QUALIFYING AS A SMALLER REPORTING COMPANY

     Under the new rules, companies qualify as "smaller reporting companies," and therefore for scaled disclosure, if they (1) have a common equity public float of less than $75 million or (2) are unable to calculate their public float and have annual revenue of $50 million or less, upon entering the system. These standards differ from the standards that governed eligibility for the SEC’s former small company disclosure requirements, which were available to "small business issuers." To qualify as a small business issuer, a company needed to have (1) less than $25 million in public float and (2) less than $25 million in annual revenue. Because of the more generous standards, many more companies qualify for scaled disclosure under the new rules.

All companies calculate their public float as of the last business day of their second fiscal quarter. Most SEC reporting companies already calculate this number to determine whether they need to file annual and quarterly reports with the SEC as "accelerated filers." You calculate public float the same way you already do for purposes of answering the item on the Form 10-KSB or Form 10-K cover page that requires stating the aggregate market value of the voting and non-voting common equity held by non-affiliates.

Yes. The new rules permit foreign companies to qualify as smaller reporting companies if they use domestic forms (instead of the special "F" forms for foreign private issuers) and if they prepare their financial statements in accordance with United States Generally Accepted Accounting Principles (U.S. GAAP). Previously, the only foreign companies permitted to use SEC scaled disclosure requirements were Canadian companies.

The new rules continue to exclude investment companies, including business development companies, and asset-backed issuers from eligibility for scaled treatment.