Offering Prospectus PIPE Transactions

Offering Prospectus PIPE transactions [aka Private Investment Public Equity]

PIPE Offering Prospectus Writing Services  & Everything You Need to Know About PIPE Transactions

What Can Do for Issuers of PIPE Offerings (Private Investment Public Equity)

Our team of securities industry consultants, investment banking veterans and attorneys can assist with the writing and drafting of your company’s offering prospectus or other offering documents necessary for your capital formation process. Whether you are conducting a private or public offering for debt or equity issuance, our expert team can ensure that your offering prospectus is structured to maximize success as you seek to raise capital from qualified investors. Here are the basic (7) steps regarding our process:

  1. staff conducts the initial analysis of your company.
  2. We will recommend the best course of action, taking into consideration time frame, budgets and overall needs.
  3. We undertake all work and begin the process. This would include the drafting of the preliminary and/or final prospectus, or any other required documents, such as the private placement memorandum, or legal agreements and/or opinion letters from our attorneys.
  4. We send the documents to you for review.
  5. Once approved, and if you need, an attorney opinion letter can be included in the paperwork.
  6. If you require filing or registration with various agencies we will undertake as well.
  7. We are a start-to-finish firm and our number one goal is the successful growth of our clients.

Public vs Private Prospectus

Some of the most common interchangeable terms in the offering document space is the usage of the word “prospectus” for both private and public offerings. Which is correct? Traditionally speaking, the term prospectus is most often associated with a public offering or listing on a stock exchange. A company going through the stages of an initial public offering must create a prospectus. However, in the private placement world, it has also become common to use the term prospectus, even though the most appropriate term would be “private placement memorandum”, “PPM”, or even “offering memorandum”. Even within this narrow field, the offering memorandum or private placement memorandum (PPM) can be associated with a hedge fund or mutual fund, or a basic company raising capital. Many refer to the private placement document process by simply calling it prospectus, as worldwide this is the most common term designated for raising capital. Our team assists with public prospectus writing and offering circular documents worldwide.

Prospectus Writing for PIPE Securities

There are two type of equity offerings that are most common, private and public. Equity is essentially ownership in a company. In return for capital an investor may be given equity, or a percentage of the company. Private offerings for PIPE companies that issue equity do so often with a prospectus or an offering memorandum. Equity offering documents vary from country to country as they must comply with various federal and local state or province rules. We can assist with any private equity offering document or prospectus globally.

Prospectus Writing for Convertible Debt Securities – PIPE

Bonds and Notes

Prospectus writing for debt issuance can be complicated. Debt is essentially a company giving a piece of paper, called a “note” or a “bond” to an investor with a promise to return the investor’s capital at a certain point in time (called a maturity date), and most often an interest payment (called interest rate) at a fixed time. Interest payments vary, and PIPE issuing convertible debt may decide to pay interest, for example, monthly, bi-annually or yearly, or even at maturity. A prospectus is needed for issuing debt, this way an investor can make an educated decision about investing. Regarding the difference between issuing notes and bonds, this depends mainly on the length of the debt. Traditionally a note is under 10 years, while a bond may exceed 10 years in length. In addition, many companies will issue convertible bonds or convertible notes. In such convertible debt, the notes or bonds will “convert” to equity at a given time, essentially making the note holder or bond holder an owner. can assist with your convertible debt prospectus needs. We are the world leading firm that specializes in public and private prospectus writing and general business and legal document writing services. provides institutional-quality prospectus document preparation and writing services for Issuer offering prospectus, offering memorandum, explanatory memorandums and related private placement documents for Issuers of PIPEs, public debt, private debt, convertible debt, senior notes, closed-end funds, credit funds, equities and preferred shares.  fees are typically 50% lower vs. prices charged by traditional securities law firms.

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What are “PIPEs”?

A PIPE (Private Investment in Public Equity) refers to any private placement of securities of an already-public company that is made to selected accredited investors (usually to selected institutional accredited investors).  In a typical PIPE transaction, investors enter into a purchase agreement that commits them to purchase securities and usually requires the issuer to file a resale registration statement covering the resale from time to time of the privately purchased securities.

Equity lines of credit are not PIPE transactions.

Are all public companies permitted to engage in PIPE transactions, or are there eligibility requirements?

Yes, all public companies that are reporting companies may engage in PIPE transactions. See Requirements for an Issuer below.

 Is there a limit to the number of purchasers that may participate in a PIPE transaction? If all of the offerees are accredited investors, there is no limit on the number of offerees or purchasers that may participate in a PIPE transaction.  SeeHow is ‘accredited investor’ defined?” below.  However, to the extent that the issuer and the placement agent intend to rely on the exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and the Rule 506(b) safe harbor, the placement agent must take care not to engage in any marketing or sales activity that would constitute a “general solicitation.”

How is “accredited investor” defined?

Rule 501 promulgated under Regulation D of the Securities Act sets forth the definition of an “accredited investor.”  The definition was updated following the passage of the Dodd-Frank Act.

What kinds of securities are sold in PIPE transactions?

PIPE transactions may involve the sale of common stock, convertible preferred stock, convertible debentures, warrants, or other equity or equity-like securities of an already-public company.

There are a number of common types of PIPE transactions, including:

 the sale of common stock at a fixed price;

 the sale of common stock at a fixed price,   together with fixed price warrants;

 the sale of common stock at a fixed price, together with resettable or variable priced warrants;

 the sale of common stock at a variable price;

 the sale of convertible preferred stock or convertible debt;

 a change of control transaction; and

 a venture-style private placement for an already-public company.

What are some of the advantages of a PIPE transaction?

A PIPE transaction offers several significant advantages for an issuer, including:

 transaction expenses that are lower than the expenses that an issuer would incur in connection with a public offering;

 the issuer will expand its base of accredited and institutional investors;

 for fixed price transactions, investors will have less incentive to hedge their commitment by shorting the issuer’s stock;

 the transaction will be disclosed to the public only after definitive purchase commitments are received from investors;

 investors receive only very streamlined offering materials or information, including publicly filed Exchange Act reports; and

 a transaction can close and fund within seven to ten days of receiving definitive purchase commitments.

What is a traditional PIPE transaction?

A traditional PIPE transaction is a private placement of either newly-issued shares of common stock or shares of common stock held by selling stockholders (or a combination of primary and secondary shares) of an already-public company that is made through a placement agent to accredited investors.

Investors in a traditional PIPE transaction commit to purchase a specified number of shares at a fixed price, and the issuer commits to filing a resale registration statement covering the resale from time to time of the purchased shares.  The closing is conditioned upon, among other things, the SEC’s preparedness to declare that resale registration statement effective.

The range of additional questions relevant to PIPE Transactions that can be answered for you by the experts at include:

What is a “black-out” period?

How do traditional PIPE transactions differ from non-traditional PIPE transactions?

What are the standard terms of a traditional PIPE transaction?

Does the placement agent or a lead investor control the process in a traditional PIPE transaction?

Do investors conduct their own due diligence in a PIPE transaction?

When does the PIPE purchaser in a traditional PIPE transaction pay for the securities?

What are the other closing conditions for a traditional PIPE transaction?

How does a traditional PIPE transaction settle?

What are the benefits of traditional PIPE transactions compared to non-traditional PIPE transactions?

What are the standard terms of non-traditional (or structured) PIPE transactions?

What are other closing conditions and covenants in non-traditional PIPE transactions?

Do purchasers receive restricted (legended) securities at closing?

Will purchasers agree to purchase securities at a fixed price or a variable price?

How is the price set?

Who bears price risk?

What are the other frequent negotiating points in PIPE transactions?

Who may participate in PIPE transactions?

What information do investors receive?

Should investors sign a confidentiality agreement?

Will investors know what a PIPE transaction is?

What kinds of issuers finance through PIPE transactions?

What are an issuer’s typical considerations relating to a PIPE transaction?

Must an issuer be eligible to use a Form S-3 registration statement on a primary basis in order to complete a PIPE transaction?

What are the eligibility requirements for use of a Form S-3 registration statement for resales?

May an issuer use an existing shelf registration statement to complete a PIPE transaction?

Does a PIPE transaction require any prior approvals from regulatory agencies or self-regulatory organizations?

How does an issuer ensure that it has complied with Regulation FD in the context of conducting a PIPE transaction?

What must the placement agent do in order to comply with Regulation M?

What are the sources of the “primary” versus “secondary” offering questions that some issuers have received in connection with resale registration statements that have been reviewed?

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Offering Prospectus PIPE transactions [aka Private Investment Public Equity] Document Writing & Preparation