How to Read a 424B5 Prospectus Supplement

What is a 424B5 prospectus supplement?

A 424B5 is a prospectus supplement filed under Rule 424(b)(5) of the Securities Act. For small-cap dilution research it is the most important single filing type, because it is the document a company files when it actually takes securities off its shelf registration and sells them.

The shelf says what the company may sell; the 424B5 says what it is selling now, how much, at what price and through whom.

They can run to 50 pages or more, but almost everything you need sits in five places: the cover page, the offering summary, the dilution section, the plan of distribution and, for smaller companies, a short paragraph about the baby shelf limit. Read those in order and you have the deal.

Minute one: the cover page

The cover page answers four questions in a few paragraphs:

1. What is being sold. Common stock, pre-funded warrants, common warrants, preferred stock or units of several.
2. How much. A number of shares at a fixed price for a registered direct or underwritten deal, or a maximum dollar amount for an ATM program.
3. Who is selling it. The underwriter or placement agent, named near the bottom of the page.
4. Which prospectus it supplements. The first lines say "To Prospectus dated..." and give the registration number of the underlying S-3.

Planet Green Holdings Corp.'s 424B5 of October 2, 2026 is a typical ATM cover. It read "Up to $22,539,922 of Common Stock," was marked "(To Prospectus dated April 13, 2026)," named Craft Capital Management LLC as sales agent under an ATM Sales Agreement, and stated that the company "may, but are not obligated to, offer and sell new shares." In four lines you know it is an ATM, its maximum size, the agent, and that nothing is committed.

Minute two: the offering summary

Under a heading like "The Offering," the supplement gives a table with:

• shares offered;
• shares outstanding before the offering, as of a stated date;
• shares outstanding after the offering;
• use of proceeds;
• the exchange and ticker.

The before and after numbers are the quickest way to size dilution. Watch the footnote that follows: it usually lists what the "before" figure excludes, such as outstanding warrants, options, restricted stock units and convertible notes. That footnote is a compact inventory of warrant overhang and other potential dilution.

Minute three: the dilution section

Most supplements include a section titled "Dilution." It measures how much the new investor pays above the company's net tangible book value (assets minus liabilities, minus intangible assets) per share. The math is the same everywhere, so it is worth learning once.

Hypothetical Company X has net tangible book value of $10,000,000 and 20,000,000 shares outstanding. It sells 10,000,000 shares at $1.00 in a registered direct with $700,000 of fees and expenses.

All figures are hypothetical.

The "increase to existing holders" line confuses people. It does not mean existing holders gained from the deal in market terms. It means the shares were sold above book value per share, so book value per share rose. If a company with negative net tangible book value sells shares, the table can show large dilution to new investors and still show book value per share improving. Treat the section as an accounting measure, not as a judgement on the deal. For an ATM, the table is illustrative, usually computed at an assumed price, because the actual sale prices are not known in advance.

Minute four: the plan of distribution

This section, sometimes titled "Underwriting," gives the fees and the mechanics:

• the underwriting discount, placement agent fee or ATM commission (Planet Green's supplement disclosed a commission rate of 4.0% of the gross sales price);
• expense reimbursements;
• warrants issued to the agent, often a few percent of the shares sold;
• any overallotment option;
• lockups for the company and its insiders;
• for ATMs, how the agent sells and that sales are "at the market" under Rule 415.

Minute five: the baby shelf paragraph and the rest

If the company's public float is under $75 million, the supplement usually includes a paragraph applying General Instruction I.B.6 of Form S-3: the public float, how it was computed, the one-third limit, and how much has been sold under I.B.6 in the prior 12 months. Planet Green's paragraph gave a public float of approximately $67,619,766 and a one-third limit of approximately $22,539,922, with $0 sold in the prior 12 calendar months.

With the time left, skim:

• Use of proceeds. "General corporate purposes and working capital" is common. Specific uses, such as repaying a note, are worth noting.
• Description of securities. For deals with warrants, the exercise price, term, cashless exercise rights and any price adjustment clauses.
• Risk factors specific to the offering. These often mention the possibility of further offerings.

424B5 vs 424B3 vs 424B4

The suffix is the paragraph of Securities Act Rule 424(b) (17 CFR 230.424) the prospectus is filed under, and each paragraph is defined by what the document adds to the registration statement.

A 424B3 often registers no new sale by the company at all: a resale prospectus lets existing holders, such as investors from a private placement, sell their shares. A 424B2 covers shelf pricing information alone and is less common for small caps. Whatever the suffix, the cover page says what is being offered and by whom.

The five-minute checklist

How to check a company on Signal8

• The live SEC filings feed lists 424B5 supplements as they are filed, so you can open one minutes after it hits EDGAR.
• Each company's Dilution tab, for example AAPL's Dilution tab, is where Signal8 organises recent offerings, shelfs and ATMs it has extracted. Coverage focuses on small-cap issuers.
• The dilution screener lets you compare companies on dilution-related data.
• Some tools answer questions about a prospectus in plain language instead. Signal8 vs AskEdgar compares that approach with a structured, cited dilution snapshot.

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