Automatic Conversion Law and Legal Definition
Automatic Conversion is a clause found in convertible promissory notes that dictates the automatic conversion of the convertible debt to the type of equity raised at a Qualified Financing. A Qualified Financing is typically defined as an equity financing by the company, for the purpose of raising capital. The conversion is considered automatic because it does not require the vote of either the company or the investor. An automatic conversion can also occur regarding preferred stock of a company before the company’s IPO, with the automatic conversion clause converting preferred stock to common stock.
Legal Definition list
- Automatic Clearing House
- Automatic Call System [Healthcare]
- Automatic Bill Payment
- Automatic Aid
- Automated Underwriting
- Automatic Conversion
- Automatic Defibrillation in Adam's Memory Reauthorization Act
- Automatic Energy-Saving Setback Thermostat
- Automatic Flue Damper
- Automatic Identification System [AIS] [National Security]
- Automatic Lender
Related Legal Terms
- Aftermarket Conversion System
- Asset Exchange or Conversion Transaction
- Automatic Aid
- Automatic Bill Payment
- Automatic Call System [Healthcare]
- Automatic Clearing House
- Automatic Defibrillation in Adam's Memory Reauthorization Act
- Automatic Energy-Saving Setback Thermostat
- Automatic Flue Damper
- Automatic Identification System [AIS] [National Security]
