Form 424B prospectus

A Form 424B prospectus is a prospectus or prospectus supplement filed with the SEC under Rule 424(b) of the Securities Act. It is how companies publish the final terms of a registered offering, such as the price of an IPO or the size and price of a sale from a shelf registration.

How it works

The suffix number refers to the paragraph of Rule 424(b) the filing relies on. The ones traders see most often:

A final 424(b) prospectus is generally due no later than the second business day after pricing or first use. In shelf offerings, a "preliminary" 424B5 is often filed before the deal prices (sometimes after the close), and a final 424B5 follows with the price.

Why it matters for traders

For public companies, a 424B5 is usually the moment a shelf becomes actual dilution. The filing shows the number of shares, price per share, discount to the market, warrants, underwriter fees and use of proceeds. A preliminary 424B5 filed after 4 p.m. typically means an overnight offering, with pricing announced before the next open, often at a discount to the last close. A 424B5 tied to an at-the-market program signals the company can sell into the market over time.

Example

A hypothetical biotech, Northwind Therapeutics (NWTX), closes at $12.00. At 4:15 p.m. it files a preliminary 424B5 for an underwritten offering under its S-3 shelf. Before the open, it files a final 424B5: 8 million shares at $10.50, a 12.5% discount, raising $84 million gross. NWTX opens near $10.60.

FAQ

What is the difference between 424B4 and 424B5?

424B4 typically carries final pricing for non-shelf deals such as IPOs. 424B5 is commonly used for prospectus supplements in shelf offerings.

Does a 424B filing mean new shares are being sold?

Usually, for primary offerings. A 424B3 or 424B7 for a resale registration covers existing holders selling, which does not raise cash for the company.