Happy Friday!

We’re one week into the new trading year, and I am already seeing signs that this might be another year filled with opportunities and room for growth. 

We’ve picked off right where we left off, in 2021.

Knowledge is power, gang, and today I want to share some important information that might be useful to you.

There are times when a stock appears to have immense selling or buying pressure or significant overnight gaps which are hard to understand.

In some cases, these moves might be the result of SEC filings.

You see, gang, publicly-traded companies in the U.S. need to report and file with the SEC.

The EDGAR database provides access to the fillings and allows the public to research a publicly-traded company’s financials and operations. 

Now I know that this can all be overwhelming, so I want to break it down for you! This is why I want to tell you three essential types of filing that I believe are important to understand.

Why does it matter?

As you know, I love trading biotech stocks and penny stocks.

It’s no secret that many small-cap biotech stocks need capital to finance their operations and drugs in the pipeline, whether it is a phase 1 or 2 prospects.

It is beneficial, in that regard, to understand what filings exist that alert me to whether or not a stock I am focusing on has dilution, which could impact the stock’s ability to trade higher.

Therefore, It is essential to understand what type of filings relate to an offering or possible dilution.

Important company communication, such as press releases, are also filed with the SEC, and it is essential to note what filing relates to that.

Gang, I also find it useful to be able to identify a company’s earnings report and make sense of it. It might help a trader or investor make essential decisions.

Form 8-K

A company will file an 8-K because they need to report specific material, corporate events. 

For example, a company might file an 8-K because they need to communicate an unregistered sale of equity, or perhaps the company entered into a material definitive agreement.

For example, here are 8-K filings filed by PTPI with the SEC on the 27th of December, 2021.

Form 10-K and 10-Q

The 10-K is an annual report that domestic public companies must file with the SEC. The 10-K form provides a detailed overview of the company’s business and financial condition and will include audited financial statements.

The 10-Q, on the other hand, is similar to the 10-K. However, it is filed every quarter. The 10-Q includes an ongoing view of the company’s financial position during the year.

Here is an example, using PTPI again, of where to find a 10-Q and what it looks like on the SEC site. 

Simply scroll down the page until you see 10-Q under the “Form type” column.

Form S-3

I’m sure many of you might have heard of the S-1 filing used by companies who plan to go public. It is used to register the company’s securities with the SEC.

However, what if a company is already public and wants to register securities to sell to raise capital?

That’s where the S-3 comes in.

The S-3 filing is used when a company wants to raise capital after the IPO (initial public offering) has already occurred.

For example, here is an S-3 filed by OPTT on the 19th of November 2021. 

As you can see with that example, the S-3 Form will lay out all of the essential information about the offering and include the security type and how the proceeds will be used.

In this example, I can see that this offering relates to selling stockholders and that the company itself will not receive any of the proceeds from the sale of shares by the selling stockholders.

The Bottom Line

Gang, there are many different types of filings and even different versions of some types of forms. However, these three forms provide a decent foundation and starting point. 

If you enjoy doing research and due diligence, you can always build on this from here.

I do not make any single trade based on filings. However, the information I gather from filings might impact a trade decision or trade management.

As I said, knowledge is power, and I like to be armed with as much knowledge and skill as possible.

Knowing how to navigate the fillings is one way I do that.


Jeff Williams

Jeff Williams is a full-time day trader with over 15 years experience. Thousands of entry-level and experienced traders alike – day-traders and swing-trade small cap stock traders – credit Jeff with guiding them to turning small accounts into big accounts.

Jeff’s "Small Account Challenge" shows people how to transform accounts from a few thousand dollars into $25k, $50k or even $100k.

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