Under the rules in effect prior to the amendments adopted at the open meeting yesterday, an accelerated filer remained an accelerated filer unless it became eligible to use Forms 10-KSB and 10-QSB. A company does not become eligible to use Forms 10-KSB and 10-QSB until it has met the definition for a small business issuer at the end of two consecutive fiscal years. In order to meet the definition of a small business issuer, a company must have revenues and a public float of less than $25 million.

At the open meeting yesterday, the SEC adopted amendments that permit an accelerated filer to exit accelerated filer status and file an annual report on a nonaccelerated basis for the fiscal year in which the accelerated filer’s public float drops below $50 million. These amendments drastically improve the ability of companies to exit accelerated filer status and the timeframe in which they may do so. In addition, the amendments permit a large accelerated filer to exit large accelerated filer status and file an annual report in the seventy-five-day period permitted for accelerated filers for the fiscal year in which the large accelerated filer’s public float drops below $500 million.

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