Series A Redeemable Preferred Stock Time to Exit 5

Rate of Dividend 8%

No of Shares 1,000
Price per share 1,800
Investment Value 1,800,000
Accrued Dividend 844,791
Redemption Price 2,824,791

Exit Value Payof

- -
1,500,000 1,500,000
2,000,000 2,000,000
2,824,791 2,824,791
3,000,000 2,824,791
5,000,000 2,824,791
6,000,000 2,824,791

Series B Convertible Preferred Stock

No of Shares 55556
% of Holding 27.90%
Price per share 3.6
Investment Value 200,002
Accrued Dividend 93,866
Redemption Price 293,868
To Earn above RP's Payof 1,053,290.20

Exit Value Payof

1,000,000 -
1,500,000 -
2,000,000 -
2,500,000 -
2,824,791 -
3,000,000 175,209
3,500,000 675,209
3,878,081 1,053,290
4,000,000 1,116,000
4,500,000 1,255,500
5,000,000 1,395,000
5,500,000 1,534,500
6,000,000 1,674,000
 Payof
3,000,000.0

2,500,000.0

2,000,000.0

1,500,000.0

1,000,000.0

500,000.0

-
- 2,000,000.0 4,000,000.0 6,000,000.0 8,000,000.0

Payof
1,800,000.0

1,600,000.0

1,400,000.0

1,200,000.0

1,000,000.0

800,000.0

600,000.0

400,000.0

200,000.0

-
- 2,000,000 4,000,000 6,000,000 8,000,000
Class A Redeemable Preferred 1,800,000
Class B Convertible Preferred 200,000
Total Investment 2,000,000
No of shares 55,556
% of VC Ownership 27.90%
Implied Valuation 7,168,459

After 5 years
RBS Suggested Valuation Implied Valuation
Valuation 6,000,000 7,168,459
Total number of shares 199,034 199,034
Implied Price per share 30.15 36.02

Here Antidilution provision comes into play

After applying antidilution provisions

RBS Suggested Valuation Implied Valuation

Number of shares 55,556 55,556
Price per share 3.60 3.01
Value of shares 200,000 167,477
No of shares (after anti dilution) 66,345
Addition to Class A Shares 9,348
Addition to Class B Shares 56,997

Comparison of Holdings after Anti-Dilution

% of Total Before % of Total After

Before Conversion conversion After Conve conversion
New Investors 55,556 27.91% - -
UTS Capital Corp 12,600 6.33% 12,600 6.01%
Others SHs/ Founders 35,395 17.78% 101,740 48.49%
Management
Founders 61,705 31.00% 61,705 29.41%
Reserved Shares- Granted 6,000 3.01% 6,000 2.86%
Reserved Shares- Available 27,778 13.96% 27,778 13.24%
Total Management 95,483 47.97% 95,483 45.51%

Total Shares 199,034 100% 209,823 100%

Class A Shares 15,456 14.09%
Class B Shares 94,244 85.91%
109,700