While the Company is not currently an SEC registrant, it is contemplating a potential registration of its shares of Common Stock and therefore applies the SEC and SEC staffguidance codified in ASC 480-10-S99 of ASC 480, Distinguishing Liabilities From Equity (ASC 480) to determine whether the Preferred Stock should be classified outside of permanent equity. Required:
1.How should Rose classify the P referred Stock under ASC 480?
2.Determine whether the Warrants meet the definition of a freestanding financial instrument as defined in ASC 480.
3.How should Rose classify the Warrants under ASC 480?
Determine whether the Warrants meet the definition of a freestanding financial instrument as defined in ASC 480.
