All Rights Reserved. Case 20-1 Rose Marketing Inc. Rose Marketing Inc. (Rose or the “Companyâ€) is a private company that provides immersive marketing for locally sold products and handcrafts. Rose entered into a series of agreements with InVest Co. (InVest), to whom shares of preferred stock (the “Preferred Stock†or the “Sharesâ€) and warrants were issued, in exchange for 0 million. The Preferred Stock Issuance • Par value —

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All Rights Reserved. Case 20-1 Rose Marketing Inc. Rose Marketing Inc. (Rose or the “Companyâ€) is a private company that provides immersive marketing for locally sold products and handcrafts. Rose entered into a series of agreements with InVest Co. (InVest), to whom shares of preferred stock (the “Preferred Stock†or the “Sharesâ€) and warrants were issued, in exchange for $100 million. The Preferred Stock Issuance • Par value — $0.01 per share. • Total shares — 250,000. • Liquidation — In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company (a “Liquidation Eventâ€), or any “Deemed Liquidation Event†(defined below), before any payment is made to the shareholders of Rose common stock (“Common Stockâ€), the shareholders of each series of Preferred Stock then outstanding should be entitled to payment out of the funds and assets available for distribution to its stockholders an amount per share equal to the greater of (1) the original issue price for such series of Preferred Stock, plus any dividends declared but unpaid, or (2) such amount per share that would have been payable had all shares of such series of Preferred Stock been converted into Common Stock immediately before such Liquidation Event or Deemed Liquidation Event.

A Deemed Liquidation Event includes any of the following events, unless the holders of at least a majority of the outstanding shares of Preferred Stock elect otherwise: • A merger or consolidation, except for one in which the stockholders of the Company continue to represent at least a majority of voting power after the transaction (a “Merger or Consolidationâ€). • The sale, lease, transfer, or other disposition, in a single transaction or a series of related transactions, by the Company, of all or substantially all the assets of the Company taken as a whole. The amount deemed paid or distributed to the holders of capital stock of the Company upon any such merger, consolidation, sale, transfer, exclusive license, or other disposition should be the cash or the value of the property, rights, or securities paid or distributed to such holders by the Company or the acquiring person, firm, or other entity.

Consent of the Company’s board of directors must be obtained before a Deemed Liquidation Event can occur. Case 3c: Rose Marketing Inc. Page 2 All Rights Reserved. • Conversion option — Each share of Preferred Stock should be convertible at any time, at the holder’s option, and without the payment of additional consideration by the holder into one fully paid and nonassessable share of Common Stock (the “Conversion Rightsâ€). • Termination of conversion rights — In the event of a Liquidation Event or a Deemed Liquidation Event, the Conversion Rights should terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Preferred Stock. • Mandatory conversion — Each share of Preferred Stock should be mandatorily converted upon the date and time specified by vote or written consent of the holders of a majority of the then-outstanding shares of Preferred Stock, in which case (1) all outstanding shares of Preferred Stock should automatically be converted into shares of Common Stock, for no additional consideration, and (2) such shares may not be reissued by the Company. • Voting rights — Holders of the Preferred Stock have the right to vote as a single class with common stockholders on an as-converted basis on any matter presented to the Company’s stockholders for their action or consideration at any stockholders meeting.

Holders of Preferred Stock, as a separate class, should also be entitled to elect four directors of the Company, and holders of the common shares, as a separate class, should be entitled to elect one director of the Company. Thus, the holders of the Preferred Stock control the voting power and Rose’s board of directors. The Warrant Agreement In connection with the issuance of the Preferred Stock, Rose and InVest entered into an agreement (the “Warrant Agreementâ€) providing InVest with the right to purchase shares of the Preferred Stock (the “Warrantsâ€). The Warrants are initially exercisable for 300,000 shares of Preferred Stock. • Exercise price — $0.01 per share. • Term — The Warrants may be exercised at any time on or after issuance and will expire 10 years later or upon the occurrence of a Deemed Liquidation Event. • Method of exercise — Cash payment. • Transfer rights — The Warrants are transferrable with the Company’s prior written consent, which should not be unreasonably withheld. • No stockholder rights — Prior to exercise, holders of the Warrants are not entitled to voting rights, dividends, or any other rights of holders of Preferred Stock or Common Stock.

Case 3c: Rose Marketing Inc. Page 3 All Rights Reserved. • Unit of account — 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 staff guidance 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 Preferred 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? Case 20-1 Rose Marketing Inc.

Required: 9.2 A Harsh Reality: Honors Today we will be reading primary sources related to women and children and working in factories during the Industrial Revolution. How bad was it? Your six evaluations are due at the end of class. 100F Directions: Consider the prompt, below: Analyze the social, political, and economic effects of the Industrial Revolution on women and children during the period 1830 to 1910 in Great Britain and the U.S. 1.

Create a GoogleDoc and “number†it A-G. We will model the first document together. 2. Read each of the primary sources and decide which section of the prompt the source applies to. Does the prompt describe a social (impact on society), political (a legal proceeding), or economic (having to do with the making of money) effect caused by the Industrial Revolution?

3. For each document provide two pieces of information as your answer. One will be whether the document fits into the social, political, or economic category and the other will be your justification for placing it in this category. Yes. You need to write 2-3 sentences for this part.

4. Take the three categories you developed today in class and expand those ideas into full paragraphs. One will be about the social, one about the political, and one about the economic. The full question is: "Analyze the social, political, and economic effects of the Industrial Revolution on women and children during the period 1830 to 1910 in Great Britain and the U.S." Document A Note and Source: Edward Baines was a newspaper journalist and editor for the Leeds Mercury Newspaper. In the 1830s, he was elected to Parliament, and served there as a political liberal.

Although Baines supported the end of slavery and various political reforms, he opposed legislation regulating factories and extending voting rights to the English working class. These are excerpts from his book History of the Cotton Manufacture in Great Britain, 1835. Above all, it is alleged that the children who labor in mills are often cruelly beaten by overlookers, that their feeble limbs become distorted by continual standing and stooping, that in many mills they are forced to work thirteen, fourteen, or fifteen hours per day, and that they have not time either for play or for education. Factory Inspectors who have visited nearly every mill in the country have proved that views mentioned above of labor in factory mills contain a very small portion of truth.

It is definitely true that there have been instances of abuse and cruelty in some factories. But abuse is the exception, not the rule. Factory labor is far less injurious than many of the most common jobs of civilized life. The human frame is liable to an endless variety of diseases. Many of the children who are born into the world, and attain the age of ten or twelve years are so weak, that under any circumstances they would die early.

Such children would sink under factory labor, as they would under any other kind of labor, or even without labor. Document C No person under the age of eighteen shall be employed in any such more than twelve hours in one day, nor more than sixty-nine hours in one week. There shall be allowed not less than one and a half hours for meals. It shall not be lawful to employ in any factory as aforesaid, except in mills for the manufacture of silk, any child who shall not have completed his or her ninth year. It shall not be lawful for any person to employ in any factory as aforesaid for longer than forty-eight hours in one week, nor for longer than nine hours in one day, any child who shall not have completed his or her eleventh year.

Source: Excerpted from The Factory Act of 1833, as outlined by English Parliament. Document B Unless you have visited the manufacturing towns and seen the workers of Manchester (England), you cannot appreciate the physical suffering and moral degradation of this class of the population. Most workers lack clothing, bed, furniture, fuel, wholesome food—even potatoes! They spend from twelve to fourteen hours each day shut up in low-ceilinged rooms where with every breath of foul air they absorb fibers of cotton, wool or flax, or particles of copper, lead or iron. They live suspended between an insufficiency of food and an excess of strong drink; they are all wizened, sickly and emaciated, their bodies thin and frail, their limbs feeble, their complexions pale, their eyes dead.

If you visit a factory, it is easy to see that the comfort and welfare of the workers have never entered the builder’s head. O God! Can progress be bought only at the cost of men’s lives?†Source: Flora Tristan, French socialist and women’s rights advocate, her published journal, 1842. Document E Document D Document G “Slaver Wagonsâ€, 1846 We were not aware, until within a few days, of the modus operandi of the factory powers in this village of forcing poor girls from their quiet homes to become their tools and, like the Southern slaves, to give up their life and liberty to the heartless tyrants and taskmasters. Observing a singular-looking "long, low, black" wagon passing along the street, we made inquiries respecting it, and were informed that it was what we term a "slaver." She makes regular trips to the north of the state [Massachusetts], cruising around in Vermont and New Hampshire, with a "commander" whose heart must be as black as his craft, who is paid a dollar a head for all he brings to the market, and more in proportion to the distance-if they bring them from such a distance that they cannot easily get back.

This is done by "hoisting false colors," and representing to the girls that they can tend more machinery than is possible, and that the work is so very neat, and the wages such that they can dress in silks and spend half their time in reading. Now, is this true? Let those girls who have been thus deceived, answer. Let us say a word in regard to the manner in which they are stowed in the wagon, which may find a similarity only in the manner in which slaves are fastened in the hold of a vessel. It is long, and the seats so close that it must be very inconvenient.

Is there any humanity in this? Philanthropists may talk of [African] slavery, but it would be well first to endeavor to emancipate the slaves at home. Let us not stretch our ears to catch the sound of the lash on the flesh of the oppressed black while the oppressed in our very midst are crying out in thunder tones, and calling upon us for assistance. Source: from Voice of Industry, January 2, 1846, in H.R. Warfel ET. al., ed., The American Mind (New York: American Book Company, 1937), p 392.

Document F Letter from Mary Paul Lowell, Massachusetts Dec 21, 1845 Dear Father, I received your letter on Thursday the 14th with much pleasure. I am well which is one comfort. My life and health are spared while others are cut off. Last Thursday one girl fell down and broke her neck which caused instant death. She was going in or coming out of the mill and slipped down it being very icy.

The same day a man was killed by the cars. Another had nearly all of his ribs broken. Another was nearly killed by falling down and having a bale of cotton fall on him. Last Tuesday we were paid. In all I had six dollars and sixty cents paid four dollars and sixty-eight cents for board.

With the rest I got me a pair of rubbers (rain boots) and a pair of .50 cent shoes. I get along very well with my work. I can doff as fast as any girl in our room. I think I shall have frames before long. The usual time allowed for learning is six months but I think I shall have frames before I have been in three months as I get along so fast.

I think that the factory is the best place for me and if any girl wants employment I advise them to come to Lowell. Tell Harriet that though she does not hear from me she is not forgotten. I have little time to devote to writing that I cannot write all I want to. Source: Mary S. Paul to Bela Paul and Henry S.

Paul [recipients]. From Thomas Dublin, ed., Farm to Factory: Women’s Letters, (New York: Columbia University Press, 1981), pp.. Summative Grading Scale 7 = = = = = = = 35 A Harsh Reality: B Day Prompt: Analyze the social, political, and economic effects of the Industrial Revolution on children during the period 1830 to 1910 in Great Britain and the U.S. Use this checkbox to estimate your rubric points: