Exchange Act threshold exemptions do not follow shares. Investors that purchased shares in exempt crowdfunding offerings and employees that receive shares under compensation plans in transactions exempt from SEC registration do not count as holders of record under the new Exchange Act reporting threshold. However, once those shares are transferred, the transferees would count as holders of record.

Annual gross revenue is US GAAP revenue. When determining emerging growth company (EGC) status, the $1 billion cap on "annual gross revenues" will be interpreted by the staff simply as US GAAP revenue.

Non-convertible debt cap is measured over a rolling period and includes all issuances. When determining EGC status, the $1 billion cap on non-convertible debt issued during the previous three years refers to a rolling three-year period without respect to any fiscal year end. Unlike determining WKSI status, the definition of debt for EGC status includes all non-convertible debt issued, irrespective of whether it was issued publicly or privately and whether it remains outstanding.

Timing of emerging growth company status determination. An issuer should determine its EGC status at the time it conducts an activity permitted for EGCs. For example, if an issuer conducts test-the-waters communications permitted for EGCs under the JOBS Act but later loses its EGC status, the communications will not be deemed offers in violation of Section 5 of the Securities Act if the issuer qualified as an EGC at the time the communications occurred.

Issuers should address EGC status and level of disclosure. An issuer should prominently disclose in its registration statement that it is an EGC and make it clear what EGC exemptions it is and is not taking advantage of in the offering process and in its future corporate governance and disclosure practices.

Foreign private issuers should choose one confidential submission route. Under certain circumstances, the staff permits foreign private issuers to submit first-time registration statements and amendments on a confidential basis, allowing these issuers to clear all SEC comments before they are required to file publicly. An EGC can also submit its IPO registration statement confidentially but must publicly file at least 21 days before its road show, regardless of whether all comments are resolved. The staff indicated that foreign private issuer EGCs submitting registration statements on a confidential basis should choose either the EGC confidential submission route or the foreign private issuer route in its entirety and may not pick and choose the benefits of each.