Hard Transitions

The JOBS Act also does not provide much guidance in relation to various phase-ins or transitions once an issuer that was an EGC crosses one of the specified thresholds and loses its EGC status.  In its set of FAQs on Title I of the JOBS Act, the Staff outlined certain principles relating to transition out of EGC status, such as the principles applicable to the availability of confidential review, the form/contents of a registration statement, and the ability to engage in test-the-waters communications.  Essentially, an issuer must test its status throughout the submission/filing process to ensure that it qualifies as an EGC at the time that it is engaging in the relevant activity, or choosing to rely on benefits available to EGCs.  Later in its life, an issuer that is approaching one of the thresholds (such as large accelerated filer status or the $1 billion in revenues threshold) likely will not have any phase-in period or grace period to prepare itself for compliance