Greenlighting Growth Act

The Greenlighting Growth Act would amend federal securities laws to clarify financial reporting requirements for Emerging Growth Companies (EGCs), which are defined as companies earning less than $1.235 billion annually. Currently, the 2012 JOBS Act allows these smaller companies to go public using simplified SEC filing requirements, including a two-year audited financial reporting window. However, when EGCs attempt to grow through acquisitions, the law becomes unclear, and the SEC may demand additional years of audited financial data from acquired companies, creating costly compliance burdens.

If enacted, this bill would establish clear rules stating that EGCs need only present financial statements from their earliest audited period used in their initial public offering, and would exempt them from providing financial statements for acquired companies from periods before their IPO. Even after a company graduates from EGC status, it would not be required to retroactively present historical financial statements from before its original IPO. The bill applies to reporting requirements under both the Securities Act of 1933 and the Securities Exchange Act of 1934.