AI Medical Device Startup — RCPS Issuance Advisory

Client Information

Corporate / Business Entity

 

Case Details

TDecent Law Firm's Corporate Practice Group advised an AI-based medical device technology company on the issuance of Redeemable Convertible Preferred Shares (RCPS) in a down-round VC investment structure, including the design of all required corporate law procedures.

The client was in the process of securing a new round of VC funding while existing preferred shares were already outstanding. The incoming investment was priced at a lower valuation than the previous round — a classic down-round structure — and the transaction timeline was tight. Decent Law Firm was engaged to ensure the round could close without legal exposure, providing a comprehensive set of procedural documentation ready for immediate use.

1. Analysis of Investment Structure and Existing Preferred Share Rights

We conducted a thorough review of the existing investment agreements and the company's articles of incorporation to assess whether a class shareholders' meeting was required and how the procedural framework should be structured. We made a legal determination as to whether the new RCPS issuance would adversely affect existing preferred shareholders, and established the direction for procedural design accordingly.


2. Drafting Consent and Rights Waiver Documentation for Existing Investors

In the context of a down-round investment, we drafted consent language covering the adjustment of existing investors' refixing rights and their acceptance of the new investment terms. The provisions were structured to preemptively eliminate the risk of conflict with existing investors and to provide the client with a solid legal defense in the event of any future dispute.


3. Procedural Document Templates and Step-by-Step Implementation Guide

We prepared a full suite of corporate law documentation aligned with the transaction timeline — including board meeting notices, waivers of convening procedures, and minutes for the board, class shareholders' meeting, and general shareholders' meeting. We also delivered a step-by-step implementation guide mapped to the actual closing schedule, enabling the client to manage each procedural requirement with confidence and precision.