What Is A Form 8k Filing?

What is a form 8k filing? It’s the form companies have to fill out when they’re about to disclose big news to their shareholders. All publicly traded companies are required to file documents periodically with the SEC. Within these forms is the requirement to detail information about their financials, executive stock sales, executive compensation and news releases. One, in particular, we’ll talk about today is the form 8k filing.

Where Does One Find The Needed SEC Forms?

Form 8k Filing

Conveniently, these forms and their valuable information can be found in the SECs’ Edgar database.

And, as far as government websites and databases are concerned, this one’s decently well designed.

So the functionality is OK – it’s not the worst, and it’s not the best, but he gets a job done. So now you know where to find a form for a form 8k filing.

Form 8-k Filing: The 5 Second Takeaway

  • The purpose of a form 8k filing is to promptly communicate “materially significant” events to shareholders and the market.
  • Also known as the “current report,” it’s released quarterly and announces significant events that shareholders should know. 
  • Materially significant events can include a company filing for bankruptcy or making changes to company personnel – such as the removal/retirement of a chief executive officer (CEO) or even the acquisition or disposal of assets
  • The public can find 8-Ks on the SEC’s EDGAR website, available here 

Form 8K Filing Definition

When researching a company, you definitely want to look up its latest 8-K filings. In short, 8-K filings are basically news releases the company has deemed important enough that investors should know.

Did you know that the information required to be disclosed on a Form 8k filing is generally considered “material?” That means that, in general, there is a substantial likelihood that a reasonable investor would consider the information necessary to decide to invest.

What Triggers an 8-K Filing?

Some examples of what you might find inside the form 8k filing include if:

  • the company is being acquired,
  • they acquire another business,
  • any of the high-level executives left the company,
  • they’re entering a new line of business, or,
  • they’re announcing their earnings releases. 

A quick peruse through the SEC Edgar database, and you’ll see companies file form 8-k’s all the time. Now, not every 8-K will have life-changing news, but it’s still news nonetheless. 

How To Read The Form 8K Filing

At this point, I’m going to go through a few of the sections in the form 8-k so you can see for yourself how they can be helpful if you come across a form 8k filing.

Item 1.02 – Termination of a Material Definitive Agreement

This section requires a company to disclose any termination of material agreements. For example, let’s say a lubricant company makes most of its sales from a long-term standing supply agreement with one significant customer. In the scenario where the customer terminates the contract, that event would need to be reported under this item.

Item 3.03 – Material Modification to Rights of Security Holders

 Under this item, any material changes to instruments that define the rights of shareholders (such as a company’s governing documents) must be reported.

Or changes that impact the rights of security holders. An example, is changes resulting from the issuance or modification of another class of securities. 

Additional examples of such changes could include loan terms restricting dividend payments, adopting an antitakeover device, or issuing preferred stock. 

Item 1.03 – Bankruptcy or Receivership 

Unfortunately, if a company finds itself the subject of bankruptcy or receivership court filing, it must be disclosed. So you got to air your dirty laundry. 

What Other Forms Must You Look At When Making Investing Decisions?

What Is A Form 8k Filing?

When it comes to doing anything with the SEC, forms are going to be pretty important. This includes a form 8k filing.

Not only to the company but also to someone interesting in them.

Companies file an S-1 filing. Another filing done with the SEC is a red herring with a prospectus.

It can be a little complicated to keep up with all the different forms. I named a couple right above but we’ll look at more you should look at below.

Annual Form 10-K

This is different than a form 8k filing. The first filing to look for or read from the SEC database is the 10-K. The Form 10-K Filing is a comprehensive annual report. Furthermore, all US publicly-traded companies must file this form with the SEC.

Likewise, it contains a lot of information about the company, such as its business lines, revenues, balance sheet, income statement, and cash flow. 

Undoubtedly, depending on the company’s size, these documents can be very long. Take, for example, large companies like Costco, Apple or even Microsoft. It’s not uncommon to see Form 10-ks at 2000 pages long or even more. 

Despite its length, its contents are invaluable. especially when researching a company for the first time. However, if you’re short on time or don’t find reading 200-page dry documents enjoyable, there’s a solution: The Form 10-Q.

Quarterly Form 10-Q

Alternatively, Form 10-k is the quarterly form 10-Q; a condensed version of the 10 K. Similar to the Form 10-K, it contains lots of information. Within it, you’ll find the company’s financials, but also a discussion about what happened during the quarter.

Once again, this is a very valuable document if you want to learn about the company’s most recent results. So look at both this an =d a form 8k filing.

Form DEF 14A 

Another filing besides the form 8k filing that you want to read is DEF 14, which is the proxy statement. The proxy statement basically is the who’s who of the company. To clarify, it outlies who the executives are, how much money they’re making and how many shares they hold. Once again, like the other forms, this is all vital information. 

Form S-4

Another type of filing you would want to know about is Form S-4. You’ll see the management buy-sell orders within this two-page form. When there are changes in holdings of the company insiders, i.e., CEO, CFO, COO, and so on, a Form S-4 filing requirement’s triggered.

 If you click on insider transactions in red, it will take you to all the form 4s. A form S-4 filing details the changes in executive share ownership. 

Form S-4 Broken Down

To elaborate, this could be because they bought or sold shares, were compensated with stock options, or perhaps gifted some of the shares to a charity. 

So, a form S-4 can arise for several reasons. And, as you can imagine, executive share ownership changes all the time. Consequently, you’ll see dozens and even hundreds of form S-4s filed over the year. 

Undoubtedly, there’s a lot of noise within these filings. However, I highly suggest taking the time to read them as they’re obviously important. Don’t you want to know what executives do with their shares?

On September 26, 2016, the SEC brought enforcement actions against issuers because they failed to file 8 K’s. More specifically, issuers failed to disclose PIPE transactions involving the issuance of convertible debt, preferred equity, warrants and similar instruments.

Final Thoughts

Now you know what a form 8k filing is. Admittedly, these forms are a little dry in terms of reading material, but they’re significant when investing. If you want to learn more about how to read these documents, how to analyze financials and get a good like that against other investors, I recommend checking out these forms. If should you have any questions about today’s topic and please leave a comment below.

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