October 24, 2008
Mr. David G. Nason
Assistant Secretary for Financial Institutions
U.S. Department of Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Dear Mr. Nason:
At your request, the staff of the Commission’s Office of the Chief Accountant and
the staff of the Financial Accounting Standards Board have reviewed the October 24,
2008 final version of the public company document entitled “Securities Purchase
Agreement,” and the accompanying document entitled “Form of Warrant To Purchase
Common Stock,” copies of which are also attached.
At your further request, the Commission staff and FASB staff have analyzed the
terms and conditions of the Warrants described within these documents and we would not
object if the Warrants, as defined in the documents provided, were to be classified as
permanent equity under applicable U.S. GAAP, provided that the issuer of such Warrants
has sufficient authorized but unissued shares of the class of stock that may be required
upon settlement and any other necessary shareholder approvals have been obtained.
If an issuer does not have required shareholder approval, including shareholder
approval for sufficient authorized but unissued shares of the class of stock that may be
required for settlement, we would also not object to classification of such Warrants as
permanent equity provided that the issuer takes the necessary action to secure sufficient
approvals prior to the end of the fiscal quarter in which such Warrants are issued.
Our conclusions solely apply to the Warrants described above and are based
solely on our review of the documents provided by your office and analysis of applicable
U.S. GAAP that has been issued as of the date of this letter.
Deputy Chief Accountant
Securities and Exchange