Once a company goes public, it must regularly file a number of disclosures with the Securities and Exchange Commission (SEC). The rationale is that this information could potentially be material to investors in making an investment decision.
To prepare to become a public company, startups should be aware of the common forms that companies file with the SEC. As a best practice, private startups should get in the habit of organizing their company records. They must identify the types of company records that they would need to disclose if they were a public company. In other words, startups should operate like a public company before actually becoming a public company. This will contribute to a smoother transition from private to public company.
Broadly speaking, there are major categories of SEC filings that would be relevant to a company that recently went public. They include registration statements, annual and quarterly reports, proxy statements, insider trading forms, and current reports of material developments.
Learning the SEC Website Jargon
The SEC receives over 60,000 filings per year through its electronic database known as EDGAR. This is an acronym for Electronic Data, Gather, Analysis and Retrieval System. The EDGAR platform accepts filing submissions by companies.
Before getting into the various different forms companies commonly file with the SEC, it is helpful to learn the jargon. A company must understand some supplemental terms that frequently appear in public filings listed on the SEC website.
The term “UPLOAD” listed next to a filing refers to a comment letter from the SEC staff to the company. The comment letter provides questions or feedback in response to a recent filing made by the company. When an item has “CORRESP” listed next to it, it refers to a response letter from the company back to the SEC staff.
The usage of “/A” denotes an amendment to an original filing. The term “/A” is often placed next to an amended form title. For example, you may see a filed Form S-4/A, Form S-1/A, or Form 10-K/A. This refers to an amended version of each of these filings. The original filings would be the initial Form S-4, Form S-1, or Form 10-K filing, respectively.
If a company submits a filing after the SEC mandated deadline, the term “NT” will appear next to the filing. This indicates a non-timely filing or notification of late filing. For example, “NT 10-Q” indicates that a company submitted Form 10-Q, a company’s quarterly report, late.
SEC Registration Statements
When a company wants to offer securities to investors, it must provide detailed information about the company on a SEC registration statement.
For a startup seeking to go public, the most relevant registration statement is the Form S-1. A company planning an IPO will use a Form S-1 to register securities with the SEC for the IPO transaction. The Form S-1 will provide a comprehensive overview of the company’s financial and strategic outlook, provide information about management, and disclose material risks to the company. The equivalent of a Form S-1 for certain foreign private issuers is a Form F-1.
If the company later wants to register up to an additional 20% of securities for an offering registered on a Form S-1, it can submit a Form S-1MEF.
Emerging growth companies, as defined in Section 6(e) of the Securities Act of 1933, can first make a confidential filing with the SEC on a draft registration statement (DRS). After getting a sense of the SEC’s reaction to the company’s disclosures on the confidentially filed DRS, the company can decide to proceed with publicly filing the Form S-1. Other frequently used SEC registration statements include a Form S-3, Form S-4, and Form S-8.
Annual and Quarterly Reports
Public companies must file annual and quarterly reports with the SEC to keep investors updated about the company’s performance. These periodic reports typically contain information covering the key business risks, audited financial statements, material legal proceedings, and management’s discussion and analysis of the results of operations and financial condition.
Companies must file an annual report with the SEC providing a comprehensive overview of the company for the past fiscal year on a Form 10-K. For certain foreign private issuers, a Form 20-F is the rough equivalent of a Form 10-K for U.S.-based issuers.
In comparison with the Form 10-K, companies need not disclose nearly as much information on a Form 10-Q. Companies must file a quarterly report to provide a continuing view of a company’s financial position.
Current SEC Reports
Companies must report certain material developments to the SEC and investors on a Form 8-K. Also referred to as a “Current Report”, a company must file a Form 8-K within 4 business days of the triggering event. The equivalent of a Form 8-K for certain foreign private issuers is a Form 6-K.
The table below summarizes some of the most commonly reported items on a Form 8-K:
Before a company holds its annual shareholder meeting, it is required to file a proxy statement with the SEC on Form DEF14A. This serves as the official notification to shareholders of the matters to be voted on. The proxy statement also contains information about the executive officers and members of the board of directors.
Insider Trading Reports
The most commonly used insider trading forms are the Form 3 and Form 4. These filings report the ownership of securities by the company’s officers, directors, and stockholders that own more 10% of the voting shares. When the individual initially becomes a company insider, it must disclose the class and number of securities held on a Form 3. Subsequent changes in securities ownership must be reported on a Form 4.