What Is a Smaller Reporting Company? Going Public Lawyer
Smaller reporting companies prepare and file their SEC reports and registration statements using the same forms as other SEC reporting companies, though the information required is different. Smaller reporting companies are eligible to provide scaled down disclosures in their periodic reports and SEC registration statements. Companies should determine smaller reporting company status before filing their Form s-1 Registration Statement in their going public transaction to take advantage of these reduced SEC disclosure obligations.
To qualify as a smaller reporting company, the issuer must:
- not be an investment company or asset-backed issuer; and
- have a non-affiliate public float of less than $75 million; or
- have annual revenues of less than $50 million (if no public float).
The method of calculating the public float differs depending on whether the company seeking smaller reporting company status is a reporting or non-reporting company. Reporting companies will follow the same date guidelines set forth in Rule 12b-2 of the Exchange Act for accelerated filers (last day of second fiscal quarter), while non-reporting companies will calculate their public float based on their choice of a date within 30 days of the filing date of their initial registration statement.
Non-reporting companies that do not have a public float, or whose common equity is not priced by the market, may rely on a revenue test to qualify as smaller reporting companies. Such non-reporting companies must have annual revenues of less than $50 million during the last fiscal year before filing the registration statement to be eligible for smaller reporting company status.
The definition of smaller reporting company, however, contains no limitation on the citizenship of eligible companies, making this designation available to foreign companies. This represents a departure from the definition of small business issuer which only applied to U.S. and Canadian companies.
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]. 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. 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
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