That is my point, shareholders of the public parent company do not qualify for such an exemption. So the only way for shareholders of GTGP to ever get ownership shares of GTHI is by buying them on the open market after it went public.
As I stated, it is being surmised that GTGP is not a more than 1% owner of GTHI and as such is not required to file an 8K, and as a private entity GTHI does not require public disclosure. Those are both correct and if true result in GTGP shareholders getting absolutely nothing from the GTHI private entity. A poster floated the idea that GTGP shareholder would be given shares via the private entity while going public. I pointed out why that cannot happen and as you just concluded, the exemption SEC Rule 701 to offer or sell shares of a private subsidiary is only for compensation plans to employees, officers.. etc.... There exist no other exemption under any SEC Rule to offer or sell shares of a private subsidiary to the public shareholders of the parent company.