How should rose classify the p referred stock

Reference no: EM132859954

If the Warrants are exercised, there would be no extinguishment of Preferred Stock. 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:

Question 1: How should Rose classify the P referred Stock under ASC 480?

Question 2: Determine whether the Warrants meet the definition of a freestanding financial instrument as defined in ASC 480.

Question 3: How should Rose classify the Warrants under ASC 480?

Reference no: EM132859954

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