April 30, 2009
Securities and Exchange Commission
Washington, D.C. 20549
Attn: Joe Foti, Senior Assistant Chief Accountant
Re: Hangman Productions, Inc. ("Hangman Productions" or the "Company")
Form 10-K for the year ended December 31, 2008
Filed March 5, 2009
File No. 000-50892
Dear Mr. Foti:
The following is in response to the comments received April 17, 2009,
related to the Company's filing on Form 10-K for the year ended December 31,
2008. Items #1 through #2 correspond to comments #1 through #2 in your letter.
1. Yes. All the facts are correct other than the SEC appears to have the
assumption that the preferred shares convert on a one for one basis. In
fact, the preferred shares convert on the basis of 10 common for one
preferred.
The Company did not allocate any loss to the noncontrolling interest
because the preferred shares were non-voting. The Company's auditors
contacted the AICPA regarding this issue. The AICPA indicated that the
preferred shares were debt rather than equity in the hands of the Company.
The reasoning was that the preferred shares did not have voting rights. The
Company disclosed the shares as non-controlling interest because the
Company felt that disclosure as preferred could be misleading. At the time
of this determination, the Company believed that Hangman Productions would
be required to absorb most of the subsidiary's loss. The Company determined
it would be more conservative to allocate the entire loss from the
subsidiary to the Company.
2. Given the aforementioned discussion in #1, the gain would result the
same even in consideration of the film cost asset and the non-controlling
interest and other liabilities extinguished with the sale. The Company
determined the fair value of the assets and liabilities approximated the
sales price because of the limited marketability of the asset, relative to
liabilities assumed. The Company followed the guidance in SFAS 144 for the
gain and disposal recognition. The following are revised calculations of
the gain:
Fair value of assets and liabilities of Subsidiary $ 29,800
Less: Carrying value (deficit) of Subsidiary $ (27,198)
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56,998
Gain Calculation:
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Cash Received $ 29,800
Liabilities Extinguished:
Accounts Payable $ 13,023
Notes Payable $ 25,323
Non-controlling interest (Preferred stock) $ 90,000
Less: Film Asset exchanged on sale $(101,148)
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Gain on sale of Subsidiary $ 56,998
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The Company acknowledges that: it is responsible for the adequacy and
accuracy of the disclosure in the filing; staff comments or changes to
disclosure in response to staff comments do not foreclose the Commission from
taking any action with respect to the filing; and the Company may not assert
staff comments as a defense in any proceeding initiated by the Commission or any
person under the federal securities laws of the United States.
If you have any other questions or concerns please contact us at your
convenience.
Sincerely,
/S/ JAMES DOOLIN
James Doolin
Principal Financial Officer
/S/ SHANE THUESON
Principal Executive Officer