A form of Anti-dilution Protection that adjusts the Conversion Ratio according to a formula that considers both the lower price and the number of shares issued at the lower price. This is more favorable to the company than a Full Ratchet. Narrow Based Weighted Average uses only the number of outstanding shares of Preferred Stock in the formula used to adjust the conversion price. This is more favorable to the investor than Broad-BasedWeighted Average, including all fully diluted shares in its formula.
A form of Anti-dilution Protection that adjusts the Conversion Ratio according to a formula that considers both the lower price and the number of shares issued at the lower price. This is more favorable to the company than a Full Ratchet. Narrow Based Weighted Average uses only the number of outstanding shares of Preferred Stock in the formula used to adjust the conversion price. This is more favorable to the investor than Broad-BasedWeighted Average, including all fully diluted shares in its formula.
