What are SEC Filings by Company?

Why are SEC Filings Important?

  • It is imperative to understand that SEC is a regulatory watchdog created for the investor’s benefit.It collects all the documents detailing the financial and operational health of the companies with stock owned and traded by the public.The SEC checks the quality of the information provided and has the right to probe the companies if certain information is not clearly provided. Investors use these filings to make an assessment of the company’s performance.It is the prime reason why the reported information becomes very important. In the next section, we will discuss different types of filings.

Types of Company’s SEC Filings

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There are different types of filings. Some of the most important ones have been discussed here.

  • Registration Statements10K Form10K FormPublic firms in the United States of America file Form 10-K. It is a detailed statement of the company’s annual financial performance that is filed with the Securities and Exchange Commission (SEC) within 60 days of the end of the fiscal year.read more10Q Reports8K ReportsSchedule 13DProxy StatementsForm 3, 4 and 5

#1 – Registration Statements

These statements are primarily of two types:

This statement is used to register securities before they are offered to a larger audience, like investors. It has two parts, one of which is a preliminary prospectus, and the second one contains certain information that is not required to be filed with a prospectus. The statements vary in purpose and content, depending upon the kind of organization that is issuing stock. If a corporation initiates an “offering” statement, it is evaluated by the SEC. If SEC requires any changes in the document, the same is informed to the corporation. After that, the document is made available to the investors to initiate the sale of the security.

The front page contains the name of the company, along with key management like the CEO, COO, and CFO.

Additionally, on the front page, you will find details of the IPO offering or the amount the company is looking to raise. In this case, Box wanted to raise $250 million.

Another critical aspect of the S1 filing is that they provide details of how the proceeds will be used. It is very important for the investor. As you can see above, Box plans to use the proceeds for corporate purposes, including the working capital, operating expenseOperating ExpenseOperating expense (OPEX) is the cost incurred in the normal course of business and does not include expenses directly related to product manufacturing or service delivery. Therefore, they are readily available in the income statement and help to determine the net profit.read more, and capital expenditure.

There is much other important information in the S1 filing, like the discussion on total dilution, management discussion, and analysis of financial conditions and results, description of shares, and capital stockCapital StockThe capital stock is the total amount of share capital (including equity capital and preference capital) that has been issued by a company. It is a way of raising funds by the company to meet its various business goals.read more, and whether the shares are eligible for future sales.

In fact, I feel all sections are critical. One section you must read through multiple times is the “Risk Factors,” as they provide a lot of detail about the business and its associated uncertainties.

If you want to learn how to analyze the registration S1 filing in detail, do have a look at these two posts:

  • Box IPO AnalysisAlibaba IPO Analysis

These statements are filed to allow trading among investors on a securities exchange or in the Over-the-Counter (OTC) market.

#2 – 10K Report

The 10-K report is an annual filing that a company needs to file within 90 days of the end of its fiscal year Fiscal YearFiscal Year (FY) is referred to as a period lasting for twelve months and is used for budgeting, account keeping and all the other financial reporting for industries. Some of the most commonly used Fiscal Years by businesses all over the world are: 1st January to 31st December, 1st April to 31st March, 1st July to 30th June and 1st October to 30th Septemberread more. It provides investors and stakeholders with a comprehensive analysis of the company. The disclosures in the 10-K are made under 14 different reporting items in four parts. Each of the parts and subsequent items are detailed below.

Item 1: This is the business section of the company, where details like principal products & services offered, markets, distribution method, competitive factors, availability of raw materials, the impact of compliance, franchises, patents, licenses, etc., are provided.

Item 2: This is the property section of the company, where details like the location of a principal manufacturing plant and other important properties are provided.

Item 3: This is the legal proceedings section of the company; it provides a brief description of material legal proceedings that are pending.

Item 4: This is the section that discloses what all matters went to the vote of security holders. It provides all information related to the meeting of shareholdersMeeting Of ShareholdersShareholders Meeting means a meeting of the stockholders of the corporation wherein resolution are placed before the shareholders to discuss and approve the corporate matters and other matters required by the bylaws of the company.read more.

Item 5: This section details the principal market in which the securities are traded. It contains details about share prices and dividends paid.

Item 6: This section contains information related to the five-year selected financial data. It includes details related to net sales Net SalesNet sales is the revenue earned by a company from the sale of its goods or services, and it is calculated by deducting returns, allowances, and other discounts from the company’s gross sales.read more, operating revenue, income or loss, etc.

Item 7: This is the company’s management discussion and analysis section. Here the company indicates information related to liquidity, capital resources, favorable and unfavorable market trends, etc. This section helps you identify answers to financial analysisFinancial AnalysisFinancial analysis is an analysis of finance-related projects/activities, company’s financial statements (balance sheet, income statement, and notes to accounts) or financial ratios to evaluate the company’s results, performance, and trends, which is useful for making significant decisions such as investment, project planning and financing activities.read more.

Item 8: It is the company’s financial statement and supplementary data section. In this section, the company reports two years of audited balance sheets and three years of audited income and cash flow statementsCash Flow StatementsA Statement of Cash Flow is an accounting document that tracks the incoming and outgoing cash and cash equivalents from a business.read more.

Item 9: This section is related to accountants and any kind of changes in the same. It also highlights the disagreements, if any.

Item 10: This section contains information related to Directors and Executive officers. It provides details like name, term of office, and background information of Directors and Executive officers.

Item 11: This section contains directors’ and officers’ remuneration information.

Item 12: This section contains information about the security ownership of certain beneficial owners and management. It helps investors gauge the company’s ownership pattern, which is one of the crucial criteria while making an investment decision.

Item 13: This section contains information about Certain Relationships and Related Transactions the company enters into.

Item 14: This section contains information related to Exhibits, Financial Statement Schedules.

10-K is one of the most necessary filings for a company, and all stakeholders look forward to it. Some of the most critical sections which analysts follow in great detail are a business overview, management discussion & analysis, financial statementsFinancial StatementsFinancial statements are written reports prepared by a company’s management to present the company’s financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels.read more, legal proceedings, etc. For an investor, it is imperative to understand that these financial statements act as an interface to learn more about the company. If the business is qualified as a small business, then the company needs to file 10-KSB.

#3 – 10-Q Reports

The 10-Q report is a quarterly filing that a company needs to file within 45 days of the end of their quarterly report Quarterly ReportQuarterly reports are unaudited financial reports that are summarized versions of financial statements released by public companies every three months (quarter) to comply with compliance requirements.read more period. One of the significant differences with the 10-K is that the financial statements are unaudited here, and the information provided is less detailed. It provides an investor with a continued view of the entity. The disclosures in 10-Q are made under 8 different reporting items under two distinct parts. Each of the parts and the subsequent items are detailed out below.

Item 1: This section contains information related to Quarterly Financial Statements.

Item 2: This is the company’s management discussion and analysis section. It includes a discussion on the operational performance during the quarter vis-à-vis performance in the previous quarters.

Item 4: This is the changes in securities of the company. It reports any material changes in the right of holders across different classes of a registered security.

Item 5: This section contains information related to default upon senior securities. From the credit perspective, this is one of the most important sections as it highlights all cases of material defaults.

Item 6: This is the section that discloses what all matters went to the vote of security holders. It provides all information related to the meeting of shareholdersMeeting Of ShareholdersShareholders Meeting means a meeting of the stockholders of the corporation wherein resolution are placed before the shareholders to discuss and approve the corporate matters and other matters required by the bylaws of the company.read more.

Item 7: This is the section that discloses other materially essential events. It contains all information that is materially important but is not finding any other head for reporting.

Item 8: This section contains information related to exhibits and corporate changes that happened and are reported during the quarter.

It is imperative to note that many changes can happen during the quarter in the business continuum. It is why the 10-Q is one of the necessary filings companies file with the SEC. If the business is qualified as a small business, then the company needs to file 10-QSB.

#4 – 8K Report

8-K filing is used to inform investors about the business’s happenings regularly. Most of the developments which happen in the business are generally ascribed in 10K or 10-Q. However, if some of the developments don’t make it to those filings in time, then they are released by means of 8-K. It is vital to note understand that this release is unscheduled and can happen anytime during the business. Some of the events which can lead to the filing of an 8-K are:

  • Bankruptcy informationMaterial impairment performed by the companyCompletion of merger or acquisitionDisposition of various assets of the companyDepartures or appointments of executives in the companyChange in fiscal yearChanges in control or registrant of the company

Please note that the list is just indicative and not exhaustive; any information that is materially important to the investor needs to be released in the form of 8-KForm Of 8-KIn addition to filing annual and quarterly reports on Form 10-K and Form 10-Q with the Securities and Exchange Commission (SEC), publicly traded companies are required to file Form 8-K with the SEC to announce any unscheduled material events (delisting, policy changes, bankruptcy, mergers and acquisitions, and so on) that their shareholders should be aware of.read more.

#5 – Schedule 13D

This filing is like an acquisition statement highlighting the details of the event. Equity owners must file this filing with more than 5% equity shares within 10 days of an acquisition event. The disclosures in Schedule 13D are made under 7 different reporting items. Each of the items is detailed below:

  • Item 1: Security and the issuer detailsItem 2: Background and identity of the person filing this statement. It helps in identifying the equity ownerItem 3: Consideration details like source and the number of funds which is involved in the transactionItem 4: This item details the actual purpose of the transactionItem 5: This item details our interest in securities of the issuerItem 6: It details out contracts and agreements, if any, which is involved in the transactionItem 7: This is the exhibit section, which generally includes the acquisition agreement, financing arrangements, and contract details

#6 – Proxy Statement

The proxy statement is an official notification to the designated class of shareholders stating what matters will be coming to vote for the shareholders. It needs to be filed before the solicitation of the shareholder vote for any matter ranging from an election of directors to approval of different kinds of corporate actions.

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#7 – Form 3, 4 and 5

In these forms, investors tend to look out for how ownership and purchases of shares are taking place within the executives of the company. Each of these forms has a specific function, which is discussed below.

Form 3

It is the initial filing that tells all the ownership amounts.

Form 4:

This form is used to identify changes in the company’s ownership structure. Form 4 must be filed by the 10th day of the following month of the transaction.

Form 5:

Form 5 is an annual summary of Form 4 and includes all information the company has disclosed using Form 4. It helps investors get in one snapshot a gauge of the trend in the ownership during a particular year.

SEC Filings Video

Conclusion

We have discussed all significant filings filed by a company with the SEC. However, let us caution investors that the list is highly representative but not exhaustive.

  • Some filings are filed in special cases and are essential to a particular event. If an investor intends to understand company information, it involves taking an extra step and learning the art of reading between the lines. here are cases when some of the significant red flags are part of the footnotes in the filings.The SEC filings are a regulatory mechanism to keep information symmetry between stakeholders and investor communities.These filings help investors decide when they intend to buy or sell securities. These filings provide an ample amount of information about the company.It can help investors to learn about the industry in which the company is operating, strategies adopted by the company in the market, and what has been the financial achievement of the company.All these set of information together intends to provide the public with information critical while making an investment decision.

The exhaustive list of all the SEC forms can be found here. Please read, learn about the companies, and analyze the financial statements like a pro!

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