Free course · Lesson 10 · 4 min

PIPEs: dilution at closing, pressure at resale

$3.3MPNDA’s PIPE, signed Jul 28

1.20Mnew shares at $2.75, sellable since Aug 18

In 4 minutes: what a PIPE is, why the dilution and the selling come on different days, and how to track both on Panda Desk.

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01A private sale

In a PIPE, a listed company sells new shares privately to a few chosen investors. The shares are restricted: owned, but not sellable in the market yet.

PNDAthe company

1.20M shares at $2.75 + 1.20M warrants at $4.50

PIPE investorsa few, chosen in advance

$3.3M to PNDA

SEC Rule 506(b): private placement shares are restricted, and a Form D is due within 15 days.

On Panda Desk →FILINGS → 8-K Items 1.01/3.02 · 59 days agoThe agreement (Item 1.01) and a sale of shares with no registration (Item 3.02).

02Two dates, two effects

At closing, the new shares exist: that is the dilution. They reach the market only once a resale is effective: that is the selling pressure.

Closingdilution: more shares, all still locked

EFFECTpressure: the same shares, now sellable

On Panda Desk →NEWS → PIPE DEAL · 59 days agoThe press release on signing day. No PIPE share could trade yet.

03PNDA’s unlock, step by step

PNDA registered the PIPE shares for resale. From the EFFECT on Aug 18, the buyers could sell.

Jul 28PIPE signed: 1.20M restricted shares at $2.75
NextPNDA files a resale S-1 for them
Aug 18EFFECT: the 1.20M shares can be sold
Today+41% to $3.42, above what they paid

With no resale, Rule 144 would have held them for 6 months.

On Panda Desk →FILINGS → EFFECT · 38 days agoThe resale S-1 for the July PIPE, declared effective.

04The second layer: warrants

Each PIPE share came with a warrant at $4.50, good for 5 years. Above $4.50, exercising pays: 1.2M more new shares.

PNDA’s PIPE, on one price scale

PIPE price

$2.75

PNDA this morning

$3.42

Warrant strike

$4.50

At $3.42, the PIPE shares are in profit. The warrants are not, yet.

On Panda Desk →DILUTION INSTRUMENTS → Warrants · $4.50 - 1.2M - 28-07-31The PIPE warrants: 1.2M shares, until July 2031.

05$2.75: the PIPE level

$2.75 is what the PIPE buyers paid. Panda Desk lists it under Hidden Levels, the price levels buried in the filings that are not obvious.

$2.75what the PIPE buyers paid

+24%their gain at $3.42 this morning

On Panda Desk →AI Insight → Hidden Levels · 2.75Taken from the July 8-K.

For the longA PIPE buyer at $2.75 is 24% up at $3.42, and the shares are free to sell. A spike like today’s lets them cash out into your bid.

Odds, not a ruleNothing forces them to sell today. The EFFECT only makes it possible.

063 checks for any PIPE

Sources

SEC, Rule 506(b): private placements, whose buyers receive restricted securities, and the Form D due within 15 days of the first sale.
17 CFR 230.144: Rule 144 and its holding period, 6 months for a company that files SEC reports.
Form 8-K, Items 1.01 and 3.02: material agreements and unregistered sales of equity securities.

Panda Desk shows these rows for any small cap, next to your montage. tspanda.com

Not financial advice. PNDA is fictional, and nothing here is a recommendation to buy or sell.

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