Reference
A Glossary of the Terms on This Site
Going public, securities law, deal structure, and collateral, defined in plain language. Every definition is descriptive — none of them states a term BlackWolf offers.
- 30 Terms
- Five Groups
- Plain Language
Going Public
- Reverse Merger
- A private company becomes publicly traded by merging into an existing public shell company rather than by registering an offering. It is usually faster than a traditional listing and creates its own costs — shell diligence, audits, and securities counsel — all of which are payable before the transaction produces anything.Reverse merger financing
- Form 10 Registration
- A registration statement filed under the Securities Exchange Act that makes a company publicly reporting without raising capital. It becomes effective automatically 60 days after filing, whether or not the SEC has finished commenting, which makes the audit and counsel timetable unusually unforgiving.Form 10 and DPO financing
- Direct Public Offering
- A company registers and sells its own securities to investors without an underwriter placing the offering. It avoids underwriting economics and puts the distribution burden, and the cost of registration, on the issuer.Form 10 and DPO financing
- Shell Company
- A company with nominal operations and either no assets or assets consisting mainly of cash. Shells are the vehicle in most reverse mergers, and securities issued by a company that is or was a shell carry additional resale restrictions under Rule 144(i).
- Exchange Uplisting
- Moving a quoted security from an over-the-counter market to a national exchange such as NYSE American or Nasdaq. Listing standards — shareholders' equity, bid price, round-lot holders — are tested at a point in time, which is why the timing of capital matters as much as the amount.Exchange uplisting financing
- Transfer Agent
- The registrar that maintains a company's shareholder records and processes issuance, transfer, legend removal, and pledges. A pledge mechanic the transfer agent will not process is not a mechanic, which is why their requirements are confirmed during documentation rather than at enforcement.
- PCAOB Audit
- An audit performed by a firm registered with the Public Company Accounting Oversight Board. Public and publicly reporting companies require one, and obtaining a first PCAOB audit is frequently the single largest cost in a going-public transaction.
Securities Law
- Rule 144
- The safe harbour that allows restricted and control securities to be resold publicly, subject to a holding period, current issuer information, and — for affiliates — volume and manner-of-sale limits. It governs what can actually be done with pledged stock, which is why it is reviewed before terms rather than after.Shareholder stock-secured loans
- Rule 144(i)
- The additional restriction applying to securities of an issuer that is or was a shell company. Rule 144 is unavailable until the issuer has been non-shell and current in its reporting for a set period, which materially affects collateral analysis after a reverse merger.Reverse merger financing
- Affiliate
- A person who controls, is controlled by, or is under common control with the issuer — in practice officers, directors, and significant shareholders. Affiliate status changes resale restrictions and reporting obligations, and affiliate pledges require additional securities-law review.Shareholder stock-secured loans
- Section 16
- The provisions requiring officers, directors, and beneficial owners of more than ten per cent to report their transactions and disgorge short-swing profits. It is part of the review on any insider pledge.
- Lock-Up Agreement
- A contractual undertaking not to sell or transfer securities for a defined period, common after a listing or a merger. A lock-up can restrict pledging as well as selling, so its terms are examined before stock is accepted as collateral.
- Restricted Stock
- Securities acquired other than in a registered public offering, which cannot be freely resold until a Rule 144 holding period and conditions are satisfied. Restricted stock can be collateral, but it is not the same collateral as a free-trading position.
- Free-Trading Stock
- Securities that may be resold publicly without further registration or restriction. Transferability and trading volume are the two properties that most affect what a position is worth as security.
Structure
- Bridge Loan
- Short-term secured financing that closes a timing gap between a present obligation and a dated future source of funds. The defining feature is not the term but the exit: a bridge is repaid by an identified event, not by operating cash flow.Bridge and convertible debt
- Convertible Note
- Debt that may convert into equity of the borrower on terms set out in the agreement. Conversion mechanics vary widely and materially affect the capitalisation table, which is why they are reviewed by securities counsel on both sides and documented before closing.Bridge and convertible debt
- Loan-to-Value
- The requested principal expressed as a percentage of the collateral's value. For stock collateral the indicative band depends on market tier, because liquidity, transferability, and enforceability differ between a national exchange and an expert market.Model a scenario
- Collateral Coverage
- Collateral value expressed as a multiple of the facility — the inverse of loan-to-value. A facility of $250,000 against $625,000 of collateral is 40% LTV and 2.5x coverage; both describe the same position.Model a scenario
- Origination Fee
- A fee expressed in points of the principal, typically payable at closing rather than over the term. It is part of the total cost of a facility and is modelled separately from interest.Model a scenario
- Interest-Only with Balloon
- A schedule where periodic payments cover interest alone and the entire principal falls due at maturity. It minimises payments during the term and concentrates the whole repayment on the exit event.
- Amortising
- A schedule where each periodic payment carries both interest and principal, so the balance reduces across the term. Payments are larger than interest-only but nothing is left outstanding at maturity.
Collateral
- UCC Lien
- A security interest in a company's personal property, perfected by filing a financing statement under the Uniform Commercial Code. A UCC search is how existing claims are found, and lien position is a threshold item rather than a detail.
- Senior Lien
- A claim that ranks ahead of others against the same collateral on enforcement. Existing senior liens do not necessarily prevent a transaction, but they change what is actually available to secure it and must be disclosed early.
- Control Agreement
- A tri-party agreement giving a secured party control over a deposit or securities account. It is how a claim over cash or a brokerage position is perfected and made enforceable in practice.
- Accounts Receivable
- Amounts contractually owed to a business for goods or services already delivered. Receivables are underwritten on collectability and concentration — who owes the money and how reliably they pay — rather than on the borrower's forecast.Receivables financing
- Settlement Receivable
- A defined future payment arising from a settled claim or judgment. It is an asset many lenders have no framework for, and it can be secured where assignability and enforcement are confirmed.Balance-sheet and settlement financing
- Capitalisation Table
- The record of who owns what in a company, including options, warrants, and convertible instruments. It is where dilution from any convertible structure is actually modelled, and it is one of the first documents a review asks for.
Markets
- OTCQX and OTCQB
- Tiers of the OTC Markets quotation system. OTCQX applies eligibility standards and requires current disclosure; OTCQB requires current reporting and a minimum bid price. Tier affects both liquidity and the indicative loan-to-value applied to a pledged position.Indicative LTV by tier
- Expert Market
- The restricted OTC tier for securities without current public disclosure, where quotations are available only to sophisticated investors. Limited transferability and limited price discovery mean positions here are assessed case by case.
- Publicly Reporting
- A company that files periodic reports with the SEC. Being publicly reporting is not the same as being publicly traded — a Form 10 registration produces the former without producing the latter.Form 10 and DPO financing
Start Smaller
Still Not Sure Which One You Need?
Describe the situation in a line. We will tell you which structure it looks like, or that it is not one of ours.
Start the Conversation
Model It, Then Send It
The calculator turns any of these structures into indicative figures. Submitting one starts a review, not a commitment.