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5120 Determination
us SEC - Financial Reporting Manual
5120.1 Status as a smaller reporting company is determined on an annual basis based upon the definitions above for reporting companies.
a. New issuers must make the determination at the time the initial registration statement is filed. In the case of a determination based on an initial Securities Act registration statement, an issuer that was not determined to be a smaller reporting company at that time has the option to redetermine its status based on the actual offering price and the number of shares included in the registration statement at the conclusion of the offering. [S-K 10(f)(2)(ii)]
b. Once an issuer fails to qualify for smaller reporting company status, it remains unqualified until it falls below a specified lower threshold for the criterion (i.e. 80% of the initial qualification thresholds). The issuer remains unqualified unless when making a subsequent annual determination either:
• Its public float falls below $200 million as of the last business day of its most recently completed second fiscal quarter; or
• Its public float and its annual revenues meet the requirements for subsequent qualification included in the following chart:
Prior Annual Revenues
(for the fiscal year completed before the fiscal year in which the company determined that it failed to qualify for SRC status)
| Prior Public Float
(as of the last business day of the second quarter of the fiscal year in which the company determined that it failed to qualify for SRC status)
| |||
None or less than $700 million
| $700 million or more
| |||
Less than $100 million
| Neither threshold was exceeded; company would not fail to qualify as a SRC.
| Public float required:
(as of the last business day of the most recently completed second fiscal quarter)
| Less than $560 million; and
| |
Revenues required:
(for the most recently completed fiscal year before the last business day of the second fiscal quarter)
| Less than $100 million.
| |||
$100 million or more
| Public float required:
(as of the last business day of the most recently completed second fiscal quarter)
| None or less than $700 million; and
| Public float required:
(as of the last business day of the most recently completed second fiscal quarter)
| Less than $560 million; and
|
Revenues required
(for the most recently completed fiscal year before the last business day of the second fiscal quarter)
| Less than $80 million.
| Revenues required:
(for the most recently completed fiscal year before the last business day of the second fiscal quarter)
| Less than $80 million.
| |
Example: A company has a December 31 fiscal year end. Its public float as of June 28, 2019 was $710 million and its annual revenues for the fiscal year ended December 31, 2018 were $90 million. It therefore does not qualify as a SRC. At the next determination date (June 30, 2020), it will remain unqualified for SRC status unless it determines that its public float as of June 30, 2020 was less than $560 million and its annual revenues for the fiscal year ended December 31, 2019 remained less than $100 million.
c. An issuer that no longer qualifies as a smaller reporting company at the determination date may continue to use the scaled disclosures permitted for a smaller reporting company through its annual report on Form 10-K and begin providing non-scaled larger company disclosure in the first Form 10-Q of the next fiscal year.
NOTE: Although the annual report may continue to include scaled smaller reporting company disclosure, the due date for the annual report will be based on the registrant's filing status as of the last day of the fiscal year. Division of Corporation Finance's C&DIs for Regulation S-K, Question 102.01, clarifies that a company can be both an accelerated filer and a smaller reporting company at the same time.
|
d. An issuer newly qualifying as a smaller reporting company as of the last business day of the second quarter may choose to reflect this change in status in its quarterly report for that second quarter. An issuer must reflect its SRC status no later than in its Form 10-Q for the first fiscal quarter of the next year.
9 For example, for a company with a December 31 fiscal year-end making a determination on June 30, 2022, "public float required" would be as of June 30, 2022.
10 For example, for a company with a December 31 fiscal year-end making a determination on June 30, 2022, “revenues required” would be for the fiscal year ended December 31, 2021.
This is a work of the U.S. Government
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