Securities Law Blog

Public companies with December 31 fiscal years are required each year to calculate their public float (meaning the aggregate worldwide market value of voting and non-voting common equity held by non-affiliates) as of June 30, or the last business day of their most recently completed second fiscal quarter, to determine their reporting company category.

• An “Accelerated Filer” has a public float of at least $75 million but less than $700 million and meets other accelerated filer tests (with the right to exit from this status if the public float drops below $50 million).

• A “Large Accelerated Filer” has a public float of at least $700 million and meets other accelerated filer tests (with the right to exit from this status if the public float drops below $500 million).

• A “Non-Accelerated Filer” is a company that does not meet the above criteria.

• A “Smaller Reporting Company” has a public float of less than $75 million.

Because a smaller reporting company (SRC) may use the SEC’s scaled disclosure system, June 30 is an important date for companies close to the edge. If a larger reporting company’s public float has dropped as of June 30 to qualify as an SRC, it may immediately enter the scaled disclosure system with its next periodic report (in this instance, its Form 10-Q for the quarterly period ended June 30).

If an SRC’s public float has increased requiring it to exit the scaled system, it may continue scaled disclosure only through the current fiscal year (including that year’s Form 10-K). To reenter the scaled disclosure system, a company would be required to determine that its public float fell below $50 million as of June 30 and would be able to use scaled disclosure again in the next fiscal year following that determination, starting with the first Form 10-Q of the next fiscal year.

Among other implications of a company’s reporting category, large accelerated filers must file their annual Form 10-K within 60 days of year end and their quarterly Form 10-Qs within 40 days of quarter end. Accelerated filers must file their Form 10-K within 75 days of year end and their Form 10-Qs within 40 days of quarter end, and non-accelerated filers including SRCs must file their Form 10-K within 90 days of year end and their Form 10-Qs within 45 days of quarter end. 

Additionally, pursuant to recent SEC rule amendments and the FAST Act, SRCs, unlike accelerated and non-accelerated filers, can both forward incorporate by reference into subsequent Securities Exchange Act filings and incorporate by reference their previous Securities Exchange Act filings into a Form S-1 registration statement. For more information on this anomaly, see our post from March 29, 2016.

Please feel free to contact Spencer Feldman or Kenneth Schlesinger of this firm if you are not sure in which category you fit now or after June 30.