Public companies enjoy greater access to capital and increased prestige. But it isn’t all sunshine and rainbows. Once a business officially becomes an SEC reporting company, it must start filing a variety of forms with the Securities and Exchange Commission (SEC). Here, we’ll tackle three essential SEC forms: 10-K, 10-Q, and 8-K.
Annual Report on Form 10-K
The 10-K is the big kahuna of SEC reports. Also known as the annual report, a company’s 10-K describes the previous year’s results and the current state of the business.
Contents of a 10-K
10-Ks require a broad range of information, giving investors a deep dive into the business. On Form 10-K, the SEC estimates the average company will spend 2,326.62 hours preparing its annual report 😱 — an intimidating and oddly specific number.
Don’t panic! The estimated 2,326.62 hours are spread between company insiders (like the CEO, CFO, and other executives) and outside service providers (such as accountants and attorneys).
Assuming you’re still with me, let’s get an idea of what the behemoth 10-K contains:
- Description of the business
- Risk factors
- Ongoing litigation
- Management discussion and analysis (MD&A) of the last year’s financials
- Description of executives, the board of directors, and their compensation
The annual report also has audited financial statements and a list of exhibits. The exhibits include items such as (i) the company’s organizational documents, (ii) material agreements, and (iii) special certifications of the CEO and CFO.
This is just a taste of what’s in a 10-K. Expect a lot of handholding from your securities lawyer.
When to File Form 10-K With the SEC
The due date for a 10-K depends on the size of your business. The SEC divides companies into several categories for determining 10-K due dates.
Please allow a quick digression while we explore some exciting SEC terminology…
Large Accelerated Filers
A company is a large accelerated filer if it:
- Has a public float (market cap excluding affiliates) of $700 million or more;
- Has been an SEC reporting company for at least 12 months;
- Has filed at least one annual report; and
- Does not qualify as a “smaller reporting company” (see below)
Accelerated Filers
A company is a large accelerated filer if it:
- Has a public float between $75 million and $700 million;
- Has been an SEC reporting company for at least 12 months;
- Has filed at least one annual report; and
- Does not qualify as a “smaller reporting company” (see below)
Non-Accelerated Filers
A non-accelerated filer is neither a large accelerated filer nor an accelerated filer.
So, a non-accelerated filer has:
- a public float of less than $75 million; or
- annual revenues of less than $100 million and a public float of less than $700 million (this makes them a smaller reporting company)
Smaller Reporting Companies
Note above that a company isn’t an accelerated filer if it is a smaller reporting company.
A smaller reporting company is a company that is not (i) an investment company, (ii) an issuer of asset-backed securities, or (iii) a majority-owned subsidiary of a parent that is not a smaller reporting company, but does have either
- a public float of less than $250 million; or
- less than $100 million in annual revenues for its most recently completed fiscal year and a public float of less than $700 million (or no public float at all).
Ok…So When Do I Have to File My 10-K?
Back to the task at hand. Your 10-K due date is calculated as follows:
- Large Accelerated Filers: 60 days from fiscal year-end
- Accelerated Filers: 75 days from fiscal year-end
- Non-Accelerated Filers: 90 days from fiscal year-end
Examples
- If your company has a public float of $800 million, you’re a large accelerated filer. If your fiscal year ends December 31, your 10-K is due March 1.
- If your company has a public float of $500 million and $200 million in annual revenue, you’re an accelerated filer. If your fiscal year ends June 31, your 10-K would be due September 13.
- If your company has a public float of $40 million, you’re a non-accelerated filer. Assuming your fiscal year ends on December 31, your 10-K is due on March 31.
Quarterly Report on Form 10-Q
A 10-Q — the quarterly report — is the 10-K’s little cousin. While it’s less comprehensive than the annual report, it’s still an essential document for SEC compliance.
Fun fact: 10-Ks and 10-Qs are called “periodic reports”
Contents of a 10-Q
Like the 10-K, the 10-Q contains financial statements. However, the 10-Q’s financial statements are unaudited.
The non-financial disclosure is lighter, too. For example, while the 10-K must have a full slate of risk factors, you only need to list risk factors in the 10-Q if the risk factors have “materially changed” since the 10-K was filed.
The SEC’s Form 10-Q estimates 186.82 hours to complete the quarterly report. I have no idea how they come up with these numbers, but 186.82 is certainly better than the 2,326.62 for the 10-K.
When to File Form 10-Q With the SEC
How many quarterly reports must a company file every year? If you said four, I’m sorry to say you’re mistaken (though it was a good guess). In fact, you only need three 10-Qs each year, because after the final quarter you file the 10-K.
Now that we have that cleared up, here are the deadlines:
- Large Accelerated Filers: 40 days from the end of the quarter
- Accelerated Filers: 40 days from the end of the quarter
- Non-Accelerated Filers: 45 days from the end of the quarter
Current Report on Form 8-K
A public company must file a Form 8-K — called a current report — whenever it does something important.
Examples of events that trigger the need for an 8-K include:
- Entering into a material agreement (Item 1.01)
- Mergers and acquisitions (Item 2.01)
- Private placements of equity securities (Item 3.02)
- Election or departure of officers or directors (Item 5.02)
- Amendment to Articles of Incorporation or Bylaws (Item 5.03)
For a full list, check out Form 8-K itself. The contents of the 8-K will depend on the event it describes.
When to File Form 8-K With the SEC
Generally, companies must file an 8-K within four business days of the event that triggers the 8-K requirement.
So, if you hire a new director on Monday, you must file the 8-K by Friday. If you enter into a material agreement on the Tuesday before Thanksgiving, you have until the following Thursday to file.
How to File Forms 10-K, 10-Q, and 8-K
Companies must submit SEC filings like 10-Ks, 10-Qs, and 8-Ks through the SEC’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system.
To file on EDGAR, you have to format the document in a very specific way. Typically, companies work with a securities lawyer to draft the document. Then, they use a service provider called a financial printer to format the document and submit it to EDGAR.
Need Help With SEC Compliance?
If you’re considering taking your company public — or you already work for an SEC-reporting business — feel free to reach out! I help public companies stay within the SEC’s good graces.