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You are the Chief Financial Officer for Bio Innovations, a private company operating since 1993. Bio develops and markets cancer drugs, and recently became a cloud provider for medical centers. You recently joined the company and have been encouraging the founder and executive chair, Mary Cooper, to take the company public. Mary is reluctant to do that primarily because of the nature of the business and her belief that GAAP financial statements place the company in an unfavorable position, especially against the background of its significant research and development expenditure that is expected to continue for the foreseeable future. Mary met an investment banker during her recent family vacation and immediately called you into her office on her return to tell you of the interaction with the banker who mentioned something to her about non-GAAP reporting. Mary is unsure of what he meant by non-GAAP reporting and how such reporting would create a favorable position for Bio, were it to go public. She is also fearful that she would face penalties if a publicly listed Bio engaged in what seems like a dubious reporting practice. Mary reluctantly asks for your advice as the investment banker is encouraging her to take the company public and wants to make a formal presentation to Bios board on going public You are excited to hear about this development as the main reason you joined the company is that you felt it was an excellent candidate for a listing on the New York Stock Exchange. Further, your involvement would be a major career achievement. Required: Write a memo to Mary to update her on non-GAAP reporting, allay her concerns and prepare her for the upcoming meeting with the investment banker. Restrict you memo to non-GAAP reporting and related matters.

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