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Conversion Convertible Notes

Potomac Law Group, PLLC

When SAFEs Get Complicated: Hidden Pitfalls in Early-Stage Financing

Last month, a startup’s Series A nearly fell apart when investors and founders realized their different calculation methods produced a $750,000 variance. The culprit was not deception or bad faith, but rather a complex...more

Latham & Watkins LLP

Demystifying Modern Convertible Notes - April 2024 - Revised Edition

Latham & Watkins LLP on

Issuing convertible notes has long been an attractive capital-raising option for public companies. At its most basic essence, a convertible note is a debt instrument that pays interest and principal, but also carries the...more

Gray Reed

Could Corporate Convertible Loans be Subject to Criminal Usury Laws in New York?

Gray Reed on

In Adar Bays, LLC v. GeneSYS ID, Inc., the New York Court of Appeals (the “Court”) held that the conversion price in a convertible option could be classified as interest thereby potentially falling under the territory of New...more

Carlton Fields

Is It an Equity Investment or Usury? Second Circuit, Nostra Sponte, Certifies Two Questions to New York Court of Appeals

Carlton Fields on

On June 11, 2020, the Second Circuit Court of Appeals confronted the question whether an option in a commercial note that allows the lender to convert the remaining balance into the borrower's common stock at a 35% discount...more

Stinson - Corporate & Securities Law Blog

Court Permits Conforming Indenture to Description of Notes

In AG Oncon, LLC et al v. Ligand Pharmaceuticals Inc., the Delaware Court of Chancery upheld an issuer’s right to conform an Indenture to the related description of notes contained in the offering memorandum used to privately...more

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