Form 10-QSB

A quarterly report that shows a company's financial position during the year

Author: Emily Rustom
Emily Rustom
Emily Rustom
I'm a BBA Finance and Economics student at Texas A&M university from Houston, Texas. On campus, I’m involved in Delta Gamma Sorority, Aggies on Wall Street, Aggie Women in Business, Horizons Finance, and Aggie Investment club on top of my job as a Fashion Marketing Coordinator. Outside of university, I've had experiences participating in the PJT Partners cohort program, WSO internship, UTIMCO Scholars program, and a Financial Officer of Grace in His hands NonProfit. These programs allowed me to develop skills in Excel, time management, organization, PowerPoint, and enhance my industry knowledge. Reach out on my Linkedin or email for more information!
Reviewed By: Adin Lykken
Adin Lykken
Adin Lykken
Consulting | Private Equity

Currently, Adin is an associate at Berkshire Partners, an $16B middle-market private equity fund. Prior to joining Berkshire Partners, Adin worked for just over three years at The Boston Consulting Group as an associate and consultant and previously interned for the Federal Reserve Board and the U.S. Senate.

Adin graduated from Yale University, Magna Cum Claude, with a Bachelor of Arts Degree in Economics.

Last Updated:January 28, 2024

What Is Form 10-QSB?

The Sec Form 10 Qsb is a quarterly report that shows a company's financial position during the year. This information found is similar to the 10-q. One main difference between these filings is that small businesses file the Qsb. 

These filings are typically low profile and do not gain much media attention. A more common term that refers to this would be 'penny stocks.' Qsb stands for Qualified small business. 

Well, what qualifies a small business under the SEC? 

  1. The issuer must be a C corporation in the U.S. (it can't be an S corporation).
  2. The corporation's assets must be $50 million or less after August 9, 1993 (or the period of the company's existence) before and after the issuance of the stock.
  3. When the stock is held, the corporation must be an active business (not a holding company).
  4. The corporation must be in a business other than one involving personal services; banking, insurance, financing, leasing, or investing; farming; mining; or operating a hotel, motel, or restaurant. Permissible businesses include manufacturing, retailing, technology, and wholesaling.

Therefore, the 10 Qsb gives investors a glimpse into a company's financial position that issues Qualified Small Business Stock (Qsbs) at a point in time. 

Key Takeaways

  • Form Qsb is a quarterly report filed by small businesses.
  • The form fulfills SEC guidelines by keeping investors updated with quarterly earnings, investments, financial statements, and risk factors.
  • The form is found on the SEC’s EDGAR Platform.
  • Qsb stands for qualified small businesses.
  • Similar reports include 13-F, Form 8-K, Proxy Statement, and Form 10-K.

Understanding Form 10-QSB

To understand a Form 10 Qsb, we can look back at the history of how its stock has developed over time.

The Revenue Reconciliation Act of 1993, aimed at creating the popularity of these stocks, provided a 50% tax exclusion on capital gains for qualified small-business stock. However, the 50% stretched to a 100% exclusion with the Creating Small Business Jobs Act of 2010.

Qualified small business stock is also known as Section 1202 stock because its regulations are laid out in Section 1202 US Internal Revenue Code (IRC).

So, Section 1202 Stock was created to generate investments in small businesses. If an investor was debating purchasing startup shares, knowing they could qualify for tax benefits on all their profit would aid in their decision-making process.

Now that we understand part Qsb Form 10, we can make sense of the filing details. According to federal securities laws, publicly traded companies must relay information to the public and their shareholders.

One way that they do this is periodic. The 10 Qsb meets the SEC's requirements by releasing important financial information and statements regarding the company's overall position. 

A 10-QSB must be filed with the SEC within 45 days of the end of the fiscal quarter (Q). A fiscal quarter is three months within a company's fiscal year. Therefore, a company must file the form 3x a year, excluding the last quarter reserved for the 10k.

Beyond SEC guidelines, this form is crucial for investors to gain a snapshot of a company's financial position. In addition, this allows for comparison between previous periods to assess future market performance, called horizontal analysis

Investors will review this form and other quarterly statements to help them make decisions about the market. However, this specific form is only designed to give the basic information for quarterly comparison, which is why it remains unaudited. 

By releasing a quarterly statement, it makes investors' lives easier by quickly assessing a company's financial health through its developing trends in the year.

What information is included in a Form 10 Qsb

The content and structure closely resemble that of a Form 10 q. This is because both forms have the same purpose of delivering financial information to investors during a period. 

Form 10-QSB
Source: SEC

According to Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, the content of the filing is filled with forward-looking statements about intentions, policies, and strategies regarding their future outlook.

The information included is split into two components, Part I and Part II. 

1. Part I

Referred to as the financial information section of the Form, it typically includes but is not limited to the following:

a. Consolidated balance sheets

Unaudited and generally shown in 3 and 6-month periods, with numbers in the thousands.

b. Consolidated Operations

Unaudited and generally shown in 3 and 6-month periods, with numbers in the thousands.

c. Consolidated cash flow statements 

Unaudited and generally shown in 3 and 6-month periods, with numbers in the thousands.

d. Notes to the Unaudited consolidated financial statements 

Used to explain the numbers from the financial statements. Typically touches on recent developments and relevant events that affected the numbers shown. 

e. Management Discussion and Analysis of financial condition and the result of the operations

Split into components that vary per company but generally include the introduction, capital resources, liquidity, operations results, controls, procedures, and disclosures. 

2. Part II

Other Information sections include but are not limited to

  • Exhibits
  • Registrant and senior securities
  • Any unregistered sales of equity securities
  • Proceeds from selling any unregistered sales of equity
  • Internal control mechanisms 

Remember that this form is unaudited, so the MD&A analysis and notes regarding the financial statements play an even more crucial role in the company explaining its performance. 


Companies will answer questions from an investor's perspective in the notes section to help build their confidence and highlight specific numbers that may have underperformed. This should be an essential part of the filing to investors. 

Where to find a Form 10 Qsb?

Now that we understand the general purpose behind this form, you might be wondering where to find it. The Securities and Exchange Commission releases much financial information about businesses on their EDGAR Database.

Edgar stands for Electronic Data Gathering, Analysis, and Retrieval system. It is an automated system where companies can submit their filings under the Securities Exchange Act of 1934, Securities Act of 1933, Trust Indenture Act of 1939, and Investment Company Act of 1940.  

The database is free to the public and allows you to search through specific financial information by viewing the filings available through the SEC. The Edgar system is crucial in investors' research of companies. 


The SEC created EDGAR to give individuals and investors a trustworthy source for all the financial information they might need for making investment decisions.

To access the Edgar system, simply type “Edgar Company filings” into the search bar and click on the first option listed. Or go on the SEC website and search for EDGAR. 


Once there, there should be a search box like the picture above. Simply type in the name, ticker symbol, or CIK of the company you wish to search for. After typing in the desired company, enter 10-qsb into the filing category to see any filings from the last five years. 

Reading a form 10 qsb

Now that we found the form, it will not be of much use to us if we do not know how to read it. Therefore, when approaching these SEC filings, it's important to remember their intended purpose when thinking about how to read them. 

For example, the Trust in Securities form was created as a guideline by the SEC to give investors a continuing view of the company. This would then allow investors to evaluate information and make decisions about it. 

As stated, the content of the 10q versus the 10qsb is very similar. So, if you know how to read a 10q, you'll go through the same process on a smaller scale when reading through the 10qsb. 

The filing is split into parts, part I and part II. Each part will have its information dated within the 3-month period it belongs to for that fiscal quarter. Here are some key things to look out for when reading a Form 10 Qsb:

Part 1: Financial information 

  1. Balance sheet
  2. Statement of operations
  3. Statement of cash flows
  4. Notes to financial statements 
  5. Management Discussion and Analysis
  6. Plan of operations
  7. Controls and procedures

Part 2: Other information 

  1. Unregistered Sales of securities
  2. Use of proceeds from unregistered sales
  3. Risk factors
  4. Other information
  5. Exhibits

Comparing Form 10 Qsbs and other financial reports

The SEC also requires different forms to be filed by public companies. These are each required to uphold SEC provisions and provide investors with the necessary information to make decisions. 

Other important forms that aid in investing decisions required by the SEC include but are not limited to

1.  Form 10-K 

The 10-K is a comprehensive annual filing, filed only once a year. The filing must be done within 90 days of the end of the fiscal year.  

Typically it is more detailed than the annual report and the 8-K. Generally, it has five sections business, risk factors, management discussion and analysis, financial statements and supplementary data, and company executive signatures. 

Investors use the 10-K to obtain relevant financial data and ratios to evaluate the company's outlook.

2. Annual Report

The 8-K, like the 10-K, is filed once a year. However, the 8-K is filed after the fiscal year's end. This document targeted shareholders describing their business operation tactics and financial relevance.

The annual report was not mandated until the Stock Market crash of 1929. It contains 

  • Corporate information
  • Operating activities
  • CEO letter to shareholders
  • Relevant photos
  • Management's discussion and analysis (MD&A)
  • Financial statements
  • Auditor's report
  • Accounting policies

Intended to report to shareholders their future financial outlook and how well their funds aided the business. 

3. Form 8-K

The 8-K reports any relevant unforeseen material, unplanned events, or structural changes of a company. The Form 8-k is necessary by the SEC to inform shareholders about any significant changes or events of importance.

4. 13F

All institutional investment managers with $100 million must file Form 13F.

Form 13F is a quarterly report that must be filed within 45 days of the calendar year. Form reveals equity holdings and can provide insights into what the smart money is doing in the market.

The purpose is to show the public the holdings of the United States' largest institutional investors. Small investors look at Form 13F as a guide for their investment portfolio. 

5. Proxy Statement

It is also called Form DEF 14A. Shareholders must receive the proxy statement before the shareholder meeting.

All information on a proxy statement must be filed with the SEC. The proxy statement includes new board of director nominees, executive compensation, and any other information a shareholder can vote on.

A proxy statement is different from a proxy vote, in which a shareholder agrees that another person can vote on behalf of the shareholder. The proxy statement must reveal the executives' compensation and directives, including their salaries, bonuses, equity awards, etc.

Researched and authored by Emily Rustom | Linkedin

Reviewed and edited by Parul GuptaLinkedIn

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