Requirements for a Section 4(a)(1) Opinion
If you cannot rely on Rule 144 because the issuing company is a previous shell company and it is not required to file reports with the SEC or has not yet satisfied Rule 144(i)(2) with respect to filing “Form 10 Information” and current reports for the last 12 months, you may be eligible for a Section 4(a)(1) opinion if the issuing company either voluntarily files reports with the SEC or publishes current information at OTCMarkets.com. You must satisfy the following requirements to qualify for a Section 4(a)(1) opinion.
- You are not an Affiliate of the issuing company;
- You paid real (not nominal) consideration for the shares, in the form of cash, promissory note that meets the requirements of Rule 144, property or substantial services which are not of the nature disqualified from use of Form S-8 for registration of compensation shares;
- The issuing company was not a shell company at the date of your investment in the shares (information of a date contemporaneous to “investment date” is available to demonstrate the business in which the Issuer was engaged at date of investment);
- You or your predecessor has fully paid for the shares (if originally purchased for promissory note, the note is fully paid) and has held the shares for more than two years, as calculated under but not in reliance on the Rule 144;
- The issuing company is not now a shell company, but is engaged in or intends to engage (development stage) in a specified business activity which does not involve the acquisition of unidentified, other businesses or assets, including mining assets;
- The issuing company is providing current information on the EDGAR system , OTCMarkets.com , or another readily available public medium, which information tends to dampen the opportunity for “pump an dump” activities;
- There is an existing public market for the issuing company’s common stock which is not dependent upon or would not be facilitated by your sale of the shares into the public securities market.