How to maintain my disclosure requirements to investors post-raise?

Following the closure of your Regulation CF (“Reg CF”) deal, you are required to provide an annual report to your investors.

The Form C-AR (Annual Report) is a mandatory filing for any issuer that has successfully sold securities in a Regulation Crowdfunding (Reg CF) offering. This requirement persists regardless of whether the offering is currently "live" or has closed.

An issuer must file a Form C-AR if:

The offering closed successfully within the last 12 months.
The offering is currently live, and a "rolling close" (disbursement of funds) was conducted in the previous fiscal year.

Note: For issuers with a fiscal year ending December 31, the Form C-AR filing deadline is April 30 of the following year.

Additional information on the Form C-AR can be found here.

What is a Form C-AR?

Form C-AR is an annual report filed via the SEC’s EDGAR system. It provides investors and the Commission with updated information regarding the company’s progress, including its financial condition, ownership structure, and use of proceeds. While it mirrors much of the information in the original Form C, it does not include an "offering" component, as it is a disclosure document rather than a solicitation document.

Is the Form C-AR an annual requirement?

Yes. An issuer must continue to file Form C-AR annually until they meet one of the following termination of reporting criteria:

The issuer becomes a reporting company under Exchange Act Sections 13(a) or 15(d).
The issuer has filed at least one annual report and has fewer than 300 holders of record.
The issuer has filed at least three annual reports and has total assets not exceeding $10 million.
The issuer (or a third party) repurchases all securities issued in the Reg CF offering.
The issuer liquidates or dissolves in accordance with state law.

Note on Financials: Unlike the initial Form C, audited or reviewed financial statements are not required for a Form C-AR unless they have already been prepared for other purposes.

What are the consequences if an issuer fails to update their financials by the deadline?

If the 120-day window passes without the filing of updated financials, the issuer’s offering is no longer compliant with SEC regulations. All offering activity must cease immediately. The issuer will be unable to process new subscriptions or close on pending funds until the required financial disclosures are filed via a Form C amendment. In addition, you would not be able to launch a new offering until you become current in your filing obligations.

If an offering deadline is already set beyond April 30, but financials need updating, which amendment type is required?

The issuer must file a Material Amendment (Form C/A). Because updated financial information is considered "material" to an investor’s decision-making process, a standard immaterial update is insufficient. This filing notifies existing and prospective investors of the new financial data and ensures the offering remains in good standing with the SEC.

Keeping Investors Updated

In addition, you will also find it is best to continue updating investors with information on the company’s progress and developments throughout the year to maintain engagement, answer questions and potentially even prime them for investing in another round, subject to applicable rules governing communications. This is all easily manageable by automatically transferring your investor list into the DealMaker Engage communications portal following your deal. You will have a platform to continue privately engaging and updating your investors all in one easy place. Click here for more information on DealMaker Engage. Contact us to get your deal ready for Engage!

Click here for more information on DealMaker Engage. Contact us to get your deal ready for Engage!