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Question 1. Metapath’s capital structure and rounds of financing Analyze Metapath’s capital structure, in particular the various forms and prices of preferred stock from the multiple rounds of financing. How has this capital structure affected the offer from
Robertson & Stephens? How would RSC’s participating preferred interact with other tranches of preferred stock? The RSC offer of $11.75 million is more than Metapath has previously raised in all four rounds combined, so RSC is taking on more risk by offering this much funding. Because RSC will be putting
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We then subtracted the value of the convertible option from the value of the participating preferred option. We believe that the value of the participating preferred feature to RSC is worth approximately $4.29 million (See Appendix 1).

One of the main risks of the financing proposed by RSC is that this deal would dilute Metapath’s original shares significantly if a sale occurs in the future. If Metapath Software accepts the RSC offer, one of the main risks to the other shareholders is that in the case of liquidation, RSC will have liquidation preference and receive the amount of money the put in as well as 13.4% of the remaining value of Metapath. However, other shareholders will get less than they would if RSC did not have a

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