SEC filing explained:

Form S-3 (or Form S-1), is a filing companies must file in order to register new shares to do an offering. It’s usually the first form I look for on SEC Edgar website.

It’s in this S-3 filing that I found $NERV 200 million dollars worth of mixed shelf registration, and another $50 mil worth of ATM offering deal with Jefferies LLC.

Form 10-K (or 10-Q), if a document listing on the financial statement for the company. This is the form I used in my last how to read SEC filings video to examine the financial status of $YRIV and $ZYNE. And whether those penny stocks are likely to do a stock offering dilution soon.

$YRIV has terrible cash balance and a clear history of offering and stock dilution. Therefore the stock should not be a buy overnight or swing long.

However, $ZYNE was a company that has good cash balance and was done with raising capital. Therefore it was safe to determine that the money the company raised was to be used to fund their upcoming drug pipeline and development. $ZYNE stock was worth a swing long.

In this video, I also talk about a few of the underwriters these penny stock companies love to deal with when planning for future stock offering registrations. Jefferies LLC is one of the usual suspects. There are two more underwriter names you should be aware of which are revealed in the video.

Reading SEC filings can definitely help with your day trading conviction, both when buying penny stocks and shorting them. However, don’t forget to put risk management first! Because you can be fundamentally right, but technically wrong.