Beneficial Ownership for Affiliates Under SEC Rule 144

Beneficial Ownership Under Rule 144 Depends on Control

Affiliates in OTC Bulletin Board and OTC Markets public companies are generally the officers, directors, and owners of greater than 10% of an Issuer’s outstanding stock in a given class.¬†¬† The question of determining how much stock an Affiliate owns comes down to the SEC’s view of beneficial ownership, which looks toward the number of shares an Affiliate can exercise control over, rather than how ownership is actually titled.

Ownership By Family Members of Affiliates Counts

Stock owned by an Affiliate’s spouse, minor children and parents living under the same roof as the Affiliate all count toward the Affiliate’s beneficial ownership under Rule 144. This includes stock in the Issuer that is owned by any corporate entity in which the Affiliate or any of these family members¬† has control as an officer, director or greater than 10% shareholder, and also includes a Trust under which the Affiliate (or any of these family members) serves as Trustee or Executor.

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