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Financial Requirements: Regulation Crowdfunding

The law requires that you disclose certain financial information in order to raise under Reg CF. The specific financial reporting requirements depend on two factors: incorporation date and raise size.

If you were incorporated more than 6 months ago, and raising:

  • Less than $250K: You will need 2 years of financials (2018, 2019) in GAAP (generally accepted accounting principles) format. These do not have to be reviewed by an independent CPA. Here's an example.
  • More than $250K: You will need 2 years of financials (2018, 2019) in GAAP format and a CPA Review Statement. Here's an example.

If you were incorporated <120 days ago and raising:

  • Less than $107K: You will need a cover sheet, balance sheet and footnotes for the period spanning your incorporation date up to the current date. Here's an example. 
  • More than $107K: You will need a cover sheet, balance sheet, and footnotes, and a CPA Review Statement. Here's an example.
  • If you just recently incorporated but do have 2 prior years of operating history, then you will need 2 years of financials (2018, 2019) in GAAP format. If you're raising >$107K, these will need to include a CPA Review Statement. 

If you were incorporated >120 days ago, but within the last 6 months, and raising:

  • Less than $107K: You will need financials in GAAP format for the period spanning your incorporation date up to the current date.
  • More than $107K: You will need financials in GAAP format for the period spanning your incorporation date up to the current date and a CPA Review Statement. Here's an example

*One exception - if this is your second Regulation Crowdfunding campaign and you are raising more than $535K, you will need audited financials. These will have to be completed by a CPA who is qualified to complete audits. 

With the exception of companies incorporated <120 days ago, this is what needs to be included in GAAP financials:

  • Cover page
  • Balance Sheet
  • Income Statement
  • Statement of Cash Flows
  • Statement of Stockholder's Equity
  • Foot notes

Foot notes are typically 2 -5 pages and usually include: accounting methodologies used, an explanation of your taxes, a summary of any debt, and a summary of outstanding equity.

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

We can introduce you to accountants that can do this work for you quickly and cheaply, though feel free to use your own accountant if you prefer. 

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.