Fair Market Value (FMV) Table

In order to generate the expense reports, an accurate record of the historical 409a fair market value (FMV) must be saved on the Carta platform. The FMV is used as an input into the valuation models used to value the option grants and restricted stock. As such, this information is crucial to record the accurate expense amounts. The Carta Expensing Tool uses the FMV information that is stored on the 409a page under Compliance.

You can add non-Carta board approved fair market values to the 409a page by following the directions here.

In addition, you can edit, delete, or add FMVs specific to expense reporting purposes on the FMV Table during the expense generation process when you 'Create a new report'. To locate this page, navigate to 'Compliance' >> 'Expense accounting' and begin the 'Create a new report' process.

In the popup, you will see that Fair Market Value is a necessary step in creating a new report.

After adding and reviewing the public peer companies to be used for the volatility assumption, you will be prompted to review the fair market values.

Please note that in order to successfully generate the expense report, you will need to make sure that a FMV is listed on this page that covers the date of the earliest issued award. For companies that did not have a third-party conducted the 409a at this early stage, a board approved FMV is sufficient. You can add additional FMV's for expensing purposes here using the green + option or delete FMVs that do not apply. Be sure to account for any splits that may have occurred by entering all values in post-split format. If you worked with Carta to record the stock split on the platform, the FMVs will already reflect the post-split numbers.

For companies that have multiple share classes of common with equity awards issued out of each share class, our expense reports will allow for an additional layer of visibility on the FMV Table, enabling the expense reports to generate accurate option values based on each grants' underlying share class. When you have multiple underlying share classes, the tool will prompt you to include a value for each common share class as seen below:

If you have any trouble editing the FMVs, please contact 718@carta.com.

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