Weighted Average Anti-Dilution Sample Clauses
The Weighted Average Anti-Dilution clause is designed to protect existing shareholders from excessive dilution of their ownership percentage when new shares are issued at a price lower than what previous investors paid. This clause recalculates the conversion price of preferred shares based on a weighted average formula that takes into account both the number of new shares issued and the price at which they are sold. For example, if a company raises additional capital at a lower valuation, the conversion rate for earlier investors' preferred shares is adjusted so their equity stake is diluted less than it would be under a full ratchet provision. The core function of this clause is to fairly balance the interests of new and existing investors by mitigating the negative impact of down-round financings while still allowing the company to raise new capital.
POPULAR SAMPLE Copied 64 times
Weighted Average Anti-Dilution. The Exercise Price shall be subject to adjustment from time to time as follows:
(a) If the Company shall at any time or from time to time during the Exercise Period, issue any shares of Common Stock (or be deemed to have issued any shares of Common Stock as provided herein), other than Excluded Securities (as defined in Section 2.1(c)) without consideration or for a consideration per share less than the Exercise Price in effect immediately prior to the issuance of Common Stock, the Exercise Price in effect immediately prior to such issuance shall forthwith be lowered to a price equal to the quotient obtained by dividing: (x) an amount equal to the sum of (1) the total number of shares of Common Stock outstanding (including any shares of Common Stock deemed to have been issued pursuant to Section 2.1(b)(iv)) immediately prior to such issuance multiplied by the Exercise Price in effect immediately prior to such issuance, plus (2) the consideration received by the Company upon such issuance, by (y) the total number of shares of Common Stock outstanding (including any shares of Common Stock deemed to have been issued pursuant to Section 2.1(b)(iv)) immediately after the issuance of such Common Stock. All calculations under this Section 2 shall be made to the nearest one tenth (1/10) of a cent or to the nearest one tenth (1/10) of a share, as the case may be.
(b) For the purposes of any adjustment of the Exercise Price pursuant to Section 2.1(a), the following provisions shall be applicable:
(i) In the case of the issuance of Common Stock for cash, the consideration shall be deemed to be the amount of cash paid therefor before deducting therefrom any 43 CONFIDENTIAL discounts, commissions or other expenses allowed, paid or incurred by the Company for any underwriting or otherwise in connection with the issuance and sale thereof.
(ii) In the case of the issuance of Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair market value thereof as determined in good faith by the Board of Directors of the Company, irrespective of any accounting treatment.
(iii) In the case of the issuance of Common Stock without consideration, the consideration shall be deemed to be $0.01 per share.
(iv) In the case of the issuance of (x) options to purchase or rights to subscribe for Common Stock, (y) securities by their terms convertible into or exchangeable for Common Stock or (z) options to purchase ri...
Weighted Average Anti-Dilution. To the extent that the Company makes a Subsequent Financing (as defined below) during the Restricted Period (as defined below) for consideration per share of Common Stock less than the consideration per share of Common Stock paid by Buyer (as adjusted for stock splits, stock dividends, reclassifications, reorganizations or other similar transactions) for any Conversion Shares, then the Company shall issue to Buyer, concurrently with such dilutive Subsequent Financing, the number of shares of Common Stock to ensure that Buyer has the number of shares of Common Stock that it would have had if it had converted the Convertible Note into Conversion Shares at the price per share as determined in accordance with the following formula (the “Post-Dilution Conversion Price”): CP2 = CP1 x (A + B) / (A + C) For purposes of the foregoing formula:
A= The total number of Conversion Shares with respect to which the Preferred Stock was exercised.
B= The total number of Common Stock that would be issued or issuable under the Subsequent Financing if issued at a per share equal to CP1.
C= The total number of Common Stock actually issued or issuable under the Subsequent Financing. CP1= The Conversion Price (as defined in the Convertible Note and as adjusted thereunder). CP2= The Post-Dilution Conversion Price; provided, however, that such Post-Dilution Conversion Price shall in no event be less than $0.01 per share of Common Stock (as adjusted for stock splits, stock dividends, reclassifications, reorganizations or other similar transactions).
Weighted Average Anti-Dilution. The Conversion Price shall be subject to adjustment from time to time as follows:
Weighted Average Anti-Dilution. To the extent that during the period from the Execution Date to one hundred eighty (180) days after the most recent Closing Date the Company makes an Additional Issuance (as defined below) for consideration per Ordinary Share less than the consideration per Ordinary Share paid by Buyer or makes an Additional Issuance consisting of Convertible Securities (as defined below) with a conversion price or exercise price per Ordinary Share less than the exercise price per Warrant Share granted to Buyer under the Warrants (in each case, as adjusted for stock splits, stock dividends, reclassifications, reorganizations or other similar transactions), then the Company shall reduce the exercise of the Warrants to a price (calculated to the nearest one-hundredth of a cent) detmerined in accordance with the following formula: CP2 = CP1 * (A + B) ÷ (A + C) For purposes of the foregoing formula, the following definitions shall apply:
Weighted Average Anti-Dilution. The Exercise Price shall be subject to adjustment from time to time as follows: