If I understand the distinction correctly, Reg. D shares would be locked up for a minimum of something like 4 months and would also require a prospectus to achieve a registration that is deemed effective by the SEC, whereas 144 shares require no prospectus or action by the SEC but can't be traded freely for a year, as you mention. Is that right?
Regarding the Reg D part of your question. If the PPM was filed under a Form D 504, 505 or 506 exemption, different rules apply. Under a 504, none of the shares are restricted, they are not registered however, the fact that they are filed under the exemption takes care of this nonsense. Please find out the date of the filing of the PPM as this ruling recently changed, effective April 9th I believe. However, I saw mention that "accredited" investors are involved in this deal, which would negate the concern for checking out the effective date of the change as accredited investors shares remain unaffected in this change. Meaning, shares sold to accredited investors are still NOT restricted and are "freely tradable"
The difference between the sections, 504, 505 and 506 from my understanding has to do with the amount of capital raised and has nothing to do with the reporting or nonreporting status of a company.
here's a few links which might give you a general understanding regarding the differences...
Rule 504.......the first one in simple laymans terms
ragingbull.com
ragingbull.com
ragingbull.com
ragingbull.com
this one applies to the issuance of the PPM prior to April 9th.. ragingbull.com
Rule 505....laymans terms
ragingbull.com
Rule 506....laymans terms
ragingbull.com
***note... my references are on the PABN thread because I went round and round about this very issue on that thread recently as the touts kept insisting (and still do) that the shares sold in the PPM/Form D-504 exemption are restricted when they are clearly not. |
