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What is the difference between a Traditional PIPE and Structured PIPE?


To put it simply, Traditional PIPEs are not price protected and Structured PIPEs are price protected.Traditional PIPEs include Common Stock, Common Stock - Shelf Sale, and Convertible - Fixed offerings.These traditional transactions have one fixed price that cannot change or fluctuate regardless of changes in market conditions of the common stock.Structured PIPEs include Common Stock - Reset, Convertible - Variable, Convertible - Reset and Structured Equity Line offerings.These structured transactions have prices that can be adjusted downward if there is a change in market conditions or fundamental conditions of the company.Structured placements have the potential effect of creating excessive dilution in the event the price of the common stock decreases after the closing date of the placement.Although Structured PIPEs were a predominant feature in the early PIPE market, they have been relegated to a very minor role over the past few years as Traditional PIPEshave become the norm for both issuers and investors. Today, less than 2% of PIPE financing is conducted in the form of Structured PIPEs.

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