What is the purpose of a Rule 144 filing?

What is the purpose of a Rule 144 filing?

Rule 144 provides an exemption and permits the public resale of restricted or control securities if a number of conditions are met, including how long the securities are held, the way in which they are sold, and the amount that can be sold at any one time.

Who Must File Form 144?

the SEC
Form 144 must be filed with the SEC by an affiliate as a notice of the proposed sale of securities when the amount to be sold under Rule 144 during any three-month period exceeds 5,000 shares or units or has an aggregate sales price in excess of $50,000.

Does Rule 144 apply to SPACs?

For former shell companies, including SPACs, Rule 144 imposes additional requirements including that the company: (i) has ceased to be a “shell company” as defined in the rule, (ii) is an SEC reporting company, (iii) has filed all reports required to be filed with the SEC during the preceding 12 months; and (iv) has …

Does Rule 144 apply to foreign private issuers?

For affiliates of foreign private issuers, which are not subject to Section 16 of the Exchange Act, a Form 144 is the only public disclosure the affiliate seller may be required to make at or around the time of sale.

Where do I file Form 144?

Form 144 must be filed with the SEC at the time the sell order is placed with the broker if the seller is an affiliate and intends to sell more than 5,000 shares or securities with a value in excess of $50,000.

What is a Rule 144 opinion letter?

A standard form to be used as a starting point for drafting an opinion to an issuer’s transfer agent in connection with a sale by an affiliate of the issuer of restricted stock in reliance on the safe harbor from registration under the Securities Act of 1933 provided by Rule 144 under the Securities Act.

What is a Rule 144 date?

The Rule 144 date is the start of the holding period for which a controlled or restricted security must be held before resale. If the issuing company is a reporting company with regards to the Securities Exchange Act of 1934, the qualifying holding period is six months.

Is a SPAC a business combination related shell company?

Neither a SPAC nor any such entity formed to facilitate a merger with a SPAC meets the definition of a business combination related shell company because neither of these entities is a shell company formed solely for the purpose of changing the corporate domicile solely within the United States or formed solely for the …

How long does de-SPAC process take?

This phase can take anywhere from one week to one month to complete. Following this filing, the SEC will review the documentation presented and may ask for comments from the company. The business will need to retain a proxy solicitor to handle the shareholder vote that is required for de-SPAC transitions.

What is a shell company under Rule 144?

A shell company is an Issuer with no or nominal operations or no or nominal non-cash assets. The rule is unavailable for the sale of securities initially issued by a shell company or any Issuer that has, at any time, previously been a shell company unless all the requirements of Rule 144 (i) (2) are met.

What is Rule 144 of the Securities Act?

Rule 144 only addresses the resale of restricted or control securities, not unrestricted securities or sales directly by an Issuer. Unrestricted securities (such as securities that have been registered under the Securities Act) may be sold without reference or regard to the Rule.

What are the Rule 144 holding periods?

The following chart summarizes the Rule 144 requirements: The six-month holding period only applies to Issuers that are subject to the reporting requirements of the Securities Exchange Act of 1934 (“Exchange Act”). A voluntary filer is not subject to the Exchange Act reporting requirements, and the longer one-year holding period is applicable.

Can a non-affiliate resell securities under Rule 144?

A non-affiliate of a non-reporting issuer must hold the securities for one year before any public resale. After one year, a non-affiliate may freely resell such securities without regard to any of the Rule 144 conditions. How does an affiliate resell securities under Rule 144?