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Frequently Asked Questions
  An issuer has convertible notes or preferred stock that will automatically convert into shares at the IPO. Would those shares be considered "Restricted Securities"?
Identification Number 1709

Shares issuable upon the automatic conversion of a convertible security at the time of the company’s IPO would not be considered "Restricted Securities" and therefore those shares would be included in the calculation of unrestricted public float, provided the shares issuable upon conversion are included on the issuer’s registration statement or otherwise registered or exempt from registration, convert automatically upon the IPO with no further actions required by the holder or company, and are otherwise freely tradeable on the IPO day. If the securities contain a restrictive legend that requires any action by the holder or company to remove, or the securities will not be freely tradeable upon the IPO day for any reason, the securities would be considered "Restricted Securities" and excluded from the calculation of unrestricted public float.

Publication Date*: 7/31/2019 Mailto Link Identification Number: 1709
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