Exploring the process of converting or repaying a CLN
You can record both a conversion and a repayment for one convertible loan note.
We will cover:
- Conversion: Convert the convertible loan note into shares (this does depend on the conversion terms whether it is a conversion discount or a fixed conversion price).
- Repayment: Repay the convertible loan note (this can be a partial repayment).
- How to view the conversion or repayment transaction
- How to edit or delete the conversion or repayment (if not published)
Conversion
Navigate to the "Convertible Notes" tab under Ownership. Then click on the "..." action button to the right of the relevant noteholder's name, and this will open a drop-down menu as below.
Select "Register Offline Conversion" to take you to the following page:
This example shows a convertible loan note with a conversion discount %.
Within this page, there are a few options you need to fill in:
Conversion Amount
- Date of conversion: The date of when the conversion took place.
- Choose to convert all outstanding or specify an amount to convert:
- Convert all outstanding: This will convert all the outstanding notes into shares.
- Specify amount to convert: Manually input a specific amount you would like to be converted. - Registration Date: This is the official date of entry into the shareholder register (you can choose this to be the same as the transaction date, or leave as blank).
Conversion Price
Select either:
- Use calculated number of shares and share price for conversion: You will need to input pre-money valuation and Capdesk will then calculate the number of shares it will convert to.
- Specify number of shares and share price for conversion: Input a share price and the number of shares.
If the convertible note has a fixed price conversion:
When converting with conversion term of a fixed conversion price the shares and share price are pre-calculated for you. If you do not want to use these values, you can input your own values using the "Specify" option.
You also have the option to assign a funding round to these notes, by selecting the Advanced drop-down option and filling in the required field. You can add a new funding round at this point too if required.
Please note that if there are any documents you wish the noteholder to have access to, you will need to upload these before publishing the conversion. This is actioned by clicking the Comments and Documents drop-down, selecting the "Add document" button and uploading the required document.
Once complete you have the choice between saving the conversion as a draft or publishing the data. Please note you will only be able to publish the data if your account is live.
Repayment
Navigate to the "Convertible Notes" tab under Ownership. Then click on the "..." action button to the right of the relevant noteholder's name, and this will open a drop-down menu. Select the Register Offline Repayment button, shown below.
This will take you to the repayment page, where you will need to enter the following details:
- Date of repayment: The date of when the repayment took place.
- Choose to repay all outstanding or specify an amount to repay:
- Repay all outstanding: This will count the whole outstanding amount as repaid.
- Specify amount to repay: Manually input a specific amount that has been repaid.
You also have the option to assign a funding round to these notes, by selecting the Advanced drop-down option and filling in the required field. You can add a new funding round at this point too if required. See 'Documents' section if you would like to upload any relevant documents.
Once complete you have the choice between saving the conversion as a draft or publishing the data. Please note you will only be able to publish the data if your account is live.
How to view the conversion/repayment transaction
To view the conversion, please click on the circled transactions shown below or select the "..." action button and the "View Transactions" option:
Once selected, you will be redirected to the Transactions page where you can view a detailed breakdown of the conversion by simply clicking on the transaction.
Editing and deleting transactions
If a transaction is saved as a draft, you have the ability to edit or delete using the "..." action button on the right hand side.
Selecting "Edit" will take you back to the original conversion or repayment page where you can make any necessary changes. Clicking the "Delete" button will remove the transaction completely.
If a transaction has been published, you will not be able to edit or delete and you will need to revoke and re-enter the transaction.
If you need further assistance, you can reach out to us by submitting a support ticket.