Understanding Capitalisation of company
#1
Understanding Capitalisation of company

Hi,

I recently went through an acquisition and I hope someone can help me understand the breakdown of shares here as I would like to determine the value and percentage ownership of the options pool, vs investor stock vs founder stock?

Total stock is 34M+19M or 53M

Options = 4.4M of 53M = 8.3%

Or are incentives 4.4M + 5.2M out of 53M?

19M is essentially all the investor stock + 61K of debt financing they owned around 56% of the company? Or do I only tally the issues and outstanding and therefore the founders owned even more of the company?

What does it mean to be issued and outstanding?

Capitalization.(a)The entire authorized capital stock of the Company consists, as of the date hereof, of:

(i)34,000,000 shares of Common Stock, $0.0001 par value per share, and 9,246,000 of which are issued and outstanding. All of the outstanding shares of Common Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws.

(ii)19,060,886 shares of Preferred Stock, $0.0001 par value per share, (a) of which 1,466,658 shares have been designated Series Seed Stock and 1,466,658 of which are issued and outstanding, (b) of which 6,343,350 shares have been designated Series A Preferred Stock and 6,343,350 of which are issued and outstanding, © of which 1,415,094 shares have been designated Series A Preferred Stock and 1,415,094 of which are issued and outstanding, (d) of which 3,835,784 shares have been designated Series B Preferred Stock and 3,774,510 of which are issued and outstanding, and (e) 6,000,000 shares have been designated Series C Preferred Stock and 5,814,120 of which are issued and outstanding. The rights, privileges and preferences of the Preferred Stock are as stated in the Restated Certificate and as provided by the DGCL.

(iii)61,274 shares of Series B Preferred Stock are issuable under the Company Warrants.(iv)4,421,709 shares of Common Stock are issuable under the Options.

(v)The Company Shares and Company Warrants are held of record and beneficially by the Persons in the amounts set forth on Schedule

4.3(a)(v). No dividends or other distributions with respect to any shares of Company Shares or any equity securities of any of the Company Subsidiaries have ever been made or declared, and none have accrued.(b)The Company has reserved 5,230,000 shares of Common Stock for issuance to directors, employees, consultants and other service providers of the Company pursuant to the Equity Incentive Plans, of which 62,291 shares of Common Stock remain available for issuance. Schedule 4.3(b) sets forth, with respect to each Option, (i) the name of the Option Holder, (ii) the maximum number of shares of Common Stock that may be issued upon exercise of such Option, (iii) the grant date, (iv) the exercise price, (v) the vesting schedule and vesting conditions, to the extent such Option is unvested as of the date of this Agreement, (vi) the vested status as of the date of this Agreement, (vii) the expiration date, and (viii) whether such Option is intended to constitute an “incentive stock option” (within the meaning of Section 422 of the Code). The Company has furnished to Parent complete copies of the Equity Incentive Plans and all forms of agreements used thereunder. Except as set forth on Schedule 4.3(b), there are no outstanding or authorized options, restricted stock, restricted stock units, warrants, purchase rights, subscription rights, conversion rights, exchange rights or other contracts or commitments that would require the Company to issue, sell or otherwise cause to become outstanding any of the Company Shares. Except as set forth on Schedule 4.3(b), there are no outstanding or authorized equity appreciation, phantom interest, profit participation, equity-based rights or other similar rights with respect to the Company. Each Option is in compliance in all material respects with all applicable Laws, and the per share exercise price of each Option is equal to or greater than the fair market value of the underlying Common Stock on the date of grant within the meaning of Section 409A of the Code and the Treasury Regulations and official guidance promulgated thereunder. Each of the Company Shares is uncertificated.©Schedule 4.3© sets forth a complete and accurate list of (i) each Warrantholder, (ii) each Company Warrant, (iii) the exercise price, (iv) the date of grant, (v) the vesting schedule, (vi) the current vesting status, and (vii) the number of shares and class and series of Company Shares subject to each such Company Warrant.(d)The Company’s Subsidiaries, as of the date hereof, are listed on Schedule 4.3(d) (the “Company Subsidiaries”). All of the outstanding shares of capital stock (or equivalent

Noob at this but thought this would be a cool and relevant example to understand at least for myself.

Any help would be appreciated!

edit: formatting

submitted by /u/hazzzzah
[link] [comments]
Reply


Forum Jump:


Users browsing this thread: 1 Guest(s)

About Startup Forum

StartupForum.co is your ultimate place for startup discussions, videos, tutorials

We welcome you to join us!

Need a coffee break?

Join us on Discord