SEC Disclosures for Smaller Reporting Companies

Securities Lawyer 101 --- Smaller Reporting Companies
Securities Lawyer 101 Blog

The SEC Disclosure rules allow smaller reporting companies to provide less comprehensive disclosures in their reports and filings so that compliance with the SEC’s disclosure requirements is  less burdensome. These reduced disclosure requirements are especially beneficial to private companies who wish to go public but are unfamiliar with the requirements of SEC reporting.

A company qualifies as a “smaller reporting company” if it has a public float  worth less than $75 million, if it is unable to calculate the value of its public float, or if it has less than $50 million in annual revenue.

A company’s public float is calculated by multiplying the number of the company’s common shares held by the public by the stock’s market price and, in the case of a direct public offering or IPO, adding to that number the value obtained by multiplying the common shares covered by the registration statement by their estimated public offering price.

The less onerous SEC disclosure requirements permit smaller reporting companies to provide less extensive narrative disclosure than that required of other reporting companies, particularly in the description of executive compensation.

Additionally, these companies need only provide audited financial statements for two fiscal years, in contrast to larger reporting companies which must provide audited financial statements for three fiscal years. Lastly, they are not required to provide an auditor attestation of internal control over financial reporting, which is generally required under Sarbanes-Oxley Act Section 404(b).  

These reduced disclosure requirements signficantly reduce costs and time required to complete going public transactions that involve SEC registration. 

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit   This securities law blog post 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 about going public and the rules and regulations affecting the use of Rule 144, Form 8K, crowdfunding, FINRA Rule 6490, Rule 506 private placement offerings and memorandums, Regulation A, Rule 504 offerings, SEC reporting requirements, SEC registration statements on Form S-1 , IPO’s, OTC Pink Sheet listings, Form 10 OTCBB and OTC Markets disclosure requirements, DTC Chills, Global Locks, reverse mergers, public shells, direct public offerings and direct public offerings please contact Hamilton and Associates at (561) 416-8956 or [email protected]. Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855