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http://www.TheSecuritiesAttorneys.com Reg 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
www.TheSecuritiesAttorneys.com 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