Regulation A - Costs and Time

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Regulation A – Costs and Time


Although many commentators

overlook this, two of the most

important factors in any offering are the

costs and time involved

How fast can you get your money

and how much do you have to go

out of pocket up front to get your

money

Old Reg A offerings took as much as

nine months after filing, although we

know those that took only three

months

We do not believe most offerings can

be completed in less than three

months no matter how careful you are

with your filing

For Tier 2, you need

two full years of audits – the SEC reports that audits

for IPOs comparable to Reg

A filings spent 1.65% on audits

In my experience, the audit is the last thing done before filing

You must consult with an

experienced auditor for your company's

situation

We are familiar with experienced small company

PCAOB auditors

The SEC estimates about 200 hours of legal time at $400 per hour,

cheaper rates are available

Fees for electronic filing on EDGAR vary widely but with electronic EDGAR filing

you save on your printing bill

An underwriter on a $25 million deal

can demand a large due

diligence fee to sign a letter of

intent

The underwriter gets a

commission on stock sold plus

you pay all expenses

You will also need to pay a market maker

about $10,000 to file a Form 15c211 and apply for DTC

eligibility

Fees for a transfer agent to transfer stock for your

shareholders vary widely but are not

high

OTCMarkets wants $4,500 per year

to be in their system

Even a Tier 2 deal will have to pay some state filing

fees

When planning your IPO, budget

out these expenses in

advance, not all have to be paid

immediately

An underwriter may help you

raise money pre-IPO to help with

expenses


Want to know more? – email me at John.Lux@ Securities-Law.info

(240) 200-4529

John E. Lux was in

the top 5% of authors on

Slideshare in 2014 and has

been quoted by Bloomberg as an expert on reverse

mergers


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Disclaimer

This is not legal or investment advice of any kind

Seek competent advice from qualified attorneys and investment bankers

Your situation may vary

The more you know about finance and business, the more you can profit

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