Anti-dilution

Contractual protection for covered securities when a later financing is priced lower, often through adjusted conversion terms. It does not necessarily preserve the holder’s ownership percentage.

Anti-dilution in round numbers

Hypothetical: preferred shares initially have a US$10 conversion price and convert one-for-one into common shares. Assume their contract provides full-ratchet protection for a covered issuance at US$6 with no applicable exclusion. The conversion price resets to US$6. The actual adjustment depends on the contract; a weighted-average provision requires additional financing and capitalization inputs.

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