Emerging Growth Companies 101 On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (the JOBS Act), which is intended to help smaller and emerging growth companies raise capital in the U.S. markets.The JOBS Act amends, and adds new sections to, the Securities Act of 1933 (the Securities Act) and the Securities Exchange Act of 1934 (the Exchange Act), as well as the Sarbanes-Oxley Act of 2002.The JOBS Act implements measures relating to initial and direct public offerings and creates a new category of issuer known as the Emerging Growth Company.The JOBS Act defines an Emerging Growth Company as an issuer with annual gross revenues of less than $1 billion during its most recent fiscal year.Once a company becomes an Emerging Growth Company, it will retain such status until the earlier of: The first fiscal year after its annual revenues are more than $1 billion. The first fiscal year following the fifth anniversary of its IPO. The date on which the issuer issued more than $1 billion in nonconvertible debt in a previous three-year period. The date on which the issuer qualifies as a large accelerated filer under SEC rules.Impact on Initial and Direct Public Offerings The JOBS Act exempts Emerging Growth Companies from certain securities regulations applicable to the registration statement process which provide significant benefits for companies who conduct IPOs,rolex milgauss replica, as well as those who go public direct by conducting a direct public offering.Testing the Waters Provided the Emerging Growth Company communicates only with qualified institutional buyers or accredited investors, it may test the waters for interest in its contemplated public offering.Research Reports Under the JOBS Act brokers and dealers are permitted to publish or otherwise distribute research reports on an Emerging Growth Company at any time before, during, or after an offering without creating a gun jumping or other violation of Section 5 of the Securities Act.Securities AnalystsThe JOBS Act allows securities analysts to participate in communications with an Emerging Growth Company and other personnel of a broker,rolex sea dweller price, dealer, or investment bank.Confidential SubmissionsAn Emerging Growth Company may submit a registration statement, as well as any amendments to the SEC confidentially instead of filing its initial registration statement and amendments publicly through the SECs EDGAR system.Lessened Disclosure Requirements Emerging Growth Companies are required to include two years of audited financial statements in their registration statement and need only include two years of managements discussion and analysis.The JOBS Act provides Emerging Growth Companies with lessened disclosure obligations, including: Executive compensation disclosure under Item 402 of Regulation S-K applicable to smaller public companies. Exemption from the say on pay provisions of the Dodd-Frank Act. Relief from the auditor attestation of internal controls required by Section 404(b) of the Sarbanes-Oxley Act of 2002. Exemption from compliance with PCAOB rules regarding mandatory audit firm rotation and expanded auditor reports.The creation of the Emerging Growth Company was designed to reduce the costs and regulatory burdens associated with public company status. Most companies who elect to go public direct will qualify as Emerging Growth Companies because they will have revenues of less than $1 billion during their most recent fiscal year. As a result of the creation of the Emerging Growth Company, direct public offerings are an appealing cost effective method for private companies to go public and maintain public company status.Anyone seeking to go public should seek the services of an experienced securities attorney. The securities lawyers at Hamilton & Associates have assisted more than 200 market participants in securities law matters.This memorandum is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. For more information concerning the rules and regulations affecting the use of Rule 144,Rolex Day-Date, Form 8K, FINRA Rule 6490, Rule 506 private placement offerings, Regulation A, Rule 504 offerings, Rule 144, SEC reporting requirements, SEC registration on Form S-1 and Form 10, Pink Sheet listing, OTCBB and OTC Markets disclosure requirements, DTC Chills, Global Locks, reverse mergers, public shells, go public direct transactions and direct public offerings.