Item 1.01 Entry into a Material Definitive Agreement.
As of January 27, 2020, Joshua Gold Resources had executed a First Amended
Lock-Up/Leak-Out Agreement (the "Amended Agreement") with 17 stockholders
(collectively, the "Stockholders" and each a "Stockholder"), who collectively
own 60,343,555 common shares, constituting approximately 49.9 percent of the
Company's outstanding shares. The Amended Agreement amends certain terms of a
Lock-Up/Leak-Out Agreement executed by the Company and the Stockholders,
together with six additional stockholders, on or before April 17, 2019 (the
"Initial Agreement"). The Company expects that these additional stockholders,
who collectively own 17,228,600 shares of common stock, will be executing the
Amended Agreement shortly.
Under the terms of the Amended Agreement, until June 17, 2020, the
above-referenced shares held by the Stockholders may only be sold under the
following terms, which are quoted below directly from the Amended Agreement:
3.1
The Shareholder shall be allowed to sell in one (1) week, no more than the
greater of (i) five percent (5%) of the total shares of the Company publicly
traded on any nationally recognized medium of a stature no less than the Pink
OTC Markets Group, Inc. (the "OTC Pink") over the previous ten (10) trading
days, or (ii) one percent (1%) of the total number of LULO Shares (i.e., 0.01 x
77,572,155 LULO Shares = 775,721 LULO Shares) divided by thirteen (13) weeks
(i.e., 775,721 LULO Shares / 13 = 59,670 LULO Shares), on a non-cumulative
basis, meaning that if the amount of shares allowed to be sold under this
subparagraph is not sold in any specific week, that the unsold amount cannot be
cumulated and sold in any subsequent week or weeks with the sale of other shares
that are allowed to be
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sold in a specific week (the "Leak-Out Sale Amount"), and that all such sales
shall be made at the "ask" price and not the "bid" price.
3.2
During the LULO Shares Leak-Out Period, all LULO Shares shall be sold by the
Shareholder in "broker's transactions" and in compliance with the "manner of
sale" requirements as those terms are defined in Rule 144 of the SEC, meaning
that the Shareholder will pay only the usual and customary brokerage commission
or discount in connection with any such sale and will not solicit or arrange for
the solicitation of orders to buy any of the Shareholders' Registered Shares in
order to ensure that all such sales are made in "routine trading transactions."
3.3
During the LULO Shares Leak-Out Period, the Shareholder will not engage in an
investment strategy based upon selling the LULO Shares or any other shares of
the Company "short" while any of the LULO Shares remain unsold.
On December 26, 2019, the Company filed with the SEC a post-effective amendment
to its Registration Statement on Form S-1 to remove all Registered Shares from
registration. The SEC declared this post-effective amendment effective on
January 6, 2020.
Copies of the Forms of Initial Agreement and the Amended Agreement are attached
hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by
reference. The foregoing descriptions of the Agreement and the Amended
Agreement do not purport to be complete and are qualified in their entirety by
reference to the exhibits hereto.
Item 9.01 Financial Statements and Exhibits.
Exhibits:
Exhibit No.
Description of Exhibit
10.1
Form of Initial Lock-Up/Leak-Out Agreement
1 0.2
Form of First Amended Lock-Up/Leak-Out Agreement
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