Common use of Conversion upon a Qualified Financing Clause in Contracts

Conversion upon a Qualified Financing. In the event that the Company issues and sells shares of its equity securities (“Equity Securities”) to investors (the “Investors”) on or before the Maturity Date in an equity financing with total proceeds to the Company of not less than $15,000,000 (excluding the conversion under this Agreement or other convertible securities issued for capital raising purposes (e.g., Simple Agreements for Future Equity)) (a “Qualified Financing”), then the Outstanding Token Balance of aPledge Digital Security Tokens shall automatically convert in whole without any further action by the Holder into Equity Securities sold in the Qualified Financing at a conversion price (“Conversion Price”) equal to the lesser of (i) the highest cash price paid per share for Equity Securities by the Investors in the Qualified Financing multiplied by 0.95, and (ii) the quotient resulting from dividing $20,000,000 by the number of outstanding shares of Common Stock of the Company immediately prior to the Qualified Financing (assuming conversion of all securities convertible into Common Stock and exercise of all outstanding options and warrants, including all shares of Common Stock reserved and available for future grant under any equity incentive or similar plan of the Company, and/or any equity incentive or similar plan to be created or increased in connection with the Qualified Financing, but excluding the shares of equity securities of the Company issuable upon the conversion under this Agreement or other convertible securities issued for capital raising purposes (e.g., Simple Agreements for Future Equity)). Each aPledge Digital Security Token and fraction thereof will convert into a number of equity securities equal to the quotient resulting from dividing Buyback Price by the Conversion Price. The issuance of Equity Securities pursuant to the conversion of aPledge Digital Security Tokens shall be upon and subject to the same terms and conditions applicable to Equity Securities sold in the Qualified Financing.

Conversion upon a Qualified Financing. In the event that the Company issues and sells shares of its equity securities (( “Equity Securities”) to investors (the “Investors”) on or before the Maturity Date while this Note remains outstanding in an equity financing with total proceeds to the Company of not less than $15,000,000 500,000 (excluding the conversion under this Agreement of the Notes or other convertible securities issued for capital raising purposes (e.g., Simple Agreements for Future Equity)) (a “Qualified Financing”), then the Outstanding Token Balance outstanding principal amount of aPledge Digital Security Tokens this Note and any unpaid accrued interest shall automatically convert in whole without any further action by the Holder into Equity Securities sold in the Qualified Financing at a conversion price (“Conversion Price”) equal to the lesser of (i) the highest cash price paid per share for Equity Securities by the Investors in the Qualified Financing multiplied by 0.950.80, and (ii) the quotient resulting from dividing $20,000,000 2,000,000 by the number of outstanding shares of Common the Capital Stock of the Company immediately prior to the Qualified Financing (assuming conversion of all securities convertible into Preferred or Common Stock and exercise of all outstanding options and warrants, including all shares of Preferred or Common Stock reserved and available for future grant under any equity incentive or similar plan of the Company, and/or any equity incentive or similar plan to be created or increased in connection with the Qualified Financing, but excluding the shares of equity securities of the Company issuable upon the conversion under this Agreement of Notes or other convertible securities issued for capital raising purposes (e.g., Simple Agreements for Future Equity)). Each aPledge Digital Security Token and fraction thereof will convert into a number of equity securities equal to the quotient resulting from dividing Buyback Price by the Conversion Price. The issuance of Equity Securities pursuant to the conversion of aPledge Digital Security Tokens this Note shall be upon and subject to the same terms and conditions applicable to Equity Securities sold in the Qualified Financing. Notwithstanding this paragraph, if the conversion price of the Notes as determined pursuant to this paragraph (the “Conversion Price”) is less than the price per share at which Equity Securities are issued in the Qualified Financing, the Company may, solely at its option, elect to convert this Note into shares of Preferred Stock having the identical rights, privileges, preferences and restrictions as the Equity Securities issued in the Qualified Financing, and otherwise on the same terms and conditions, other than with respect to (if applicable): (i) the per share liquidation preference and the conversion price for purposes of price-based anti-dilution protection, which will equal the Conversion Price; and (ii) the per share dividend, which will be the same percentage of the Conversion Price as applied to determine the per share dividends of the Investors in the Qualified Financing relative to the purchase price paid by the Investors.