Private capital into public companies. We draft the securities purchase agreement, the registration rights, and the resale registration so a listed issuer raises quickly without tripping a disclosure question or an exchange-approval rule.
Nasdaq requires a shareholder vote before a listed company sells 20 percent or more of its shares in a private placement priced below the Minimum Price, the lower of the last official closing price before signing and the average of the five before it. Warrant shares count toward the 20 percent and the warrants themselves count as discount, which is how a deal sized at 18 percent ends up needing a vote.
A PIPE sells unregistered shares under Regulation D, and the investors cannot trade until the resale registration is effective or Rule 144 opens six months later, so the registration rights set a filing deadline, an effectiveness deadline and liquidated damages for missing either, typically one to two percent of the price a month. A registered direct sells off an effective shelf and trades at closing, but the baby-shelf rule caps a smaller issuer at one third of its public float in any twelve months.
We run that arithmetic before terms are fixed, draft the registration rights to deadlines the company can meet, and carry the resale statement through SEC review before the damages clock starts.
Choosing between a PIPE and a registered direct, sizing the raise, and setting price, discount, and any warrant coverage, so the terms deliver the capital the company needs without consequences it did not intend.
The securities purchase agreement and the representations, covenants, and closing conditions around it. That contract governs what the investors buy, what the company warrants, and what each side owes at and after closing.
Negotiating registration rights agreements and preparing the resale registration statement, including the filing and effectiveness deadlines, the liquidated-damages terms, and the SEC comment process that carries a PIPE to investor liquidity.
Nasdaq and NYSE issuance and shareholder-approval analysis covering the 20% rule, the change-of-control and insider-issuance limits, and the pricing tests, run before terms are fixed so a deal is not structured into a vote.
Regulation D and Regulation S exemption analysis, accredited-investor and integration questions, Form D filings, and the offering-document disclosure that keeps an exemption intact and the purchase agreement defensible.
PIPEs structured with convertible notes, convertible preferred, or warrants, with the conversion and exercise mechanics, the anti-dilution and price-protection terms, and the accounting and disclosure consequences they carry for a listed issuer.
An investor who agrees to keep it confidential may be told about the deal under Regulation FD, but it holds inside information until the company announces. Deals sign after the close and are announced before the open, and the investor confirms in the purchase agreement that it has not sold short since it was wall-crossed.
The 20 percent rule is the familiar one. Nasdaq also requires a vote where an investor would end up with 20 percent or more as the largest shareholder, which it treats as a change of control, and where an officer or director buys at a discount, which it treats as equity compensation.
A resale registration covering a large block relative to the public float invites the SEC staff to ask whether the selling holders are really underwriters for the company, and a shelf deemed primary is unavailable to an issuer that is not shelf-eligible. The share count is sized against the float before the rights are signed.
Form S-3 requires every periodic report of the prior twelve months to have been filed on time, so one late quarterly report takes the shelf away for a year, and the registered direct with it. The shelf itself expires three years after it went effective, a date we calendar with the deal.
If the resale registration stalls, a non-affiliate who has held PIPE shares of a reporting company for six months may sell under Rule 144, provided the company is current in its filings, and the legend comes off on counsel's opinion. The registration rights are negotiated knowing that fallback exists.
Signing the purchase agreement is a material definitive agreement, and an unregistered sale of more than one percent of the outstanding shares is a reportable event; each goes on a Form 8-K within four business days. In practice both are filed the next morning, since that filing releases the wall-crossed investors to trade.
Before a single term circulates, the placement agent's market sounding is scripted: who gets wall-crossed, what MNPI they receive, and when the cleansing disclosure must land. The confidentiality clock starts here, and so does Regulation FD exposure if the sounding is run loosely.
The discount, warrant coverage, and share count are tested against the exchange's 20% threshold and the issuer's remaining shelf capacity. This is where the deal is decided as a true PIPE, a registered direct off the shelf, or a structure that needs a shareholder vote it cannot wait for.
The securities purchase agreement, registration rights agreement, warrants, and disclosure package are negotiated in parallel, usually between market close and open. Signing and the 8-K announcing the deal are sequenced so investors are cleansed the moment the market learns the terms.
For a PIPE, the resale shelf is filed on the negotiated deadline and pushed through SEC review before liquidated damages accrue; legends come off through counsel opinions under Rule 144. The matter ends when every investor can trade.
A PIPE is priced in an evening and answered for in the registration statement.
A PIPE, private investment in public equity, is a sale of securities by an already-public company to selected investors in a private placement, usually under Regulation D, at a negotiated price. The investors buy unregistered shares or convertible instruments, and the company typically agrees to file a resale registration statement afterward so those investors can sell into the public market. It lets a listed company raise capital quickly and privately, without the timeline of a fully marketed registered offering.
In a registered direct offering the securities are sold off an effective shelf registration statement, so the shares the investor receives are already registered and freely tradable at closing, with no separate resale registration to wait on. A PIPE sells unregistered securities under an exemption and registers the resale later. Registered directs are often faster to liquidity for the investor but require an effective shelf; PIPEs are available even without one. The right structure depends on the company's shelf status, the investor base, and how quickly capital is needed.
Speed, certainty, and discretion. A PIPE can be negotiated and closed with a defined group of investors on a compressed timeline, without the roadshow and market-risk exposure of a fully marketed follow-on, and it can be arranged when market conditions make a public deal difficult. The trade-offs are a negotiated discount, resale-registration obligations to the investors, and exchange-rule limits on issuance. We weigh those against a follow-on or an ATM program so the company chooses the route that fits the raise.
Nasdaq and NYSE shareholder-approval rules generally require a vote before a listed company issues 20% or more of its outstanding shares in a transaction priced below the applicable market measure, and additional rules govern issuances to insiders and changes of control. Pricing, warrant coverage, and the size of the raise all bear on whether approval is triggered. We run the exchange analysis before terms are fixed so a deal is not structured into a shareholder vote it did not intend.
Yes. The registration rights agreement sets the deadline to file and the deadline for effectiveness, often with damages if they slip. We prepare and file the resale registration statement, respond to any SEC staff comments, and manage the process to effectiveness so the investors gain liquidity on the schedule the deal promised and the company avoids registration-default penalties.
We have represented clients in matters before the SEC. On a PIPE or registered direct that means responding to staff comment letters on a resale or shelf registration statement, addressing disclosure questions, and representing the issuer, as its counsel, in front of the regulator.
Marketed and overnight follow-on offerings and secondary sales, the public route a PIPE is weighed against when a listed company needs to raise.
Explore →Shelf registration and at-the-market programs that sell into the market over time and provide the standing capacity that makes a registered direct possible.
Explore →Convertible notes, exchangeable bonds, and equity-linked instruments, the hybrid structures a PIPE borrows when a straight equity raise does not fit.
Explore →Exempt placements to institutional and offshore investors, the private-offering toolkit that a PIPE's Regulation D structure sits alongside.
Explore →Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice
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