Driving Business Advantage

HOAG LLP Driving Business Advantage Antidilution Protection FOLEY ■ Protects investors in a future “down round" - when new money is invested at a pre-$ valuation (or price per share) that is lower than the previous round's post- $ valuation ■ Changes the conversion price used to calculate the number of shares of common stock issued when a share of preferred stock converts ■ Two main flavors: - Full ratchet -Weighted average (broad-based and narrow based) ■ Certain (critical) exceptions will not trigger the adjustment © 2014 Foley Hoag LLP. All Rights Reserved. 29 29

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