Stock Issued Upon Conversion Clause Samples

The "Stock Issued Upon Conversion" clause defines the process by which convertible securities, such as convertible notes or preferred shares, are exchanged for company stock. Typically, this clause outlines the conversion ratio, timing, and any conditions that must be met for the conversion to occur, such as a qualifying financing event or at the holder's discretion. By specifying these terms, the clause ensures that both the company and the security holders understand how and when conversion will take place, thereby providing clarity and reducing the risk of disputes regarding ownership and dilution.