Prepare Now to Comply with SEC’s Financial Disclosure Requirements

Key Summary

• Form 10-K: Comprehensive annual report to the SEC, filed 2-3 months after year-end, includes financial information, MD&A, and management responses.
• Form 10-Q: Quarterly report filed 40-45 days after each of the first three quarters, includes condensed financial data, MD&A, and risk disclosures.
• Form 8-K: Current report for significant events, filed within four business days of the event, includes details on acquisitions, securities sales, accounting changes, and mergers.

Are you a small company looking to raise capital by opening up shares to investors? Then it’s no news to you that publicly owned firms, however small, are subject to detailed disclosure requirements about their financial status, operating results, salaries to management, and other areas of their business.

Monitored and enforced by the U.S. Securities and Exchange Commission (SEC), the current system of mandatory corporate disclosure is known as the integrated disclosure system. Through this, the SEC has strived to make reporting less burdensome by standardizing forms and eliminating some differences in reporting requirements between the SEC and shareholders.

SEC’s Financial Disclosure Requirements

To help you hop on board with ease or quench your thirst for knowledge on all things SEC and the obligations you have to meet, we have put together a list of mandates that you’ll need to look out for.

The Exchange Act has mandated the submission of the following forms:

• • Form 10-K
  • Form 10-Q
  • Form 8-K
  • Proxy statements

These reports are available to the public through the SEC’s EDGAR portal. These filings pave the way for a transparent exposure of crucial financial information facilitating objective decision-making for shareholders and the public.

Form 10-K

As part of a publicly owned company, you are required to prepare two annual reports: one for the SEC and one for stakeholders.

Purpose and Content

• Annual Report to the SEC: Form 10-K is the annual report submitted to the SEC, containing detailed and statutory-required content.
• Financial Information and Operations: It provides a comprehensive explanation of the company’s financial status and operations over the past year.
• Management’s Discussion and Analysis (MD&A): Includes management’s response and analysis of the financial results, offering insights into the company’s performance and future outlook.

Filing Timeline

• Form 10-K is typically filed two to three months after the end of the fiscal year, ensuring that the information is up-to-date and accurate.

Accompanying Documents

• Proxy Statements: These are often submitted alongside the annual reports to stakeholders, containing information required by the SEC.
• SEC Amendments: The SEC has introduced amendments to ensure that proxy statements comply with their mandates, enhancing transparency and shareholder communication.

Form 10-Q

Form 10-Q is a quarterly report providing a snapshot of the company’s financial performance for each of the first three quarters of the financial year.

Purpose and Content

Condensed Financial Overview: It serves as a shorter version of the 10-K, focusing on the most recent quarter’s financial performance.

Key Components:

• • • Balance Sheets: Presenting the company’s financial position at the end of the quarter.
    • MD&A: Offering management’s analysis of the quarter’s financial results and operations.
    • Risk Disclosures: Highlighting potential risks and internal controls affecting the company.

Filing Timeline

• Form 10-Q must be filed within 40-45 days after the end of each of the first three quarters, ensuring timely disclosure of financial information to the SEC and investors.

Form 8-K

Form 8-K is known as a “current report” and is filed to notify the SEC of significant events that occur during the fiscal year.

Purpose and Content

• Significant Event Reporting: It provides details on major events that could affect the company’s financial condition or operations.

Types of Events Requiring Form 8-K:

• Acquisition or Disposal of Assets: Reporting when the company completes the acquisition or disposal of significant assets.
• Unregistered Securities Sales: Disclosing the sale of securities that are not registered with the SEC.
• Changes in Certifying Accountant: Notifying when there is a change in the company’s certifying accountant.
• Mergers: Reporting on mergers or consolidations involving the company.

Filing Timeline:

• Form 8-K must be filed within four business days of the significant event, ensuring prompt disclosure to the SEC and stakeholders.

Proxy Statements

These statements are a vehicle to keep shareholders of a public company aware of operational aspects of the business. Be it an expansion of the board of directors or a change in executive compensation, these types of material matters go on a proxy statement through Form DEF 14A and keep your shareholders attuned to what’s going on in your organization, particularly at the executive and board levels.

Quite an intimidating list, isn’t it? And while we have tried to summarize the main points, there are many other possible filings in your public entity future. There are so many; it can be difficult for you and the stakeholders to keep track and file all of these mandatory requirements on time.

Although SEC’s EDGAR system is quite intuitive, you will need assistance to ensure you get on there. Enter DataTracks – your one-stop shop for all things regulatory compliance with SEC.

Drop a line at enquiry@datatracks.com and get in touch with our disclosure management specialists.

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FAQs on SEC Reporting Forms: 10-K, 10-Q, and 8-K

What is the primary purpose of Form 10-K and when is it filed?

Form 10-K is the annual report submitted to the SEC, providing a comprehensive overview of the company’s financial status, operations, and management’s discussion and analysis. It is typically filed two to three months after the fiscal year-end.

What information is included in Form 10-Q and how often is it filed?

Form 10-Q is a quarterly report that includes a condensed version of the financial statements, management’s discussion and analysis (MD&A), and disclosures on risk factors and internal controls. It is filed within 40-45 days after the end of each of the first three quarters of the financial year.

What types of significant events require the filing of Form 8-K?

Form 8-K is required for significant events such as the completion of acquiring or disposing of assets, unregistered securities sales, changes in the certifying accountant, and mergers. It must be filed within four business days of the significant event.

How do proxy statements relate to Form 10-K filings?

Proxy statements often accompany the annual reports submitted to stakeholders along with Form 10-K. They contain important information required by the SEC, and recent amendments ensure these statements comply with SEC mandates, enhancing transparency and communication with shareholders.

Why is Real-Time Validation important in SEC reporting software like DataTracks Rainbow?

Real-Time Validation in SEC reporting software helps ensure the accuracy and compliance of financial reports by continuously monitoring data inputs and identifying inconsistencies or inaccuracies in real-time. This proactive approach prevents errors, enhances efficiency, and reduces the risk of regulatory scrutiny and associated fines.