Rule 701 Worksheet Updates - Carta Release Notes - Product Updates

Rule 701 Worksheet Updates

Recently, we've made updates to the Rule 701 worksheet to improve the calculation methodologies. Here are a few changes we hope you'll find useful.

1. Ability to a reporting date range - regardless of whether your company uses a rolling or fixed reporting period for Rule 701, you have full control over the securities to include in the report. By default, we show a 12 month rolling period. Change dates to review historical data or model out future issuances.

2. Report calculation methodology detailed -

   • We do not include canceled or expired securities in our Rule 701 check
     • Securities that are canceled as part of a transfer or repurchase will remain included in the report
       • The resulting balance certificates from the transfer or repurchase stock are excluded
   • Common certificates resulting from the exercise or settlement of Rule 701 equity awards are included
     • The exercised portion of the equity award is moved from ‘Common shares issuable upon exercise of Rule 701 option grants/RSUs’ to ‘Common shares issued under Rule 701’ to avoid double counting and enable accurate tracking of Rule 701 shares after an exercise.
   • The aggregate sales price for RSUs is set to the FMV value at grant
   • We define outstanding shares as securities that were not issued under Rule 701

Alex Chen