Down Round Adjustments Sample Clauses
A Down Round Adjustments clause is designed to protect existing investors from dilution if a company issues new shares at a lower price than previous financing rounds. Typically, this clause adjusts the conversion price of preferred shares, so that investors receive additional shares or a lower conversion price to maintain their ownership percentage. Its core function is to ensure that early investors are not disproportionately disadvantaged by future financings at reduced valuations, thereby allocating risk more equitably among shareholders.
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Down Round Adjustments. If the Company during the term of this Warrant (the "Anti-Dilution Period") issues any additional securities (a "New Issuance") (including, but not limited to, any class of shares, preferred stock, warrants, rights to subscribe for shares, convertible debt or other securities convertible into any share class) for a consideration per share, after giving effect to commissions, fees and other expenses (collectively "offering costs"), that is less, or which on conversion or exercise of the underlying security is less, than the closing price on the Initial Funding Date (as adjusted for any change of resulting from any forward or reverse share splits, stock dividends and similar events) (a "Down Round Price"), then the Exercise Price shall be adjusted to a price that is 90% of the price of the New Issuance.
Down Round Adjustments. If the Company during the term of this Warrant (the “Anti-Dilution Period”) issues any additional securities (a “New Issuance”) (including, but not limited to, any class of shares, preferred stock, warrants, rights to subscribe for shares, convertible debt or other securities convertible into any share class) for a consideration per share, after giving effect to commissions, fees and other expenses (collectively “offering costs”), that is less, or which on conversion or exercise of the underlying security is less, than $0.665 per share, (as adjusted for any change resulting from any forward or reverse share splits, stock dividends and similar events) (a “Down Round Price”), the Company shall reduce the Exercise Price to equal the result obtained by multiplying (A) a fraction whose (i) numerator is the Down Round Price and (ii) denominator is the then Exercise Price by (B) the then Exercise Price and shall increase the number of Warrant Shares by multiplying the number of Warrant Shares (as adjusted for any change resulting from any forward or reverse share splits, stock dividends and similar events) by the inverse of clause (A). By way of illustration: If within the Anti-Dilution Period (assuming no adjustments for any change resulting from any forward or reverse share splits, stock dividends and similar events have occurred) the Company issues convertible debt that may at the option of the holder be converted into common stock, giving effect to offering costs, or issues new warrants to any person, at a Down Round Price of $0.50 per share, the Company thereupon shall reduce the Exercise Price to equal (A) 0.50 over 0.665 x (B) $0.665 = $0.50 per share and shall increase the number of Warrant Shares to 375,000 shares x 0.665 over 0.50 = 498,750 shares.