When does my holding period start for stock I receive in exercise of a “cashless option” or “cashless warrant”?

There is good news for shareholders who acquire warrants or options that specify a cashless exercise.  Rule 144 allows a Shareholder to tack onto the holding period of the warrants if the exercise into shares is “cashless.”

That is, the holding period under Rule 144 starts on the date the cashless language was first inserted into the option or warrant.  That could be either when the warrant or option was originally issued or the date of an amendment which included the language.

In contrast, if consideration is paid for the option or in order to exercise the warrants, then the holding period starts when that consideration is paid.