SEC Form 144: Notice of Proposed Sale of Securities Overview

An executive officer, director, or affiliate of a company must file SEC Form 144: Notice of Proposed Sale of Securities with the Securities and Exchange Commission or SEC when placing an order to sell that company's stock during any three-month period in which the sale exceeds 5,000 shares or units or has an aggregate sales price greater than $50,000. This is also known as Rule 144.

According to the SEC’s website, the party filing Form 144 must have a bona fide intention to sell the securities referred to in the Form 144 within a reasonable time frame after filling.

Since sales covered under Form 144 are often very close to the interests of the issuing company, at times filers must register the securities under Section 5 of the Securities Act of 1933. If the correct conditions are met, Rule 144 can provide an exemption and permit the public resale of restricted or control securities. Still, all parties must obtain a transfer agent to remove the securities’ legend prior to sale.

Form 144 must be filed with the SEC by an affiliate of the issuer as a notice of the proposed sale of securities in reliance on Rule 144, when the amount to be sold under Rule 144 by the affiliate during any three-month period exceeds 5,000 shares or units or has an aggregate sales price in excess of $50,000. A person filing a Form 144 must have a bona fide intention to sell the securities referred to in the Form within a reasonable time after the filing of the Form. While the SEC does not require the form to be sent electronically to the SEC’s EDGAR database, some filers choose to do so.

In addition to From 144, critical SEC filing forms include the S-1 and S-1/A (registration statements), 10-K and 10-Q (annual and quarterly reports, respectively), SEC Form 4 (statement of changes in beneficial ownership of securities), 12b-25 (notification of late filing), 15 (certification and notice of termination of registration under Section 12(g) or suspension of duty to file reports under Sections 13 and 15(d)), ABS 150G (Asset-Backed Securitizer Report), and several more. A full list, along with descriptions and downloadable forms, can be found on the SEC’s website.

A lock-up agreement is a legally binding contract between company underwriters and insiders that prohibits inside individuals from selling any shares of stock for a specified period of time. Lock-up periods typically last 180 days (six months) but can on occasion last for as little as 120 days or as long as 365 days (one year). Underwriters will have company executives, managers, employees, and venture capitalists sign lock-up agreements surrounding a company’s initial public offering (IPO) to encourage an element of stability in the stock's price in the first few months of trading.

On April 26, 2018, Lee Kirk, a Director of Guaranty Bancshares, Inc., filed to sell 20,891 shares of company stock for an aggregate market value of $686,896.08 on the NASDAQ Exchange. The approximate date of the sale was set for the time period 4/27/18 through 6/12/18. Additional information on Form 144 for individuals may include a physical address, IRS number, nature of the payment, and additional similar sales in the past several months.

Here is a link to a downloadable SEC Form 144: Notice of Proposed Sale of Securities.