We are truly at a unique point in the JOBS Act life-cycle. In 2016, Regulation Crowdfunding ("Reg CF") became legal and since then a couple hundred companies have tried their hand at raising money online through the crowd. We have been a part of a large number of these offerings when an issuer is trying to raise over $100,000 and needs a CPA's financial statement review. But now, being in April 2017, many of the Companies who have found success find a new challenge, updating their investors with an annual report on From C-AR (Form C Annual Report).
The Form C-AR does not require another financial statement review from a CPA, but rather the Company to present GAAP compliant financial statements certified by the principal officer of the Company. While this won't necessarily be a new task since the initial filing to raise money also required GAAP compliant financial statements, many of those filings were pre-funding from the crowd and included the CPA who reviews financial statements before such are released to the public. With the Form C-AR, the Company may now have to show post-funding financials and without the assistance of the CPA doing the review. What happens if the From C-AR is not filed....that's a good question. We will definitely be watching because it's almost certain some companies won't complete this task.
If you are a successful Reg CF issuer that is now having to fill out the annual report on Form C-AR and need help, don't hesitate to use the contact us form for assistance.
dbbmckennon is a full service CPA firm with offices in Orange County, San Diego and Santa Monica. We specialize in companies filing with the SEC and utilizing equity crowdfunding through Reg A+ and Regulation Crowdfunding. For additional complimentary information regarding this topic or other questions you may have please call one of dbbmckennon‘s offices located in Southern California or contact us here.