What Is SEC Form 10-Q?
The SEC form 10-Q is a comprehensive report of a company's performance that must be submitted quarterly by all public companies to the Securities and Exchange Commission (SEC). The 10-Q is generally an unaudited report.
In the 10-Q, firms are required to disclose relevant information regarding their financial position. There is no filing after the fourth quarter because that is when the 10-K is filed.
Understanding SEC Form 10-Q
Federal securities laws mandate that publicly-traded companies provide certain information to shareholders and the general public. These disclosures may occur periodically or as specific events occur. A company utilizes Form 10-Q—one of many required by the SEC—upon the completion of each quarter to disclose unaudited financial statements and give an overview of the company’s financial situation.
The exact filing dates depend on the organization’s fiscal year, but it is necessary to file three 10-Q reports each year. The final quarter of the year is not necessary, as noted above, because information from that quarter is included in the company's 10-K filing. This report, unlike the 10-Q, is audited and is filed annually.
The 10-Q provides investors with the financial position of companies on an ongoing basis. The deadline for filing a 10-Q depends on a company's available float. Anyone who wishes to look up a company's 10-Q or other filings can go to the SEC's EDGAR database by entering "10-Q" in the form type box.
A company's form 10-Q is available on the SEC's EDGAR database.
A filer is classified in one of three categories, and has different deadlines based upon the category in which they belong. This category is determined by its public float. A public float represents the portion of corporate shares that are in the hands of the public, and not held by officers, owners, or the government.
The largest companies are classified as large accelerated filers. To meet this requirement, the organization must have at least $700 million in public float. If the company meets this requirement, it has 40 days after the close of the quarter to file its 10-Q.
Accelerated filers are companies with at least $75 million in public float but less than $700 million. Although accelerated filers also have 40 days to file the 10-Q, they have a little more time to file the 10-K.
Finally, non-accelerated filers are companies with less than $75 million of public float. These companies have 45 days from the end of the quarter to file the 10-Q.
- The 10-Q is a comprehensive report of a company's performance submitted quarterly by all public companies to the Securities and Exchange Commission.
- The form provides investors with the financial position of companies on an ongoing basis.
- It contains financial statements, management discussion and analysis, disclosures, and internal controls.
- Companies must file their 10-Qs 40 or 45 days after the end of their quarters depending on the size of their public float.
Failure to Meet Filing Deadline
When a company fails to file a 10-Q by the filing deadline, it must use a non-timely (NT) filing. An NT filing must explain why the deadline has not been achieved, and it gives the company with an additional five days to file.
As long as a company has a reasonable explanation, the SEC allows late filings within a specified time period. Companies are required to submit an NT 10-Q. Common reasons why companies not be able to file on time include mergers and acquisitions (M&A), corporate litigation, an ongoing review by corporate auditors, or lingering effects from a bankruptcy.
A 10-Q filing is considered timely if it is filed within this extension. Failure to comply with this extended deadline results in consequences, including potential loss of the SEC registration, removal from exchanges, and legal ramifications.
Components of a 10-Q
There are two parts to a 10-Q filing. The first part contains relevant financial information covering the period. This includes condensed financial statements, management discussion and analysis on the financial condition of the entity, disclosures regarding market risk, and internal controls.
The second part contains all other pertinent information. This includes legal proceedings, unregistered sales of equity securities, the use of proceeds from the sale of unregistered sales of equity, and defaults upon senior securities. The company discloses any other information—including the use of exhibits —in this section.
Importance of Form 10-Q
As noted above, the 10-Q provides a window into the financial health of the company. Investors can use the form to see what changes are taking place within the corporation even before it files its quarterly earnings.
Some areas of interest to investors that are commonly visible in the 10-Q include changes to working capital and/or accounts receivables, factors affecting a company's inventory, share buybacks, and even any legal risks that a company faces.
You can use a close competitor's 10-Q to compare that to a company in which you are invested, or considering to invest in, to see how it's performing. This will give you an idea of whether it's a strong choice, where its weaknesses are, and how it could stand to improve.
Other Important SEC Filings
The 10-Q is one of many reports public companies are required to file with the SEC. Other important reports that are related to this form include:
10-K: Another comprehensive report that is filed by public companies. The 10-K must be filed once per year, and includes the final quarter of the company's performance, which is why only three 10-Qs are filed each year. This report contains more information than an annual report, and must be filed within 90 days of the end of their fiscal year. The 10-K generally includes a summary of the company's operations, management's financial outlook, financial statements, and any legal or administrative issues involving the company.
8-K: This report is filed if there are any changes or developments to a business that didn't make the 10-Q or 10-K reports. This is considered an unscheduled document, and may contain information such as press releases. If a company disposes of or acquires assets, has announcements of executive hiring or departures, or goes into receivership, this information is filed with an 8-K.
Annual Reports: A company's annual report is filed every year, and contains a wealth of company information including—but not limited to—general information about the company, a letter to shareholders from the CEO, financial statements, and an auditors report. This report is submitted a few months after the end of a company's fiscal year. The report is available through a company's website or investor relations team, and can also be obtained from the SEC.