Free course · Lesson 3 · 3 min

Registered vs restricted shares

1.20MPNDA shares that were locked until Aug 18

$2.75what their buyers paid for them

$3.42PNDA this morning

In 3 minutes: restricted vs registered shares, the two ways a locked share gets out, and where to see it on Panda Desk.

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01Restricted: owned, but not sellable yet

In a private placement (a PIPE), the company sells new shares straight to a few investors, with no SEC registration. Those shares are restricted: the buyers own them but cannot sell them in the market yet.

PNDAthe company

new shares

PIPE investors1.20M shares at $2.75

not yet: restricted

The marketyour tape

$3.3M cash to PNDA

SEC Rule 506(b): shares sold in a private placement are restricted.

On Panda Desk →FILINGS → 8-K Items 1.01/3.02 · 59 days agoPNDA’s $3.3M PIPE. Item 3.02 means shares sold without registration.

02Two ways out

A registered share can go straight to the market. A restricted share gets there in one of two ways.

EFFECTway 1: the company files a resale S-1 or S-3, and the SEC declares it effective

6 monthsway 2: Rule 144, the wait when the company files its SEC reports

The fine printIf the company does not file SEC reports, the Rule 144 wait is 1 year.

03PNDA took way 1

PNDA registered the PIPE shares for resale. They became sellable on Aug 18, well before a 6-month wait would have ended.

Jul 28PIPE signed: 1.20M shares at $2.75, restricted
ThenPNDA files a resale S-1 for them
Aug 18EFFECT: the 1.20M shares can be sold
TodayPNDA at $3.42, +41% on a press release

Without the resale, Rule 144 would have kept them restricted for at least 6 months.

On Panda Desk →FILINGS → EFFECT · 38 days agoThe resale S-1 for the July PIPE, declared effective.

04Unlock day means new supply

Unlock day creates no new shares. It lets 1.20M shares that could not be sold reach your tape.

PIPE price vs this morning

What the PIPE buyers paid

$2.75

PNDA this morning

$3.42

Above $2.75, every share they sell is sold at a profit.

On Panda Desk →AI Insight → Hidden Levels · 2.75The PIPE price, taken from the July 8-K.

For the longA resale EFFECT is supply with a date on it. Since Aug 18, PNDA’s PIPE buyers can sell into your bid, in profit above $2.75.

Odds, not a ruleThey may also hold. A resale makes selling possible, not certain.

053 checks for any private placement

Sources

17 CFR 230.506: private placements under Rule 506(b), whose shares are restricted.
17 CFR 230.144: Rule 144 and its holding period, 6 months for a company that files SEC reports, 1 year for one that does not.
Form 8-K, Item 3.02: unregistered sales of equity securities.

Panda Desk shows these rows for any small cap, next to your montage. tspanda.com

Not financial advice. PNDA is fictional, and nothing here is a recommendation to buy or sell.

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