Define: Emerging Growth Company

An EGC is a newly public company with less than $1 billion in annual revenue that is eligible for certain regulatory exemptions and reduced reporting requirements under the JOBS Act.

EGCs are eligible for reduced disclosure and reporting requirements, such as confidential submission of IPO filings, exemption from certain auditor attestation requirements, and extended transition periods for complying with new or revised accounting standards.

A company qualifies as an EGC for up to five years after its IPO, or until it reaches $1 billion in annual revenue, whichever comes first.

Some investors may view EGC status as a sign of increased risk, and EGCs may face challenges in attracting investment and navigating the transition to full compliance with SEC regulations.

Yes, EGCs are still subject to the same legal and regulatory requirements as other public companies, and can be held liable for securities fraud, insider trading, and other violations.

EGCs are required to file certain disclosures with the SEC, but are eligible for reduced reporting requirements and exemptions from certain regulations.

Yes, an EGC can choose to opt out of the reduced reporting requirements and comply with the same regulations as other public companies.

Yes, EGCs can still participate in public offerings and fundraising activities, but may be subject to certain restrictions and limitations.

When an EGC exceeds the $1 billion revenue threshold or reaches the end of the five-year eligibility period, it must comply with the full reporting and disclosure requirements of a public company.

A company can determine if it qualifies as an EGC by meeting the revenue and public offering criteria outlined in the JOBS Act and consulting with legal and financial advisors.