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Current Equity Position

FOUNDER SHARES 200,000    
Shares Issued for Conversion of Founder Notes 54,545 $300,000 Paid-in 2014 - converting w/ no interest at $5.50/sh
Shares Issued in Angel Financing (Q1-15) 24,648 $265,000 Paid-in March 2015 - share value = $10.75
Shares Reserved for Conversions of Bridge Loan (6% interest) 8,492 $269,000 Paid-in Oct to Nov 2015 - converting Nov 2016 - share value = $25.00
Shares Issued in 1st Round of the Financing (Q4-15 / Q1-16 ) 16,633 $815,000 Paid in Nov 2015 to Apr 201 - share value =$49.00
Shares Reserved for the Conversion of Business Expenses 31,235 $57,160 Incurred / unpaid Yrs 2014 & 2015
SHARES IN EXCHANGE FOR CASH 135,553 $1,706,160  
Shares Issued for work - (Still Vesting) 386,104    
Shares Reserved for compensation of Extra Work Hours  100,000 Shares would be issued at $25.00 per share to compensate for $2.5M worth of unpaid work.
Total Shares Issued and Outstanding - 10/31/16 821,657    


This chart shows the composition of the currently-issued and outstanding equity.

All shares are common shares.  In round numbers:

200,000 shares are founder shares.

54,000 shares were issued at $5.50 per share for $300,000 of early capital that was paid in 2014 by the founders

24,000 shares were issued at $10.75 per share for $265,000 that was paid in 2015 by insiders.

Insiders also contributed $300,000 in bridge loans in October 2015.  They were given the option to convert the loans upon completion of the outside financing at the prevailing price.  $265,000 of the bridge loans have been approved for conversion and 8,500 shares are reserved for this.

16,000 were issued at $49.00 per share for $815,000 that was paid by outside investors in late 2015 / early 2016.  The price was admittedly aggressive, and the investors received an assurance that they would be made whole, should up to $1.3 million in subsequent financing be raised at a lower price.

Some insiders with significant business expenses (mainly travel), agreed in 2014 to forgo re-imbursement and, instead convert the moneys that would accumulate into shares at the then-prevailing price of $1.83 per share.   This program will be closed and 31,000 shares issued to retire the expenses.

386,000 shares were issued to contributors for work.  These shares must be earned, and must vest over 4 years.  The company has a claw-back provision to buy-back unvested shares for $1.00 in total.

Contributor work contracts provide for the compensation of work with a mixture of equity and cash.  Some are 100% equity for up to 3 years, others have a sliding scale.  The contracts stipulate that cash will not be paid until the company’s cash flow allows.  The plan indicates that by the time cash flow is sufficient to start cash payments, $2.5 million worth of work will have been delivered.  100,000 shares have been reserved for those who would choose to receive equity at $25.00 per share instead of cash. 

The total of all shares issued, reserved, and outstanding is 821,657.



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