Form 424B5 prospectus supplement
A 424B5 is a prospectus supplement filed under SEC Rule 424(b)(5) to document a specific offering made off an effective shelf, stating the securities sold, the price and the use of proceeds.
Last verifiedWhat it is
A shelf registration registers securities in general terms. When the company actually sells some, it files a prospectus supplement that fills in the details of that offering. Rule 424(b) has several paragraphs for different situations; paragraph (b)(5) covers supplements that add or change information about the offering, which is why most shelf takedowns appear on EDGAR as form type 424B5.
The supplement generally has to be filed no later than the second business day after pricing or first use, so it often appears on EDGAR the morning after a deal is priced.
What is inside
- Cover page: the securities offered (common stock, pre-funded warrants, warrants), the price, the agent or underwriter, and the gross proceeds.
- The offering summary: shares outstanding before and after, and the warrant terms.
- Use of proceeds: what the company says it will do with the money.
- Dilution section: the per-share dilution to new investors measured against net tangible book value.
- Baby shelf disclosure: for smaller issuers, the public float calculation and amounts sold in the prior 12 months.
- Plan of distribution: fees and agent compensation.
ATM programs also use a 424B5 to establish the program size, and further supplements may be filed as it is increased.
Worked example
Hypothetical: a 424B5 for Company X states "shares outstanding before this offering: 40,000,000; shares offered: 6,000,000; shares outstanding after: 46,000,000". That is a 15% increase in the basic share count, before counting any warrants sold in the same deal.
How to spot it
Search EDGAR or the Signal8 SEC filings feed for form type 424B5. Read the cover and the "The Offering" summary first. The guide Reading a 424B5 walks through one section by section.
See it on DilutionScan
Companies DilutionScan covers, with the instruments read from their SEC filings. Open one to see each instrument and the filing it came from.
- GNSGenius Group Limited8 warrant series, 1 convertible, 1 ATM program, 3 shelf registrations and 2 completed offerings on file
- SMXSMX (Security Matters) Public Limited Company Ordinary Shares10 warrant series, 8 convertibles, 2 equity lines, 4 shelf registrations, 4 S-1 registrations and 2 completed offerings on file
- MLGOMicroAlgo, Inc. Ordinary Shares2 warrant series, 5 convertibles and 2 shelf registrations on file
- HOLOMicroCloud Hologram Inc. Ordinary Shares2 warrant series, 1 convertible, 3 shelf registrations and 2 completed offerings on file
Guides that use this term
- How to Trade Penny Stocks Without Getting DilutedA dilution-first guide to penny stocks. How new shares reach the tape, which SEC filings announce them, worked examples, and a 20-minute filing check.
- Why Penny Stocks Drop After Good News: The Offering PlaybookWhy a small-cap stock can fall on a strong press release. Registered direct and ATM mechanics, the offering math with a worked example, and the filings to read.
- How to Check a Penny Stock for Dilution in 20 MinutesA six-step filing checklist for dilution risk in a small-cap stock. What to open on EDGAR, which phrases to search for, and the four numbers to write down.
- Baby Shelf Rule Explained: S-3 I.B.6 vs Form S-1The baby shelf rule explained: how Form S-1 and S-3 differ, who can use a shelf, and how I.B.6 caps sales at one-third of public float per 12 months.
- What Is an ATM Offering? At-the-Market Sales ExplainedWhat an at-the-market (ATM) offering is, how the sales agreement and 424B5 work, how fast an ATM can sell shares, and where its sales show up in later filings.
- Registered Direct vs PIPE vs Underwritten OfferingRegistered direct vs PIPE vs underwritten offering: how each sells a block of shares at a fixed price, how each is registered and disclosed, and what fees cost.
Related terms
Check any ticker for dilution
DilutionScan reads each covered company's SEC filings and lists its warrants, convertibles, ATM programs, shelves and S-1s on one page, with a dilution rating and cash runway.
Definition from the Signal8 Academy glossary. Educational content only. DilutionScan and Signal8 are not broker-dealers or investment advisers, and nothing here is a recommendation to buy or sell any security.