Today, the SEC adopted a number of inflation-related adjustments under the JOBS Act, including an adjustment to the revenue cap in the definition of “emerging growth company,” as well as adjustments to certain thresholds and limitations in the crowdfunding exemption under Reg Crowdfunding. Inflation has been very real in the last couple of years, so the adjustments are more substantial than for the prior period. The new inflation-adjusted amounts will become effective upon publication in the Federal Register.
Currently, an EGC is defined to mean, among other things, an issuer that had total annual gross revenues of less than $1,070,000,000. Under the JOBS Act, the SEC is required, every five years, to index to inflation that annual gross revenue limitation to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics. (If you’re interested, the release delves into the elaborate mechanics of the calculation, which starts with the CPI for December 2021, and goes on from there.) As adjusted, the new inflation-adjusted EGC revenue cap will be $1,235,000,000.