Documentation of convertible securities in the Cap Table and its dilutive effects.
Dilutive effect in the cap table
Dilutive effect of convertible contracts is reflected in the cap table the same way as dilution from Long Term Incentive Programs (LTIP). The amount of dilutive shares from convertible contracts are calculated using today’s date, the current share price, and the current total amount of issued shares. Meaning it uses the same estimated amount of shares that you can read in the “New shares” column on your “Securities” page.
Description of contract details
| Field | Description |
| Contract date | The date on which the contract comes into effect. This is also the date from which interest will be calculated. |
| Maturity date | The date on which the contract comes due and is scheduled to be converted. |
| Convertible name | Provide a unique name to identify the specific convertible security. |
| Share class | What share class the convertible security will be converted into upon conversion. |
| Interest rate |
Non-compounding interest on the investment amount. Calculated starting from the contract date using the selected interest calculation method. The investment amount including accumulated interest is displayed in the column “Conversion amount”. |
| Discount |
A discount on the market valuation at the conversion event. The lowest resulting price per share from either the discount or the conversion cap will be used. |
| Conversion cap |
This is the maximum valuation at which the investment will convert into equity. This means that if the company's valuation in a future financing round exceeds the conversion cap, the conversion will be based on the lower cap value. The lowest resulting price per share from either the conversion cap or the discount will be used. |
| Conversion threshold | This represents the minimum valuation required for the automatic conversion of the convertible security. This means that if the company's valuation in a future financing round exceeds the conversion threshold, the conversion becomes mandatory irrespective of the maturity date specified in the agreement. |
Description of columns in the "Convertibles" table
| Column name | Description |
| Conversion amount | The amount used to calculate new shares in the conversion. Includes the investment amount and accumulated interest at today’s date. |
| Share price | The calculated price per share if conversion happened at today’d date. |
| New shares | The estimated amount of shares the convertible security will convert into, if the conversion event was today. Displayed as dilution in the cap table. |