Understanding Anti-Dilution Provisions

Anti-dilution provisions protect an investor’s equity stake from dilution. A company may issue new shares with a round of equity financing or let its options be exercised by their owners. In either case, the total number of shares outstanding will increase, while the investor still owns the same number of shares. Therefore, the investor’s percentage ownership in the company will decrease.

In this webinar, Scott Peterman will walk you through a series of case studies to explain how anti-dilution provisions work. This topic is relevant now, especially when so many companies are distressed and undertaking down-round financings.

This seminar offers lots of worked numerical examples, but don’t worry – the math won’t hurt you!

Agenda

• Understanding dilution
• When are anti-dilution provisions used?
• Types of anti-dilution provisions and how they work
  • Full ratchet
  • Weighted average
• Comparison of conversion methods

Email cynthia.claytor@klgates.com or Alsace.Yau@klgates.com for more information.