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SEC Filings

Updated on May 30, 2024
Edited byAaron Crowe
Reviewed byDheeraj Vaidya, CFA, FRM

What Are SEC Filings?

SEC Filings are formal documents submitted to the Securities and Exchange Commission in the United States. These contain financial information of the company or any other material information regarding activities that took place or to be taken in the near future.

SEC Filings Definition

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The SEC filings include registration statements, formal periodic reports, and other forms. The information provided in the filings is accessible to institutional investors, thereby helping them decide whether to invest in a company or not.

Key Takeaways

  • SEC filing refers to formal submitting documents to the U.S. Securities and Exchange Commission (SEC) containing financial and other information about a company’s activities.
  • Different types of SEC filings include registration statements, periodic reports such as 10K and 10Q reports, 8K reports for significant events, Schedule 13D filings for beneficial ownership, proxy statements, and Forms 3, 4, and 5 for insider trading activities.
  • The S1 filing is an important registration statement that details how the proceeds from an offering will be used, providing crucial information for investors.

SEC Filings Explained

SEC filings are financial statements that are submitted to the United States Securities & Exchange Commission (SEC). The information is transparent and investors can use it to make relevant investment decisions. The list is highly representative but not exhaustive. Some of the aspects of this kind of filing have been listed below:

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 exceptional 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.
  • The SEC filings are a regulatory mechanism to keep information symmetry between stakeholders and investor communities.
  • Here are cases when some significant red flags are part of the footnotes in the filings.
  • 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.

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Types

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

SEC Filings types

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  1. Registration Statements
  2. 10K Form
  3. 10Q Reports
  4. 8K Reports
  5. Schedule 13D
  6. Proxy Statements
  7. Form 3, 4 and 5

#1 – Registration Statements

These statements are primarily of two types:

#1 – “Offering” registrations filed under the Securities Act of 1933:

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.

s1-filing-box-1

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

s1-filing-box-2

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.

s1-filing-box-3

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 expense, and capital expenditure.

s1-filing-box-4

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 stock, 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:

#2 – “Trading” registrations filed under the Securities Exchange Act of 1934:

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. 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.

Part I

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.

colgate-sec-filing-10k-report-1

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.

colgate-sec-filing-10k-report-2

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

colgate-sec-filing-10k-report-3

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 shareholders.

Part II

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

colgate-sec-filing-10k-report-5

Item 6: This section contains information related to the five-year selected financial data. It includes details related to net sales, 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 analysis.

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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 statements.

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

Part III

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.

Part IV

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 statements, 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 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.

Part I

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

colgate-sec-filing-10q-report-1

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.

colgate-sec-filing-10q-report-2
Part II

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 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 shareholders.

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 information
  • Material impairment performed by the company
  • Completion of merger or acquisition
  • Disposition of various assets of the company
  • Departures or appointments of executives in the company
  • Change in fiscal year
  • Changes 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-K.

colgate-sec-filing-8k-report

#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 details
  • Item 2: Background and identity of the person filing this statement. It helps in identifying the equity owner
  • Item 3: Consideration details like source and the number of funds which is involved in the transaction
  • Item 4: This item details the actual purpose of the transaction
  • Item 5: This item details our interest in securities of the issuer
  • Item 6: It details out contracts and agreements, if any, which is involved in the transaction
  • Item 7: This is the exhibit section, which generally includes the acquisition agreement, financing arrangements, and contract details
schedule-13d

#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.

colgate-proxysource:

#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.

colgate-form-3

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.

colgate-form-4

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.

colgate-form-5

Importance

The process is of great help for anyone desiring to associate with a particular company. The financial information is accessible to users, who study, analyze, and evaluate the financial position of a firm before collaborating or investing in it. Here are the points that show why SEC filings are important for any company:

  • 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.

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!

Frequently Asked Questions (FAQs)

1. Are SEC filings public? 

Yes, SEC filings are generally accessible to the public. They can be accessed through the SEC’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) system or other authorized sources.

2. What is the difference between SEBI and SEC? 

SEBI (Securities and Exchange Board of India) and the SEC (U.S. Securities and Exchange Commission) are regulatory authorities overseeing the securities markets in their respective countries. While SEBI is responsible for the Indian market, the SEC regulates the U.S. market. These organizations have distinct jurisdictions and operate under separate regulatory frameworks, ensuring compliance, investor protection, and fair functioning of the securities markets in India and the United States, respectively.

3. What is the SEC classification of income? 

The SEC does not provide a specific classification of income. However, in financial reporting, companies are required to disclose various types of income, such as operating income, net income, and other comprehensive income, as per the applicable accounting standards and SEC regulations.

This has been a guide to what are SEC filings. Here, we explain the concept along with a detailed study of their types, and importance. You may also have a look at some more related articles listed below:

Reader Interactions

Comments

  1. Collin Edward says

    I must appreciate your work. Brilliant job!

  2. Francisco Almeda says

    My first compliment for this article must be “Wow”. I mean you have explained everything in such a brief way that I should appreciate your work. Really amazing. Sir I would also like to know if you have any case study material on Financial Statement Analysis. If you have any kind of study material then please let me know?

  3. Arinjay says

    Thanks for such an update sir. Only 20-F/40-F are missing

  4. Mveleli says

    Enjoy the outline a great deal.Maybe need to look at developing nations as well. These kind of openness must be encouraged and in nations where information is hidden and use a tool to keep the disadvantaged at bay and far from activities of the economy.

    this is of great help