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Financial Requirements: Regulation Crowdfunding

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

If you were incorporated last year or earlier and raising:

- Less than $124K: You will need 2 years of financials (2022, 2023) in GAAP (generally accepted accounting principles) format. These do not have to be reviewed by an independent CPA. Here's an example.

- More than $124K: You will need 2 years of financials (2022, 2023) in GAAP format and a CPA Review Statement. Here's an example.

- More than $1.235M: You will need 2 years of financials (2022, 2023) in GAAP format and an Independent Auditor's Report. Here's an example.

If you were incorporated less than 120 days ago and raising:

- Less than $124K: 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 $124K: You will need a cover sheet, balance sheet, footnotes, and a CPA Review Statement. Here's an example.

- More than $1.235M: You will need a cover sheet, balance sheet, footnotes, and an Independent Auditor's Report.

- If you just recently incorporated but have 2 prior years of operating history (e.g., your company operated as an LLC for a while and then recently converted to a C-Corp), you will need 2 years of financials (2022, 2023) in GAAP format. If you're raising >$124K, these must include a CPA Review Statement.

If you were incorporated more than 120 days ago but within this year and raising:

- Less than $124K: You will need financials in GAAP format for the period spanning your incorporation date up to the current date.

- More than $124K: 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.

- More than $1.235M: You will need financials in GAAP format for the period spanning your incorporation date up to the current date and an Independent Auditor's Report.

*One exception - if this is your second Regulation Crowdfunding campaign and you are raising more than $618K, 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 less than 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

- Footnotes

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

Wefunder can introduce you to a CPA that can do this work for you quickly and cheaply, though feel free to use your own CPA if you prefer. 

 

Can't find what you're looking for?

Email us: support@wefunder.com