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How much does a Regulation A+ offering cost?

Costs Summary Estimate for a Reg A+ Offering on Manhattan Street Capital

This list is intended to summarize the costs for guidance and information purposes.  It is not precise, and it is not a binding proposal. Most fees below are paid directly to the relevant service provider. When needed we will refer you to service providers that are experienced in Reg A+.

Total cash costs are generally approximately 10% of the capital raised without a Broker-Dealer, and approximately 12% with a Broker-Dealer, Plus warrants (which are similar to stock options). (NOT charged as a percentage - we use % here as a guide only.)

Costs incurred prior to achieving the first closing: Marketing, Form 1-A legal filing, Audit, Broker-Dealer up front fee, some payments to Manhattan Street Capital. See below for more detail;

 

General Costs:

  • SEC Form 1A filing. $50k or more, payable to the legal service provider to do the work of gaining SEC qualification for a Tier 2 offering. (More for a Tier 1, amount and time depends on which States company selects).
  •  The cost of a two-year US GAAP audit by your choice of provider. Ranges from $2k for a new startup to far higher amounts for established, complex businesses. We will introduce you to experineced and cost effective auditors. If your company was started 6 months ago then you are required to provide the audit for the 6 months.
  • Marketing costs will depend on specific circumstances. Early months set up and content creation costs of $50k to $200k. Expect media/advertising costs of 2% to 6% of the raised amount. (Stated here as % for simplicity only. NOT charged as a %, the agencies and media like Google and Facebook are paid in cash according to the budget that you select). These fees go direct from your companyy to the marketing agency and to the media firms like Google and Facebook.
  • Transfer Agent, Escrow fees will be approximately 0.5% of capital raised. (Not charged as a %.)
  • For Broker Dealer involvement in order to allow access to investors in the US States that are not cooperating with the SEC, we recommend a broker-dealer to our client companies that charges a 1% fee. When broker-dealer syndicates are involved, they will charge approx. 7.5% of the capital they bring in and may levy a 2 to 3% fee on the capital raised through the Manhattan Street Capital site. They also charge an upfront cash fee, the amount varies. Approximately $20k on a small deal and much more on larger deals. 

Ongoing Expenses:

  • SEC required annual audit at US GAAP standard - depends on your provider. (For Tier 2 offerings only) PCAOB level required after the Issuer is listed on the NASDAQ or NYSE.
  • Each six months report to SEC the profits and revenues - nominal direct cost. (Far more stringent requirements for S-1 listings on the NASDAQ and NYSE)
  • Transfer agent fee per investor, nominal, only applies while the shares are held at transfer agent.

Optional Fees:

  • If you choose to list the company on the OTCQB marketplace, the cost of registration and ticker is $2,500 paid to OTC Markets. 6 to 8-week process. Higher price for OTCQX - $20k. Staying listed on the OTC costs $10,000 per year for the QB – paid to OTC Markets. Higher price for OTCQX. In most Reg A+ IPOs, marketing costs can be reduced because more of the work is done by the underwriter syndicate.
  • DTCC Filing fee to make your stock easier to transfer to investor brokerage accounts, $12k-18k.
  • For the RegA+Audition(TM) (it is a market test of your company) MSC charges a standard price of $10k/mth (currently available for the reduced price of $8k per month) including marketing for a minimum of two months. Note that the marketing services provided in the program are provided by a separate marketing agency, not by Manhattan Street Capital.  See the  RegA+Audition(TM) FAQ.

You might be interested in our FAQ that explains the Regulation A+ offering process in details.  We have broken up the process into steps and illustrated it with a summary view flowchart. 

 

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Related Content: 

Summarize Regulation A+ for me

Timeline Schedule for a Regulation A+ Offering

Timeline Schedule for a Regulation A+ IPO