On August 27, 2025, the SEC published a new compliance and disclosure interpretation (CD&I) providing guidance on when an issuer may become an accelerated or large accelerated filer after losing its status as a smaller reporting company.
New CD&I
New CD&I question 130.05 provides:
Question: An issuer is a smaller reporting company under the revenue test in paragraph (2) or (3)(iii)(B) of the “smaller reporting company” definition in Rule 12b-2. On the last business day of its second fiscal quarter of 2025, the issuer conducts its annual determination of smaller reporting company status and determines that it no longer qualifies as a smaller reporting company. When the issuer assesses its accelerated filer or large accelerated filer status, as of the end of fiscal year 2025, will this issuer become an accelerated filer or large accelerated filer?
Answer: No. When determining its accelerated filer or large accelerated filer status as of the end of its fiscal year, the issuer must assess, among other things, whether it is “eligible to use the requirements for smaller reporting companies under the revenue test in paragraph (2) or (3)(iii)(B) of the ‘smaller reporting company’ definition” in Rule 12b-2. See paragraph (1)(iv) of the definition of “accelerated filer” and paragraph (2)(iv) of the definition of “large accelerated filer” in Rule 12b-2. In this case, the issuer would be eligible to continue to use the requirements for smaller reporting companies through the end of fiscal year 2025 and until its Form 10-Q for the first fiscal quarter of 2026. See paragraph (3)(i)(C) of the definition of “smaller reporting company” in Rule 12b-2. Accordingly, the issuer would not satisfy the condition in paragraph (1)(iv) of the definition of “accelerated filer” or paragraph (2)(iv) of the definition of “large accelerated filer” as of the end of fiscal year 2025. The issuer would be a non-accelerated filer for filings due in fiscal year 2026 and would be ineligible to use the requirements for smaller reporting companies beginning with its Form 10-Q for the first fiscal quarter of 2026.
More Information on Filer Status
The SEC disclosure requirements are scaled based on company size. The SEC categorized companies as non-accelerated, accelerated and large accelerated in 2002 and introduced the smaller reporting company category in 2007 to provide general regulatory relief to these entities. Smaller reporting companies, accelerated filers and large accelerated filers have different periodic reporting deadlines. In 2012, the SEC introduced “emerging growth companies” (EGCs) which, like smaller reporting companies, are subject to scaled disclosure requirements. The definition of an EGC does not include filing deadlines and as such an EGC must determine its other filer status (smaller reporting, accelerated, large accelerated) in order to determine filing deadlines.
Both accelerated filers and large accelerated filers are required to have an independent auditor attest to and report on management’s assessment of internal control over financial reporting in compliance with Section 404(b) of SOX. Non-accelerated filers are not subject to Section 404(b) requirements. Under Section 404(a) of SOX, all companies subject to SEC Reporting Requirements, regardless of size or classification, must establish and maintain internal controls over financial reporting (ICFR), have management assess such ICFR, and file CEO and CFO certifications regarding such assessment. For more on CEO and CFO certifications, see HERE.
A ”smaller reporting company” (“SRC”) is defined to include companies: (i) with less than a $250 million public float; or (ii) had annual revenues of less than $100 million and either (x) no public float; or (y) a public float of less than $700 million. Public float is calculated as of the last day of a company’s completed second fiscal quarter while annual revenues are determined as of the last day of the most recently completed fiscal year for which audited financial statements are available. For more information on SRC status, including a chart of the scaled disclosure requirements as of June 2018 – see HERE.
An ”accelerated filer” is a company that: (i) has an aggregate worldwide market value of its voting and non-voting common equity held by non-affiliates of $75 million or more but less than $700 million as of the last business day of its most recently completed second fiscal quarter; (ii) has been subject to the Exchange Act reporting requirements for at least 12 months; (iii) has filed at least one annual report pursuant to its Exchange Act reporting; and (iv) is not eligible to as an SRC under the revenue test (i.e. has less than $100 million in revenues).
A ”large accelerated filer” is a company that: (i) has an aggregated worldwide market value of its voting and non-voting common equity held by non-affiliates of $700 million or more measured as of the last business day of its most recently completed second fiscal quarter; (ii) it has been subject to the Exchange Act reporting requirements for at least 12 months; (iii) it has filed at least one annual report pursuant to its Exchange Act reporting; and (iv) is not eligible to as an SRC under the revenue test (i.e. has less than $100 million in revenues).
For more information on determining accelerated and large accelerated status, including entering and exiting such filer status see HERE.
An “emerging growth company” (EGC) is dined as: a company with total annual gross revenues of less than $1,235,000,000 during its most recently completed fiscal. An EGC loses its EGC status on the earlier of (i) the last day of the fiscal year in which it exceeds $1,235,000,000 in revenues; (ii) the last day of the fiscal year following the fifth year after its IPO (for example, if the issuer has a December 31 fiscal year-end and sells equity securities pursuant to an effective registration statement on November 2, 2025, it will cease to be an EGC on December 31, 2030); (iii) the date on which it has issued more than $1,000,000,000 in non-convertible debt during the prior three-year period; or (iv) the date it becomes a large accelerated filer. For more information on EGC’s see HERE.
The Author
Laura Anthony, Esq.
Founding Partner
Anthony, Linder & Cacomanolis
A Corporate and Securities Law Firm
Securities attorney Laura Anthony and her experienced legal team provide ongoing corporate counsel to small and mid-size private companies, public companies as well as private companies going public on the Nasdaq, NYSE American or over-the-counter market, such as the OTCQB and OTCQX. For more than two decades Anthony, Linder & Cacomanolis, PLLC has served clients providing fast, personalized, cutting-edge legal service. The firms reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker-dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions, securities token offerings and initial coin offerings, Regulation A/A+ offerings, as well as registration statements on Forms S-1, S-3, S-8 and merger registrations on Form S-4; compliance with the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers; applications to and compliance with the corporate governance requirements of securities exchanges including Nasdaq and NYSE American; general corporate; and general contract and business transactions. Ms. Anthony and her firm represent both target and acquiring companies in merger and acquisition transactions, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. The ALC legal team assists Pubcos in complying with the requirements of federal and state securities laws and SROs such as FINRA for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the small-cap and middle market’s top source for industry news, and the producer and host of LawCast.com, Corporate Finance in Focus. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
Ms. Anthony is a member of various professional organizations including the Crowdfunding Professional Association (CfPA), Palm Beach County Bar Association, the Florida Bar Association, the American Bar Association and the ABA committees on Federal Securities Regulations and Private Equity and Venture Capital. She is a supporter of several community charities including the American Red Cross for Palm Beach and Martin Counties, Susan Komen Foundation, Opportunity, Inc., New Hope Charities, the Society of the Four Arts, the Norton Museum of Art, Palm Beach County Zoo Society, the Kravis Center for the Performing Arts and several others.
Ms. Anthony is an honors graduate from Florida State University College of Law and has been practicing law since 1993.
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