Protects investors from overpaying for stock by adjusting the Conversion Ratio if the company later issues shares for a price less than the price the investors paid. Adjustment of the Conversion Ratio results in more shares of Common Stock becoming issuable upon converting each share of Preferred Stock than was agreed at the time of the investment. There are two basic types of Price Anti-dilution Protection; Full Ratchet and Weighted Average. Weighted Average can be either Broad-Based or Narrow Based.
Protects investors from overpaying for stock by adjusting the Conversion Ratio if the company later issues shares for a price less than the price the investors paid. Adjustment of the Conversion Ratio results in more shares of Common Stock becoming issuable upon converting each share of Preferred Stock than was agreed at the time of the investment. There are two basic types of Price Anti-dilution Protection; Full Ratchet and Weighted Average. Weighted Average can be either Broad-Based or Narrow Based.
