A Convertible Note is a simple promissory note, usually bearing interest and payable at some future date. The unique aspects of a convertible note are:
A. It converts into equity in the company so long as certain agreed metrics are achieved;
B. Conversion rather than repayment is the usual intention of the parties
C. The usual events for conversion (a conversion event) could be some or all of:
1. Later financing acquired of an agreed minimum level;
2. Developmental milestones reached by the company; and/or
3. Strategic partnerships concluded with important companies;
The conversion into equity is usually at a valuation that is consistent with the valuation agreed to with investors in an investment round that occurs at a later time.
A Puerto Rico Convertible Promissory Note by Corporation is a financial instrument used by corporations in Puerto Rico to raise capital. It is issued as part of a series of notes under a Convertible Note Purchase Agreement, a legal document outlining the terms and conditions of the note issuance. The Puerto Rico Convertible Promissory Note allows the issuing corporation to borrow money from investors, promising to repay the principal amount along with interest over a specified period. What sets it apart from a traditional promissory note is that it includes an option for the note holder to convert the debt into equity in the corporation at a later date, usually at the discretion of the note holder. This type of note provides a flexible financing option for both the corporation and investors. For the corporation, it offers a means to secure needed funds while attracting potential investors with the option to convert their debt into ownership stakes in the company, aligning their interests. Investors, on the other hand, have the opportunity to benefit from any future success of the corporation by converting their debt into equity. There may be different variations or types of Puerto Rico Convertible Promissory Notes depending on the specific terms agreed upon by the issuer and the investors. Some potential variations could include different interest rates, repayment terms, conversion ratios, or other specific provisions catering to the needs and preferences of both parties involved. Overall, a Puerto Rico Convertible Promissory Note by Corporation is a financial tool that bridges the gap between debt and equity financing for corporations in Puerto Rico. It combines the benefits of borrowing with the potential for equity participation, providing a win-win scenario for both the issuing corporation and investors.A Puerto Rico Convertible Promissory Note by Corporation is a financial instrument used by corporations in Puerto Rico to raise capital. It is issued as part of a series of notes under a Convertible Note Purchase Agreement, a legal document outlining the terms and conditions of the note issuance. The Puerto Rico Convertible Promissory Note allows the issuing corporation to borrow money from investors, promising to repay the principal amount along with interest over a specified period. What sets it apart from a traditional promissory note is that it includes an option for the note holder to convert the debt into equity in the corporation at a later date, usually at the discretion of the note holder. This type of note provides a flexible financing option for both the corporation and investors. For the corporation, it offers a means to secure needed funds while attracting potential investors with the option to convert their debt into ownership stakes in the company, aligning their interests. Investors, on the other hand, have the opportunity to benefit from any future success of the corporation by converting their debt into equity. There may be different variations or types of Puerto Rico Convertible Promissory Notes depending on the specific terms agreed upon by the issuer and the investors. Some potential variations could include different interest rates, repayment terms, conversion ratios, or other specific provisions catering to the needs and preferences of both parties involved. Overall, a Puerto Rico Convertible Promissory Note by Corporation is a financial tool that bridges the gap between debt and equity financing for corporations in Puerto Rico. It combines the benefits of borrowing with the potential for equity participation, providing a win-win scenario for both the issuing corporation and investors.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
