{{::axanar_logo_wallpaper-720px.jpg|Star Trek Axanar Logo Wallpaper by DeviantArt user gazomg}}
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====== Annual Report ======
//See also: [[analysis_reply|Axanar Response to Annual Report Analysis]]//
//**__ __**// **By [[user>cpedraza|Carlos Pedraza]]**
On [[http://www.axanarproductions.com/revised-axanar-annual-report-released/|December 15, 2015]], producer [[Alec Peters]] issued a revised **Annual Report,** a 23-page document to donors, outlining the [[Axanar Productions]]' finances covering the //[[Prelude to Axanar]]// and //[[Axanar]]// [[crowdfunding platforms|Kickstarter campaigns]].
===== Contents =====
{{page>analysis box}}
The report includes:
* //Prelude to Axanar// financials.
* Financials for infrastructure to produce the //Axanar// feature film.
* An examination of Axanar's initial expectations and why its costs have risen.
* Lessons learned and accomplishments.
* Plans for 2016.
==== Openness and Transparency ====
Upon the report's release, Peters praised its demonstration of Axanar's openness and transparency:
**DOWNLOAD** the Axanar Annual Report, 2015, Revised. {{:axanar-annual-report-v2.pdf|2.1 MB PDF}}
> There are many Star Trek fan films that are raising 6-figure amounts. But none show you exactly where that money is going. None gives you daily updates or visibility into the operations as Axanar does. This is our commitment to you.(([[http://www.axanarproductions.com/revised-axanar-annual-report-released/|Axanar blog, Alec Peters: Revised Axanar Annual Report Released!]], 12/15/15.))
That transparency, however, was intended only for donors, Peters told one questioner:
> **Q.** Does the Axanar team plan to make this report public (to non-donors) at any point in the near future? \\ **Peters**: Why would we? What vested interest does a non-donor have in our finances? Our fiduciary obligation is to our donors, not the general public.(([[http://www.axanarproductions.com/revised-axanar-annual-report-released/#comment-13981|jedman67 comment, Axanar blog]], 12/17/15.)) [//emphasis added//]
//**__Editor’s Note__**//
[{{ :annual-report.jpg?nolink&200|**AXANAR**'s 2015 Annual Report.}}]
=== A Pattern of Obfuscation? ===
**REPORTS LIKE** Axanar's are not required by the [[crowdfunding platforms]]. Peters admirably chose to release this Annual Report in the interests of "financial accountability and transparency in the world of crowd-funded projects."(([[http://www.axanarproductions.com/revised-axanar-annual-report-released/|Axanar blog, Alec Peters: Revised Axanar Annual Report Released!]], 12/15/15.)) \\
\\
While the report does indeed contain a great deal of information, analyzing presented various challenges. One spreadsheet, for example, was a bitmap graphic with entries organized chronologically.((Axanar Annual Report, 2015, Revised, pp. 5-6.)) The information had to be re-entered into a new spreadsheet, then categorized and sorted in more meaningful ways. The document even lacked page numbers.
{{ ::mike-bawden.jpg?nolink|}} **AXANAR RESPONSE** Spokesman **Mike Bawden** [[Analysis Reply|responds]] to the findings of **AxaMonitor**'s analysis of the Annual Report.
**SIGNIFICANT, THOUGH**, was how salary data was obscured. Few job positions are specified, some employees' wages are bundled together with non-personnel costs, expenses are sometimes vaguely described, requiring additional research to discover they were actually personnel-related. Also, it's not clear whether other personnel were inappropriately paid as independent contractors instead of employees, a common problem among independent film productions. \\
\\
Once the data were transcribed, coded, sorted and analyzed, a pattern of possible problems emerged, from unreported salaries to ballooning costs and repeated deficit spending. They are noted below as 'questioned costs' in charts for Axanar's two Kickstarter campaigns, and are presented here in the interest of seeking greater openness and transparency from Axanar Productions.
//— Carlos Pedraza,// \\
**AxaMonitor** //editor//
===== Deficits =====
Despite successful [[crowdfunding_platforms|Kickstarter campaigns]] that both exceeded their goals by large amounts, both the //Prelude// budget and //Axanar// infrastructure costs ran deficits requiring cash infusions from their successive crowdfunding campaign.
//**__Kickstarter Financials{{ ::view-charts.png?nolink|Rotate mobile device for best view of charts}}__**//
^ ^ Income ^ Expenses ^ Deficit |
^ //Prelude to Axanar// Campaign | $113,833 | 123,285 | -9,452* |
^ //Axanar// Infrastructure Campaign | $638,471 | 641,797 | -3,326† |
| | | * Deficit covered by [[axanar_kickstarter_details|Axanar Kickstarter]] campaign. \\
† Deficit covered by [[axanar_indiegogo_details|Axanar Indiegogo]] campaign. ||
[{{ ::prelude-spreadsheets-1.jpg?direct&225|**ABOVE** The spreadsheet at top is from the images on pages 5-6 of Axanar's Annual Report. **BELOW** The spreadsheet is from AxaMonitor's Excel analysis of spending on Prelude. //Click image to view full size.//}}]
===== 'Prelude' Spending =====
//See also: [[Prelude Kickstarter details]]//
**About the //Prelude// Data** The analysis in this section is based on the spreadsheet image labeled //Prelude to Axanar Income and Expenses// on pages 5-6 of the Annual Report. The data has been transcribed into the {{:axanar_financials.xlsx|Axanar Financials}} Excel spreadsheet.
==== Analysis Methodology ====
Spending data for //Prelude to Axanar// in the Annual Report was displayed in an image rather than an actual spreadsheet, and listed in chronological order — presenting obstacles to easily analyzing project income and expenses. The data had to be transcribed into an Excel spreadsheet, each item labeled with a spending category and then sorted with like items.
==== Budget Categories ====
{{ :view-charts.png?nolink|Rotate mobile device for best view of charts}}
//Prelude// expenses were grouped into these subtotaled budget categories:
//Figure 1//
^ Category ^ Amount |
| Administration | $2,378 |
| Art | 1,500 |
| Sets | 2,000 |
| Costumes | 13,987 |
| Craft Services | 2,337 |
| Entertainment | 716 |
| Equipment | 4,158 |
| Loss & Damage((Director of photography [[imdb>name/nm2010725/|Milton Santiago]] [[face>groups/CBSvsAxanar/permalink/1183562961655072/?comment_id=1183622228315812&reply_comment_id=1184118514932850&comment_tracking=%7B%22tn%22%3A%22R%22%7D|explains damage]] to the dolly on the //Prelude// set, 3/27/16.)) | 2,450 |
| Makeup | 7,440 |
| Marketing | 7,416 |
| Perks | 18,516 |
| {!Pick up:Additional footage shot}} | 1,460 |
| Post-production | 1,000 |
| Salaries | 20,086 |
| Shipping | 5,059 |
| Soundstage | 9,128 |
| Travel | 2,651 |
| VFX | 15,000 |
| Unattributed* | 6,003 |
^ Total ^ $123,285† |
| * Four expenses lacked sufficient detail to assign to a budget category. See [[#Budget questions]] below. | † $113,833 raised, leaving deficit of ($9,452). |
=== Spending by Category ===
The chart below illustrates the proportion of spending by budget category, based on the amounts in Figure 1 (above).
//Figure 2// \\ {{::prelude_pie_chart.jpg?direct&400|}} \\ //Click image to view full size.//
==== 'Prelude' Budget Questions ====
{{ :view-charts.png?nolink|Rotate mobile device for best view of charts}}
Various items in the spending report are unclear, and noted below. The item number corresponds with the Item column on the {{:axanar_financials.xlsx|Axanar Financials}} spreadsheet tab labeled “Prelude.”
^ Item No. ^ Description ^ Amount ^ Questioned Costs |
| 3 | Insurance | $198 | Was this the total expenditure for production insurance? |
| 28 | Stripe Deposit(s) | 22,826 | **UPDATE** Stripe collects and process all payments for projects hosted on Kickstarter, starting in 2015.(([[http://techcrunch.com/2015/01/06/kickstarter-drops-amazon-payments-for-stripe/e|TechCrunch: Kickstarter Drops Amazon Payments For Stripe]], Sarah Perez, 1/6/15.)) However, the report does not explain this, requiring additional research to determine. |
| 106-109 | • Anderson Live Media \\ • Robert Romero \\ • The Film Group \\ • Camadeus Film | 6,003 | These vendors are not identified, so the expenses are not attributed to any budget categories. They make up 5 percent of the //Prelude// expenditures. |
| | **//Personnel// ** ||
| 88 | NPI Production Services | 6,815 | What personnel were covered by this payroll service vendor? Cast? Crew? Both? Presumably, these were employees, not contractors. |
| 89 | Metamorfic,((Metamorfic Productions LLC is an independent production company whose principals include //Prelude// crew Christian Gossett (director) and Jhennifer Webberley (producer).)) "Cast" | 5,000 | Listed as 1099 payment for contractors, but cast members should be paid as employees. This is a serious employment compliance problem; back taxes may be owed. |
| 90 | Brad Look | 3,208 | Not identified in Annual Report; independently ID'd via IMDb as makeup design and supervisor. |
| 91 | Gary Perticone | 2,000 | Not identified in Annual Report; independently ID'd via IMDb as hair and wigs designer and supervisor. |
| 92 | Tony Todd,((Actor who portrayed Admiral Ramirez; he later [[tony_todd|left Axanar]] citing irregularities and production delays.)) promotional fee | 2,000 | No description of what promotional services the actor provided the production. |
===== 'Axanar' Spending =====
[{{ ::axanar-ks-excel.jpg?direct&300|**AXANAR EXCEL** spreadsheet, transcribed from the Kickstarter figures presented in the Annual Report, categorized and sorted for ease of analysis.}}]
The spending described for //[[Axanar]]// solely comprises funds raised during the [[axanar_kickstarter_details|second Kickstarter]] campaign, the 'infrastructure Kickstarter,' a month-long effort in 2014, following release of the short film, //[[Prelude to Axanar]]//. The effort succeeded in raising $638,471 from 8,548 backers; its original goal was $100,000. Of the three [[crowdfunding platforms|crowdfunding campaigns]], this one raised the most in the shortest time.
**CONTROVERSY** This campaign is also the production's most controversial, as it marks the production's [[moving the goalposts|departure from its original goal]] of simply producing //Star Trek: Axanar//, the feature film, and instead investing a significant portion of donors' dollars in the infrastructure of [[Ares Studios]], a for-profit venture by [[Axanar Productions]] to produce future Star Trek-related films and other science fiction properties.(({{:axanar-annual-report-v2.pdf|Axanar Annual Report 2015, Revised}}, pp. 7, 8, 15, 20.))
==== 'Axanar' Methodology ====
//See also: [[Axanar Kickstarter details]]//
**About the Axanar Data** The analysis in this section is based on the figures presented on pages 7-10 of the Annual Report. The data has been transcribed into the {{:axanar_financials.xlsx|Axanar Financials}} Excel spreadsheet.
Income and expenses for //Axanar// spending appear in a line item format. For analysis purposes, line items were grouped into one income and 10 expense categories.
{{ :view-charts.png?nolink|Rotate mobile device for best view of charts}}
==== 'Axanar' Budget Categories ====
//Figure 3//
^ Category ^ Amount |
| Salaries | $121,527.88 |
| Admin (includes ~$67K Kickstarter fees) | 107,876.81 |
| Computer | 1,098.18 |
| Equipment | 35,155.87 |
| Marketing | 13,919.25 |
| Perks | 37,258.30 |
| Production | 60,322.56 |
| Studio | 246,456.66 |
| Transportation | 9,163.62 |
| Travel | 9,018.29 |
^ Total Expenses ^ $641,797.42* |
| * $638,471 raised, leaving ($3,326.42) deficit. ||
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=== 'Axanar' Spending by Category ===
The chart below illustrates the proportion of spending by budget category, based on the amounts in Figure 3 (above). The spending on the Ares Studios assets consumed the lion's share (38 percent) of the money raised in this Kickstarter campaign.
//Figure 4// \\
{{::axanar-budget-categories.jpg?direct&400|}} \\
//Click image to view full size.//
==== 'Axanar' Budget Questions ====
//**__« 54 percent of the salary total is unaccounted for in terms of personnel names, services, or tax liability. »__**//
The following charts detail questions arising out of spending from Axanar's Kickstarter campaign.
=== Axanar Salaries ===
One of the most controversial parts of the Annual Report are the salary expenses paid out of the proceeds from the [[axanar_kickstarter_details|Axanar Kickstarter]] because of the [[lawsuit#plaintiffs]]' allegation of the defendants' "[[direct financial benefit]]." {{ :view-charts.png?nolink|Rotate mobile device for best view of charts}}
^ Payee ^ Amount ^ Questioned Costs |
| Salaries 1099 | $17,420.00 | The contractors paid out of this line item are not identified, nor the services they provided, so it's not possible to know whether they should have been employees instead. If so, the production would liable for unpaid taxes. This is a common problem among independent film productions.(([[http://www.abspayroll.net/payroll101-hiring-independent-contractors.html|ABS Payroll — "Educate and inform yourself in the basics of payroll: Hiring Independent Contractors,"]] retrieved 3/24/16.)) |
| Alec Peters | 38,166.57 | This may be the defendant's "direct financial benefit" to which the lawsuit refers. It's unclear if applicable employer taxes were paid as part of this amount. |
| Peters' Union Fees | 3,099.00 | Although not specifically identified as producer Alec Peters' initiation dues for SAG-AFTRA,((Axanar Annual Report 2015, Revised, p. 10.)) he has confirmed he joined the actors' union as a result of his portrayal as Captain Garth in //Prelude to Axanar//.((citation needed)) This would be an additional financial benefit Peters gained. He has stated he will [[cast|not portray]] the younger Garth in //Axanar//. |
| Diana Kingsbury | Deferred til 2016 | Her position is reported as heading fulfillment. It's unknown what amount her deferred salary is, nor how much is owed for applicable employer taxes. Kingsbury is also listed on IMDb as a producer. It's not clear if she receives compensation for the latter position.(([[https://pro-labs.imdb.com/name/nm6741987/|Diana Kingsbury profile, IMDb Pro (subscription only)]], retrieved 3/24/16.)) |
| Robert Burnett | 5,000.00 | This salary as director is a round figure, making it possible that this does not include applicable employer taxes, in which case it's unclear what line item taxes were paid out of. |
| Curtis Laseter | 9,800.00 | Construction coordinator. He is no longer with the production. The Annual Report notes that construction workers' salaries are not reflected in the salary section of the report but in the Set Construction line item. Dean Newberry replaced Laseter. His salary is not reflected in this part of the report.((Axanar Annual Report, 2015, Revised, p. 16)) |
| Salaries | 48,042.31 | The report fails to name how many people were paid out of this line item, whether they were employees or contractors, nor whether this figure includes applicable employer taxes. |
^ Total ^ $121,527.88 ^ |
== Unreported Salaries ==
The unreported salaries and personnel total $65,462 — 54 percent of the salary total is unaccounted for in terms of personnel names, services, or tax liability. Note that this does not include the unknown amount of Diana Kingsbury's deferred compensation and the unknown set construction personnel.
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=== Other Expense Questions ===
{{ :view-charts.png?nolink|Rotate mobile device for best view of charts}}
The following expenses are red-flagged with questions or concerns. The items are referred to by the line number on which they appear in **AxaMonitor**'s {{:axanar_financials.xlsx|Axanar Financials}} spreadsheet on the tab labeled Axanar 2014-15.
^ Line No. ^ Description ^ Amount ^ Questioned Costs |
| 30 | Insurance | $9,320.52 | This appears to be the annual cost for production insurance, but only a short-term policy would've been needed for shooting the [[Vulcan Scene]] in June 2015. |
| 35 | Event Cost | 1,061.52 | No information about the event, what it was for or cost breakdown. |
| 39-42 | Perks (shipping and production) | 37,258.30 | $25,142 alone has been spent on producing perks, yet four of the [[axanar_kickstarter_details#Top 5 rewards]] cannot be delivered until //Axanar// is produced. Those four perks represent more than 69 percent of the total number of donors. |
| 44 | //Prelude to Axanar// deficit | 7,000.00 | This makes up the shortfall between //Prelude//'s costs and the amount raised in the previous Kickstarter campaign. Though this listed as $7,000, the actual amount was $9,452.((Axanar Annual Report, 2015, Revised, p. 3.)) This additional shortfall should be added to the bottom line for the Axanar Kickstarter, which is currently listed as -$3,326.42, for a total -$5,778.42, presumably to be carried forward to proceeds from the [[axanar_indiegogo_details|Indiegogo campaign]]. |
| 46 | Set Construction | 36,372.56 | This line item conflates labor costs with materials and other costs related to constructing //Axanar//'s sets.((Axanar Annual Report, 2015, Revised, p. 16.)) Apart from construction coordinator Dean Newberry, the report fails to account for additional employees, their salaries and applicable employer taxes. Without this information it is impossible to calculate what the non-personnel costs were for //Axanar//'s sets. \\ \\ "Building our sets is a much more expensive process," the Annual Report states. "But with a locked script finally in, we now know how many sets we have to build. … The initial budget of $100,000 is certainly low. The entire process of set construction will cost $150,00-200,000."((Axanar Annual Report, 2015, Revised, p. 15.)) \\ \\ Since only $36,373 is encompassed in this spending report, the balance of as much as $163,627 will presumably come from the subsequent [[axanar_indiegogo_details|Indiegogo campaign]] funds. |
| 47-49 | Studio | 246,456.66 | This amount includes facility fees, studio build-out and rent. However, the total projected infrastructure cost is expected to exceed $400,000,((Axanar Annual Report 2015, Revised, p. 8.)) Since those costs do not appear to be encompassed by this spending report, they will presumably be covered by proceeds from the subsequent [[axanar_indiegogo_details|Indiegogo campaign]]. |
| 50 | Auto | 9,163.62 | These costs are not broken out. |
| 51 | Travel | 9,018.29 | These costs are not broken out. |
| 37 | Convention Expenses | 2,670.00 | These costs are not broken out, nor correlated with possible associated travel expenses. |
| n/a | Vulcan Scene | Unknown | Costs for preproduction, principal photography and post-production for the three-minute '[[Vulcan Scene]]' are not specified. They are likely spread out over several line items in this spending report (e.g., unspecified salaries, insurance, equipment and equipment rental, music, makeup and set construction). |
/* What percentage of Kickstarter rewards have been fulfilled? Since all the Kickstarter money has been spent, does this mean that fulfillment of remaining Kickstarter rewards will come out of Indiegogo proceeds? Or is the rewards line items amounts in the Annual Report set aside for future fulfillment? What did they spend $25K making if so many of the perks depend on completion of the film? What has all the $5K shipping been spent on if so many perks remain unfulfilled? Is this money spent on fulfilling non-Kickstarter perks sold through the Donor Store?
Annual Report, p. 18: "No perks will be shipped til movie is produced" so how come so much was spent on shipping and perks out of this budget? This must be from Donor Store purchases, right? Get confirmation.
Why no report on additional revenue from direct donations and merchandising?
Difficult to break out what the costs were for shooting the Vulcan Scene. */
{{section>crowdfunding platforms#Source Data}}
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===== Accomplishments and Rising Costs =====
{{page>Moving the goalposts}}
===== Plans for 2016 =====
{{page>change in character}}
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**Keywords** {{tag>commercial crowdfunding defendants fact_check}}