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How much does a Regulation A+ offering cost?

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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+.

Note that this cost summary is for conventional Reg A+ offerings, the Reg A+ ICO costs are significantly lower.

Total cash costs are generally approximately 8% of the capital raised without a Broker-Dealer, and approximately 10% 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 filing, Audit. ~$80k plus audit for a very small offering, more for a larger raise.

 

General Costs:

  • SEC Form 1A filing. $45k for a startup ($55k for an existing company), payable to the legal service provider to do the work of gaining SEC qualification, includes due diligence for a Tier 2 offering. (More for a Tier 1, amount and time depends on which States company selects).
  •  The cost of Audittwo-year audit by your choice of provider. Ranges from $2k for a new startup to far higher amounts for established, complex businesses. We can introduce you to good auditors.
  • Marketing costs will depend on specific circumstances. $50k to $300k or far higher for a larger offering. Expect 2% to 4% of the raised amount. (Stated here as % for simplicity only. NOT charged as a %, they are paid in cash according to their budget).
  • Transfer Agent, Escrow fees will be approximately 0.5 to 1% of capital raised. (Not charged as a %.)
  • When broker-dealer syndicates are involved, they will charge approx. 7.5% of the capital they bring in and some may levy a 1 to 4% 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. For BD involvement with no selling effort on their part, they will charge a fee of 1to 3% of capital raised.

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.
  • DTCC Filing fee to make your stock easier to transfer to investor brokerage accounts, $12k-18k.
  • For the RegA+Audition(TM) 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. 

 

Related Content: 

Timeline Schedule for a Regulation A+ Offering

Timeline Schedule for a Regulation A+ IPO