Learning objectives

• Identify the type of information that must be included in Form 10-Q.
• Identify compliance requirements related to Form 10-Q instructions and the requirements for interim financial statements in Rule 10-1 of Regulation S-X.

An example of Form 10-Q can be located on the SEC’s website.

Facebook, Inc.’s 2017 Form 10-Q can be found at: www.sec.gov/Archives/edgar/data/1326801/000132680118000057/fb-06302018x10q.htm

Notice to readers: If the included link in the text to the website does not appear when typed into a web browser, copy the link into a search engine to be redirected to the proper web page.

Smaller reporting company status

Smaller reporting companies have the option of following scaled disclosure rules, which are generally less onerous than those for larger reporting companies. The test to determine smaller reporting company status is made at the end of an issuer’s second fiscal quarter. The SEC amended the definition of a smaller reporting company, effective September 10, 2018, to allow more companies to provided scaled disclosures. Under the new definition, an issuer is a smaller reporting company if it has less than $250 million in public equity float as of the end of its most recently completed second fiscal quarter or, if the company has no public equity float or less than $700 million in public equity float, it had less than $100 million in revenue during its most recently completed fiscal year. A registrant meeting these conditions will qualify as a smaller reporting company for the fiscal year ending after September 10, 2018, even if it did not previously qualify as a smaller reporting company.

A smaller reporting company will generally follow the non-accelerated filer due dates; however, due to the existing definition of accelerated filer or other transition rules, a smaller reporting company could be required to comply with the accelerated filer due dates and the requirement to provide the auditor’s attestation on management’s assessment of internal control over financial reporting.

Transitioning between filing categories and reporting categories

The tests to determine an issuer’s filing status are made at year-end based in part on a company’s public float as of the end of its second fiscal quarter. The first report an issuer files under a new filing category is always an annual report. For example, if in 20X8 the public equity float of an accelerated filer with a December 31 year-end drops below $50 million on the last day of its second quarter, the issuer is still required to file its Form 10-Qs for the quarters ending June 30 and September 30, 20X8, on an accelerated basis (within 40 days after quarter-end), but may file its annual report for the year ended December 31, 20X8, on a non-accelerated basis (within 90 days of year-end).

The rules for entering and exiting smaller reporting company and non-accelerated filer status are not the same. Therefore, it is possible for a company that is a smaller reporting company for scaled disclosure purposes to also be an accelerated filer. The rules for transitioning in and out of smaller reporting company status are as follows:

• Entering by reporting companies. A larger reporting company that determines it is a smaller reporting company as of the last business day of its most recently completed second fiscal quarter can report as a smaller reporting company on its Form 10-Q for the just completed second quarter. In other words, the company can file as a smaller reporting company immediately.
• Exiting. A smaller reporting company that determines it is no longer a smaller reporting company as of the last business day of its most recently completed second fiscal quarter will not be required to satisfy the larger reporting company disclosure requirements until the first quarter after the end of the fiscal year. That is, the smaller reporting company can wait until after its annual report is filed and then begin complying with the larger reporting company disclosure requirements.
• Re-entering. A smaller reporting company that moves into larger reporting company status will remain a larger reporting company until its public float is less than $200 million as of the last business day of its second fiscal quarter. In addition, a company that is not a smaller reporting company because it exceeded either or both of the $100 million annual revenue and $700 million public equity float thresholds, will move back to smaller reporting company status when it meets 80% of the criteria on which it previously failed to qualify ($80 million of annual revenue and $560 million of public equity float) and continues to meet an threshold it previously satisfied. For example, if a registrant with less than $700 million of public float lost its smaller reporting company because its annual revenues exceeded $100 million, it can re-enter smaller reporting company status if its revenues drop below $80 million (i.e., public float does not also need to be below $560 million for the registrant to re-enter smaller reportign company status).

Under the initial transition rules, a registrant qualified as a smaller reporting company if its public float as of the end of its second fiscal quarter was less than $250 million. In contrast, the public float of a company that was an accelerated filer must drop below $50 million before it can exit accelerated filer status. Thus, an accelerated filer with a public float between $50 and $250 million as of the end of its second fiscal quarter immediately qualified as a smaller reporting company but remains an accelerated filer.

In addition, the differing transition rules for filing status versus reporting company status can result in the following:

• A company entering accelerated filer status must do so at the time it files its next annual report. A company entering larger reporting company status is not required to comply with the larger reporting company disclosure requirements until the first quarter after the end of the fiscal year in which its status changed. Thus a calendar year-end smaller reporting company whose public float exceeded $250 million on June 30, 20X8, would be permitted to file its 20X8 annual report in accordance with the smaller reporting company disclosure requirements but must file it within 75 days of December 31, 20X8, the accelerated filer deadline.
• The tests to determine whether a company is an accelerated filer are not made until year-end. Therefore, a company whose public float was less than $50 million as of the end of its second fiscal quarter cannot exit accelerated filer status until it files its next annual report. In contrast, a company entering smaller reporting company status may do so immediately. Thus, a calendar year-end accelerated filer whose public float dropped below $50 million on June 30, 20X8, would be permitted to file its June 30 and September 30, 20X8, interim reports on Form 10-Q in accordance with the smaller reporting company disclosure requirements but must file them within 40 days of quarter-end, the accelerated filer deadline.

A uniform set of instructions for interim financial statements is included in Rule 10-1 of Regulation S-X, as an extension of the SEC’s integrated disclosure program. Smaller reporting companies should refer to Rules 8-01 to 8-08 of Regulation S-X. In addition, certain requirements for the current Form 10-Q are contained in Codification of Financial Reporting Releases sections 301, 303, 304, and 305. Interpretations of the rules are provided in SAB Series Topic 6-G.

A registrant may elect to incorporate all of the information required by Part I by reference to a quarterly stockholder report or other published document containing the information, provided such reports or documents are filed as an exhibit. Other information also may be incorporated by reference in answer or partial answer to any item in Part II, provided the incorporation by reference is clearly identified. Alternatively, the SEC permits the filing of a combined report (quarterly stockholder report combined with the information required by Form 10-Q) if the report contains all information required by Part I, and all other information (cover page, signature, Part II) is in the combined report or included on Form 10-Q, with appropriate cross-referencing.

All filings are required to be submitted electronically (unless the registrant has requested and received a hardship exemption), in accordance with Regulation S-T.

Note: In May 2019, the SEC proposed to amend the definitions of an accelerated and large accelerated filer. As proposed, smaller reporting companies with less than $100 million in annual revenue would not be required to obtain an audit of their internal control over financial reporting. The initial qualification thresholds for accelerated and large accelerated filer status based on public float would remain the same (i.e., $75 million or more but less than $700 million in public float for an accelerated filer and more than $700 million in public float for a large accelerated filer). Examples of registrants that will no longer qualify as accelerated filers under the proposed definitions include:

• Registrants with annual revenue of less than $100 million and public float between $75 million and $250 million; and
• Registrants with no revenue and public float between $75 million and $700 million.

Conversely, registrants with more than $100 million in annual revenue and between $75 million and $250 million in public float would still qualify as accelerated filers under the proposed rules. The public float transition thresholds for exiting accelerated and large accelerated filer status would be 80% of the initial qualification thresholds. The proposal is subject to a 60-day public comment period after it is published in the Federal Register.

Knowledge check

1. For an accelerated filer, what is the filing deadline for a Form 10-Q?
   1. 35 days after fiscal quarter-end.
   2. 40 days after fiscal quarter-end.
   3. 45 days after fiscal quarter-end.
   4. 75 days after fiscal quarter-end.
2. If a calendar year-end registrant’s reporting status changes from smaller reporting company to accelerated filer for its year ended December 31, 2018, it will have to file periodic reports on an accelerated basis beginning with
   1. The quarter ended June 30, 2018.
   2. The quarter ended September 30, 2018.
   3. The year ended December 31, 2018.
   4. The quarter ended March 31, 2019.
3. The financial statement requirements for Form 10-Q are set forth in Regulation S-X
   1. Rules 3-01 to 3-20.
   2. Rule 10-1.
   3. Rules 11-01 to 11-03.
   4. Rules 12-01 to 12-29.

Checkbox for XBRL data

The SEC requires issuers to provide financial statements in interactive data format using Extensible Business Reporting Language (XBRL). Issuers are required to provide the XBRL data as an exhibit to their annual and quarterly reports, transition reports, Form 8-K, and 6-K reports containing updated or revised versions of financial statements that appeared in a periodic report, and registration statements, and on their corporate website if they maintain one.

In 2018, the SEC amended its XBRL reporting requirements to require the use of “inline” XBRL. The amendments will require issuers to embed XBRL tags directly in their financial statements in lieu of providing tagged data in a separate exhibit.

The inline XBRL requirements take effect based on filing status as follows:

• June 15, 2019 — Large accelerated filers that prepare their financial statements in accordance with U.S. GAAP
• June 15, 2020 — Accelerated filers that prepare their financial statements in accordance with U.S. GAAP
• June 15, 2021 — All other filers

Form 10-Q filers will commence inline XBRL reporting in their Form 10-Q for the first quarter ending on or after these dates.

The quarterly report on Form 10-Q and the annual report on Forms 10-K, 20-F and 40-F require issuers to indicate in a checkbox whether or not they have submitted electronically and posted on their corporate website, if any, “every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).”

Item 1 — Financial statements (Rule 10-01 of Regulation S-X)

The financial statements should be prepared in accordance with Rule 10-01 of Regulation S-X, and FASB Accounting Standards Codification (ASC) 270, Interim Reporting. An understanding of these requirements is essential in preparing Form 10-Q. Smaller reporting companies may provide the information required by Rule 8-03 of Regulation S-X.

The financial statements may be condensed and should include a balance sheet, statement of comprehensive income (comprehensive income may be presented in two separate but consecutive financial statements — an income statement and a statement of comprehensive income), and statement of cash flows for the required periods. Additionally, a reconciliation of changes in stockholders’ equity must be included in the notes or as a separate statement. The statements are required to be reviewed by independent accountants in accordance with PCAOB auditing standards.

• Balance sheets as of the end of the latest quarter and the end of the preceding fiscal year are required. A comparative balance sheet as of the end of the previous year’s corresponding interim date need be included only when, in the registrant’s opinion, it is necessary for an understanding of seasonal fluctuations.

  Only the major captions prescribed by Rules 5-01 to 5-03 of Regulation S-X are required to be disclosed, except that the components of inventory (raw materials, work-in-process, finished goods) must also be presented on the balance sheet or in the notes. Thus, even if a company uses the gross profit or a similar method to determine cost of sales for interim periods, management will have to estimate the inventory components.

  There is also a materiality rule for disclosure of major balance-sheet captions. Those that are less than 10% of total assets and that have not changed by more than 25% from the preceding fiscal year’s balance sheet may be combined with other captions. Reclassification of the year-end balance sheet, in terms of separate or combined captions, is required to conform to the current period’s classification.

• Statements of comprehensive income for the latest quarter and the year-to-date period and for the corresponding periods of the prior year are required. Statements may also be presented for the twelve-month periods ending with the latest quarter and the corresponding period of the prior year.

For example, if a company reports on a November 30, 20X8 fiscal year-end, its Form 10-Q for the quarter ended August 31, 20X8 would include comparative income statements for the nine months ended August 31, 20X8 and 20X7 and for the three months ended August 31, 20X8 and 20X7.

• Statements of cash flows for the year to date and for the corresponding period of the prior year are required. In addition, the statement may be presented for the 12-month periods ending with the latest quarter and the corresponding period of the prior year.

  The statement of cash flows may be abbreviated, starting with a single amount for net cash flows from operating activities. Additionally, individual items of financing and investing cash flows, and disclosures about non-cash investing or financing transactions, need be presented only if they exceed 10% of the average net cash flows from operating activities for the last three years. In computing the average, any years that reflect a net cash outflow from operations should be excluded, unless all three years reflect a net cash outflow, in which case the average outflow should be used for the test.

• Reconciliations of changes in stockholders’ equity for both the quarterly and year-to-date periods for which an income statement is required as well as the prior year comparative periods must be included in the filing. This reconciliation must comply with the content requirements of Rule 3-04 of Regulation S-X and must be first disclosed in the Form 10-Q for the quarter that begins after November 5, 2018.

The rules for the inclusion and updating of interim financial statements for smaller reporting companies are the same as those for regular issuers, except that the thresholds for combining captions in condensed financial statements are different, as follows:

• Balance sheet. Must disclose separately any item that represents 10% or more of total assets.
• Statements of comprehensive income. Must disclose each cost and expense that exceeds 20% of sales.
• Cash flow statements. May not be abbreviated (that is, displaying a single figure for net cash flows from operations).

Other important provisions of the rules relating to financial information are as follows:

• The interim financial information shall include disclosures sufficient to make the interim financial presentation not misleading. Detailed schedules required by Regulation S-X may be omitted from the interim finrancial statements.

• • There is a presumption that financial statement users have read or have access to the audited financial statements containing detailed disclosures for the latest fiscal year. As such, most continuing footnote disclosures, such as significant accounting policies, can be omitted.
  • Regulation S-X specifically requires disclosure of events occurring since the end of the latest fiscal year having a material effect on the financial statements, such as changes in

1. 1. • accounting principles and practices;
      • estimates used in the statements;
      • status of long-term contracts;
      • capitalization, including significant new borrowings, or modification of existing financing arrangements; or
      • the reporting entity resulting from business combinations or dispositions.

• • If there are material contingencies, disclosure is required even if significant changes have not occurred since year-end.
  • In addition, based on existing pronouncements and informal statements by the SEC, the following matters, if applicable, should be considered for disclosure:

1. 1. • Significant events during the period (for instance, unusual or infrequently occurring items, such as material write-downs of inventory or goodwill).
      • Significant changes in the nature of transactions with related parties.
      • The basis for allocating amounts of significant costs and expenses to interim periods if different from those used for the annual statements (for instance, inventory pricing methods).
      • Significant variations in the customary relationship between income tax expense and income before taxes.
      • The amount of any LIFO liquidation expected to be replaced by year-end or the effect of a material liquidation during the quarter.
      • The components of inventory (finished goods, raw materials, and so on)
      • Significant new commitments or changes in the status of those previously disclosed.

• Disclosures regarding adoption of a new accounting principle must be reported in each Form 10-Q until they are included in a Form 10-K. Although it is not mentioned in the rules, registrants may consider it desirable to indicate with a legend on Form 10-Q that the financial statements are condensed (if applicable) and that they do not contain all disclosures required by generally accepted accounting principles to be included in a full set of financial statements.
• The interim financial statements should reflect all adjustments that are, in management’s opinion, necessary for a fair presentation and a statement to that effect is required. These adjustments would include estimates such as provisions for bonuses and for profit-sharing contributions normally determined at year-end. If all such adjustments are of a normal recurring nature, a statement to that effect is required. The nature and amount of other significant, nonrecurring adjustments must be disclosed.
• The registrant may furnish additional information of significance to investors, such as seasonality of business, major uncertainties, significant proposed accounting changes, and backlog. In that regard, it would ordinarily be appropriate to include a statement that the interim results are not necessarily indicative of results to be obtained for the full year.
• If the registrant has reported a discontinued operation during any period covered by the interim financial statements, the effect on revenues and net income (including earnings per share) must be disclosed for all periods presented.
• In addition, if a material business combination occurs during the current fiscal year the following must be disclosed:

• • Name and description of acquired entity and the percentage of voting interest acquired
  • Primary reasons for acquisition and factors affecting purchase price
  • Period for which results of acquisition are included in income statement
  • Cost of acquired entity, including value assigned to equity if part of consideration. Additionally, pro forma disclosures showing the results of operations as though the companies had combined at the beginning of the comparative prior year-to-date period are required. Pro forma financial statements should be presented for the current interim period and the current year-to-date period, as well as for the comparative prior year periods. These pro forma disclosures must show, at a minimum, revenues; income before extraordinary items and cumulative effect of an accounting change; and net income (including per share amounts).

• Any material, retroactive prior-period adjustments made after the initial reporting of that period must be disclosed, including the effect of the change on net income (including earnings per share).
• Disclosure is required of earnings and dividends declared per share of common stock, the basis of the computation, and the number of shares used in the computation for all periods presented. Historically, registrants were required to file an exhibit in Part II showing, in reasonable detail, the computation of earnings per share. However, in light of FASB ASC 260, Earnings per Share, the SEC staff has informally indicated that such exhibits are no longer needed. Instead, a reconciliation of the numerators and denominators used in basic and diluted earnings per share, as required by FASB ASC 260, must be included in a footnote. Per share data is not required if registrants have no publicly traded equity securities (such as registrants with only public debt).
• Summarized income statement information must be provided for unconsolidated subsidiaries and 50% or less owned equity investees that would be required to file separate financial statements in a Form 10-K (Rule 4-08(g) of Regulation S-X).
• In addition, financial information about guarantors must be provided in accordance with Rule 3-10 of Regulation S-X.
• If a change in accounting principle was made, the date of the change and the reasons for making it must be disclosed.

• • In addition, in the first Form 10-Q filed after the date of an accounting principle change (or in the Form 10-K, if the change was made in the fourth quarter), a letter from the accountants (referred to as a preferability letter) must be filed as an exhibit in Part II, indicating whether the accountants believe that the change was to a preferable alternative accounting principle under the circumstances. If the change was made in response to a FASB requirement, no such letter need be filed.
  • The SEC staff acknowledges that when objective criteria for determining preferability have not been established by authoritative bodies, the determination of the preferable accounting treatment should be based on the registrant’s particular circumstances. In many cases, the registrant’s business judgment and business planning (for example, expectations regarding the effect of inflation, consumer demand for the company’s products, or a change in marketing methods) may be major considerations in the determination of preferability. The staff believes that the registrant’s judgment and business planning, unless they appear to be unreasonable, may be accepted and relied on by the accountant as the basis of the preferability letter.
  • If the circumstances used to justify a change in accounting method vary in subsequent years, theregistrant may not return to the principle originally used unless it can again be justified that the original principle is preferable under current conditions.

Item 2—Management’s discussion and analysis of financial condition and results of operations (Item 303(b) of Regulation S-K)

Management’s discussion and analysis of financial condition and results of operations (the MD&A) must be provided pursuant to Item 303(b) of Regulation S-K. The MD&A should discuss substantially the same issues covered in the MD&A for the latest Form 10-K and specifically focus on

• material changes in financial condition for the period from the latest fiscal year-end to the date of the most recent interim balance sheet; and
• material changes in results of operations for the most recent year-to-date period, the current quarter, and the corresponding periods of the preceding fiscal year.

In preparing the discussion, companies may presume that users of the interim financial information have access to the MD&A covering the most recent fiscal year. The MD&A should address any seasonal aspects of the business affecting the business’s financial condition or results of operations and identify any significant elements of income from continuing operations that are not representative of the ongoing business.

The MD&A should be as informative as possible. As discussed previously, the registrant should avoid the use of boilerplate analysis and not merely repeat numerical data easily derived from the financial statements.

Item 3—Quantitative and qualitative disclosures about market risk (Item 305 of Regulation S-K)

Market risk information is required to be presented if there have been material changes in the market risks faced by a registrant or in how those risks are managed since the end of the most recent fiscal year.

Item 4—Controls and procedures (Item 307 and 308(c) of Regulation S-K)

Item 4 requires the principal chief executive and financial officers to evaluate the effectiveness of disclosure controls and procedures as of the end of each quarter. Regulation S-K Item 307 requires disclosure of the conclusions of such evaluations.

The XBRL rule release clarifies that an XBRL exhibit would fall within the definition of “disclosure controls and procedures” and, accordingly, no specific exclusion for XBRL data was made pursuant to the SEC’s rules requiring evaluation of disclosure controls and procedures. This means that as part of the evaluation of disclosure controls and procedures, issuers will need to consider controls surrounding the preparation and submission of their XBRL exhibits.

Rules 13a-15(d) require management to evaluate any change in the issuer’s internal control over financial reporting that occurred during each fiscal quarter (including the fourth quarter) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting. Foreign private issuers need to perform this evaluation only on an annual basis. Item 308(c) of Regulations S-K requires management to disclose the changes that have occurred during the quarter. The rules do not require a quarterly report on the effectiveness of a company’s internal controls.

The requirement to evaluate changes in internal control over financial reporting on a quarterly basis is effective for a company’s first quarterly report after the first annual report required to include a management report on internal control over financial reporting. This requirement must be distinguished from the requirement to report significant changes in internal control over financial reporting on a quarterly basis if such changes are identified per Item 307 of Regulation S-K. (Even though a formal evaluation of internal control over financial reporting may not yet be required of a company, such as in the case of a newly public company, a registrant might identify such changes through their evaluations of disclosure controls and procedures or other means.)

Knowledge check

4. What must the financial statements in a Form 10-Q filing include?
   1. Balance sheet, statement of comprehensive income, cash flow statement, statement of changes in shareholders’ equity, and financial statement schedules.
   2. Balance sheet, statement of comprehensive income, cash flow statement, and a reconciliation of changes in stockholders’ equity.
   3. Balance sheet, income statement, and cash flow statement.
   4. Balance sheet and income statement.
5. Under Article 10, an interim income statement may be condensed and may combine captions that are less than 15% of average net income for the last three fiscal years and that have not changed by more than
   1. 10% from the corresponding interim period of the preceding year
   2. 20% from the corresponding interim period of the preceding year.
   3. 25% from the corresponding interim period of the preceding year.
   4. 30% from the corresponding interim period of the preceding year.
6. If a registrant has disposed of a significant business during the first quarter of its fiscal year, for which quarter should information about the disposal be disclosed?
   1. Only for the quarter that includes the month in which the transaction occurred.
   2. For the quarter that includes the month in which the transaction occurred and in subsequent quarters.
   3. In the quarter in which the transaction occurred and in the annual financial statements.
   4. Only for the year-to-date periods in the annual financial statements.
7. If a registrant has completed a material business combination during the current fiscal year, what must the registrant disclose in a footnote to the financial statements included in its Form 10-Q?
   1. Information about the transaction, including pro forma disclosures.
   2. Information about the transaction and a summarized income statement for the acquired business.
   3. Information about the transaction, including historical results of operations of the acquired business for the comparative period of the prior year.
   4. No information about the transaction, because it does not have to be disclosed until the
   5. registrant files its Form 10-K.
8. If a registrant makes a voluntary material accounting change during the year (that is, not a change in accounting principle mandated by the standard setters), what must it file in the first Form 10-Q after the date of the accounting change?
   1. An accountant’s review report on the interim financial statements.
   2. A consent from the registrant’s independent registered public accountant.
   3. A copy of the Form 8-K that was filed to disclose the accounting change.
   4. A preferability letter from the registrant’s independent registered public accountant.

Item 1—Legal proceedings (Item 103 of Regulation S-K)

A legal proceeding must be reported in the quarter in which it first becomes a reportable event or in subsequent quarters in which there are material developments. For terminated proceedings, information about the date of termination and a description of the disposition should be provided in the Form 10-Q covering that quarter.

Item 1A—Risk factors

Item 1A requires disclosure of any material changes to the factors reported in response to Item 1A of the issuer’s annual report on Form 10-K. Smaller reporting companies are not required to provide the information required by this item.

Item 2—Unregistered sales of equity securities and use of proceeds (Items 701 and 703 of Regulation S-K)

1. Furnish the information required by Item 701 of Regulation S-K as to all equity securities of the registrant sold by the registrant during the period covered by the report that were not registered under the Securities Act. If the Item 701 information previously has been included in a Current Report on Form 8-K, it need not be furnished.
2. If required pursuant to Rule 463 of the Securities Act of 1933, furnish the information required by Item 701(f) of Regulation S-K.
3. Furnish the information required by Item 703 of Regulation S-K for any repurchase made in the quarter covered by the report. Provide disclosures covering repurchases made on a monthly basis. For example, if the quarter began on January 16 and ended on April 15, the chart would show repurchases for the months from January 16–February 15, February 16–March 15, and March 16–April 15.

Under Item 2(a) of Form 10-Q, any sales during the quarter of equity securities not registered under the Securities Act (other than unregistered sales under Regulation S) and not previously disclosed on Form 8-K must be disclosed. The disclosure should include a description of the securities sold, the purchasers, the consideration received, the exemption from registration claimed, and the terms of conversion or exercise (if applicable).

Under Item 2(b) of Form 10-Q, for initial registration statements filed under the Securities Act (that is, initial public offerings), the issuer must report the use of proceeds in the first periodic report filed after the registration statement’s effective date, and in each subsequent periodic report (that is, Form 10-K or 10-Q) until the offering is terminated or all proceeds applied, whichever is later. The registrant must quantify the use of proceeds to date (that is, to invest in property and plant, to acquire businesses, to repay debt), and identify any direct or indirect payments to directors, officers, or 10% or more stockholders. Any material changes in the use of proceeds from the uses cited in the registration statement must be described.

Under Item 2(c), issuers must disclose information regarding repurchases (in open market or private transactions) of their equity securities.

Under Item 703 of Regulation S-K, issuers are required to provide tabular disclosure of information regarding equity securities purchased during each month of the period covered by the report, regardless of whether the repurchases were effected in accordance with Exchange Act Rule 10b-18. The table must provide the following information:

• The total number of shares purchased
• The average price paid per share
• The total number of shares purchased during the month as part of publicly announced share repurchase plans
• The maximum number of shares that may yet be purchased under share repurchase plans

Item 3—Defaults on senior securities

1. If there has been any material default in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not cured within 30 days, with respect to any indebtedness of the registrant or any of its significant subsidiaries exceeding 5% of the total assets of the registrant and its consolidated subsidiaries, identify the indebtedness and state the nature of the default. In the case of such a default in the payment of principal, interest, or a sinking or purchase fund installment, state the amount of the default and the total arrearage on the date of filing this report.

   Instruction. This paragraph refers only to events that have become defaults under the governing instruments (that is, after the expiration of any period of grace and compliance with any notice requirements).

2. If any material arrearage in the payment of dividends has occurred or if there has been any other material delinquency not cured within 30 days, with respect to any class of preferred stock of the registrant which is registered or which ranks prior to any class of registered securities, or withrespect to any class of preferred stock of any significant subsidiary of the registrant, give the title of the class and state the nature of the arrearage or delinquency. In the case of an arrearage in the payment of dividends, state the amount and the total arrearage on the date of filing this report.

   Instruction. Item 3 need not be answered as to any default or arrearage with respect to any class of securities all of which is held by, or for the account of, the registrant or its totally held subsidiaries. The information required by Item 3 need not be made if previously disclosed on a report on Form 8-K.

Disclosure is required of a default (with respect to principal, interest, or sinking fund) not cured within 30 days of the due date, including any grace period, if the related indebtedness exceeds 5% of total consolidated assets. A default relating to dividend arrearage on preferred stock must also be disclosed. The registrant must identify the particular indebtedness or class of stock, disclose the nature and amount of the default, and disclose the total arrearage as of the report filing date.

Item 4—Mine safety disclosures

All companies, regardless of whether they have mine safety disclosures to make, should make the appropriate disclosures and indicate “not applicable” if the company is not subject to the mine safety disclosure rules.

Item 5—Other information

1. The registrant must disclose under this item any information required to be disclosed in a report on Form 8-K during the period covered by this Form 10-Q, but not reported, whether or not otherwise required by this Form 10-Q. If disclosure of such information is made under this item, it need not be repeated in a report on Form 8-K which would otherwise be required to be filed with respect to such information or in a subsequent report on Form 10-Q; and (b) Furnish the information required by Item 407(c)(3) of Regulation S-K.

Under Item 5(a), an issuer must report under this caption Form 8-K reportable events that occurred during the most recent quarter but were not previously reported on Form 8-K. Such information would not be required to be repeated in a report on Form 8-K that otherwise would be required.

Item 6—Exhibits (Item 601 of Regulation S-K)

1. Furnish the exhibits required by Item 601 of Regulation S-K.

This caption should include a listing of exhibits filed with Form 10-Q.

Inapplicable exhibits may be omitted without referring to them in the index. When exhibits are incorporated by reference, that fact should be noted.

Knowledge check

9. In Form 10-Q, which statement is accurate regarding risk factors?
   1. Risk factors are not required in Form 10-Q, because they are included in Form 10-K.
   2. Material risk factors from Form 10-K should be repeated in Form 10-Q.
   3. Risk factors are required for all registrants other than smaller reporting companies if there have been material changes in the risk factors faced by a registrant.
   4. Risk factors are required for all registrants.

Signatures

The form must be signed by the principal financial officer or chief accounting officer of the registrant, as well as another duly authorized officer. When the principal financial officer or chief accounting officer is also a duly authorized signatory, one signature is sufficient, provided the officer’s dual responsibility is indicated.

Signatures for any electronic submission are in typed form rather than manual format; However, manually signed pages (or other documents acknowledging the typed signatures) must be obtained prior to the electronic filing. The registrant must retain the original signed document for a period of five years after the filing of the related document and provide it to the SEC or the staff upon request.

Form 10-Q after an initial public offering

In accordance with Exchange Act Rule 13a-13 and Securities Act Rule 15d-13, a Form 10-Q is due for the first quarter subsequent to the quarter included in the registration statement (or the first quarter of the year if the registration statement included only annual financial statements). The Form 10-Q is due either 45 days after the effective date of the registration statement or on or before the date on which Form 10-Q would have been required to be filed if the issuer has been required to file such reports (45 days after the end of the fiscal quarter for non-accelerated filers and 40 days after the end of the fiscal quarter for accelerated and large accelerated filers), whichever is later. For example, assume the registration statement for a December 31 year-end company’s IPO is declared effective on July 15, 20X8, and includes interim financial statements for the quarter ended March 31, 20X8. A Form 10-Q for the quarter ended June 30, 20X8, would be due August 29, 20X8 (45 days after the effective date).

Knowledge check

10. For a December 31 year-end company that is a non-accelerated filer and whose registration statement for an initial public offering (IPO) was declared effective on July 15, 2018, which statement is accurate regarding the company’s filing actions?
    1. It does not have to file any periodic reports until its first Form 10-K is due.
    2. It must file its first Form 10-Q 45 days after the effective date of the registration statement.
    3. It must file its first Form 10-Q 40 days after the effective date of the registration statement.
    4. It must file its first Form 10-Q 45 days after the end of the most recently completed fiscal quarter.