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Friday, March 20, 2020 8:58:05 AM
mCig Post # 92899 Dated 2/14/2018
so the outstanding shares aren't necessarily all tradeable in the float
I'm a bit confused by the S-1 but it appears that 5,460,000 shares will be outstanding when trading starts on day one. However, 5,000,000 of those shares will be owned by insiders with 4,500,000 shares divided between Paul (3 million) and APO holdings (1.5 million). It would appear that most, if not all, of those shares will be restricted for 6 months and only 1% can be sold by any shareholder in a three month period. Whether they're restricted or not, it's unlikely that any of these insiders would be rushing to sell their shares on day 1. Consequently the true float would probably be the 402,811 shares distributed in the dividend. Moreover, it may take several days for those shares to be posted to our brokerage accounts. Consequently, most of us would be able to buy shares on day 1 but not yet be able to sell any shares. If the pps breaks $1/share on day one, which would seem likely with so few shares available, the 3,000,000 warrants would become exercisable, but that may also take several days to process even if all the holders decide to exercise them. From the S-1...
OBITX S-1
Rule 144
In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated), including an affiliate, who beneficially owns “restricted securities” of a “reporting company” may not sell these securities until the person has beneficially owned them for at least six months. Thereafter, affiliates may not sell within any three-month period a number of shares in excess of the greater of 1% of the then outstanding shares of common stock.
Sales under Rule 144 by our affiliates also will be subject to restrictions relating to the manner of sale, notice and the availability of current public information about us and may be effected only through unsolicited brokers’ transactions.
Persons not deemed to be our affiliates who have beneficially owned “restricted securities” for at least six months but for less than one year may sell these securities, provided that current public information about us is “available,” which means that, on the date of sale, we have been subject to the reporting requirements of the Exchange Act for at least ninety days and are current in our Exchange Act filings. After beneficially owning “restricted securities” for one year, our non-affiliates may engage in unlimited resales of such securities.
Shares received by our affiliates in the spin-off or upon exercise of stock options or upon vesting of other equity-linked awards may be “controlled securities” rather than “restricted securities.” “Controlled securities” are subject to the same volume limitations as “restricted securities” but are not subject to holding period requirements.
mCig will exercise control of OBITX by virtue of the 100,000 shares of Series A preferred stock each share of which is convertible to 50 shares of common stock and has voting rights of 1,000 votes/share. These shares are restricted, definitely fall under Rule 144 and are unlikely to be converted or sold by mCig any time soon.
Les
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