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Shares     Price
Series A                           1,000     $          1.0
Series A Warrants                  1,000     $          1.0
Options                            1,000     $          0.2
Common                             1,000
Dividend per share                           $          0.5




Scenario 1: Non Participating Series A. Dividend for Warrants would be declared from the day it becomes Ser

                                        $0   Before this break point, debt is repaid
                                        $0   After this break point, the Series A receives value
                                    $1,500   After this break point, the Common receive value
                                    $1,700   After this break point, the $0.20 options exercise (Common at $0.20)
                                    $3,300   After this break point, the Series A Warrants converts (Common at $1.0)
                                    $4,800   After this break point, the Series A converts (Common at $1.5)


Break Point #1               Debt is repaid
Debt Principal                                                                     $0
Debt Interest through OPM Term (a)                    4.42%                        $0
                                            Break Point #1                                                          $0


(a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%.
Break Point #2               After this break point, the Series A receives value
Break Point #1                                                                     $0
Plus: Series A Liquidation Preference                                          $1,000
Plus: Series A Liquidation Dividend                                              $500
                                           Break Point #2                                                       $1,500


Break Point #3               After this break point, the $0.20 options exercise (Common at $0.20)
Shares Outstanding                                                              2,000
Strike Price                                                                    $0.20
Subtotal                                                                         $400
Less: Cash Proceeds from Option Exercise                                       ($200)
Plus Break Point # 2                                                           $1,500
                                           Break Point #3                                                       $1,700


Break Point #4               After this break point, the Series A Warrants converts (Common at $1.0)
Shares Outstanding                                                              3,000
Strike Price                                                                    $1.00
Subtotal                                                                       $3,000
Less: Cash Proceeds from Option and Warrants Exercise                        ($1,200)
Plus Break Point #2                                                     $1,500
                                           Break Point #4                                     $3,300
* Options available are included in this breakpoint.
Break Point #5               After this break point, the Series A converts (Common at $1.5)
Shares Outstanding                                                       4,000
Strike Price                                                             $1.50
Subtotal                                                                $6,000
Less: Cash Proceeds from Option and Warrants Exercise                  ($1,200)
Plus Break Point # 1                                                        $0
                                           Break Point #5                                     $4,800
m the day it becomes Series A.                             Scenario 2: Non Participating Series A. Divi

                                                                             $0
                                                                             $0
                                                                         $1,000
e (Common at $0.20)                                                      $2,000
nverts (Common at $1.0)                                                  $2,200
 mmon at $1.5)                                                           $4,800


                                 Break Point #1            Debt is repaid
                                 Debt Principal
                                 Debt Interest through OPM Term (a)



                                 (a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q
                                 Break Point #2            After this break point, the Series A receives interi
                                 Break Point #1
                                 Plus: Series A Interim LP




                                 Break Point #3            After this break point, the Series A receive remain
                                 Break Point #1
                                 Plus: Series A remaining LP
                                 Subtotal
                                 Plus: Series A Warrants remaining Value




                                 Break Point #4            After this break point, the $0.20 options exercise
                                 Shares Outstanding
                                 Strike Price
                                 Subtotal
                                 Less: Cash Proceeds from Option and Warrants Exercise
Plus Break Point #3


* Options available are included in this breakpoint.
Break Point #5           After this break point, the Series A and Series A W
Shares Outstanding
Strike Price
Subtotal
Less: Cash Proceeds from Option and Warrants Exercise
Plus Break Point # 1
io 2: Non Participating Series A. Dividend for Warrants would be declared from the original issue date of Series A.

              Before this break point, debt is repaid
              After this break point, the Series A receives interim LP and Series A Warrants Exercise
              After this break point, the Series A receive remaining value
              After this break point, the Common receives value
              After this break point, the $0.20 options exercise (Common at $0.20)
              After this break point, the Series A and Series A Warrants converts (Common at $1.5)




                                                 $0
                          4.42%                  $0
               Break Point #1                                           $0


licon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%.
is break point, the Series A receives interim LP and Series A Warrants Exercise
                                                 $0
                                             $1,000
                                                 $0
               Break Point #2                                       $1,000


is break point, the Series A receive remaining value
                                             $1,000                                             1000     1000
                                               $500                                   .5*2000   1000     2000
                                             $1,500                                             2000    -1000
                                              $500                                                       2000
                                                 $0
               Break Point #3                                       $2,000


is break point, the $0.20 options exercise (Common at $0.20)
                                              2,000
                                              $0.20
                                               $400
n and Warrants Exercise                      ($200)
$2,000
               Break Point #4                               $2,200
n this breakpoint.
is break point, the Series A and Series A Warrants converts (Common at $1.5)
                                         4,000
                                         $1.50
                                        $6,000
n and Warrants Exercise                ($1,200)
                                            $0
               Break Point #5                               $4,800
Shares     Price
Series A                           1,000     $          1.0
Series A Warrants                  1,000     $          1.0
Options                            1,000     $          0.2
Common                             1,000
Dividend per share                           $          0.5




Scenario 1: Fully Participating Series A. Dividend for Warrants would be declared from the day it becomes Se

                                        $0   Before this break point, debt is repaid
                                        $0   After this break point, the Series A receives value and Warrants Exercise
                                    $1,500   After this break point, the Common and Series A receive value
                                    $2,100   After this break point, the $0.20 options exercise (Common at $0.20)




Break Point #1               Debt is repaid
Debt Principal                                                                     $0
Debt Interest through OPM Term (a)                    4.42%                        $0
                                            Break Point #1                                                          $0


(a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%.
Break Point #2               After this break point, the Series A receives value and Warrants Exercise
Break Point #1                                                                     $0
Plus: Series A Liquidation Preference                                          $1,000
Plus: Series A Liquidation Dividend                                              $500
                                           Break Point #2                                                       $1,500


Break Point #3               After this break point, the $0.20 options exercise (Common at $0.20)
Shares Outstanding                                                              4,000
Strike Price                                                                    $0.20
Subtotal                                                                         $800
Less: Cash Proceeds from Option Exercise                                       ($200)
Plus Break Point # 2                                                           $1,500
                                           Break Point #3                                                       $2,100
m the day it becomes Series A.                             Scenario 2: Fully Participating Series A. Divi

                                                                             $0
e and Warrants Exercise                                                      $0
A receive value                                                          $1,000
e (Common at $0.20)                                                      $2,000
                                                                         $2,600




                                 Break Point #1            Debt is repaid
                                 Debt Principal
                                 Debt Interest through OPM Term (a)



                                 (a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q
                                 Break Point #2            After this break point, the Series A receives interi
                                 Break Point #1
                                 Plus: Series A Interim LP




                                 Break Point #3            After this break point, the Series A receives rema
                                 Break Point #1
                                 Plus: Series A remaining LP (Dividend amount)
                                 Plus: Series A Liquidation Dividend
                                 Plus: Series A Warrants remaining Value (Dividend Amount)




                                 Break Point #4            After this break point, the Common and Series A
                                 Shares Outstanding
                                 Strike Price
                                 Subtotal
                                 Less: Cash Proceeds from Option and Warrants Exercise
Plus Break Point #3
io 2: Fully Participating Series A. Dividend for Warrants would be declared from the original issue date of Series A.

              Before this break point, debt is repaid
              After this break point, the Series A receives interim LP and Series A Warrants Exercise
              After this break point, the Series A receives remaining value
              After this break point, the Common and Series A receive value
              After this break point, the $0.20 options exercise (Common at $0.20)




                                                 $0
                          4.42%                  $0
               Break Point #1                                           $0


licon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%.
is break point, the Series A receives interim LP and Series A Warrants Exercise
                                                 $0
                                             $1,000
                                                 $0
               Break Point #2                                       $1,000


is break point, the Series A receives remaining value
                                             $1,000
dend amount)                                   $500
                                             $1,500
g Value (Dividend Amount)                     $500
                                                 $0
               Break Point #3                                       $2,000


is break point, the Common and Series A receive value
                                              4,000
                                              $0.20
                                               $800
n and Warrants Exercise                      ($200)
$2,000
Break Point #4            $2,600
Shares     Price
Series A                           1,000     $          1.0                             Series A Cap of 3x
Series A Warrants                  1,000     $          1.0                             Series A reaches Cap
Options                            1,000     $          0.2                             Series A converts
Common                             1,000
Dividend per share                           $          0.5




Scenario 1: Capped Participating Series A. Dividend for Warrants would be declared from the day it becomes

                                        $0   Before this break point, debt is repaid
                                        $0   After this break point, the Series A receives value and Warrants exercise
                                    $1,500   After this break point, the Common receive value
                                    $2,100   After this break point, the $0.20 options exercise (Common at $0.20)
                                    $9,300   After this break point, the Series A and Series A Warrants reaches cap (C
                                   $11,300   After this break point, the Series A Warrants converts (Common at $3.0)
                                   $12,800   After this break point, the Series A converts (Common at $3.5)

Break Point #1               Debt is repaid
Debt Principal                                                                     $0
Debt Interest through OPM Term (a)                    4.42%                        $0
                                            Break Point #1                                                          $0


(a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%.
Break Point #2               After this break point, the Series A receives value and Warrants exercise
Break Point #1                                                                     $0
Plus: Series A Liquidation Preference                                          $1,000
Plus: Series A Liquidation Dividend                                              $500
                                           Break Point #2                                                       $1,500


Break Point #3               After this break point, the $0.20 options exercise (Common at $0.20)
Shares Outstanding                                                              4,000
Strike Price                                                                    $0.20
Subtotal                                                                         $800
Less: Cash Proceeds from Option Exercise                                       ($200)
Plus Break Point # 2                                                           $1,500
                                           Break Point #3                                                       $2,100


Break Point #4               After this break point, the Series A and Series A Warrants reaches cap (Common at $2.0)
Shares Outstanding                                                              4,000
Strike Price                                                                    $2.00
Subtotal                                                                       $8,000
Less: Cash Proceeds from Option Exercise                                       ($200)
Plus Break Point #2                                                   $1,500
                                       Break Point #4                                                $9,300


Break Point #5             After this break point, the Series A Warrants converts (Common at $3.0)
Shares Outstanding                                                     3,000
Strike Price                                                           $3.00
Subtotal                                                              $9,000
Less: Cash Proceeds from Option and Warrants Exercise                ($1,200)
Plus Break Point # 1                                                      $0
Plus Remaining Max Par of Series A                                    $3,500
                                       Break Point #5                                                $11,300


Break Point #6             After this break point, the Series A converts (Common at $3.5)
Shares Outstanding                                                     4,000
Strike Price                                                           $3.50
Subtotal                                                             $14,000
Less: Cash Proceeds from Option and Warrants Exercise                ($1,200)
Plus Break Point # 1                                                      $0
                                       Break Point #5                                                $12,800
$   3.0
                          $   2.0
                          $   3.5




from the day it becomes Series A.                                  Scenario 2: Capped Participating Series A. D

                                                                                    $0
e and Warrants exercise                                                             $0
                                                                                $1,000
e (Common at $0.20)                                                             $2,000
 Warrants reaches cap (Common at $2.0)                                          $2,600
nverts (Common at $3.0)                                                         $9,800
 mmon at $3.5)                                                                 $12,800

                                         Break Point #1            Debt is repaid
                                         Debt Principal
                                         Debt Interest through OPM Term (a)



                                         (a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q
                                         Break Point #2            After this break point, the Series A receives interi
                                         Break Point #1
                                         Plus: Series A Interim LP
                                         Plus: Series A Liquidation Dividend



                                         Break Point #3            After this break point, the Series A receives rema
                                         Break Point #1
                                         Plus: Series A remaining LP
                                         Plus: Series A Liquidation Dividend
                                         Plus: Series A Warrants remaining Value




ap (Common at $2.0)                      Break Point #4            After this break point, the $0.20 options exercise
                                         Shares Outstanding
                                         Strike Price
                                         Subtotal
                                         Less: Cash Proceeds from Option and Warrants Exercise
Plus Break Point #3



Break Point #5         After this break point, the Series A and Series A W
Shares Outstanding
Strike Price
Subtotal
Less: Cash Proceeds from Option and Warrants Exercise
Plus Break Point # 1



Break Point #6         After this break point, the Series A and Series A W
Shares Outstanding
Strike Price
Subtotal
Less: Cash Proceeds from Option and Warrants Exercise
Plus Break Point # 1
io 2: Capped Participating Series A. Dividend for Warrants would be declared from the original issue date of Series A.

              Before this break point, debt is repaid
              After this break point, the Series A receives interim LP and Series A Warrants Exercise
              After this break point, the Series A receives remaining value
              After this break point, the Common and Series A receives value
              After this break point, the $0.20 options exercise (Common at $0.20)
              After this break point, the Series A and Series A Warrants reaches cap (Common at $2.0)
              After this break point, the Series A and Series A Warrants converts (Common at $3.5)


                                                 $0
                          4.42%                  $0
               Break Point #1                                           $0


licon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%.
is break point, the Series A receives interim LP and Series A Warrants Exercise
                                                 $0
                                             $1,000
                                                 $0
               Break Point #2                                       $1,000


is break point, the Series A receives remaining value
                                             $1,000
                                               $500
                                             $1,500
                                              $500
                                                 $0
               Break Point #3                                       $2,000


is break point, the $0.20 options exercise (Common at $0.20)
                                              4,000
                                              $0.20
                                               $800
n and Warrants Exercise                      ($200)
$2,000
              Break Point #4                                $2,600


is break point, the Series A and Series A Warrants reaches cap (Common at $2.0)
                                         4,000
                                         $2.00
                                        $8,000
n and Warrants Exercise                 ($200)
                                        $2,000
              Break Point #5                                $9,800


is break point, the Series A and Series A Warrants converts (Common at $3.5)
                                         4,000
                                         $3.50
                                       $14,000
n and Warrants Exercise                ($1,200)
                                            $0
              Break Point #5                               $12,800
of Series A.
Shares     Price
Series A                           1,000     $          1.0                             Series A MPP (including Dividend)
Series A Warrants                  1,000     $          1.0                             Series A reaches Cap
Options                            1,000     $          0.2                             Series A converts
Common                             1,000                                                Series A Warrants reaches cap at
Dividend per share                           $          0.5




Scenario 1: Capped Participating Series A. Dividend for Warrants would be declared from the day it becomes

                                        $0   Before this break point, debt is repaid
                                        $0   After this break point, the Series A receives value
                                    $1,500   After this break point, the Common receives value
                                    $2,100   After this break point, the $0.20 options exercise (Common at $0.20)
                                    $7,300   After this break point, the Series A reaches cap (Common at $1.5)
                                    $8,800   After this break point, the Series A Warrants reaches its cap (Common at
                                   $10,800   After this break point, the Series A and Series A Warrants converts (Com

Break Point #1               Debt is repaid
Debt Principal                                                                     $0
Debt Interest through OPM Term (a)                    4.42%                        $0
                                            Break Point #1                                                          $0


(a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%.
Break Point #2               After this break point, the Series A receives value
Break Point #1                                                                     $0
Plus: Series A Liquidation Preference                                          $1,000
Plus: Series A Liquidation Dividend                                              $500
                                           Break Point #2                                                       $1,500


Break Point #3               After this break point, the $0.20 options exercise (Common at $0.20)
Shares Outstanding                                                              4,000
Strike Price                                                                    $0.20
Subtotal                                                                         $800
Less: Cash Proceeds from Option Exercise                                       ($200)
Plus Break Point # 2                                                           $1,500
                                           Break Point #3                                                       $2,100


Break Point #4               After this break point, the Series A reaches cap (Common at $1.5)
Shares Outstanding                                                              4,000
Strike Price                                                                    $1.50
Subtotal                                                                       $6,000
Less: Cash Proceeds from Option Exercise                                       ($200)
Plus Break Point #2                                                   $1,500
                                       Break Point #4                                               $7,300


Break Point #5             After this break point, the Series A Warrants reaches its cap (Common at $2.0)
Shares Outstanding                                                     3,000
Strike Price                                                           $2.00
Subtotal                                                              $6,000
Less: Cash Proceeds from Option and Warrants Exercise                  ($200)
Plus Break Point # 1                                                      $0
Plus Remaining Max Par of Series A                                    $3,000
                                       Break Point #5                                               $8,800


Break Point #6             After this break point, the Series A and Series A Warrants converts (Common at $3.0)
Shares Outstanding                                                     4,000
Strike Price                                                           $3.00
Subtotal                                                             $12,000
Less: Cash Proceeds from Option and Warrants Exercise                ($1,200)
Plus Break Point # 1                                                      $0
                                       Break Point #5                                              $10,800
including Dividend)      $     3.0
                         $     1.5
                         $     3.0
nts reaches cap at       $     2.0




from the day it becomes Series A.                               Scenario 2: Capped Participating Series A

                                                                                 $0
                                                                                 $0
                                                                             $1,000
e (Common at $0.20)                                                          $2,000
 Common at $1.5)                                                             $2,600
 ches its cap (Common at $2.0)                                               $7,800
 Warrants converts (Common at $3.0)                                         $10,800

                                      Break Point #1            Debt is repaid
                                      Debt Principal
                                      Debt Interest through OPM Term (a)



                                      (a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as o
                                      Break Point #2            After this break point, the Series A receives int
                                      Break Point #1
                                      Plus: Series A Interim LP
                                      Plus: Series A Liquidation Dividend



                                      Break Point #3            After this break point, the Series A receives rem
                                      Break Point #1
                                      Plus: Series A remaining LP
                                      Plus: Series A Liquidation Dividend
                                      Plus: Series A Warrants remaining Value




                                      Break Point #4            After this break point, the $0.20 options exerci
                                      Shares Outstanding
                                      Strike Price
                                      Subtotal
                                      Less: Cash Proceeds from Option and Warrants Exercise
Plus Break Point #3



                  Break Point #5         After this break point, the Series A and Series
                  Shares Outstanding
                  Strike Price
                  Subtotal
                  Less: Cash Proceeds from Option and Warrants Exercise
                  Plus Break Point # 1



                  Break Point #6         After this break point, the Series A and Series
Common at $3.0)   Shares Outstanding
                  Strike Price
                  Subtotal
                  Less: Cash Proceeds from Option and Warrants Exercise
                  Plus Break Point # 1
io 2: Capped Participating Series A. Dividend for Warrants would be declared from the original issue date of Series A.

              Before this break point, debt is repaid
              After this break point, the Series A receives interim LP and Series A Warrants Exercise
              After this break point, the Series A receives remaining value
              After this break point, the Common and Series A receives value
              After this break point, the $0.20 options exercise (Common at $0.20)
              After this break point, the Series A and Series A Warrants reaches cap (Common at $1.5)
              After this break point, the Series A and Series A Warrants converts (Common at $3.0)


                                                 $0
                          4.42%                  $0
               Break Point #1                                           $0


licon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%.
is break point, the Series A receives interim LP and Series A Warrants Exercise
                                                 $0
                                             $1,000
                                                 $0
               Break Point #2                                       $1,000


is break point, the Series A receives remaining value
                                             $1,000
                                               $500
                                             $1,500
                                              $500
                                                 $0
               Break Point #3                                       $2,000


is break point, the $0.20 options exercise (Common at $0.20)
                                              4,000
                                              $0.20
                                               $800
n and Warrants Exercise                      ($200)
$2,000
              Break Point #4                                $2,600


is break point, the Series A and Series A Warrants reaches cap (Common at $1.5)
                                         4,000
                                         $1.50
                                        $6,000
n and Warrants Exercise                 ($200)
                                        $2,000
              Break Point #5                                $7,800


is break point, the Series A and Series A Warrants converts (Common at $3.0)
                                         4,000
                                         $3.00
                                       $12,000
n and Warrants Exercise                ($1,200)
                                            $0
              Break Point #5                               $10,800
of Series A.

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Understanding warrants treatment

  • 1. Shares Price Series A 1,000 $ 1.0 Series A Warrants 1,000 $ 1.0 Options 1,000 $ 0.2 Common 1,000 Dividend per share $ 0.5 Scenario 1: Non Participating Series A. Dividend for Warrants would be declared from the day it becomes Ser $0 Before this break point, debt is repaid $0 After this break point, the Series A receives value $1,500 After this break point, the Common receive value $1,700 After this break point, the $0.20 options exercise (Common at $0.20) $3,300 After this break point, the Series A Warrants converts (Common at $1.0) $4,800 After this break point, the Series A converts (Common at $1.5) Break Point #1 Debt is repaid Debt Principal $0 Debt Interest through OPM Term (a) 4.42% $0 Break Point #1 $0 (a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%. Break Point #2 After this break point, the Series A receives value Break Point #1 $0 Plus: Series A Liquidation Preference $1,000 Plus: Series A Liquidation Dividend $500 Break Point #2 $1,500 Break Point #3 After this break point, the $0.20 options exercise (Common at $0.20) Shares Outstanding 2,000 Strike Price $0.20 Subtotal $400 Less: Cash Proceeds from Option Exercise ($200) Plus Break Point # 2 $1,500 Break Point #3 $1,700 Break Point #4 After this break point, the Series A Warrants converts (Common at $1.0) Shares Outstanding 3,000 Strike Price $1.00 Subtotal $3,000 Less: Cash Proceeds from Option and Warrants Exercise ($1,200)
  • 2. Plus Break Point #2 $1,500 Break Point #4 $3,300 * Options available are included in this breakpoint. Break Point #5 After this break point, the Series A converts (Common at $1.5) Shares Outstanding 4,000 Strike Price $1.50 Subtotal $6,000 Less: Cash Proceeds from Option and Warrants Exercise ($1,200) Plus Break Point # 1 $0 Break Point #5 $4,800
  • 3. m the day it becomes Series A. Scenario 2: Non Participating Series A. Divi $0 $0 $1,000 e (Common at $0.20) $2,000 nverts (Common at $1.0) $2,200 mmon at $1.5) $4,800 Break Point #1 Debt is repaid Debt Principal Debt Interest through OPM Term (a) (a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q Break Point #2 After this break point, the Series A receives interi Break Point #1 Plus: Series A Interim LP Break Point #3 After this break point, the Series A receive remain Break Point #1 Plus: Series A remaining LP Subtotal Plus: Series A Warrants remaining Value Break Point #4 After this break point, the $0.20 options exercise Shares Outstanding Strike Price Subtotal Less: Cash Proceeds from Option and Warrants Exercise
  • 4. Plus Break Point #3 * Options available are included in this breakpoint. Break Point #5 After this break point, the Series A and Series A W Shares Outstanding Strike Price Subtotal Less: Cash Proceeds from Option and Warrants Exercise Plus Break Point # 1
  • 5. io 2: Non Participating Series A. Dividend for Warrants would be declared from the original issue date of Series A. Before this break point, debt is repaid After this break point, the Series A receives interim LP and Series A Warrants Exercise After this break point, the Series A receive remaining value After this break point, the Common receives value After this break point, the $0.20 options exercise (Common at $0.20) After this break point, the Series A and Series A Warrants converts (Common at $1.5) $0 4.42% $0 Break Point #1 $0 licon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%. is break point, the Series A receives interim LP and Series A Warrants Exercise $0 $1,000 $0 Break Point #2 $1,000 is break point, the Series A receive remaining value $1,000 1000 1000 $500 .5*2000 1000 2000 $1,500 2000 -1000 $500 2000 $0 Break Point #3 $2,000 is break point, the $0.20 options exercise (Common at $0.20) 2,000 $0.20 $400 n and Warrants Exercise ($200)
  • 6. $2,000 Break Point #4 $2,200 n this breakpoint. is break point, the Series A and Series A Warrants converts (Common at $1.5) 4,000 $1.50 $6,000 n and Warrants Exercise ($1,200) $0 Break Point #5 $4,800
  • 7. Shares Price Series A 1,000 $ 1.0 Series A Warrants 1,000 $ 1.0 Options 1,000 $ 0.2 Common 1,000 Dividend per share $ 0.5 Scenario 1: Fully Participating Series A. Dividend for Warrants would be declared from the day it becomes Se $0 Before this break point, debt is repaid $0 After this break point, the Series A receives value and Warrants Exercise $1,500 After this break point, the Common and Series A receive value $2,100 After this break point, the $0.20 options exercise (Common at $0.20) Break Point #1 Debt is repaid Debt Principal $0 Debt Interest through OPM Term (a) 4.42% $0 Break Point #1 $0 (a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%. Break Point #2 After this break point, the Series A receives value and Warrants Exercise Break Point #1 $0 Plus: Series A Liquidation Preference $1,000 Plus: Series A Liquidation Dividend $500 Break Point #2 $1,500 Break Point #3 After this break point, the $0.20 options exercise (Common at $0.20) Shares Outstanding 4,000 Strike Price $0.20 Subtotal $800 Less: Cash Proceeds from Option Exercise ($200) Plus Break Point # 2 $1,500 Break Point #3 $2,100
  • 8.
  • 9. m the day it becomes Series A. Scenario 2: Fully Participating Series A. Divi $0 e and Warrants Exercise $0 A receive value $1,000 e (Common at $0.20) $2,000 $2,600 Break Point #1 Debt is repaid Debt Principal Debt Interest through OPM Term (a) (a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q Break Point #2 After this break point, the Series A receives interi Break Point #1 Plus: Series A Interim LP Break Point #3 After this break point, the Series A receives rema Break Point #1 Plus: Series A remaining LP (Dividend amount) Plus: Series A Liquidation Dividend Plus: Series A Warrants remaining Value (Dividend Amount) Break Point #4 After this break point, the Common and Series A Shares Outstanding Strike Price Subtotal Less: Cash Proceeds from Option and Warrants Exercise
  • 11. io 2: Fully Participating Series A. Dividend for Warrants would be declared from the original issue date of Series A. Before this break point, debt is repaid After this break point, the Series A receives interim LP and Series A Warrants Exercise After this break point, the Series A receives remaining value After this break point, the Common and Series A receive value After this break point, the $0.20 options exercise (Common at $0.20) $0 4.42% $0 Break Point #1 $0 licon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%. is break point, the Series A receives interim LP and Series A Warrants Exercise $0 $1,000 $0 Break Point #2 $1,000 is break point, the Series A receives remaining value $1,000 dend amount) $500 $1,500 g Value (Dividend Amount) $500 $0 Break Point #3 $2,000 is break point, the Common and Series A receive value 4,000 $0.20 $800 n and Warrants Exercise ($200)
  • 13. Shares Price Series A 1,000 $ 1.0 Series A Cap of 3x Series A Warrants 1,000 $ 1.0 Series A reaches Cap Options 1,000 $ 0.2 Series A converts Common 1,000 Dividend per share $ 0.5 Scenario 1: Capped Participating Series A. Dividend for Warrants would be declared from the day it becomes $0 Before this break point, debt is repaid $0 After this break point, the Series A receives value and Warrants exercise $1,500 After this break point, the Common receive value $2,100 After this break point, the $0.20 options exercise (Common at $0.20) $9,300 After this break point, the Series A and Series A Warrants reaches cap (C $11,300 After this break point, the Series A Warrants converts (Common at $3.0) $12,800 After this break point, the Series A converts (Common at $3.5) Break Point #1 Debt is repaid Debt Principal $0 Debt Interest through OPM Term (a) 4.42% $0 Break Point #1 $0 (a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%. Break Point #2 After this break point, the Series A receives value and Warrants exercise Break Point #1 $0 Plus: Series A Liquidation Preference $1,000 Plus: Series A Liquidation Dividend $500 Break Point #2 $1,500 Break Point #3 After this break point, the $0.20 options exercise (Common at $0.20) Shares Outstanding 4,000 Strike Price $0.20 Subtotal $800 Less: Cash Proceeds from Option Exercise ($200) Plus Break Point # 2 $1,500 Break Point #3 $2,100 Break Point #4 After this break point, the Series A and Series A Warrants reaches cap (Common at $2.0) Shares Outstanding 4,000 Strike Price $2.00 Subtotal $8,000 Less: Cash Proceeds from Option Exercise ($200)
  • 14. Plus Break Point #2 $1,500 Break Point #4 $9,300 Break Point #5 After this break point, the Series A Warrants converts (Common at $3.0) Shares Outstanding 3,000 Strike Price $3.00 Subtotal $9,000 Less: Cash Proceeds from Option and Warrants Exercise ($1,200) Plus Break Point # 1 $0 Plus Remaining Max Par of Series A $3,500 Break Point #5 $11,300 Break Point #6 After this break point, the Series A converts (Common at $3.5) Shares Outstanding 4,000 Strike Price $3.50 Subtotal $14,000 Less: Cash Proceeds from Option and Warrants Exercise ($1,200) Plus Break Point # 1 $0 Break Point #5 $12,800
  • 15. $ 3.0 $ 2.0 $ 3.5 from the day it becomes Series A. Scenario 2: Capped Participating Series A. D $0 e and Warrants exercise $0 $1,000 e (Common at $0.20) $2,000 Warrants reaches cap (Common at $2.0) $2,600 nverts (Common at $3.0) $9,800 mmon at $3.5) $12,800 Break Point #1 Debt is repaid Debt Principal Debt Interest through OPM Term (a) (a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q Break Point #2 After this break point, the Series A receives interi Break Point #1 Plus: Series A Interim LP Plus: Series A Liquidation Dividend Break Point #3 After this break point, the Series A receives rema Break Point #1 Plus: Series A remaining LP Plus: Series A Liquidation Dividend Plus: Series A Warrants remaining Value ap (Common at $2.0) Break Point #4 After this break point, the $0.20 options exercise Shares Outstanding Strike Price Subtotal Less: Cash Proceeds from Option and Warrants Exercise
  • 16. Plus Break Point #3 Break Point #5 After this break point, the Series A and Series A W Shares Outstanding Strike Price Subtotal Less: Cash Proceeds from Option and Warrants Exercise Plus Break Point # 1 Break Point #6 After this break point, the Series A and Series A W Shares Outstanding Strike Price Subtotal Less: Cash Proceeds from Option and Warrants Exercise Plus Break Point # 1
  • 17. io 2: Capped Participating Series A. Dividend for Warrants would be declared from the original issue date of Series A. Before this break point, debt is repaid After this break point, the Series A receives interim LP and Series A Warrants Exercise After this break point, the Series A receives remaining value After this break point, the Common and Series A receives value After this break point, the $0.20 options exercise (Common at $0.20) After this break point, the Series A and Series A Warrants reaches cap (Common at $2.0) After this break point, the Series A and Series A Warrants converts (Common at $3.5) $0 4.42% $0 Break Point #1 $0 licon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%. is break point, the Series A receives interim LP and Series A Warrants Exercise $0 $1,000 $0 Break Point #2 $1,000 is break point, the Series A receives remaining value $1,000 $500 $1,500 $500 $0 Break Point #3 $2,000 is break point, the $0.20 options exercise (Common at $0.20) 4,000 $0.20 $800 n and Warrants Exercise ($200)
  • 18. $2,000 Break Point #4 $2,600 is break point, the Series A and Series A Warrants reaches cap (Common at $2.0) 4,000 $2.00 $8,000 n and Warrants Exercise ($200) $2,000 Break Point #5 $9,800 is break point, the Series A and Series A Warrants converts (Common at $3.5) 4,000 $3.50 $14,000 n and Warrants Exercise ($1,200) $0 Break Point #5 $12,800
  • 20. Shares Price Series A 1,000 $ 1.0 Series A MPP (including Dividend) Series A Warrants 1,000 $ 1.0 Series A reaches Cap Options 1,000 $ 0.2 Series A converts Common 1,000 Series A Warrants reaches cap at Dividend per share $ 0.5 Scenario 1: Capped Participating Series A. Dividend for Warrants would be declared from the day it becomes $0 Before this break point, debt is repaid $0 After this break point, the Series A receives value $1,500 After this break point, the Common receives value $2,100 After this break point, the $0.20 options exercise (Common at $0.20) $7,300 After this break point, the Series A reaches cap (Common at $1.5) $8,800 After this break point, the Series A Warrants reaches its cap (Common at $10,800 After this break point, the Series A and Series A Warrants converts (Com Break Point #1 Debt is repaid Debt Principal $0 Debt Interest through OPM Term (a) 4.42% $0 Break Point #1 $0 (a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%. Break Point #2 After this break point, the Series A receives value Break Point #1 $0 Plus: Series A Liquidation Preference $1,000 Plus: Series A Liquidation Dividend $500 Break Point #2 $1,500 Break Point #3 After this break point, the $0.20 options exercise (Common at $0.20) Shares Outstanding 4,000 Strike Price $0.20 Subtotal $800 Less: Cash Proceeds from Option Exercise ($200) Plus Break Point # 2 $1,500 Break Point #3 $2,100 Break Point #4 After this break point, the Series A reaches cap (Common at $1.5) Shares Outstanding 4,000 Strike Price $1.50 Subtotal $6,000 Less: Cash Proceeds from Option Exercise ($200)
  • 21. Plus Break Point #2 $1,500 Break Point #4 $7,300 Break Point #5 After this break point, the Series A Warrants reaches its cap (Common at $2.0) Shares Outstanding 3,000 Strike Price $2.00 Subtotal $6,000 Less: Cash Proceeds from Option and Warrants Exercise ($200) Plus Break Point # 1 $0 Plus Remaining Max Par of Series A $3,000 Break Point #5 $8,800 Break Point #6 After this break point, the Series A and Series A Warrants converts (Common at $3.0) Shares Outstanding 4,000 Strike Price $3.00 Subtotal $12,000 Less: Cash Proceeds from Option and Warrants Exercise ($1,200) Plus Break Point # 1 $0 Break Point #5 $10,800
  • 22. including Dividend) $ 3.0 $ 1.5 $ 3.0 nts reaches cap at $ 2.0 from the day it becomes Series A. Scenario 2: Capped Participating Series A $0 $0 $1,000 e (Common at $0.20) $2,000 Common at $1.5) $2,600 ches its cap (Common at $2.0) $7,800 Warrants converts (Common at $3.0) $10,800 Break Point #1 Debt is repaid Debt Principal Debt Interest through OPM Term (a) (a) The after-tax cost of debt is Silicon Valley Bank's average loan yield as o Break Point #2 After this break point, the Series A receives int Break Point #1 Plus: Series A Interim LP Plus: Series A Liquidation Dividend Break Point #3 After this break point, the Series A receives rem Break Point #1 Plus: Series A remaining LP Plus: Series A Liquidation Dividend Plus: Series A Warrants remaining Value Break Point #4 After this break point, the $0.20 options exerci Shares Outstanding Strike Price Subtotal Less: Cash Proceeds from Option and Warrants Exercise
  • 23. Plus Break Point #3 Break Point #5 After this break point, the Series A and Series Shares Outstanding Strike Price Subtotal Less: Cash Proceeds from Option and Warrants Exercise Plus Break Point # 1 Break Point #6 After this break point, the Series A and Series Common at $3.0) Shares Outstanding Strike Price Subtotal Less: Cash Proceeds from Option and Warrants Exercise Plus Break Point # 1
  • 24. io 2: Capped Participating Series A. Dividend for Warrants would be declared from the original issue date of Series A. Before this break point, debt is repaid After this break point, the Series A receives interim LP and Series A Warrants Exercise After this break point, the Series A receives remaining value After this break point, the Common and Series A receives value After this break point, the $0.20 options exercise (Common at $0.20) After this break point, the Series A and Series A Warrants reaches cap (Common at $1.5) After this break point, the Series A and Series A Warrants converts (Common at $3.0) $0 4.42% $0 Break Point #1 $0 licon Valley Bank's average loan yield as of Q2 2010. The tax rate utilized is 40%. is break point, the Series A receives interim LP and Series A Warrants Exercise $0 $1,000 $0 Break Point #2 $1,000 is break point, the Series A receives remaining value $1,000 $500 $1,500 $500 $0 Break Point #3 $2,000 is break point, the $0.20 options exercise (Common at $0.20) 4,000 $0.20 $800 n and Warrants Exercise ($200)
  • 25. $2,000 Break Point #4 $2,600 is break point, the Series A and Series A Warrants reaches cap (Common at $1.5) 4,000 $1.50 $6,000 n and Warrants Exercise ($200) $2,000 Break Point #5 $7,800 is break point, the Series A and Series A Warrants converts (Common at $3.0) 4,000 $3.00 $12,000 n and Warrants Exercise ($1,200) $0 Break Point #5 $10,800