The founders of a start-up issued themselves 1,000,000 shares of common stock when the company was formed. One year later, a venture investor provided $500,000 in return for preferred stock shares convertible into 500,000 shares of common stock ($1.00 per share). The venture investor negotiated FULL RATCHET anti-dilution protection at the time of the $500,000 investment. Subsequently the company needed to raise $625,000 and did so by issuing 1,000,000 new shares of convertible preferred stock ($.625 per share). Initial conversion price is $1/share Company sells 1,000,000 new shares at $.625

If the Round 1 investors have weighted average anti-dilution protection, what is the new conversion price for the Round 1 investors after the $625,000 Round 2 investment (down from $1.00)? (2)