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PIPE Pre-Funded Warrant (US Issuer)
A pre-funded common stock warrant issued in a PIPE transaction with a near-zero exercise price, a beneficial-ownership blocker, cashless exercise, and Black-Scholes cash-out on Fundamental Transactions.
What is a PIPE Pre-Funded Warrant?
A PIPE Pre-Funded Warrant (US Issuer) is a pre-funded common stock warrant issued in a PIPE transaction with a near-zero exercise price, a beneficial-ownership blocker, cashless exercise, and Black-Scholes cash-out on Fundamental Transactions.
U.S. public-company issuers running a registered-direct or private PIPE, and institutional investors (hedge funds, healthcare/tech crossover funds, family offices) that want equity exposure without crossing the Section 13(d) 5% reporting threshold or a Nasdaq/NYSE 20% stockholder-approval limit at signing. Also used by placement agents and issuer/investor counsel drafting the transaction documents.
PIPE Pre-Funded Warrant template, current for 2026
Reflects 2026 market practice. The 4.99%/9.99% blocker toggles on 61-day upward-election notice (default maximum 9.99%, with a PIPE-friendly 19.99% election), and DWAC or Standard Settlement Period delivery is aligned with T+1 settlement. The investor may elect a Black-Scholes cash-out on a Fundamental Transaction with a 100-day vol floor at 100%, cashless exercise is gated on registration-statement effectiveness, the buy-in remedy includes a brokerage make-whole and a share-reissuance option, and distributions that would breach the blocker are held in abeyance.
How HDAi does this differently
Unlike a static form, HDAi runs a guided interview and assembles your PIPE Pre-Funded Warrant as you answer. When you want it finished, a licensed Hart David Carson attorney reviews it and tailors it to your facts before you sign. The interview and the first draft are automated. The judgment belongs to an attorney.
What you’ll be asked
A short interview in plain language that asks only what this document needs.
- Full legal name of the issuing company? The public-company issuer of the warrant. Use the exact name on the certificate of incorporation.
- Issuer entity type? Almost all U.S. public-company PIPE issuers are Delaware corporations.
- State of incorporation/formation of the issuer? The state whose corporate law governs the issuer's existence.
- Par value per share of the Common Stock? Look at the issuer's certificate of incorporation. Typical is $0.0001 or $0.001. Include the dollar sign.
- Principal trading market for the Common Stock? The exchange on which the Common Stock is listed. Governs settlement periods, the VWAP source, and the application of the Nasdaq/NYSE 19.99% Exchange Cap.
- Warrant certificate number? An internal identifier the issuer uses to track this warrant on its warrant register. Any short alphanumeric string works.
- Original Issue Date of the warrant? The closing date of the PIPE. This is also the date the pre-funded portion of the exercise price was paid.
- Date of the underlying Securities Purchase Agreement? The SPA under which the investor purchased the warrant. Usually the same as, or one Business Day before, the Original Issue Date. The Exchange Cap is measured against the shares outstanding on this signing date.
- Full legal name of the initial Holder (investor)? The named investor on the warrant. Use the exact fund/entity name as it appears on the SPA signature page.
- Holder entity type? Drives the recital describing the Holder.
- Initial number of Warrant Shares? Total number of Common Stock shares issuable on full exercise (before adjustments). Comma format is fine.
- Per-share Exercise Price? The nominal remaining exercise price after the pre-funded portion. Market standard is $0.0001 per share. Enter as a decimal without the dollar sign.
- Cashless exercise available from closing, or only if resale registration lapses? 'From closing' is more investor-favorable and typical when Warrant Shares aren't being registered for resale. 'On lapse' is issuer-favorable and typical when a resale S-1 is being filed.
- Warrant Share delivery deadline (Trading Days after exercise)? The outer limit on transfer-agent delivery. One Trading Day is aggressive/investor-favorable; two is market standard post-T+1.
- Initial Beneficial Ownership Limitation? 4.99% keeps the investor below the Section 13(d) 5% reporting threshold. 9.99% is common for investors already known to hold larger positions or who don't mind 13G filings.
- Maximum Beneficial Ownership Limitation the Holder may elect (with 61 days' notice)? 9.99% is the standard cap when the initial blocker is 4.99%. 19.99% is used when the issuer wants to avoid triggering the Nasdaq 20% change-of-control rule and the investor may want room to accumulate.
- For anti-dilution calculations, round Warrant Shares up or down? 'Down' is the traditional issuer-favorable convention. 'Up' is increasingly common in investor-negotiated PIPEs. The Exercise Price is always rounded to $0.0001 (four decimals) so the nominal pre-funded price is preserved.
- Assumed remaining term (in years) for the Black-Scholes cash-out on a Fundamental Transaction? Because pre-funded warrants have no stated expiration, market practice assigns a synthetic term (typically 5 years) for the Black-Scholes model. Investors sometimes negotiate for a longer assumed term.
- Deadline (days) to call a stockholder meeting after an Authorized Share Failure? If the issuer runs out of authorized shares to cover the warrant, this is how many days it has to call a meeting to increase authorized shares. 60 or 75 days is market standard.
- Issuer notice address? Street address for delivery of legal notices to the issuer.
- Issuer notice attention party? Title of the person at the issuer to whom notices should be addressed.
- Issuer notice email? Backup email for notices. Notices of Exercise are often accepted by email in current practice.
- Governing law state? New York is standard for institutional PIPE documents; Delaware is common when the issuer is Delaware and wants Chancery Court access.
- Exclusive venue city for disputes? The city whose state and federal courts will have exclusive jurisdiction. Should match the governing-law state.
- Include a jury-trial waiver? Standard in institutional financing documents. California courts do not enforce pre-dispute jury waivers, so consider omitting it if California law is chosen.
- Name of the issuer's authorized signatory? The officer signing on behalf of the issuer.
- Title of the issuer's authorized signatory? Typical: CEO, CFO, or General Counsel.
- Name of the Holder's authorized signatory? For a fund, this is usually a Managing Member/Partner of the general partner or investment manager.
- Title of the Holder's authorized signatory? For a fund, e.g. 'Managing Member of the General Partner' or 'Portfolio Manager, Titan Capital Management LLC, as investment manager'.
Frequently asked
About the PIPE Pre-Funded Warrant and how HDAi works.
What is a PIPE Pre-Funded Warrant (US Issuer)? +
A PIPE Pre-Funded Warrant (US Issuer) is a pre-funded common stock warrant issued in a PIPE transaction with a near-zero exercise price, a beneficial-ownership blocker, cashless exercise, and Black-Scholes cash-out on Fundamental Transactions. U.S. public-company issuers running a registered-direct or private PIPE use it, as do institutional investors (hedge funds, healthcare/tech crossover funds, family offices) that want equity exposure without crossing the Section 13(d) 5% reporting threshold or a Nasdaq/NYSE 20% stockholder-approval limit at signing. Placement agents and issuer and investor counsel drafting the transaction documents also use it.
Is HDAi's PIPE Pre-Funded Warrant (US Issuer) legally binding? +
The PIPE Pre-Funded Warrant (US Issuer) HDAi generates is a professionally drafted document that becomes binding once it is completed, reviewed, and properly signed. If you want a licensed Hart David Carson attorney to finish it, book a planning call. The firm's flat-fee packages, the Illinois Family Plan and Company Launch, cover the most common needs; for any other draft, an Illinois attorney will tell you on the call what finishing it would involve.
Do I need a lawyer to use this PIPE Pre-Funded Warrant (US Issuer)? +
You can generate and download the PIPE Pre-Funded Warrant (US Issuer) in minutes, free of charge. A licensed Hart David Carson attorney can then review it and tailor it to your facts before you sign, which is the part no template can do.
What makes this PIPE Pre-Funded Warrant (US Issuer) current for 2026? +
Reflects 2026 market practice. The 4.99%/9.99% blocker toggles on 61-day upward-election notice (default maximum 9.99%, with a PIPE-friendly 19.99% election), and DWAC or Standard Settlement Period delivery is aligned with T+1 settlement. The investor may elect a Black-Scholes cash-out on a Fundamental Transaction with a 100-day vol floor at 100%, cashless exercise is gated on registration-statement effectiveness, the buy-in remedy includes a brokerage make-whole and a share-reissuance option, and distributions that would breach the blocker are held in abeyance.
How long does the PIPE Pre-Funded Warrant (US Issuer) take? +
Estimated time about 15 min (29 questions), depending on how much you already know. The document assembles as you answer. Export it as PDF or Word, or send it to a Hart David Carson attorney for review.
Does this PIPE Pre-Funded Warrant (US Issuer) work in my state? +
HDAi's interview is state-aware. If you ask an attorney to finish the draft, a licensed Hart David Carson attorney confirms it against your state's requirements before you rely on it. Validity and required formalities vary by state.
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