What defines an emerging growth company?

Answer: An “emerging growth company” is defined in the Securities Act and the Exchange Act as an issuer with “total annual gross revenues” of less than $1 billion during its most recently completed fiscal year.

How long does EGC status last?

The first of emerging growth companies (“EGC’s”) will begin losing EGC status as the five-year anniversary of the creation of an EGC has now passed.

What happens when a company loses EGC status?

A company that has lost EGC status does not need to present, in subsequently filed registration statements and periodic reports, selected financial data for periods prior to the earliest audited period presented in its initial Securities Act or Exchange Act registration statement.

Are emerging growth companies non accelerated filers?

How does all this affect you? For issuers with annual revenue of less than $100 million and public float between $75 million and $700 million — your company may now qualify as a non-accelerated filer. Note that these rules do not apply to emerging growth companies (EGCs) until they exit EGC status.

Who qualifies as an EGC?

A company qualifies as an emerging growth company if it has total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year and, as of December 8, 2011, had not sold common equity securities under a registration statement.

What are the requirements for a company to be considered an emerging growth company EGC under the JOBS Act?

A category of issuer created under the Jumpstart Our Business Startups (JOBS) Act of 2012, an emerging growth company is a company with annual gross revenues of less than $1,070,000,000 (initially $1 billion, but adjusted for inflation in April 2017) during its most recent fiscal year.

How do you qualify for EGC?

A pre-IPO company will qualify as an EGC if (i) it had less than $1.07 billion of gross revenue during its most recently completed fiscal year and (ii) it has issued no more than $1 billion in non-convertible debt during the prior three-year period.

Can an EGC be a large accelerated filer?

Once non-affiliated public float exceeds $700 million, you will soon trigger large accelerated filer status, exit EGC, and be subject to ICFR attestation requirements.

Can you be an emerging growth company and a smaller reporting company?

For more information, see Practice Note, Determining Smaller Reporting Company Status and Understanding Key Differences in Its Disclosure and Reporting Requirements. While the accommodations available to EGCs and SRCs overlap in some areas, they differ in others. A company may qualify as both an EGC and an SRC.

Can a SPAC be an EGC?

A SPAC may be considered an emerging growth company (“EGC”) as defined in Section 2(a)(19) of the Securities Act, and if so it will remain an EGC until the earlier of (i) the last day of the fiscal year (a) Page 5 WHAT’S THE DEAL? SPACs | 5 following the fifth anniversary of the completion of the IPO, (b) in which the …

Is a SPAC a shell company Rule 405?

See Securities Act Rule 405 and Exchange Act Rule 12b-2. However, any exceptions to the Commission’s shell company limitations designed for business combination related shell companies do not apply to SPACs and any shell company formed to facilitate a merger with a SPAC.

Does SPAC have underwriters?

SPACs seek underwriters and institutional investors before offering shares to the public. The funds SPACs raise in an IPO are placed in an interest-bearing trust account. These funds cannot be disbursed except to complete an acquisition or to return the money to investors if the SPAC is liquidated.