Reference no: EM132604670
One million (1,000,000) shares of stock were issued to the founders of a start-up company on January 1, 2019. On July 1, 2019, the firm raised $500,000 from outside investors and issued 500,000 of convertible preferred stock with a conversion price of $1 per share (ROUND 1). At the time capital was raided, the investors insisted on a FIVE YEAR vesting schedule for the founders' initial equity interest, with vesting on a monthly basis (1/60 of the founders' interest vests each month); and weighted average anti-dilution protection in the case of a subsequent DOWN ROUND. Operations during the first eighteen months have been sluggish, and the company needs additional capital to continue operations and grow the firm's sales and value. A second set of outside investors is willing to provide $1,300,000 in return for 2,000,000 shares of convertible preferred stock (ROUND 2). For purposes of this problem, today is July 1, 2020.
Question 1: Given the down round, what is the new conversion price for Round 1 shares?
Question 2: How many shares will Round 1 investors get if they convert their interest to common stock?
Question 3: As of July 1, 2020, what percentage interests would the three parties have in the equity of the firm? (On an as if converted basis)
Question 4: If no additional funding is raised, what will the equity percentages be on January 1, 2024?
|
Would one asset management ratio
: Would One asset management ratio, the inventory turnover ratio, is defined as revenues divided by inventories this ratio be more important for a medical device
|
|
Show calculations of warranty repairs and warranty liability
: Canton Repairs offers a warranty on sewing machines, Show calculations of warranty repairs and warranty liability and journal entry.
|
|
What advice would give to someone interested in buying
: Companies are sometimes able to show very rapid growth in EPS, What advice would you give to someone interested in buying Contesco stock?
|
|
What will be the effect of this error on Net Income
: In 2017 the accountant for Johnson corporation mistakenly overstates cost of goods sold by $52,000. What will be the effect of this error on Net Income for 2017
|
|
What percentage interests would the three parties
: As of July 1, 2020, what percentage interests would the three parties have in the equity of the firm? (On an as if converted basis)
|
|
Case Study - SB sets out its Strategic Vision
: Compare the advantages and disadvantages of two Project/programme Management Frameworks/Techniques of your choice in terms of how they would achieve improved
|
|
Compute the proper earnings per share
: The corporation earned $799,800 after deducting all expenses. The tax rate was 30%. Compute the proper earnings per share for 2021
|
|
What is the balance in Whispering equity investment
: Ayayai's net income for 2021 was $363,000. What is the balance in Whispering's equity investment account at the end of 2021
|
|
Communication of power and authority
: Historically, works of art have been thought of as valuable and effective tools in the communication of power and authority.
|