10110.1 An issuer is an EGC if it meets all of the following criteria:

10110.2 Revenue Test: The phrase "total annual gross revenues" means total revenues as presented on the statement of comprehensive income under U.S. GAAP (or IFRS as issued by the IASB, if used as the basis of reporting by a foreign private issuer). The term "most recently completed fiscal year" is the most recent annual period completed, regardless of whether the financial statements for the period are presented in the registration statement.

If the financial statements of a foreign private issuer are presented in a currency other than U.S. dollars, total annual gross revenues should be calculated in U.S. dollars using the exchange rate as of the last day of the most recently completed fiscal year.

A bank must include all gross revenues from traditional banking activities. Banking activity revenues may include interest on loans and investments, dividends on investments, fees from loan origination, fees from trust and investment services, commissions, brokerage fees, mortgage servicing revenues, and any other fees or income from banking or related services. (Last updated: 10/30/2020)

If the financial statements for the most recently completed fiscal year are those of the predecessor of the issuer, the predecessor's revenues should be used when determining if the issuer meets the definition of an EGC.

10110.3 First sale of common equity securities: This phrase is not limited to a company's initial primary offering of common equity securities for cash. It could also include registered offerings of common equity pursuant to an exchange offer, merger, employee benefit plan on a Form S-8, and selling shareholder's secondary offering on resale registration statements.

10110.4 Disqualifying Provisions

An issuer retains its status as an EGC until the earliest of:

10110.5 Losing Eligibility Prior to Effectiveness – If a company was an EGC at the time it submitted a draft registration statement or publicly filed a registration statement, but ceases to qualify as an EGC while undergoing the confidential review of its draft registration statement or the review of its publicly filed registration statement – for example, since the initial submission or filing date, a fiscal year has been completed with revenues over $1.235 billion – the company will continue to be treated as an EGC for the purposes of disclosure requirement accommodations in its initial registration statement until the earlier of:

10110.6 Losing Eligibility Between Initial Filing Date and Effectiveness – Securities Act Rule 401(a) provides that the "form and content of a registration statement and prospectus shall conform to the applicable rules and forms as in effect on the initial filing date of such registration statement and prospectus." Accordingly, the ability to use in a registration statement the scaled disclosure provisions applicable to EGCs depends on whether the company qualifies as an EGC at the initial public filing date of the registration statement. If a company qualifies as an EGC on the initial date that it publicly files a registration statement, the scaled disclosure provisions related to EGCs would continue to apply through effectiveness of the registration statement even if the issuer loses its EGC status during the registration process.

10110.7 Losing Eligibility After First Sale – If an issuer loses its EGC status after it has conducted its first sale of common equity securities pursuant to an effective registration statement as an EGC, it cannot regain EGC status.

10110.8 Effect of Prior Exchange Act Reporting Obligation that No Longer Exists - If an issuer would otherwise qualify as an EGC but for the fact that its initial public offering of common equity securities occurred on or before December 8, 2011, and such issuer was once an Exchange Act reporting company but is not currently required to file Exchange Act reports, then the staff would not object if such issuer takes advantage of all of the benefits of EGC status for its next registered offering and thereafter, until it triggers one of the disqualifying provisions. This position is not available to an issuer that has had the registration of a class of its securities revoked pursuant to Exchange Act Section 12(j).

Based on the particular facts and circumstances, the staff may question EGC status of an issuer if it appears that the issuer ceased to be a reporting company for the purpose of conducting a registered offering as an EGC. Issuers with questions relating to taking advantage of the benefits of EGC status after ceasing to be an Exchange Act reporting company should contact the Division's Office of the Chief Counsel.

10110.9 Effect of Predecessor Ineligibility on Successor - If an issuer completes a transaction through which it becomes the successor to its predecessor's Exchange Act registration and reporting obligations and the predecessor is not eligible to be an EGC because its first sale of common equity securities occurred on or before December 8, 2011, then similarly the issuer (successor) is not eligible to be an EGC.