What is SEC Form NT 10-Q

SEC Form NT 10-Q is a Securities and Exchange Commission (SEC) filing required for companies that will not be able to submit their 10-Q filing (for quarterly financial results) by the SEC deadline or in a timely manner. Mandated by SEC rule 12b-25, Form NT 10-Q requires the registrant's information and explanation of the reason why the 10-Q is delayed. It also provides for application for relief from the deadline.

BREAKING DOWN SEC Form NT 10-Q

SEC Form NT 10-Q is required to be filed within 45 days following the end of each of a company's first three fiscal quarters. If the 10-Q cannot be filed in a timely manner, the company must file a Form 10-QT with the commission. A very common reason for an NT 10-Q is a merger or acquisition, which prevents results from being incorporated in time for the filing. The SEC provides for "unreasonable effort and expense," with a suitable explanation, as part of the application for relief. Late filings may also be because of uncertainty surrounding litigation, due to a company’s auditor not having yet completed its review of the company’s operations, a sign of a company in financial distress, or because a company emerging from bankruptcy needs more time to complete the required disclosures.

The Market Impact of Form NT 10-Q Filings

Late financial report filings, whether of 10-Qs or other documents, especially 10-Ks, can be red flags to analysts following a company, as well as its regulators, investors and lenders. While the reasons vary, companies who list accounting issues or unexpected changes in accounting or auditor firms (particularly if these involve disagreements over accounting principles or resignations of auditors) as the reason for the delay typically face much more scrutiny of their late filings.

A study conducted by professors Eli Bartov, of New York University’s Stern Business School, and Yaniv Konchitchki, of the University of California at Berkeley, and published in December 2017, looked at financial market reactions to companies with late filings. The authors found several impacts including that “(a) delayed quarterly filings have distinctly different effects on firm value than do delayed annual filings, (b) investors do not accept at face value management assertions about the expected filing date, (c) accounting problems play a unique role in communicating the seriousness of the delay, and (d) delayed announcements tend to be followed by continued poor operating and stock price performance. (SEC Filings, Regulatory Deadlines, and Capital Market Consequences).”