Securities Act of 1933
Section 3(a)(10)

June 6, 2018

Response of the Office of Chief Counsel
Division of Corporation Finance

Based on the facts presented, the Division's views are as follows. Capitalized terms have the same meanings as defined in your letter.

The Division will not recommend enforcement action to the Commission if the Company, in reliance on your opinion of counsel that the exemption under Section 3(a)(10) of the Securities Act is available, issues the Settlement Stock to the Settlement Fund for the benefit of the Class in exchange for the claims of the Class Members, without registration under the Securities Act. In reaching this position, we note that:

• the Court will conduct a hearing on the fairness of the Settlement;
   
• the Court will approve the fairness of the terms and conditions of the Settlement, including the issuance of the Settlement Stock to the Settlement Fund for the benefit of the Class in exchange for the claims of the Class Members;
   
• the Class Members have received notice of the hearing regarding the Settlement and will have the opportunity to be heard at the hearing; and
   
• the Company has advised the Court before the hearing that, if the Court approves the terms and conditions of the Settlement, its approval of the Settlement will constitute the basis for the issuance of the Settlement Stock without registration under the Securities Act, in reliance on the exemption from registration provided by Securities Act Section 3(a)(10).
   

The Division is of the view that the Settlement Stock received pursuant to the Settlement will not be "restricted securities" within the meaning of Securities Act Rule 144(a)(3). Furthermore, the Division is of the view that the Settlement Fund may resell the Settlement Stock as follows:

1. If the Settlement Fund is not an affiliate of the Company and has not been an affiliate of the Company within 90 days of the date of the issuance of the Settlement Stock, it may sell the Settlement Stock without regard to the requirements of Rule 144 under the Securities Act; and
    
2. If the Settlement Fund is an affiliate of the Company, it may sell the Settlement Stock in accordance with the provisions of Rule 144, without regard to the holding period requirement of Rule 144(d).
    

These positions are based on the representations made to the Division in your letter. Any different facts or conditions might require the Division to reach a different conclusion. Further, regarding whether the Section 3(a)(10) exemption from registration is available for the Settlement Stock to be issued under the Settlement, this response expresses the Division's position on enforcement action only and does not express any legal conclusion on the question presented.

Incoming Letter:

The Incoming Letter is in Acrobat format.

http://www.sec.gov/divisions/corpfin/cf-noaction/2016/sellas-life-sciences-060618-3a10.html