Sonnet Will Take California IOUs at Face Value

Robert Farnsworth, founder and CEO of Irvine, California-based Sonnet Technologies, Inc. announced his company will accept at face value IOUs issued by the State of California for purchase of its products. The offer is open-ended and will extend to distributors, resellers, and end users.

"We believe in the future of California and in those who do business in California," said Farnsworth. "To demonstrate our confidence, we have decided to accept the IOUs even as many banks have determined that they are unwilling to do so. While Sonnet is feeling the effect of the financial downturn, our strong balance sheet permits us to support our customers who sell to California government agencies and can’t afford to hold IOUs."

California State Controller John Chiang started issuing IOUs on behalf of the state on July 2 to conserve cash while lawmakers and Gov. Arnold Schwarzenegger try to close a multibillion dollar budget gap. Also called registered warrants, the IOUs pay an interest rate of 3.75 percent and can be redeemed on Oct. 2 or earlier – whenever state officials reach a budget deal. Because the California IOU notes are considered as securities by the U.S. Securities and Exchange Commission, anyone wishing to pay Sonnet with an IOU must additionally present a notarized bill of sale.

For 23 years, Sonnet has manufactured high-performance computer products in California and intends to stay.