SEC Company Response from NextPlat Corp (NXPL) (CIK 0001058307) (NXPL) — Oct 8, 2008
NextPlat Corp (NXPL) (CIK 0001058307)
Date: Oct. 8, 2008 · CIK: 0001058307 · Accession: 0001380389-08-000080
AI Filing Summary & Sentiment
Reasoning
Letter
Form 10-KSB for the year ended December 31, 2007 Form 10-QSB for the quarter ended March 31, 2008 Form 10-Q for the quarter ended June 30, 2008 File No. 0- 25097
Re:
Dear Mr. Vaughn:
This letter and its attachments are being submitted in response to the Securities and Exchange Commission (“SEC” or “Commission”) staff’s comment letter of September 16, 2008 (the “Letter”) directed to World Energy Solutions, Inc. (“WES” or the “Company”) regarding the referenced periodic filings. We will respond to each of the Commission staff’s comments in the order in which they appear in the Letter.
Form 10-KSB for the year ended December 31, 2007
Item 8A. Controls and Procedures, page 15
Comment:
1.
…
Please revise your disclosure to provide separate disclosures addressing your conclusions for each of disclosure controls and procedures based on Item 307 of Regulation S-K and your internal controls over financial reporting based on Item 308(T) of Regulation S-K.
3900A 31st Street North, Saint Petersburg, Florida 33714 727-525-5552 727-499-7413 Fax
Kevin L. Vaughn, Acct. Br. Chief
Re: World Energy Solutions
October 8, 2008
Page 2 of 30
Response:
Attached hereto as Appendix “A” is a draft of an abbreviated Form 10-KSB/A that contains the amendment of Item 8A Controls and Procedures as suggested by the Commission staff. You will notice that we have placed into separate paragraphs, our conclusions relating to disclosure controls and procedures and internal controls over financial reporting. We are providing the proposed amendment to the SEC in draft form to ensure we are including the proper Item 8A disclosures prior to filing with the SEC via the EDGAR system. If this proposed amendment is acceptable, we also will file the revised Exhibit 31 draft that was attached to our September 3, 2008 letter.
Comment:
2.
Further to the above, we note your disclosure that “the Company … does not expect that its disclosure controls and procedures … will prevent all error and all fraud.” … Please revise to state clearly, if true, that your disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives….”
Response:
Attached hereto as Appendix “A” is a draft of an abbreviated Form 10-KSB/A that contains the amendment of Item 8A Controls and Procedures. We have addressed the staff’s comment in the proposed amendment. We are providing the proposed amendment to the SEC in draft form to ensure we are including the proper Item 8A disclosures prior to filing with the SEC via the EDGAR system.
Note 2 – Mergers and Acquisitions, page F-3
Comment:
3.
Please refer to prior comment 3. We note from your response that you fully anticipated that the technology you acquired would result in future sales and that you also anticipated undertaking further development of the acquired technology. We further note your disclosures in your June 30, 2008 Form 10-Q that you expect to further develop the related technology. In light of these disclosures, it is not clear why you believe that the impaired assets will not be held and used in your future operations. Please tell us why you believe your current presentation of the impairment of the assets as a non-operating expense complies with paragraph25 of SFAS 144 and Item 5-03.9 of Regulation S-X. Please note this comment also applies to your June 10, 2008 transaction with Advanced Alternative Energy, Inc.
Response:
In all the acquisitions noted in your comments, management was unable to provide any positive undiscounted cash flow projections related to any of the rights for the technologies
Kevin L. Vaughn, Acct. Br. Chief
Re: World Energy Solutions
October 8, 2008
Page 3 of 30
identified at the time of each acquisition. As a result, the allocation of the acquisition price was unable to support any value associated with the rights acquired and the impairment was necessary. The business purpose was to acquire the rights to the technologies and the cash in each entity.
In response to the classification of the impairments not currently included in loss from operations, we have considered what impact, if any, the reclassification might have on users of the issued financial statements.
We note no effect to the balance sheet as a result of this reclassification. The net loss and loss per common share would also remain unchanged. Loss from operations would increase by the impairment amount for each period in which impairment was recorded.
We also took into consideration qualitative factors related to the potential materiality of the error on the financial statements. The error does not change the trend in earnings (losses), expectations of the general public, the direction of the net loss or loss from operations, compliance with contractual requirements and was not an intentional misstatement to mislead users of the financial statements.
In our professional judgment, we do not believe that this reclassification would affect the judgment of a reasonable person relying upon the currently issued financial statements.
Since we believe this reclassification not to be material, we do not consider it necessary to amend the Company’s 10KSB or 10Q’s for the periods related to your comments. Instead, we would like to suggest that we reclassify the impairment amounts in future filings with the SEC and will follow the disclosure guidance of SFAS 154 – “Accounting Changes and Error Corrections” in such filings.
Comment:
4.
Further to the above, we note that you immediately impaired the intangible assets acquired in the Hydrogen Safe Technologies asset acquisition in September 2007. Further it appears that you also immediately impaired the intangible assets acquired in the Advanced Alternative Energy asset acquisition in June 2008. Please clarify for us the business purpose for the acquisitions of these assets in light of your determination as indicated in your response to prior comment that the assets would not be held and used. Tell us and revise your disclosures in future filings to clearly disclose the specific purpose for each asset acquisition and how you believe each asset acquisition will benefit the company.
Response:
In all the acquisitions noted in your comments, management was unable to provide any positive undiscounted cash flow projections related to any of the rights for the technologies identified at the time of each acquisition. As a result, the allocation of the acquisition price was unable to support any value associated with the rights acquired and the impairment was
Kevin L. Vaughn, Acct. Br. Chief
Re: World Energy Solutions
October 8, 2008
Page 4 of 30
necessary. The business purpose was to acquire the rights to the technologies and the cash in each entity.
In response to the classification of the impairments not currently included in loss from operations, we have considered what impact, if any, the reclassification might have on users of the issued financial statements.
We note no effect to the balance sheet as a result of this reclassification. The net loss and loss per common share would also remain unchanged. Loss from operations would increase by the impairment amount for each period in which impairment was recorded.
We also took into consideration qualitative factors related to the potential materiality of the error on the financial statements. The error does not change the trend in earnings (losses), expectations of the general public, the direction of the net loss or loss from operations, compliance with contractual requirements and was not an intentional misstatement to mislead users of the financial statements.
In our professional judgment, we do not believe that this reclassification would affect the judgment of a reasonable person relying upon the currently issued financial statements.
Since we believe this reclassification not to be material, we do not consider it necessary to amend the Company’s 10KSB or 10Q’s for the periods related to your comments. Instead, we would like to suggest that we reclassify the impairment amounts in future filings with the SEC and will follow the disclosure guidance of SFAS 154 – “Accounting Changes and Error Corrections” in such filings.
Form 10-QSB for the quarter ended March 31, 2008
Comment:
5.
We note that your response to prior comment 7. … Please file your abbreviated amendment on Form 10-Q/A rather than Form 10-QSB/A.
Response:
We respectfully acknowledge the Commission staff’s comment and will file our abbreviated amendment on Form 10-Q/A.
Comment:
6.
We note your response to prior comment 6 and the proposed revised disclosures to be included in your Form 10-Q/A. … [R]evise the disclosures to only present the disclosures required by Item 307 of Regulation S-K. Please note this comment also applies to your Form 10-Q for the quarter ended June 30, 2008.
Kevin L. Vaughn, Acct. Br. Chief
Re: World Energy Solutions
October 8, 2008
Page 5 of 30
Response:
We respectfully acknowledge the Commission staff’s comment and will only include the disclosures required by Item 307 of Regulation S-K when we file our abbreviated amendment on Form 10-Q/A in the form attached hereto as Appendix “B”. We will make this same adjustment to our abbreviated amendment to the Form 10-Q for the quarter ended June 30, 2008 as reflected by Appendix “C”.
Form 10-Q for the quarter ended June 30, 2008
Notes 4. Stock transactions and agreements, page 9
Comment:
7.
We note that you issued 100,000 shares of Series B Convertible Preferred Stock to UTEK Corporation in connection with your acquisition of Advanced Alternative Energy in June 2008. Please tell us and revise future filings to disclose the significant terms of your Series B Convertible Preferred Stock, including voting rights, dividend rights and liquidation preferences. Preferred to paragraph 4 of SFAS 129.
Response:
We reviewed SFAS 129, paragraph 4 and footnote 4 of our 10-Q filing for the period ended June 30, 2008. While we did disclose the voting rights, conversion rights, dates, exercise prices and pertinent dates, we had not disclosed the fact that the Series B Convertible Preferred Stock had no liquidation preferences and had no dividend rights. In our future filings we will include disclosure related to the fact there are no liquidation preferences and no dividend rights related to these preferred shares. We have indicated by italics the proposed modification to the referenced paragraph disclosure within the footnote as follows:
The shares may be converted by the holder at any time into common stock prior to the sixty month anniversary of the execution of the agreement into the face value of the debenture which is $3,500,000 of common shares of WESI, based on the average of the five day closing price prior to the conversion. At any time after six months and before the sixty month anniversary of the execution of the agreement, WESI will have the right, at its sole discretion, to repurchase at an agreed upon percentage value, any non-converted shares of the Series B Convertible Preferred Stock. The shares may be repurchased within twelve months at 105%; within thirteen and twenty-four months at 110%; within twenty-five and thirty-six months at 115%; and at any time after thirty-six months at a 120% value. The convertible preferred shares have no voting rights, no liquidation preferences and no dividend rights.
Kevin L. Vaughn, Acct. Br. Chief
Re: World Energy Solutions
October 8, 2008
Page 6 of 30
Comment:
8.
Please revise future filings to provide disclosures required by paragraphs 40 and 41 of SFAS 128. Please note that this disclosure should include disclosure of the number of securities that could potentially dilute basic EPS in the future but were specifically excluded because to do so would have been anti-dilutive (i.e., the common shares that could be issued upon conversion of preferred stock).
Response:
We will update our future filings to include disclosures as required by paragraphs 40 and 41 of SFAS 128 to disclose the number of securities that could potentially dilute basic EPS in the future, but were not included in the computation of diluted EPS because to do so would have been anti-dilutive for the period(s) presented and will provide a description of any transactions, if in existence, that occur after the end of the most recent period but before the issuance of the financial statements that would have changed materially the number of common shares or potential common shares outstanding at the end of the period.
Comment:
Note 9. Recent Accounting Pronouncements, page 13
9.
We note your disclosures here relating to SFAS 157, SFAS 159, and EITF 07-3. Specifically, you state that “(you) do not expect the adoption of (the standard) to materially impact (your) financial statements” (SFAS 157 and EITF 07-3) and “(you) are currently assessing the possible impact of the adoption of this statement, but (you do) not anticipate it to materially impact the financial statements” (SFAS 159). Since each of these standards was effective for you as of January 1, 2008, please tell us and revise the financial statements in future filings to update these disclosures. To the extent the adoption had a material impact, revise your accounting policy disclosures to disclose the new accounting policy. In addition, clarify if you have chosen to apply SFAS 159 to financial instruments or certain other items at fair value that were not previously required to be measured at fair value.
Response:
We propose the following updates to our future filings with modifications italicized:
In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements.” SFAS No. 157 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. SFAS No. 157 was effective for financial statements issued for fiscal years beginning after November 15, 2007 and
Kevin L. Vaughn, Acct. Br. Chief
Re: World Energy Solutions
October 8, 2008
Page 7 of 30
interim periods within those fiscal years, with early adoption permitted. On February 12, 2008, the effective date for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in financial statements on a recurring basis (at least annually) was delayed to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years for items within the scope of FSP FAS 157-2. The Company has not had any material impact to its financial statements from the adoption of SFAS No. 157 and does not anticipate any material impact upon the adoption of the extended deadline for nonfinancial assets and liabilities.
The Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”, in February, 2007. SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. A not for profit organization shall report unrealized gains and losses in its statement of activitie
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CORRESP 1 filename1.htm WES Letter SEC2 October 8, 2008 Mr. Kevin L. Vaughn, Accounting Branch Chief U.S. Securities and Exchange Commission 100 F Street, N.E., Mail Stop 5546 Washington, DC 20549 Re: World Energy Solutions, Inc. Form 10-KSB for the year ended December 31, 2007 Form 10-QSB for the quarter ended March 31, 2008 Form 10-Q for the quarter ended June 30, 2008 File No. 0- 25097 Dear Mr. Vaughn: This letter and its attachments are being submitted in response to the Securities and Exchange Commission (“SEC” or “Commission”) staff’s comment letter of September 16, 2008 (the “Letter”) directed to World Energy Solutions, Inc. (“WES” or the “Company”) regarding the referenced periodic filings. We will respond to each of the Commission staff’s comments in the order in which they appear in the Letter. Form 10-KSB for the year ended December 31, 2007 Item 8A. Controls and Procedures, page 15 Comment: 1. … Please revise your disclosure to provide separate disclosures addressing your conclusions for each of disclosure controls and procedures based on Item 307 of Regulation S-K and your internal controls over financial reporting based on Item 308(T) of Regulation S-K. 3900A 31st Street North, Saint Petersburg, Florida 33714 727-525-5552 727-499-7413 Fax Kevin L. Vaughn, Acct. Br. Chief Re: World Energy Solutions October 8, 2008 Page 2 of 30 Response: Attached hereto as Appendix “A” is a draft of an abbreviated Form 10-KSB/A that contains the amendment of Item 8A Controls and Procedures as suggested by the Commission staff. You will notice that we have placed into separate paragraphs, our conclusions relating to disclosure controls and procedures and internal controls over financial reporting. We are providing the proposed amendment to the SEC in draft form to ensure we are including the proper Item 8A disclosures prior to filing with the SEC via the EDGAR system. If this proposed amendment is acceptable, we also will file the revised Exhibit 31 draft that was attached to our September 3, 2008 letter. Comment: 2. Further to the above, we note your disclosure that “the Company … does not expect that its disclosure controls and procedures … will prevent all error and all fraud.” … Please revise to state clearly, if true, that your disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives….” Response: Attached hereto as Appendix “A” is a draft of an abbreviated Form 10-KSB/A that contains the amendment of Item 8A Controls and Procedures. We have addressed the staff’s comment in the proposed amendment. We are providing the proposed amendment to the SEC in draft form to ensure we are including the proper Item 8A disclosures prior to filing with the SEC via the EDGAR system. Note 2 – Mergers and Acquisitions, page F-3 Comment: 3. Please refer to prior comment 3. We note from your response that you fully anticipated that the technology you acquired would result in future sales and that you also anticipated undertaking further development of the acquired technology. We further note your disclosures in your June 30, 2008 Form 10-Q that you expect to further develop the related technology. In light of these disclosures, it is not clear why you believe that the impaired assets will not be held and used in your future operations. Please tell us why you believe your current presentation of the impairment of the assets as a non-operating expense complies with paragraph25 of SFAS 144 and Item 5-03.9 of Regulation S-X. Please note this comment also applies to your June 10, 2008 transaction with Advanced Alternative Energy, Inc. Response: In all the acquisitions noted in your comments, management was unable to provide any positive undiscounted cash flow projections related to any of the rights for the technologies Kevin L. Vaughn, Acct. Br. Chief Re: World Energy Solutions October 8, 2008 Page 3 of 30 identified at the time of each acquisition. As a result, the allocation of the acquisition price was unable to support any value associated with the rights acquired and the impairment was necessary. The business purpose was to acquire the rights to the technologies and the cash in each entity. In response to the classification of the impairments not currently included in loss from operations, we have considered what impact, if any, the reclassification might have on users of the issued financial statements. We note no effect to the balance sheet as a result of this reclassification. The net loss and loss per common share would also remain unchanged. Loss from operations would increase by the impairment amount for each period in which impairment was recorded. We also took into consideration qualitative factors related to the potential materiality of the error on the financial statements. The error does not change the trend in earnings (losses), expectations of the general public, the direction of the net loss or loss from operations, compliance with contractual requirements and was not an intentional misstatement to mislead users of the financial statements. In our professional judgment, we do not believe that this reclassification would affect the judgment of a reasonable person relying upon the currently issued financial statements. Since we believe this reclassification not to be material, we do not consider it necessary to amend the Company’s 10KSB or 10Q’s for the periods related to your comments. Instead, we would like to suggest that we reclassify the impairment amounts in future filings with the SEC and will follow the disclosure guidance of SFAS 154 – “Accounting Changes and Error Corrections” in such filings. Comment: 4. Further to the above, we note that you immediately impaired the intangible assets acquired in the Hydrogen Safe Technologies asset acquisition in September 2007. Further it appears that you also immediately impaired the intangible assets acquired in the Advanced Alternative Energy asset acquisition in June 2008. Please clarify for us the business purpose for the acquisitions of these assets in light of your determination as indicated in your response to prior comment that the assets would not be held and used. Tell us and revise your disclosures in future filings to clearly disclose the specific purpose for each asset acquisition and how you believe each asset acquisition will benefit the company. Response: In all the acquisitions noted in your comments, management was unable to provide any positive undiscounted cash flow projections related to any of the rights for the technologies identified at the time of each acquisition. As a result, the allocation of the acquisition price was unable to support any value associated with the rights acquired and the impairment was Kevin L. Vaughn, Acct. Br. Chief Re: World Energy Solutions October 8, 2008 Page 4 of 30 necessary. The business purpose was to acquire the rights to the technologies and the cash in each entity. In response to the classification of the impairments not currently included in loss from operations, we have considered what impact, if any, the reclassification might have on users of the issued financial statements. We note no effect to the balance sheet as a result of this reclassification. The net loss and loss per common share would also remain unchanged. Loss from operations would increase by the impairment amount for each period in which impairment was recorded. We also took into consideration qualitative factors related to the potential materiality of the error on the financial statements. The error does not change the trend in earnings (losses), expectations of the general public, the direction of the net loss or loss from operations, compliance with contractual requirements and was not an intentional misstatement to mislead users of the financial statements. In our professional judgment, we do not believe that this reclassification would affect the judgment of a reasonable person relying upon the currently issued financial statements. Since we believe this reclassification not to be material, we do not consider it necessary to amend the Company’s 10KSB or 10Q’s for the periods related to your comments. Instead, we would like to suggest that we reclassify the impairment amounts in future filings with the SEC and will follow the disclosure guidance of SFAS 154 – “Accounting Changes and Error Corrections” in such filings. Form 10-QSB for the quarter ended March 31, 2008 Comment: 5. We note that your response to prior comment 7. … Please file your abbreviated amendment on Form 10-Q/A rather than Form 10-QSB/A. Response: We respectfully acknowledge the Commission staff’s comment and will file our abbreviated amendment on Form 10-Q/A. Comment: 6. We note your response to prior comment 6 and the proposed revised disclosures to be included in your Form 10-Q/A. … [R]evise the disclosures to only present the disclosures required by Item 307 of Regulation S-K. Please note this comment also applies to your Form 10-Q for the quarter ended June 30, 2008. Kevin L. Vaughn, Acct. Br. Chief Re: World Energy Solutions October 8, 2008 Page 5 of 30 Response: We respectfully acknowledge the Commission staff’s comment and will only include the disclosures required by Item 307 of Regulation S-K when we file our abbreviated amendment on Form 10-Q/A in the form attached hereto as Appendix “B”. We will make this same adjustment to our abbreviated amendment to the Form 10-Q for the quarter ended June 30, 2008 as reflected by Appendix “C”. Form 10-Q for the quarter ended June 30, 2008 Notes 4. Stock transactions and agreements, page 9 Comment: 7. We note that you issued 100,000 shares of Series B Convertible Preferred Stock to UTEK Corporation in connection with your acquisition of Advanced Alternative Energy in June 2008. Please tell us and revise future filings to disclose the significant terms of your Series B Convertible Preferred Stock, including voting rights, dividend rights and liquidation preferences. Preferred to paragraph 4 of SFAS 129. Response: We reviewed SFAS 129, paragraph 4 and footnote 4 of our 10-Q filing for the period ended June 30, 2008. While we did disclose the voting rights, conversion rights, dates, exercise prices and pertinent dates, we had not disclosed the fact that the Series B Convertible Preferred Stock had no liquidation preferences and had no dividend rights. In our future filings we will include disclosure related to the fact there are no liquidation preferences and no dividend rights related to these preferred shares. We have indicated by italics the proposed modification to the referenced paragraph disclosure within the footnote as follows: The shares may be converted by the holder at any time into common stock prior to the sixty month anniversary of the execution of the agreement into the face value of the debenture which is $3,500,000 of common shares of WESI, based on the average of the five day closing price prior to the conversion. At any time after six months and before the sixty month anniversary of the execution of the agreement, WESI will have the right, at its sole discretion, to repurchase at an agreed upon percentage value, any non-converted shares of the Series B Convertible Preferred Stock. The shares may be repurchased within twelve months at 105%; within thirteen and twenty-four months at 110%; within twenty-five and thirty-six months at 115%; and at any time after thirty-six months at a 120% value. The convertible preferred shares have no voting rights, no liquidation preferences and no dividend rights. Kevin L. Vaughn, Acct. Br. Chief Re: World Energy Solutions October 8, 2008 Page 6 of 30 Comment: 8. Please revise future filings to provide disclosures required by paragraphs 40 and 41 of SFAS 128. Please note that this disclosure should include disclosure of the number of securities that could potentially dilute basic EPS in the future but were specifically excluded because to do so would have been anti-dilutive (i.e., the common shares that could be issued upon conversion of preferred stock). Response: We will update our future filings to include disclosures as required by paragraphs 40 and 41 of SFAS 128 to disclose the number of securities that could potentially dilute basic EPS in the future, but were not included in the computation of diluted EPS because to do so would have been anti-dilutive for the period(s) presented and will provide a description of any transactions, if in existence, that occur after the end of the most recent period but before the issuance of the financial statements that would have changed materially the number of common shares or potential common shares outstanding at the end of the period. Comment: Note 9. Recent Accounting Pronouncements, page 13 9. We note your disclosures here relating to SFAS 157, SFAS 159, and EITF 07-3. Specifically, you state that “(you) do not expect the adoption of (the standard) to materially impact (your) financial statements” (SFAS 157 and EITF 07-3) and “(you) are currently assessing the possible impact of the adoption of this statement, but (you do) not anticipate it to materially impact the financial statements” (SFAS 159). Since each of these standards was effective for you as of January 1, 2008, please tell us and revise the financial statements in future filings to update these disclosures. To the extent the adoption had a material impact, revise your accounting policy disclosures to disclose the new accounting policy. In addition, clarify if you have chosen to apply SFAS 159 to financial instruments or certain other items at fair value that were not previously required to be measured at fair value. Response: We propose the following updates to our future filings with modifications italicized: In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements.” SFAS No. 157 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. SFAS No. 157 was effective for financial statements issued for fiscal years beginning after November 15, 2007 and Kevin L. Vaughn, Acct. Br. Chief Re: World Energy Solutions October 8, 2008 Page 7 of 30 interim periods within those fiscal years, with early adoption permitted. On February 12, 2008, the effective date for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in financial statements on a recurring basis (at least annually) was delayed to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years for items within the scope of FSP FAS 157-2. The Company has not had any material impact to its financial statements from the adoption of SFAS No. 157 and does not anticipate any material impact upon the adoption of the extended deadline for nonfinancial assets and liabilities. The Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”, in February, 2007. SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. A not for profit organization shall report unrealized gains and losses in its statement of activitie