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    Riffpad, INC

    Uploaded by

    Nimith Kona
    This document discusses a series A preferred stock certificate of designation for Riffpad Inc. It provides answers to 7 questions about details in the certificate such as accrued dividends, liquidation preferences, board representation, and debt and equity issuances.

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    © All Rights Reserved
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    Riffpad, INC

    Uploaded by

    Nimith Kona
    70 views2 pages
    This document discusses a series A preferred stock certificate of designation for Riffpad Inc. It provides answers to 7 questions about details in the certificate such as accrued dividends, liquidation preferences, board representation, and debt and equity issuances.

    Original Description:

    Legal analysis of riffpad, INC

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    This document discusses a series A preferred stock certificate of designation for Riffpad Inc. It provides answers to 7 questions about details in the certificate such as accrued dividends, liquidation preferences, board representation, and debt and equity issuances.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    70 views2 pages

    Riffpad, INC

    Uploaded by

    Nimith Kona
    This document discusses a series A preferred stock certificate of designation for Riffpad Inc. It provides answers to 7 questions about details in the certificate such as accrued dividends, liquidation preferences, board representation, and debt and equity issuances.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Name: Kem Tepnimith

    Riffpad, Inc.

    Review Certificate of Designation of Series A Convertible Preferred Stock (“CD”) of


    Riffpad, Inc. and then answer the following questions. Assume that Riffpad filed the CD
    with the Delaware Division of Corporations on January 1, 2016 and issued all 10,000
    shares of Series A Preferred Stock on that date to Sjo- Time Fund IX, LP (“Sjo-Time”) and
    all 10,000 shares remain outstanding. Assume that additional facts given in a particular
    question below only apply to that question.

    1. What is the dollar amount of Accruing Dividends per share of Series A Preferred Stock on June 30, 2018
    assuming that Riffpad has never paid a dividend on its Series A Preferred Stock?

    - $50 per share a year, and accumulates, occurring day to day.


    - 180 days / 365=0.49 x 50 (a day) = $24.65
    - The total accruing is $124.65

    2. Are the Series A Preferred Stock dividends participating?


    - Yes

    3. If Riffpad were to liquidate on June 30, 2019, and assuming that Riffpad had never paid a dividend on
    its Series A Preferred Stock as of that date, what is the dollar amount per share of the preferential
    payment described in section 2.1 of the Certificate of Designation?

    - As of June 30, 2019 the mount will be equal to five times the Series A original issue price.
    - This means 1000 x 5 = 5000, plus occurring dividends.
    - 174.67 + 5000 = $5,174.66 needs to be paid.

    4. Is the Series A Preferred Stock liquidation preference participating?


    - Yes, because the preferred gets a liquidation preference and the remaining money is shared between
    common and preferred.

    5. What is the size of Riffpad’s board of directors? How many Riffpad directors is Sjo-Time entitled to
    elect?
    - There are five directors on the board (atleast) and Sjo-Time gets two.

    6. According to the CD, what approval is needed for Riffpad to take out a $1,000,000 loan from a bank?

    - Riffpad needs to get incurred of other indebtedness and must receive consent or affirmative vote of
    the requisite holders giving in writing or by vote at least 80% approval.

    7. Assume that Riffpad has not issued any stock since issuing the Series A Preferred Stock to Sjo Time.
    What would be the conversion price per share of Series A Preferred Stock following an issuance by
    Riffpad of 5,000 shares of common stock to a consultant in exchange for $25,000 worth of services
    rendered by the consultant to Riffpad? Assume that Riffpad’s board of directors unanimously approved
    the arrangement.

    - The conversion price is equal to $10.00, subject to adjustment if converted into shares of
    common stock. Then, 4.4.4 states that the Series A conversion price shall be reduced
    concurrently with such issuance or deemed issuance to the consideration per share received by
    the corporation.

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