Financing questions listed issuers ask

Questions and answers

What does Issuer Financing do?

Issuer Financing provides capital directly to publicly listed and pre-listing companies, through PIPE transactions, registered direct offerings, convertible notes and debentures, equity and share subscription facilities, standby and committed equity facilities, and at-the-market programmes. It is the capital in the transaction, not the placement agent, the broker-dealer or the adviser.

Which companies qualify?

The test is a listing and a market. An issuer needs securities admitted to trading on a recognised exchange, or a listing process already under way, plus a free float and traded volume a financing can be sized against. Sector matters far less than float, liquidity and the quality of the continuous disclosure record.

Do you fund private companies or startups?

No. Every structure on this site depends on a public market price, a public float or an effective registration statement, and a private company has none of them. Seed-stage convertible notes and SAFEs are a different market with different investors. A company with a signed listing or reverse-takeover process under way is a different conversation.

What is the difference between a PIPE transaction and a registered direct offering?

Registration timing, and it changes everything downstream. The full comparison, including which route is faster, what each one costs the issuer and whether registering the offering avoids the exchange approval rules, is set out side by side on the page comparing a PIPE transaction with a registered direct offering.

How is the issue or conversion price set?

By reference to the market rather than to a number fixed in advance. A pricing formula looks at the volume weighted average price over a defined window before each issuance or conversion and applies an agreed reference to it. The window, the reference and any floor price are negotiated, and they shape the outcome more than the headline size does.

When do the shares become freely tradable?

By one of two routes, and both carry conditions. Either a resale registration statement covering the shares is declared effective, or the Rule 144 holding period runs where Rule 144 is available: six months for restricted securities of an issuer subject to Exchange Act reporting for at least 90 days before the sale, and one year for a non-reporting issuer. Neither route is automatic.

Does a raise need shareholder approval?

It depends on size and price, and the listing venue sets the test. On Nasdaq, shareholder approval is required before a 20% Issuance priced below the Minimum Price under Listing Rule 5635(d). Other venues run their own capacity limits, such as the Australian placement capacity rules and the Hong Kong general mandate. Counsel in the listing jurisdiction should confirm the position before terms are agreed.

Can a former shell company use Rule 144?

Only on the Rule 144(i) conditions. Rule 144 is not available for the resale of securities initially issued by a shell company, or by an issuer that has at any time previously been a shell company, unless those conditions are met. It is the most misunderstood fact in the small-cap market, and it is why a resale registration statement is often the only workable route.

How does a standby equity facility differ from a convertible note?

A convertible note is debt from day one: it sits on the balance sheet, it usually carries interest, and the investor decides when to convert. A standby or committed equity facility is not debt. It is a right for the issuer to put shares to the investor over time, drawn at the issuer's election, so the issuer controls the timing.

Will existing shareholders be diluted?

Yes. Every structure here issues new shares at some point, and new shares dilute. What differs is the shape: a single priced round dilutes once at a known price, while a facility or a convertible dilutes progressively at prices nobody knows when the documents are signed. Any provider framing one of these as non-dilutive is describing it wrongly.

Is a market-referenced convertible death spiral financing?

That label describes a failure pattern, not a product. It arises where a convertible has no floor price, no cap on the shares issuable, and a formula that produces more shares as the price falls, so issuance and price movement feed each other. Floor prices, issuance caps, ownership blockers and sizing tied to actual traded volume are what separate a workable structure from that pattern.

What happens if the share price falls after signing?

It depends which protections were written in. A floor price stops issuance below a stated level. An issuance cap limits the total shares deliverable. A drawdown mechanic tied to traded volume limits how much can be sold into a weak market in any period. These are negotiated terms, so the time to argue for them is before signing.

Are you a broker-dealer, an investment bank or an adviser?

None of the three. No broker-dealer, investment-banking or investment-advisory services are provided or held out, and nothing here is a recommendation that any structure suits any issuer. Where a transaction requires a registered placement agent, as a registered direct offering or an at-the-market programme normally does, that agent is a separate firm appointed by the issuer.

Do you publish rates, discounts or fees?

No. Pricing depends on the float, the traded volume, the instrument, the tenor and the resale route, and every one of those is issuer specific. Any site in this market quoting a discount or a rate is quoting a number it cannot stand behind. Indicative terms follow a review of the actual situation and remain indicative until definitive documents are signed.

Which markets do you cover?

Fifty-eight markets have a dedicated page, including the United States, Canada, Australia, the United Kingdom, Germany, Sweden, Norway, Singapore, Hong Kong, Japan, India and Israel. Those are the venues where capacity rules, resale routes and disclosure practice are set out in detail here. An enquiry from a listing outside that set is still worth sending.

What do you need from us to reply with an indicative structure?

Exchange and ticker, free float and market capitalisation, average daily traded value, whether a registration statement or prospectus is already effective, the amount sought, the use of proceeds, the timing, and any existing convertibles or facilities. That set is enough to say which structures are available and which are not, and what conditions attach to each.