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Financial Requirements: Regulation Crowdfunding

The law requires that you disclose up to two years of financials in GAAP (generally accepted accounting principles) format. 

If you are raising less than $107,000 you must provide GAAP financials as explained below, which include an explanation of your taxes in the notes section (note: full tax statements will not be required.) These do not have to be reviewed by an independent CPA.

If you are raising more than $107,000, you will also need a CPA Review Statement.

We can introduce you to CPAs that can do this work for you quickly and cheaply. 

However, if you are using your own CPA, please provide them with this information:

1. GAAP Financials must include:

  • Balance Sheet

  • Income Statement

  • Statement of Cash Flows

  • Statement of Stockholder's Equity

  • Notes ← Make sure this is included. 

Notes are typically 2-5 pages and describe your major accounting policies. Here's an example of GAAP financials.

2. Years required:

  • Incorporated within 120 days of the fundraise: Need balance sheet as of a date in that period, which may be the inception date

  • Incorporated 2018: Need GAAP compliant 2018 financials (from inception)

  • Incorporated 2017: Need GAAP compliant 2017 financials (from inception) 

  • Incorporated 2016: Need GAAP compliant 2016 and 2017 financials

  • Incorporated earlier: Need GAAP compliant 2016 and 2017 financials

  • If your fiscal year is not 12/31, please provide year end financials. Your financial statements cannot be more than 16 months old.

Even if you are pre-revenue and have $0s all the way through- these statements are still required. 

NOTE: PLEASE DO NOT JUST SUBMIT YOUR TAX STATEMENTS, OR QUICK BOOKS. THEY MUST BE IN THE CORRECT FORMAT TO BE ACCEPTED BY THE SEC. 

Have you raised a Reg CF round in the last 12 months?

If yes, and you are raising more than $535,000 through two offerings, within a 12 month period, you will need audited financials. These will have to be completed by a CPA who is qualified to complete audits. 

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