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management discussion & analysis (MD&A)

Katherine Motlagh's Profile

Hi,

has anyone out there had to write an MD&A section for an offering from a private company? Are there any particular aspects that woudl make that different from a SEC registrant? Are there any resources (white papers, corporate finance discussions, bolgs, etc..) you could recommend that were useful in the process?

Answers

Andrew Lee
Title: Director of Finance
Company: Anonymous
(Director of Finance, Anonymous) |

Katherine-

When you say "private company", are you referring to a company issuing under rule 144a?

Katherine Motlagh
Title: Vp Finance
Company:
(Vp Finance, ) |

it is a private placement to qualified investors.

thanks,
katherine

Steve Rabin
Title: CPA
Company: Steve Rabin CPA
(CPA, Steve Rabin CPA) |

What specific registration will you be filing, S-1, S-3, ?. The instructions for each form type at www.sec.gov are a good place to start. You also might want to search Edgar for recent similar Filings by other companies in the same industry (SIC) code, AND search for any responding SEC staff comments (Edgar filing type=UPLOAD) indicating what was done wrong in these filings. Don't make the same mistakes they made :)

The securities laws of 1933 increase the auditor's liability for initial offerings, therefore they will closely read every word for excess optimism and try to tie every number to the body of the filing. The SEC reviewers are also more likely to spend time looking at initial filings so plan to spend more time than you would for an ongoing filing.

You might want to attend a current workshop in SEC reporting. I teach for www.cpeonline.com which offers such classes. So does www.secinstitute.com

You also might want to look at any XBRL requirements in your situation and at special text editors for SEC reporting such as www.webfilings.com

Your SEC attorney should also review the draft filing and they can suggest additional resources, in particular any language necessary under rules 144/145 regarding share transfer limits and 6 month holding periods for unregistered securities.

Katherine Motlagh
Title: Vp Finance
Company:
(Vp Finance, ) |

we are doing a private placement and will not be an SEC registrants but want to include MD&A in the spirit of full disclosure and for future. thanks for your comments!

katherine

Topic Expert
Barrett Peterson
Title: Manager, Accounting Standards,
Company: TTX
(Manager, Accounting Standards,, TTX) |

We present an MD&A in our annual Report, but conform it to SEC requirements, the only general standards in the US and a good benchmark. The SEC's website contains the rules and the Staff Guidance on the subject. I have also drafted an MD&A for an IPO preparation circumstance [a previously public company, now private, but substantiall changed]also clearly to SEC requirements.

There is IASB guidance on management comments for IFRS.

Barrett Peterson

Phil Bolles
Title: Chief Financial Officer
Company: Global Commercial Strategies Group
(Chief Financial Officer, Global Commercial Strategies Group) |

You note the offering as private company, so I assume that the offeror is not and will not be an SEC registrant. If so, the local regulations of the offeror may determine the requirement for and content of the MD&A. However, assuming that you wish to include MD&A in the interest of full disclosure of the offeror's business operations, there is an excellent publication - Staff Review of Common Financial Reporting Issues Facing Smaller Issuers - that provides guidance on MD&A disclosures on pages 23 and 24. Locate it at the SEC website - www.sec.gov. On the home page, click on Corporation Finance under Divisions/Offices. Under Specific Information About . . ., click Accounting and Financial Reporting. Under Locating Other Helpful Information, click Corporation Finance Accounting & Financial Reporting - Frequently Requested Materials. The Staff Review will be the first item on the page.

The guidance is general but useful since it describes the type of information and manner of presentation. It also references SEC releases that are more specific as to content.

I trust that this will help.

Katherine Motlagh
Title: Vp Finance
Company:
(Vp Finance, ) |

this is very helpful, thanks!

katherine

Debbie Kaufman
Title: CFO/COO
Company: Rood & Riddle Equine Hospital
(CFO/COO, Rood & Riddle Equine Hospital) |

All good suggestions. I have two additional suggestions:
1. You might also look at The Pink Sheets to see similar filings. The website is otcmarkets.com.
2. I attended a seminar by SEC Institute that was very helpful. They were able to distill reams of information down to a managable amount of essentials while making the regulations more understandable. At my suggestion our CEO also attended so he would understand the process better.

I hope all goes well for you and your company,
Debbie

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