144 refers to SEC Rule 144 which allows restricted securities to be sold in limited quantities without first registering those securities. Rule 144 applies to holders of private placement shares as well as officers, directors and other corporate insiders who own more than 10% of a company's outstanding shares. Under Rule 144, restricted securities can be sold if the seller has held them for at least one year, makes current financial statements available to the buyer, and handles the sale as a routine trading transaction (i.e. no additional commission paid). If the securities were owned for less than two years, Rule 144 limits the amount sold to 1% of outstanding shares or four week's trading volume. Rule 144 also requires the seller to file Form 144 "Notice of Proposed Sale" with the SEC. A new Form 144 must be filed to extend the sale beyond 90 days or sell additional securities. |
