What is the effective date of my exercise?
The effective date of exercises differ based on the payment method used.
ACH exercises
Exercising via ACH is available for US optionholders of US-based companies. For an ACH exercise, Carta records the effective date of the exercise as the date the optionholder submits the request, which is also reflected as the issue date of the resulting certificate.
At the time the optionholder submits the exercise request, they are irrevocably committing to complete and fund the exercise, similar to handing the completed option paperwork along with a paper check in person, as they agree to have the funds withdrawn from their connected bank account and transferred to Carta.
Online wire exercises to US companies
For wire exercises to US companies, the effective date of the exercise will be the date that Carta receives the full exercise amount of funds, which is also reflected as the issue date of the resulting certificate.
Even though the exercise workflow is initiated and tracked on Carta, the funds transfer is dependent on the optionholder manually wiring funds for submission.
Funds must be received by Carta (i) within 30 days of exercise approval and (ii) prior to the expiration of the post-termination exercise period and grant expiration date.
If the funds are not received by Carta on time, it will not be possible to complete the exercise on the Carta platform and the exercise may be automatically canceled.
Offline wire exercises to non-US companies
This method is available for optionholders of non-US-based companies. Unlike wire exercises within the US, these funds will not flow through Carta but will be directly transferred from the optionholder to the company.
The effective date of exercise will be the date the company acknowledges receipt of the funds. It is crucial that the optionholder ensures timely remittance of funds to the company.
Failure to send the funds within 30 days of exercise approval or before the expiration of the post-termination exercise period and grant expiration date may result in the company canceling the exercise.