Indiana Anti-Dilution Adjustments, also known as anti-dilution provisions, are legal mechanisms established to protect the rights of existing shareholders in a company from substantial dilution of their ownership stake due to subsequent equity issuance. These adjustments are enacted to maintain the proportional value of existing shareholder holdings when new shares are issued at a price per share that is lower than their current market value. In Indiana, as in many other jurisdictions, there are different types of anti-dilution adjustments that can be employed. These include: 1. Full Ratchet Anti-Dilution: This type of adjustment provides the highest level of protection for existing shareholders. Under a full ratchet provision, if new shares are issued at a lower price than the existing shares, the conversion or exercise price of the existing shares is reduced to match the new price. This results in a significant decrease in the conversion or exercise price, minimizing the dilution suffered by current shareholders. 2. Weighted Average Anti-Dilution: This is the most commonly used form of anti-dilution adjustment. It employs a formula that takes into account both the price and the number of new shares issued. The conversion or exercise price of existing shares is adjusted based on a weighted average calculation, aiming to lessen the impact of the dilution caused by the issuance of new shares at a lower price. 3. Broad-Based Weighted Average Anti-Dilution: This type of anti-dilution provision encompasses broader criteria compared to regular weighted average adjustments. It takes into account not only the price and number of new shares issued but also any shares that were issued or reserved for issuance as equity compensation or for convertible securities. This adjustment provides an even more comprehensive protection to existing shareholders. The main aim of Indiana Anti-Dilution Adjustments is to safeguard the value and ownership interests of shareholders as new rounds of financing or equity issuance occur. These provisions ensure fairness and maintain the proportional value of existing shareholders' holdings, preventing significant dilution and loss of control. It is essential for companies and investors in Indiana to carefully consider and negotiate the terms of anti-dilution provisions to protect their interests and maintain a balanced capital structure.