Essay on Feed Case Study

1497 Words Jun 28th, 2012 6 Pages
Exhibit 1
Term Sheet

FEED RESOURCE RECOVERY
SERIES A PREFERRED STOCK FINANCING
SUMMARY OF TERMS

I. INTRODUCTION

FEED Resource Recovery (the “Company”) is a company incorporated in the state of Massachusetts and currently has 20,000 ordinary shares issued which are held by the Founders Shane Etan, who holds 16,000 shares, and Ryan Begin who holds the remaining 4,000 shares. The Company desires to authorize the issue of 206,612 shares of Series A Preferred Stock to the investors, Group One Investment Company (the “Investors”), on the terms and conditions as set forth below:

II. TERMS OF FINANCING

Amount of Financing…………..………. US$250,000

Securities……………………….………. 206,612 Convertible Cumulative Preference shares
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Liquidation preference

On the occurrence of any liquidation, dissolution or winding up of the Company, the Series A Preferred shareholders will be entitled to receive, in preference to the ordinary shareholders, an amount equal to US$2 per share plus any accrued but unpaid dividends. If any sums remain after such payment, they will be distributed to all shareholders on an as converted basis.

Voluntary Conversion

The Series A Preferred may be converted by the Series A Preferred holders to an equal number of the Company’s Ordinary Shares at any time by serving written notice to the Company.

Redemption

The Series A Preferred are not redeemable at the option of the Company.

Anti-Dilution Protection

The conversion rate of the Series A Preferred will be adjusted in the event of stock splits, stock dividends, reclassifications and any similar events that alters the share base of the Company.

The parties acknowledge that future funding will be required by the Company. In the event that the future shares are issued at a price which is less than the current conversion price of the Series A Preferred then the price of the Series A Preferred will be adjusted on a weighted average basis in accordance with the formula below:

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Where

AP = Adjusted Price of Series A Preferred OP = Original Price of Series A

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