Regulation Crowdfunding (Reg CF) offers an exciting avenue for startups and small businesses to raise capital directly from the public. However, success in a Reg CF offering comes with certain ongoing responsibilities, chief among them being the legal obligation to keep investors informed about the business’s progress and financial health. This is where the Form C-AR, or the annual report, becomes crucial.
Understanding Form C-AR
Form C-AR is an annual report that issuers who have successfully raised funds through Regulation Crowdfunding must file with the SEC. This document helps maintain transparency by providing investors and the public with up-to-date information on the company’s financial status and operational developments. It typically includes updated financial statements, a discussion of the business’s operations and financial condition, and details on the use of the funds raised.
Step-by-Step Guide to Filing Form C-AR for Free
Before Filing: Preparation is Key
- Gather Financial Statements: You will need to compile financial statements for the most recent fiscal year. If your total annual gross revenues or the total offering amount from all securities offerings in the past 12 months are less than $124,000, your company’s principal executive officer can certify them. If they are between $124,000 and $618,000, they must be reviewed by an independent public accountant. If they are over $618,000, they may need to be audited. Download the free step-by-step guide to see which category you fall in.
- Update Business Information:
- Summarize significant business activities and operational milestones achieved during the year.
- Discuss any known trends, demands, commitments, or events that are likely to affect your financial condition.
- Report on the progress of specific projects funded through the crowdfunding campaign.
- Outline the Use of Proceeds:
- Detail how the funds raised have been used in comparison to the previously disclosed plans.
- If there are deviations from the planned use of proceeds, provide a rationale for these changes.
Filing on EDGAR:
To continue, download the instructions for free.
