Legal Definitions - Form 10-Q

Form 10-Q is a mandatory quarterly report that publicly traded companies in the United States must file with the Securities and Exchange Commission (SEC). The SEC is an independent federal government agency responsible for protecting investors, maintaining fair and orderly functioning of securities markets, and facilitating capital formation.

This report provides a detailed, though unaudited, overview of a company's financial performance and operational activities for the most recently completed fiscal quarter. It typically includes financial statements (like the balance sheet, income statement, and cash flow statement), management's discussion and analysis of the company's financial condition and results of operations, and disclosures about legal proceedings or other significant events.

Companies generally file three Form 10-Qs each year, covering their first three fiscal quarters. The financial information for the fourth quarter is instead included in the more comprehensive and audited annual report, known as Form 10-K.

Here are some examples of how Form 10-Q applies:

• Imagine InnovateTech Inc., a publicly traded software development company. After the first three months of its fiscal year, InnovateTech needs to update its investors on its performance. They would file a Form 10-Q detailing their revenue from software subscriptions, operating expenses, and net income for that quarter. This report gives shareholders a timely, albeit unaudited, snapshot of the company's financial health and operational progress before the more extensive annual audit is completed.

• Consider Global Apparel Co., a large publicly traded clothing retailer. Its second fiscal quarter often includes significant seasonal sales events. To keep investors informed, Global Apparel Co. would file a Form 10-Q to report on its sales figures, inventory levels, and profit margins for that specific three-month period. This allows shareholders to quickly assess how the company performed during that critical sales window, even though the financial data has not yet undergone a complete external audit.

• Let's look at BioPharma Solutions Inc., a publicly traded pharmaceutical company that invests heavily in new drug research and development. At the end of its third fiscal quarter, the company files a Form 10-Q. This report would disclose its research and development expenditures, cash flow, and any significant operational updates, such as progress in clinical trials, for that three-month period. Investors can track the company's spending and operational advancements without having to wait for the comprehensive, audited annual report.