How Cake tracks your $10M disclosure threshold

Cake tracks the total value of your Rule 701 grants against the $10M disclosure threshold automatically. This article explains how the running total is built and which grants count toward it, so you can read your position with confidence.

How the running total is built

Cake adds up the value of every Rule 701 grant in your rolling 12-month window and compares it to the $10M threshold. Grants are valued the same way as for the exemption limits:

Grant type	How Cake values it
Options	Strike price x shares granted
RSAs	Higher of purchase price or 409A fair market value at grant date, x shares granted
RSUs	409A fair market value at grant date x shares granted

The total is aggregated across all recipients in the window, not measured per person. That is why a recipient with a small grant is still counted once the company total crosses $10M.

The 12-month window

The threshold is measured over a rolling 12-month period - the 12 months ending on each new grant date. Grants older than 12 months drop out of the window, and your running total reflects only the grants currently inside it.

Which grants count

The same grant-status rules as the exemption limits apply: active, exercised, and lapsed grants count; cancelled and forfeited grants do not. See How Cake calculates your Rule 701 position for the full breakdown.

When data is missing

If a grant in the window has no covering 409A, Cake cannot value it, and your running total against the $10M threshold becomes a floor only. Resolve the missing 409A under Compliance > 409A Valuations and the total updates.

What Happens Next

Add or update grants and your position against the $10M threshold recalculates automatically.

Important: If you approach or cross the $10M threshold, or think you might, speak with your securities counsel about your disclosure obligations before any recipient exercises.

What is the Rule 701 disclosure rule? - what the threshold means
How Cake calculates your Rule 701 position
What is Rule 701?