Greenlighting Growth Act

The Greenlighting Growth Act amends two major federal securities laws to ease certain historical financial reporting requirements for Emerging Growth Companies (EGCs). Specifically, it lets an EGC skip presenting acquired company financial statements or certain related information for any period before the earliest audited period shown in connection with its initial public offering (IPO). If an issuer was an EGC but later ceases to be one, the bill bars retroactive requirements to present those earlier periods. The same relief applies to applications under the Securities Exchange Act of 1934. In short, the bill reduces the burden on smaller growth companies by preventing the need to recover and disclose older acquired-company financials that predate the company’s IPO, including after it is no longer an EGC. The changes would affect Section 7(a)(2) of the Securities Act of 1933 and Section 12(b)(1)(K) of the Securities Exchange Act of 1934, adding a specific carve-out for periods prior to the earliest audited period of the EGC’s IPO and limiting retroactive disclosure obligations for former EGCs.