Page 81 - Initial Public Offering - An Introduction to IPO on Wall Street

action the organization has taken or plans to take to correct any shortcomings. Internal and
external liquidity streams should also be listed and defined and any material streams of liquid
assets that are not used should be explained briefly.

Capital Resources—The MD&A should provide a summary of the registrant 's material
obligations for capital expenses, the general intent of those obligations and the estimated source
of funds available to meet such obligations. Any established material developments in the
capital resources of the business, favorable or unfavorable, should be disclosed.

Disclosure of off-balance sheet processes, overall contractual commitments and other
aspects—This section may include, but is not limited to, a description of off-balance sheet deals
and agreements, including the relationship between the company and unconsolidated firms or
other individuals that have, or are highly probable to have, an real or potential material effect on
the financial situation, adjustments in the financial position, revenues or expenditures, operating
performance, liquidity or capital.

Key Accounting Policies and Projections—This segment should provide more visibility into
the consistency and uncertainty of the financial situation and operational effectiveness of the
business as a consequence of key accounting policies, judgments and projections. The
explanation of important accounting policies in the notes to the financial reports should be
augmented not duplicated, and, if needed, quantitative and qualitative reporting, sensitivity
evaluations, and essential segmental projections should be included. This segment remains a
topic of great focus for the SEC.

Market risk disclosures—A quantitative and qualitative review of the key risks of the registrant
(i.e. forex risk, risk of commodity prices, interest rate risk, and other related market risks), how
the registrant handles these risks, any adjustments in such strategies over time, and an
evaluation of the vulnerability to the effects of income if there were hypothetical interest rate
changes.

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