Common use of Conversion Calculation Clause in Contracts

Conversion Calculation. The number of shares of Common Stock the Investor is entitled to receive upon conversion of this Note in accordance with this Section 2 shall be determined as follows: (i) Except as otherwise provided in Section 2(c)(ii), the Investor shall receive such number of shares of Common Stock as determined by the following formula (the “Base Amount”): where: A = the principal amount of this Note. For example, for a Note with a principal amount of $5,000,000, the Investor would receive 2,166,667 shares of Common Stock calculated as follows: Investment amount $ 5,000,000 Divided by total investment $ 10,000,000 Percent of total investment 50 % Multiplied by total shares for $10MM 4,333,333 Shares issued for $5MM investment 2,166,667 (ii) If this Note is converted on the Maturity Date and the average closing price of the Common Stock on the Trading Market it is listed or quoted on during the ten (10) Trading Days ending three (3) days before the date of conversion (the “Adjusted Closing Price”) is less than $3.00 (subject to adjustment in accordance with Section 3 and subject to Section 2(f)), then the Investor shall receive such number of shares of Common Stock as determined by the following formula: where: A = the Base Amount; and B = the Adjusted Closing Price. For example, if the Adjusted Closing Price is $2.95, the Investor would receive 3,147,700 shares of Common Stock calculated as follows: Base Amount 2,166,667 Multiplied by 3 3.00 Divided by 70% of the Adjusted Closing Price 2.065 Adjusted number of shares 3,147,700