{"componentChunkName":"component---src-templates-blog-post-ts","path":"/anti-dilution-clause-may-prevent-company-from-issuing-additional-shares/","result":{"data":{"site":{"siteMetadata":{"title":"Clausehound Blog","author":"Joshua Koudys"}},"markdownRemark":{"id":"057db66b-943c-52c4-a23d-77e612b2bb32","excerpt":"The representation that the company may issue additional shares in the future means that the company may dilute the shares of the subscriber at will. A…","html":"<p>The representation that the company may issue additional shares in the future means that the company may dilute the shares of the subscriber at will. A subscriber who does not wish to give the issuer the ability to dilute their shareholding may require that anti-dilution provisions to be included in the subscription agreement.</p>\n<p>The largest shareholder <em>(Caitlyn Limited) of Azumah Resources</em> holding 13% of the shares, reinvested $2.1 million. As part of the investment, the subscription agreement contained an anti-dilution clause where the shareholder was to maintain its 13% equity holding for 12 months.</p>\n<p><a href=\"http://www.proactiveinvestors.com.au/companies/news/57606/azumah-resources-cornerstone-investor-adds-to-holdings-at-premium-57606.html?\" target=\"_blank\" rel=\"nofollow noopener\">Read the article here.</a></p>\n<p><strong>Take away:</strong></p>\n<ul>\n<li>When subscribing to shares of a company, consider negotiating an anti-dilution provision in your subscription agreement to avoid having your equity holding in the company significantly diluted.</li>\n</ul>","frontmatter":{"title":"Anti-Dilution Clause May Prevent Company from Issuing Additional Shares","date":"July 17, 2015","description":"When subscribing to shares of a company, consider negotiating an anti-dilution provision in your subscription agreement to avoid having your equity holding in the company significantly diluted.","author":{"id":"rajah@cobaltcounsel.com","first":"Rajah","last":"Lehal","bio":"Rajah Lehal is Founder and CEO of Clausehound.com.  Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.","image":{"childImageSharp":{"fluid":{"base64":"data:image/jpeg;base64,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","aspectRatio":1,"src":"/static/d7bbad08c257f3987a4a5710553e9e17/bdd4d/Rajah.jpg","srcSet":"/static/d7bbad08c257f3987a4a5710553e9e17/2b9ee/Rajah.jpg 80w,\n/static/d7bbad08c257f3987a4a5710553e9e17/e5d64/Rajah.jpg 160w,\n/static/d7bbad08c257f3987a4a5710553e9e17/bdd4d/Rajah.jpg 320w,\n/static/d7bbad08c257f3987a4a5710553e9e17/6e63d/Rajah.jpg 400w","sizes":"(max-width: 320px) 100vw, 320px"}}}},"tags":["Term Sheet","Letter of Intent","Representations and Warranties","Subscription Agreement","Company Formation","Rajah","Share Purchase Agreement","Investor Term Sheet","Memorandum of Understanding"]}}},"pageContext":{"slug":"/anti-dilution-clause-may-prevent-company-from-issuing-additional-shares/","previous":{"fields":{"slug":"/using-the-right-amount-offorce-majeure/"},"frontmatter":{"title":"Using the Right Amount of…Force Majeure","tags":["Force Majeure","Long Form","Commercial Activities","Rajah"],"author":{"id":"rajah@cobaltcounsel.com","first":"Rajah","last":"Lehal"}}},"next":{"fields":{"slug":"/closing-conditions-may-include-the-acquisition-of-assets/"},"frontmatter":{"title":"Closing Conditions May Include the Acquisition of Assets","tags":["Conditions of Closing","Subscription Agreement","Company Formation","info@clausehound.com"],"author":{"id":"info@clausehound.com","first":"","last":null}}}}}}