An at-the-market (ATM) offering allows a company to sell shares directly into the public market at prevailing prices, usually via a sales agreement with a broker-dealer. Unlike a traditional offering, there is no fixed share count or price — the company sells when it wants, in the size it chooses, up to a registered cap.
Sales agreement structure
The company signs a Sales Agreement (often disclosed in an 8-K and exhibit) with a placement agent — Cantor, H.C. Wainwright, and B. Riley are the usual names in small-cap land. The agent earns 2–3% on shares sold.
The cap is set by the dollar amount in the active S-3 takedown. A $50M ATM on a $100M company can mean 50% dilution if fully drawn.
How to detect it's running
ATMs disclose sales in the next 10-Q (or 10-K) under 'subsequent events' and in the equity rollforward. Watch the line items: 'Issuance of common stock under ATM' with share count and net proceeds.
Between filings, the only real-time signal is the share count — most companies post a current share count on the cover page of every 10-Q quarter and many disclose updated counts in 8-Ks every few weeks if material.
Why ATMs are price-sensitive
Companies generally won't sell aggressively into weakness — it would crater the stock and reduce proceeds. They tend to lean into strength, which puts a ceiling on rallies once an ATM is known to be active.
That's why ATM-laden small-caps often round-trip large green moves: the bid for the offering only shows up when the tape is green.
Common mistakes
Assuming an ATM is dormant just because it was filed months ago. The capacity persists for the life of the shelf.
Treating share-count updates as routine. A 5% bump between quarters on a small-cap is a fast ATM at work.