OUTSTANDING EQUITY AWARDS
None.
OPTIONS/SAR GRANTS IN THE LAST FISCAL YEAR
None. We have no outstanding options or stock appreciation rights.
OPTIONS/SAR EXERCISES IN THE LAST FISCAL YEAR
None. We have no outstanding options or stock appreciation rights.
LONG TERM INCENTIVE PLAN AWARDS IN THE LAST FISCAL YEAR
None. We have no long-term incentive plans.
30
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth the ownership by any person known to us to
be the beneficial owner of more than 5% of any class of our voting securities as
of December 31, 2008. Beneficial ownership is determined in accordance with the
rules of the SEC and generally includes voting or investment power with respect
to securities. The persons named in the table below have sole voting power and
investment power with respect to all shares of common stock shown as
beneficially owned by them. The percentage of beneficial ownership is based upon
1,490,000 shares of common stock outstanding at that date.
Number of Shares Percentage
Name Beneficially Owned of Class
- ---------------- ------------------ --------
Leonard W. Burningham 100,000 6.7%
1227 East Gilmer Drive
Sale Lake City, UT 84105
James P. Doolin* 551,250 37.0%
1704 E. Harvard Ave.
Salt Lake City, UT 84108
Michael J. Doolin* 300,000 20.1%
5 Pepperwood Drive
Sandy, UT 84092
Quad D LTD Partnership* 100,000 6.7%
5 Pepperwood Drive
Sandy, UT 84092
Shane E. Thueson 250,000 17.0%
10972 Cindy Circle
Sandy, UT 84092
TOTAL 1,301,250 87.3%
* Michael and Sharlene Doolin are husband and wife. James Doolin is the son of
Michael and Sharlene Doolin.
** Sharlene Doolin is deemed a beneficial owner, as she is the general partner
of Quad D LTD Partnership
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the holdings of common stock of the
Company's directors and executive officers as of the date hereof. The percentage
of beneficial ownership is based upon 1,490,000 shares of common stock
outstanding at that date.
Name Beneficially Owned of Class
- ---------------- ------------------ --------
James P. Doolin* 551,250 37%
1704 E. Harvard Ave.
Salt Lake City, UT 84108
Shane E. Thueson 250,000 17%
10972 Cindy Circle
Sandy, UT 84092
John K. Winchester 1,250 0%
762 East Gable Street
Midvale, UT 84047
TOTAL OFFICERS & DIRECTORS 802,250 54%
31
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
None. We have no equity compensations plans.
CHANGES IN CONTROL
We do not have any arrangements that would result in any change in control
of our company. However, there are no provisions in our Articles of
Incorporation or Bylaws that would delay, defer or prevent a change in control.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
None. We have no undisclosed related transactions.
RESOLVING CONFLICTS OF INTEREST
Our directors must disclose all conflicts of interest and all corporate
opportunities to the entire board of directors. Any transaction involving a
conflict of interest will be conducted on terms not less favorable than that
which could be obtained from an unrelated third party.
DIRECTOR INDEPENDENCE
We do not have any independent directors serving on our board of directors
ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following is a summary of the fees billed to us by our principal
accountants during the fiscal years ended December 31, 2008 and 2007:
Fee Category 2008 2007
- --------------------------------------------------------------
- --------------------------------------------------------------
Audit Fees $ 19,286 15,779
Audit-related Fees $ 564 0
Tax Fees $ 390 412
All Other Fees $ 0 0
-----------------
Total Fees $ 20,240 16,191
=================
Audit Fees - Consists of fees for professional services rendered by our
principal accountants for the audit of our annual financial statements and
review of the financial statements included in our Forms 10-Q or services that
are normally provided by our principal accountants in connection with statutory
and regulatory filings or engagements.
Audit-related Fees - Consists of fees for assurance and related services by
our principal accountants that are reasonably related to the performance of the
audit or review of our financial statements and are not reported under "Audit
fees."
Tax Fees - Consists of fees for professional services rendered by our
principal accountants for tax compliance, tax advice and tax planning.
All Other Fees - Consists of fees for products and services provided by our
principal accountants, other than the services reported under "Audit fees,"
"Audit-related fees," and "Tax fees" above.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Auditors
We have not adopted an Audit Committee; therefore, there is no Audit
Committee policy in this regard. However, we do require approval in advance of
the performance of professional services to be provided to us by our principal
accountant. Additionally, all services rendered by our principal accountant are
performed pursuant to a written engagement letter between us and the principal
accountant.
32
ITEM 15: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Exhibits. The following exhibits are filed as part of this Annual Report:
No. Description
- ---- ---------------------------------------------------------------------------------------
31.1 Certification of Principal Executive Officer as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 *
31.2 Certification of Principal Financial Officer as adopted pursuant to Section 302 of the
Sarbanes Oxley Act of 2002 *
32.2 Certification of Principal Executive and Financial Officer Pursuant to 18 U.S.C Section
1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *
* Filed herewith
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
HANGMAN PRODUCTIONS, INC.
Date:3/5/09 /S/JAMES DOOLIN
James Doolin
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated:
HANGMAN PRODUCTIONS, INC.
Date:3/5/09 /S/JAMES DOOLIN
James Doolin
President and Director
Date:3/5/09 /S/Shane Thueson
Shane Thueson
Vice President and Director
33