June 16, 2006 Letter: SEC Staff Comments; Solo Responses

Full letter available here:

SEC Staff Comment
...Other Contingencies, page 28

4. You disclosed that you have entered into agreements with the State of Illinois and the City of Chicago related to the acquisition and development of certain property. You further disclose that you are required to fulfill certain obligations, which if not fulfilled would require you to repay the amounts granted to you. If material, please expand your disclosure to discuss the certain obligations you have under these agreements and the amount you may be required to repay. Please also disclose whether you have recorded any amounts in your financial statements related to amounts you expect to repay, including the periods and line items in which these were recorded. Similarly, please include this information in Note 17 to your financial statements....

Solo's response:

We confirm that we will expand our disclosure in our future filings (beginning with our Annual Report on Form 10-K for the fiscal year ending December 31, 2006), in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations “Liquidity and Capital Resources” by including the underlined text below and will similarly include such disclosure in our notes to the financial statements, as appropriate, for such Annual Report. We will also continue to analyze any related loss contingencies in accordance with SFAS 5 and provide the necessary disclosures based on such guidance. We have not recorded any liability related to this contingency because we believe the likelihood of incurring a liability is not probable.

“The Company has entered into agreements with the State of Illinois (“State”) and the City of Chicago (“City”) relating to the acquisition and development of certain property of the Company located in the City. Pursuant to these agreements, the State and City provided certain grants to the Company, paid certain costs on behalf of the Company and undertook certain obligations relating to the property. Under these agreements, the Company is required to fulfill certain obligations relating to development of the property and retention of a certain number of employees.

If these obligations were not fulfilled, the Company may be required to repay certain amounts granted or paid by the City or the State, the net impact of which, we believe, would not be material to our business, financial condition, results of operations or cash flows....