Legal Definitions - smaller reporting company

A smaller reporting company is a type of company that has fewer disclosure requirements than regular reporting companies. The Securities and Exchange Commission (SEC) has established specific criteria for a company to qualify as a smaller reporting company.

To qualify as a smaller reporting company, a company must:

• Not be an investment company or a subsidiary of a parent that is not a smaller reporting company
• Have a public float of less than $250 million; or
• Have less than $100 million in annual revenues and no public float or public float of less than $700 million

Once a company qualifies as a smaller reporting company, it is subject to relaxed disclosure requirements. For example:

• Under item 402, Executive Compensation, a smaller reporting company only needs to name three executive officers and provide two years of summary compensation, instead of five officers and three years of compensation for regular reporting companies.
• Under item 303, Management Discussion and Analysis (MD&A), a smaller reporting company only needs to provide two years of comparison, instead of three years.
• Under Regulation S-X, a smaller reporting company only needs to provide two years of income statements and cash flow statements, instead of three years.

For example, if a company has a public float of $200 million, it can qualify as a smaller reporting company and only needs to provide two years of executive compensation and MD&A, and two years of income and cash flow statements.