What is a Rule 144 affiliate?

Rule 144 at (a)(1) defines an “affiliate” of an issuing company as a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such issuer.”

What does cashless warrant mean?

Cashless Warrants means warrants to purchase 100,000,000 shares of Common Stock with an exercise price per share of $0.01 and a term of five years, which warrants shall be exercisable on a cashless basis.

Are warrants automatically exercised?

In many cases, the warrant will provide that either the warrant will be deemed automatically exercised immediately prior to the sale (usually through a cashless exercise) if the acquisition price is above the exercise price, or that the warrant will be assumed by the buyer.

What happens to stock price when warrants are exercised?

When a warrant is exercised, the company issues new shares, increasing the total number of shares outstanding, which has a dilutive effect. If the current stock price is below the strike price, the warrant may still have some time value and can still have value in the market.

Can a cashless warrant be tacked to a holding period?

The payment of even a de minimis amount of cash upon a warrant exercise would preclude the holder from tacking the holding period of the common stock to the warrant under Rule 144(d)(3)(ii). The warrant exercise must be “cashless” (similar to the analysis under Section 3(a)(9)) in order to tack the holding period of the common stock to the warrant.

When is Rule 144 not available to the issuer?

Some of the interps are revised versions of previously published interps. Rule 144 is not available to the issuer of the securities. Rule 144 is not available for the sale of securities acquired by an underwriter or finder as compensation for services rendered in connection with a registered public offering.

Is there a holding period for Rule 144 resales?

Resales by non-affiliates under Rule 144 are considerably more streamlined than those by affiliates of the issuer. In essence, for non-affiliates who have not held affiliate status within the past 90 days, the only Rule 144 requirement is the holding period.

Can a railroad equipment trust be resold under Rule 144?

A company issued securities under Section 3 (a) (6) (exemption for interests in a railroad equipment trust), but has lost its eligibility to use that exemption in the future. Shares held by affiliates of the company may be resold pursuant to the provisions of Rule 144 (except for the holding period provisions).

What is a Rule 144 affiliate? Rule 144 at (a)(1) defines an “affiliate” of an issuing company as a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such issuer.” What does cashless warrant mean? Cashless Warrants means warrants to purchase 100,000,000 shares…