The document defines prime and composite numbers. A prime number has only two factors - itself and 1, and is only divisible by those two numbers. A composite number has more than two factors. This is illustrated with 2 being a prime number since it only has two factors, and 6 being a composite number since it has four factors. The key points are that a prime number has two factors, a composite number has more than two, and these categories do not apply to negative integers.