U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2009
[ ] 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
---- -----------
(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
(Former Name or Former Address, if changed since last Report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Sections 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.
(1) Yes X No (2) Yes X No
---- ---- ---- ----
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. (as
defined in Rule 12b-2 of the Exchange Act).
Large accelerated filer [_] Accelerated filer [_]
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|
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
None, Not Applicable;
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by court. Yes |_| No |X|
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the Registrant's classes of common stock, as of the latest
practicable date:
May 13, 2009
1,490,000
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Registrant required to be filed with this
10-Q Quarterly Report were prepared by management and commence on the following
page, together with related Notes. In the opinion of management, the Financial
Statements fairly present the financial condition of the Registrant. The
Financial Statements are on file with the Company's Auditor.
HANGMAN PRODUCTIONS, INC.
[A Development Stage Company]
BALANCE SHEETS
As of March 31, 2009
and December 31, 2008
03/31/2009 12/31/2008
---------------- ----------------
[Unaudited] [Audited]
ASSETS
Assets
Current Assets
Cash $ 682 $ 9,380
---------------- ----------------
Total Current Assets 682 9,380
---------------- ----------------
Total Assets $ 682 $ 9,380
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities
Current Liabilities
Accounts Payable $ 14,807 $ 14,447
Franchise Taxes Payable - 100
Accrued Interest - Related Party - 981
Accrued Director Compensation 2,408 2,379
---------------- ----------------
Total Current Liabilities 17,215 17,907
Long Term Liabilities
Note Payable - Shareholders 41,424 40,427
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Total Long Term Liabilities 41,424 40,427
---------------- ----------------
Total Liabilities $ 58,639 $ 58,334
Noncontrolling Interest -
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 103,298 102,997
Deficit Accumulated during the
development stage (176,155) (166,851)
---------------- ----------------
Total Stockholders' Deficit (57,957) (48,954)
---------------- ----------------
Total Liabilities and Stockholders' Deficit $ 682 $ 9,380
================ ================
2
HANGMAN PRODUCTIONS, INC.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2009 and 2008
and For the Period from Inception through March 31, 2009
For the For the
Three Months Three Months Since Inception
Ended Ended through
03/31/2009 03/31/2008 03/31/2009
----------- ----------- -----------
Revenues $ - $ - $ 20,203
Cost of Sales - - 9,000
----------- --------- -----------
Gross Margin - - 11,203
General and Administrative Expenses 8,278 10,214 144,616
----------- --------- -----------
Operating Loss (8,278) (10,214) (133,413)
Interest Income - - 43
Interest Expense (1,026) (1,176) (9,495)
----------- --------- -----------
Net Loss Before Income Taxes (9,304) (11,390) (142,865)
Provision for Income Taxes - - 880
----------- --------- -----------
Net Loss from Continuing Operations (9,304) (11,390) (143,745)
Discontinued Operations:
Loss from discontinued operations,
net of tax - (5,118) (32,410)
----------- --------- -----------
Loss from Discontinued Operations - (5,118) (32,410)
Net Income/(Loss) (9,304) (16,508) (176,155)
=========== ========= ===========
Income/(Loss) Per Share from
Continuing Operations $ (0.01) $ (0.01) $ (0.15)
=========== ========= ===========
Income/(Loss) Per Share from
Discontinued Operations - - $ (0.03)
=========== ========= ===========
Income/(Loss) Per Share $ (0.01) $ (0.01) $ (0.18)
=========== ========= ===========
Weighted Average Shares Outstanding 1,490,000 1,490,000 957,534
=========== ========= ===========
3
HANGMAN PRODUCTIONS, INC.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2009 and 2008
and For the Period from Inception through March 31, 2009
For the For the
Three Months Three Months Since Inception
Ended Ended through
03/31/2009 03/31/2008 03/31/2009
------------ ------------------------
Cash Flows from Operating Activities
Net Income/(Loss) (9,304) (16,508) (176,155)
Gain/(Loss) from Discontinued Operations - 5,118 32,410
------------ ---------- ----------
Loss from Continuing Operations (9,304) (11,390) (143,745)
Adjustments to reconcile net loss to net cash
From Operating Activities:
Non-cash contributed by shareholder 300 300 2,700
(Increase)/Decrease in prepaid expenses - 684 -
Increase / (Decrease) accounts payable 361 94 14,808
Increase/(Decrease) in income taxes payable (100) - -
Increase / (Decrease) in salaries payable 29 28 39,908
Increase/(Decrease) in unearned revenue - 33 -
Increase / (Decrease) in accrued interest - related party 16 1,148 6,424
------------ ---------- ----------
Net Cash from Continuing Operations (8,698) (9,103) (79,905)
Net Cash from Discontinued Operations - (19,298) (120,213)
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Net Cash From Operating Activities (8,698) (28,401) (200,118)
Cash Flows from Investing Activities
Net Cash from Continuing Investing Activities - - -
Net Cash from Discontinued Investing Activities - - 29,800
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Net Cash from Investing Activities - - 29,800
Cash Flows from Financing Activities
Proceeds from Loans from Shareholders - - 49,000
Repayment on Loans from Shareholders - - (14,000)
Issued Stock for Cash - - 21,000
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Net Cash from Continuing Financing Activities - - 56,000
Net Cash from Discontinued Financing Activities - 20,000 115,000
------------ ---------- ----------
Net Cash from Investing Activities - 20,000 171,000
Net Increase / (Decrease) in Cash (8,698) (8,401) 682
Beginning Cash Balance 9,380 12,461 -
------------ ---------- ----------
Ending Cash Balance 682 $ 4,060 682
============ ========== ==========
Supplemental Schedule of Cash Flow Activities
Cash paid for
Interest $ - $ - $ -
Income taxes $ 100 $ - $ 984
Stock issued for accrued liabilities $ - $ - $ 37,500
Gain from disposal of subsidiary booked to APIC $ - $ - $ 56,997
4
HANGMAN PRODUCTIONS, INC.
[A Development Stage Company]
Notes to the Financial Statements
NOTE 1- BASIS OF PRESENTATION
The accompanying unaudited financial statements of Hangman
Productions, Inc. have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission ("SEC") and
disclosures normally included in the financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and
notes thereto contained in the Company's Annual Report on Form 10-K
for the period ended December 31, 2008. In the opinion of management
these interim financial statements contain all adjustments, which
consist of normal recurring adjustments, necessary for a fair
presentation of financial position. The results of operations for the
interim period are not necessarily indicative of the results to be
expected for the full year.
Reclassifications - Certain reclassifications have been made to prior
period balances in order to conform to current period classifications.
NOTE 2- LIQUIDITY/GOING CONCERN
The Company has accumulated losses since inception, has minimal
assets, and has a net loss from continuing operations of $9,304 for
the three months ended March 31, 2009. Because the Company has
accumulated losses from it operations since inception, has minimal
liquid current assets, and has limited sales activity there is
substantial doubt about the Company's ability to continue as a going
concern. Management plans include continuing to develop its screenplay
contests. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
NOTE 3- DIRECTOR 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. Accordingly, there was no officer expense
recorded for the three months ended March 31, 2009. 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.
Beginning July 1, 2006 salaries payable began accruing interest at a
rate of 5% per annum. The amounts owed are unsecured and are due on
December 31, 2010. The Company has accrued interest relating to the
salaries payable of $308 and the outstanding balance of the salaries
payable is $2,408 as of March 31, 2009. For the quarter ended March
31, 2009 the Company accrued interest of $29 on the salaries payable.
During the years ended December 31, 2006 and 2007, James Doolin, the
Company's President and director, loaned the Company an aggregate of
$25,116 on an unsecured debenture. The Note accrues interest at 10%
per annum and matures on December 31, 2010. As of March 31, 2009, the
outstanding note payable to the shareholder was $30,182. For the
quarter ended March 31, 2009 the Company accrued interest of $726 on
the note.
During the years ended December 31, 2007 and 2008, a shareholder
loaned the Company an aggregate of $8,500 on an unsecured debenture.
The Note accrues interest at 10% per annum and matures on December 31,
2010. As of March 31, 2009, the outstanding note payable to the
shareholder was $11,241. For the quarter ended March 31, 2009, the
Company accrued interest of $271 on the note.
As of March 31, 2009, approximately 68% of the Company's issued and
outstanding common stock was 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 quarter ended March 31, 2009, management 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, charged to expense and equity for the three
months ended March 31, 2009 equates to $300.
5
HANGMAN PRODUCTIONS, INC.
[A Development Stage Company]
Notes to the Financial Statements (cont.)
NOTE 4 - Recent Accounting Pronouncements
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities" (SFAS 159). This
Statement provides companies with an option to report selected
financial assets and liabilities at fair value. Generally accepted
accounting principles have required different measurement attributes
for different assets and liabilities that can create artificial
volatility in earnings. The Statement's objective is to reduce both
complexity in accounting for financial instruments and the volatility
in earnings caused by measuring related assets and liabilities
differently. SFAS 159 was effective for the Company beginning January
1, 2008 with no impact on the Company's financial statements.
In March 2008, the FASB issued SFAS No. 161, "Disclosures about
Derivative Instruments and Hedging Activities. "SFAS 161 is intended
to improve financial reporting about derivative instruments and
hedging activities by requiring enhanced disclosures to enable
investors to better understand their effects on an entity's financial
position, financial performance, and cash flows. The Company adopted
SFAS No. 161 on January 1, 2009 with no impact on the Company's
financial statements.
In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally
Accepted Accounting Principles. The new standard is intended to
improve financial reporting by identifying a consistent framework, or
hierarchy, for selecting accounting principles to be used in preparing
financial statements that are presented in conformity with generally
accepted accounting principles ("GAAP") for nongovernmental entities
in the United States. SFAS 162 is effective 60 days following SEC
approval of the Public Company Accounting Oversight Board Auditing
amendments to AU Section 411, "The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles." The Company
is currently evaluating the impact, if any, of adopting FAS 162, on
its Consolidated 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 consolidated results of operation, financial position or
cash flows. Based on that review, the Company believes that none of
these pronouncements will have a significant effect on its
consolidated financial statements.
6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
PLAN OF OPERATION
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 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. The Company has received
sponsorship from a screenwriting software company for the Company's upcoming
screenplay contest. The Company has also developed relationships with over ten
literary producers, managers and agents who have agreed to consider the top five
finalists of this year's ScreenplayShootout! for representation and development.
The Company feels that the participation by the sponsor and producers, managers
and agents will provide greater exposure and interest for this year's
ScreenplayShootout!
The Company has not been able to generate positive cash flow from
operations since inception. This along with the above mentioned factors raise
substantial doubt about the Company's ability to continue as a going concern.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
OPERATING RESULTS - OVERVIEW
The three month period ended March 31, 2009, resulted in a net loss of
$9,304. The Basic Loss per Share for the three month period ended March 31, 2009
was ($0.01). Details of changes in revenues and expenses can be found below.
All prior period financial figures provided for comparison purposes will be
derived from continuing operations data.
OPERATING RESULTS - REVENUES
The Company has not generated a profit since inception. The Company
generated a net loss of $9,304 and no revenue for the period ended March 31,
2009. For the period ended March 31, 2008 the Company generated a net loss of
$11,390 on no revenue. The Company was unable to generate revenue in either
period due to the timing on the Company's screenplay contests. The Company's
current screenplay contest, the ScreenplayShootout! commences June, 2009.
The Company will not provide any forecasts of future earnings or
profitability. The future success of the Company cannot be ascertained with any
certainty, and if and until the Company obtains distribution of its film
projects, no such forecast or guidance will be formulated or provided.
7
OPERATING RESULTS - COST OF SALES
Cost of sales was $0 for the three month period ended March 31, 2009 and
March 31, 2008. The Company did not generate revenue for the period ended March
31, 2009 or March 31, 2008, and therefore did not incur any expenses related to
revenue.
OPERATING RESULTS - OPERATING EXPENSES
Operating expense for the three month period ended March 31, 2009, was
$8,278 compared with $10,214 for the period ended March 31, 2008. Operating
expenses included director compensation, professional fees, and general
administrative expenses.
- The Company's professional fees include accounting, legal and website
maintenance fees. The net professional expenses incurred in the three month
period ended March 31, 2009 totaled $7,369. In comparison the net
professional expenses incurred in the three month period ended March 31,
2008 totaled $7,531. The Company's professional expenses were not
materially different between the two periods. The Company estimates that
for the fiscal year accounting expenses will be approximately $8,000, legal
expenses will be approximately $5,000 and website maintenance fees will be
approximately $1,500.
- The Company incurred $300 in rent for the three month period ended March
31, 2009 and 2008.
- Other general and administrative expenses for the quarter ended was
approximately $609 compared to $903 for the same period a year prior. The
difference between the two periods is not deemed material.
OPERATING RESULTS - INTEREST EXPENSES
The Company incurred $1,026 in interest expense for the quarter ended March
31, 2009 and $1,176 for the quarter ended March 31, 2008. The decrease in
interest for the three month period ended March 31, 2009, was due to a lower
Note Payable balance due to a shareholder. On August 13, 2008 the Company paid
$10,000 toward the Note Payable balance.
LIQUIDITY
As of March 31, 2009, the Company maintained a cash balance of $682, and an
outstanding balance of $17,215 in accounts payable and accrued expenses. The
Company also has a note payable to the Company's President and a shareholder in
the amount of $41,424. The Company had no inventory as of March 31, 2009.
The Company's $ 682 cash balance as of March 31, 2009 is not sufficient to
cover the Company's general expenses of operation for the next twelve months.
The Company's management will continue to advance the Company monies not to
exceed $100,000, 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. If the Company needs funds in excess of $100,000, 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. The Company can provide no
assurances that if additional funds are needed the Company will be able to
obtain financing.
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 opportunities to enhance the value of the
Company and its profitability.
8
CRITICAL ACCOUNTING POLICIES - ESTIMATES
Our discussion herein and analysis thereof is based upon our financial
statements in Item 1 above, which have been prepared in accordance with the
rules and regulations of the Securities and Exchange Commission("SEC")for
interim financial reporting. The preparation of these statements requires
management to make estimates and best judgments that affect the reported
amounts.
OFF-BALANCE SHEET ARRANGMENTS
We do not have any off-balance sheet arrangements as of March 31, 2009.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
This item is not applicable to smaller reporting companies.
Item 4(T). Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Exchange Act) are designed to ensure that information required to be disclosed
in reports filed or submitted under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in rules and forms
adopted by the Securities and Exchange Commission ("SEC"), and that such
information is accumulated and communicated to management, including the
President and Vice President, to allow timely decisions regarding required
disclosures.
Under the supervision and with the participation of our management,
including our President and Vice President, we evaluated the effectiveness of
the design and operation of our disclosure controls and procedures (as defined
in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange
Act")). Based upon that evaluation, our President and Vice President concluded
that, as of the end of the period covered by this report, our disclosure
controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
During the most recent fiscal quarter covered by this report, there has
been no change in our internal control over financial reporting (as defined in
Rule 13a-15(f) under the Exchange Act) that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.
9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 1A. Risk Factors
This item is not applicable to smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None; not applicable
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None; not applicable
Item 5. Other Information.
None; applicable
Item 6. Exhibits.
(a) Exhibits
31.1 302 Certification of James Doolin
31.2 302 Certification of Shane Thueson
32 906 Certification
(b)Reports on Form 8-K.
None; Not Applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Issuer has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
HANGMAN PRODUCTIONS, INC.
Date: 05/13/09 /S/ JAMES DOOLIN
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James Doolin, Principal Financial Officer,
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has also been signed below by the following person on
behalf of the Registrant and in the capacities and on the dates indicated.
Date: 05/13/09 /S/ SHANE THUESON
--------------------------------------------
Shane Thueson, Principal Executive Officer,
Vice President and Director
10