Effective February 4, 2008, smaller reporting companies may begin preparing their SEC reports and registration statements using the same forms as other SEC reporting companies but with scaled disclosure requirements. Eventually, there will be no special “small business” forms such as Forms 10-KSB and SB-2.

Companies qualify as a smaller reporting company 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.

Public float is calculated as of the last business day of the second fiscal quarter.

Companies with a public float between $25 million and $75 million would not have qualified as “small businesses” under the old rules, but can now choose to alternate between the disclosure requirements of smaller reporting companies and other companies, with some limitations.

Note the following key differences in disclosure obligations:

  • Smaller reporting companies do not have to disclose risk factors;
  • Smaller reporting companies need only provide two years of analysis and financial statements, as opposed to three years, in their Management Discussion & Analysis; and
  • Smaller reporting companies need only provide 3 of the 7 compensation tables in their proxy statement.