Term Sheet
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SUMMARY OF TERMS FOR THE PRIVATE PLACEMENT OF
SERIES A PREFERRED STOCK OF
________________, Inc.
Month Day, Year
|This document summarizes the principal terms of the proposed financing of _______, Inc. (the “Company”). This summary is for discussion |
|purposes only; there is no obligation on the part of any negotiating party until a definitive stock purchase agreement is signed by all |
|parties and the conditions precedent to financing set forth below are satisfied. This summary does not constitute either an offer to sell or |
|an offer to purchase securities. |
|Amount of Financing: |$____________________ |
|Type of Security: |Series A Convertible Preferred Stock (the “Series A Preferred”). |
|Pre-money Valuation: |$____________________ |
|Number of Shares: |_____________________ |
|Price: |$_____ per share (the “Purchase Price”). |
|Closing Date: |The closing of the sale of Series a Preferred Stock will be on or about ____________, ______ (the |
| |“Closing”) |
|Investor(s): | | |Investment Amount | |Number of Shares |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
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| | | |$_________ | |________ |
|Post-Financing Capitalization: | | |Number of Shares | | |
| |Class | | | |Percent |
| | | | | | |
| | | | | | |
| |Total | | | |100.0% |
|Use of Proceeds: |Proceeds will be used in accordance with a plan (including key milestones) and a 12-month budget to be|
| |mutually agreed upon by the Company and the Investors prior to Closing. |
|Rights, Preferences, Privileges and |Dividends. The holders of Series A Preferred shall be entitled to receive dividends when, as and if |
|Restrictions of the Series A Stock: |declared by the Board. Declared, but unpaid dividends shall be paid upon conversion in either cash or|
| |Common Stock at the option of a majority of the Board at the then fair market value (as determined by |
| |a majority of the Board). Without the approval of a majority of the holders of the Series A |
| |Preferred, no dividends shall be paid on the Common Stock so long as the Series A Preferred is |
| |outstanding. |
| |Liquidation Preference. In the event of any liquidation, dissolution or winding up of the Company, |
| |the holders of the Series A Preferred shall be entitled to receive in preference to the holders of the|
| |Common Stock a per share amount equal to the Purchase Price (as adjusted for stock splits, stock |
| |dividends, stock combinations and the like), plus any declared but unpaid dividends (the “Liquidation |
| |Preference”). After the payment of the Liquidation Preference to the holders of the Series A |
| |Preferred, the remaining assets shall be distributed ratably to the holders of the Common Stock and |
| |the Series A Preferred on an as-converted basis; provided that the holders of Series A Preferred will |
| |stop participating once they have received a total liquidation amount per share equal to two (2) times|
| |the Purchase Price. A merger, acquisition or sale of voting control or sale of substantially all of |
| |the assets of the Company (a “Sale of the Company”) in which the shareholders of the Company |
| |immediately prior to such event do not own a majority of the outstanding shares of the surviving |
| |corporation shall be deemed to be a liquidation. |
| |Voluntary Conversion. Each holder of Series A Stock will have the right, at the option of the holder |
| |at any time, to convert shares of Series A Stock into shares of Common Stock at an initial conversion |
| |ratio of one-to-one. |
PARTIAL DOCUMENT – THE REMAINDER IS NOT SHOWN. GET THE FULL DOCUMENT HERE.
ADDITIONAL TEMPLATE PREVIEWS
Click Link to Preview Document
|Guides |LOI Tools and Templates |
|Anatomy of LOI - Ver1 |Full Buyout |
|Anatomy of LOI - Ver2 |Asset Purchase - Ver1 |
|Asset vs. Stock Purchase |Asset Purchase - Ver2 |
|Purchase Price Payment Considerations |Stock For Cash |
|Ways to Structure the Deal - Ver1 |Stock For Stock |
|Ways to Structure the Deal - Ver2 |Stock For Cash & Stock |
|Ways to Structure the Deal - Ver3 |Earnout |
|Structuring Effective Earnouts |Partial Investments |
|Tax Implications |Series A Preferred |
|What is a Reverse Merger? |Series B Preferred |
| |Presentations |
| |Presenting the Deal - Ver1 |
| |Presenting the Deal - Ver2 (No Preview) |
| |Presenting the Deal - Ver3 |
| |Presenting the Deal - Ver4 |
| |Presenting the Deal - Ver5 |
| |Business Sale Presentation |
|Buying or Selling a Business Step-by-Step Procedure - Click Here To View |
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