If you operate a publicly traded company, you are required to follow a variety of mandates established by the Securities Exchange Act of 1934 and enforced by the U.S. Securities and Exchange Commission (SEC).
One of those mandates is that you need to file a Form 10-Q the first three quarters of your company’s fiscal year. This form seems more intimidating than it is, but you shouldn't have trouble filing it as long as you keep track of everything you need to include.
What Is a Form 10-Q?
A Form 10-Q provides the SEC a thorough report of your company’s performance during the preceding quarter. It allows potential and current investors to get an ongoing look at how your company is faring financially and to keep an eye on any potential risks.
On a Form 10-Q, you provide:
- Financial statements.
- Management’s discussion and analysis of financial condition and results of operations.
- Quantitative and qualitative disclosures about market risk.
- Your company’s controls and procedures.
- Other information, including legal proceedings, risk factors, unregistered sales of equity securities and use of proceeds, defaults upon senior securities and mine safety disclosures.
Why You Need a Form 10-Q for Your Business
A Form 10-Q is legally mandated for all publicly traded companies, so you’re required to submit it within 40 or 45 days of the end of each of the first three quarters. Companies with $75 million or more in public shares are required to submit the report within 40 days. Companies with less than $75 million in public shares are required to submit within 45 days.
The final quarter report is included in the report for the entire fiscal year, which is on a different form, SEC Form 10-K.
A Form 10-Q allows investors to make educated investment decisions when they are deciding whether to purchase or sell shares in a company.
Penalty for Failing to File a Form 10-Q
Since filing a Form 10-Q is mandated by the Securities Exchange Act of 1934, there is a penalty for filing late, filing a materially deficient report or not filing at all. The SEC can suspend trading or revoke the registration of companies that are delinquent in their filings. This comes at a high price to companies, which may lose investors and have to pay large regulatory penalties.
Companies that do not file the form on time are required to submit a non-timely filing within one day of the original due date. This gives the company a five-day grace period in which to properly file its Form 10-Q and explain why it filed late. If the company files within those five days, it is compliant with the mandates and avoids any penalties. Companies that do not file within the grace period face the penalties.
Where to Find a Form 10-Q Online
You can find Form 10-Q online on the SEC’s website. As indicated on the form itself, you cannot fill out the form online and submit it. It is provided as a guide to use when preparing the report in accordance with the SEC rules and regulations. It's a good idea to save or print the file to use as a reference each quarter.
You can find completed Form 10-Q filings from all publicly traded companies in the SEC’s Electronic Data Gathering, Analysis and Retrieval database. The EDGAR database makes public documents that have been filed by companies. A Form 10-Q is required to be filed electronically unless a company claims a hardship exemption and is allowed to file it in paper format.
Leslie Bloom has worked in upper-level management positions in both publishing and the mental health field. In addition to years of business and management experience, she has more than 20 years of experience writing for a variety of online and print publications, including Metro Magazine. She holds degrees in both journalism and law.