KAT Exploration Inc (KATX)

[rubber duck]

In my limited experience with this subject, it's because distribution shares are looked at as a "gift" by the SEC. To prevent companies from gifting shares to people, and those people or insiders immediately dumping the shares in the market, there are restrictions in place. This keeps some underhanded things from taking place. SEC says, it's a gift..fine, but you're married to it for a little bit, which is fine by me.