Footnotes for your lawyer:
Financial numbers that must be disclosed include assets, cash, accounts receivable, short term debt, long term debt, revenues, cost of goods,
taxes paid, and net income. Financials are certified by CEO if raised under $100k. Otherwise, financials must be reviewed by an independent CPA.
No audited financials are required for the issuer's first Regulation Crowdfunding raise.
Our library includes industry standard investment contracts like the Y Combinator SAFE and the Techstars Convertible
Note. However, "NCF" can handle any type of custom security.
During the fundraise, the SEC requires periodic fundraising progress updates on Form C-U and any amendments to the offering statement on Form C/A. We file these automatically based on information the issuer provides.
If the issuer raises more than $1m and opts for a concurrent Regulation D 506(c) raise, National Crowd Finance will handle the verification of accredited status of investors. Additionally, any public solicitation should comply with the tighter rules of Regulation Crowdfunding.
Investment limits are calculated from self-reported income and net worth. "NCF" helps enforce investor limitations.
The issuer is not liable unless it can be proven they know an investor lied.
Advertisements can include no more than:
(1) a statement that the issuer is conducting an offering and a link to their CF profile;
(2) the terms of the offering; and
(3) facts like name, legal identity, location, phone, website, e-mail, and a brief description of the business.
“Terms of the offering" include:
(1) the amount of securities offered;
(2) the nature of the securities;
(3) the price of the securities; and
(4) the closing date of the offering period.
The issuer is not exempt from Exchange Act Section 12g and is subject to the Exchange Reporting Act if they have over 500 hundred unaccredited shareholders or over 2000 total shareholders, while also having over $25m in assets.
The annual report includes financial statements self-certified by the CEO as well as a business discussion. No review or audit is required. Annual reports terminate after 3 years if the company has less than $10m in assets, or after 1 year if there are fewer than 300 shareholders. Filing the annual report is not a condition of the exemption.