EFTA01366601.pdf

Amendment #4 Page 172 of 868 104 of cosIdIi• based on analyses of future values for IM enterprise assisning various acesde outcomes Share value is based on Ire probate ty-weighted present value of expected (rein returns to tre &ity investor coreidering Pp liltety future scene nos available to the enterprise and the rights and preferences of each share class After the equity value is determned a dscount for lack or MarlWtabtlty 'sapped to our common stock to a rnve at the far value of our common stock The baobablily and timing of each scenario were based upon discussore between our board of directors and our rnansgemenl lean Under IM PVVERM the value of our common stock was based upon two possOre future everts for our company • neal public of feting. and • rio rmtal pubic offenng We believe we applied a reasonable vauat on method to determine the estmated fair value of ots common stock on the grant date Between our date of formation of September 12. 2014 and the dole d this posoodus we granted the following snores Historical As converted" Fair value per Falr value per Number of shared s/ share on date of share on date of Grant date grant Number of shares grant September 29 2014 20 450 $ 21 80 3 657 464 5 012 March 31 2015 35 245 5 37 10 6 333 537 5 021 Ire Easre.s.40.1re WO 4.• Wrien041 and m444 441664 of ire '100• /44.)r Wise cin$461 Of 04 "IN. me 60 040a ITS 640 ,I4-tte sNalt 10K J Ma Outstor6146 044 a0.. Curs A sranson stack Qt INd 4'014t4 The restricted stock vests in tour equal arnual installments commencing on the first annversary of the completion of this offering si..tieci to acceerated vesting upon certain events Under cenan circumstances upon a terminalon of employment any unvestec shares of Oass A common stock reed by the terns rated employee will be forfeited The restricted stock awards ate subject to certain ackustmerts to prevent dilut on at tie time of ocnverson 10 Class A common stock Vaatcn inputs In estimating the far value of ors common stock. cur board of drectors considered a valuation analyse for ois common stodt daises of September 23. 2014 and March 31 2015. respectively and valuation analysis reflected a fair value for our common stock of 521 8 million and 537 1 million, respectwety Win respect to the September 29. 2014 gent ie primary valuation considerations were an erterprise value determined from the incorre-based approach usrg an enterprise value multiple applied to our /onward reverse rretnc and a lack of marketablity daccure of 10% The illiquidity discount rrodel it iliZed the forIcmnng assume:tons (0 a lime to liquidity event of so mend's, 00 a rek free rate of 3 0%, and (in volatility of 401E over the time to a loudly event Estimates of tne volatility of our common stock were based on available information on the volatility of common stack cl comparable p.tircly traded convenes Our board of *rectors considered the proximrty relative to tne September 23 2014 valuation and cur hnanoal performance n establishing the fair value of the common stock Win respect to the March 31, 2015 grant, the pre-nary vakot on considerations were an enterprise value deterrnred from the income-tased approach using an enterprise value multiple applied to our forward revenue 164 http://cfdocs.btogo.com:27638/cf/drv7/pub/edgar/2015/07/20/0001193125-15-256461/d78... 7/20/2015 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0058129 CONFIDENTIAL SONY GM_00204313 EFTA01366601