Anyway, my short candidate would be Famine, easy pick for me as they clearly have
diluted equity holders in the past and haven't built any long term value.
The Company's issuance of shares of common stock, including the additional shares that will be authorized if the proposal is adopted, may
dilute the
equity ownership position of current
holders of common stock and may be made without stockholder approval, unless otherwise required by applicable laws or NYSE regulations.
The Series A Preferred shall also be convertible into any future series of Preferred Stock (the «Future Preferred») under either of the following circumstances: (a) if such conversion is approved by the Board or (b) if such conversion is in connection with a future Preferred Stock
equity financing in which the Company's fully
diluted pre-money valuation is greater than the Company's fully
diluted post-money valuation immediately following the Series A Financing contemplated by this term sheet (a «Future Financing»), in either case, on a one - for - one basis (subject to anti-dilution adjustment) at the option of the
holder; provided however, if such conversion is in connection with a Future Financing, that the
holder may convert into shares of Future Preferred only in the event that all of such shares of Future Preferred received by the
holder upon conversion are sold to an Approved Investor (as defined below) no later than 90 days following the first closing of the Future Financing at a price per share no lower than the price per share at which the Company sells shares of such Future Preferred in the Future Financing and, provided further, that such Approved Investor is not an affiliate, family member, or related party of the
holder.
In the case of a rights issue, where the issuing company is creating new shares and
diluting the existing share
holders share of
equity, the effect on the share price will depend on the reason for raising funds and the markets perception of future returns arising from how the company puts the new funds to use.