Note converts to Class B Non-Voting Units when the company raises $500,000 in a qualified equity financing.
Maturity Date: December 31, 2020
Valuation Cap: $2,500,000
Discount Rate: 20%
Annual Interest Rate: 6%
Maximum ($107,000) in Convertible Notes
Minimum ($10,000) in Convertible Notes
What is a Convertible Note?
A convertible note offers you the right to receive Class B Non-Voting Units in Ella & Oak. The number of units you will receive in the future will be determined at the next equity round in which the Company raises at least $500,000 in qualified equity financing. The highest conversion price per security is set based on a $2,500,000 Valuation Cap or if less, then you will receive a 20% discount on the price the new investors are purchasing. You also receive 6% interest per year added to your investment. When the maturity date is reached, if the note has not converted then you are entitled to receive Class B Non-Voting Units equal to your investment and interest back at a price per security determined by dividing the Valuation Cap by the aggregate number of outstanding Units of the Company as of immediately prior (on a fully diluted basis), subject to discount rate, if applicable.