ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On July 10, 2020, Lord Global Corporation (the "Company") entered into a Joint
Venture and Revenue Sharing Agreement (the "Agreement") with 81 Logistics Group
LLC, founded and owned by Tim Brown, a member of the NFL Hall of Fame ("81
Logistics Group"). As a minority, Black owned company, 81 Logistics Group is one
of the only Black owned companies licensed to distribute fuel in all 50 states.
A copy of the Agreement is attached as Exhibit 10.1 to this Form 8-K. Pursuant
to the Agreement, in consideration for 81 Logistics Group sharing revenues
generated by 81 Logistic Group's contracts with third parties for the purchase
and sale of petroleum products pursuant to the terms set forth in the Agreement
(the "Revenue Contracts"), the Company has agreed to issue to 81 Logistics Group
or its designees 3,500 sharers of Series G Convertible Preferred Stock (the
"Series G Preferred"), each convertible into 1,000 shares of the Company's
common stock, par value $0.001 ("Common Stock"). The number of shares of Series
G Preferred is subject to adjustment as set forth in the Agreement and
beneficial ownership limitations set forth in the Series G Preferred Certificate
of Designation, as described below. Reference is made to Item 3.02-Unregistered
Sales of Equity Securities, below.
The number of shares of Series G Preferred are subject to adjustment at the
six-month and twelve-month anniversaries of the Agreement, based upon the value
of the shares compared to the proceeds generated for the Company by the Revenue
Contacts. In addition, the conversion rights of 81 Logistics Group (or its
designee) are subject to beneficial ownership limitations contained in the
Certificate of Designation applicable to the shares of Series G Preferred, in
relevant part, as follows:
"provided, however, that in no event shall any Holder be entitled to convert . .
. [if] . . . the sum of (1) the number of shares of Common Stock beneficially
owned by the Holder and its affiliates . . . and (2) the number of . . . shares
issuable upon the conversion of [shares] of Series G Preferred Stock . . . would
result in beneficial ownership by the Holder and its affiliates of more than
4.99% of the then outstanding shares of Common Stock."
The Agreement provides, among other things, that 100% of the proceeds of each
Revenue Contract be paid into an account designated by the Company and 81
Logistics Group (the Account") and the Company shall then be responsible for
disbursement of funds from the Account to the Seller, as set forth in each
Revenue Contract with the remaining proceeds to be shared between 81 Logistics
Group and the Company, which is subject to adjustment based upon the profit
margins of each Revenue Contract.
On August 6, 2020, 27 Health Inc. ("27 Health"), the Company's wholly owned
subsidiary, entered into a Mentor-Protégé Agreement ("Mentor Agreement") with
Innovative Regulatory Risk Advisors LLC, a Texas limited liability company and,
as a minority, Black owned company, is certified as an SBA 8(a) firm ("IRRA")
licensed to receive contracts from the U.S. Government on a no bid basis.
Pursuant to the terms of the Mentor Agreement, which has a term of 3 years
subject to a renewal for an additional 3 years and is subject to approval of the
U.S. Small Business Administration's Director, the Company will provide IRRA
with funding support and business development planning in furtherance of IRRA's
business, which is to sell a wide variety of products, including petroleum and
other energy products, to the U.S. Government.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
Pursuant to the terms of the Joint Venture and Revenue Sharing Agreement with 81
Logistics Group LLC, as discussed in Item 1.01 above, the Company agreed to
issue to 81 Logistics Group or its designees 3,500 shares of Series G
Convertible Preferred Stock (the "Series G Preferred"). The Company intends to
issue the shares of Series G Preferred within ten days. Reference is made to
Series G Preferred Certificate of Designation, filed as Exhibit 5.1 hereto.
ITEM 8.01 OTHER EVENTS.
On September 10, 2020, the Company issued a press release announcing that: (i)
it had entered into a strategic partnership with 81 Logistics Group LLC [see
Exhibit 10.1 hereto]; (ii) 81 Logistics Group LLC has reached an agreement with
Exxon Mobile to be a reseller of fuel products [see Exhibit 10.3 hereto] and
further disclosing that by becoming an Exxon Mobil reseller, it should enable
the Company's partnership with 81 Logistics Group LLC to perform on its
agreement under a major fuel distributor agreement announced in a separate
release on August 10, 2020 that should generate over $50 million in revenues per
week; and (iii) 27 Health entered into a partnership with Innovative Regulatory
Risk Advisors LLC (IRRA), the Company believes that it is in an ideal position
to pursue contracts with the U.S. government under the Small Business
Administration's mentor/protégé program. IRRA is an SBA 8(a) licensee, which
enables them to sell products to the U.S. federal government on a no bid basis
for a period of 9 years.
The Company's release on September 10 also disclosed that 81 Logistics Group and
IRRA, both minority, Black owned businesses, together with the Company's
minority equity interest in a Black owned subsidiary, J.A. Lafayette, should
enable the Company to identity a large number of business and investment
opportunities in Black owned businesses doing business with both the public and
private sector, which the Company believes have been largely ignored for far too
long.
A copy of the press release is attached hereto as Exhibit 99.1 and incorporated
herein by reference.
ITEM 9.01-FINANCIAL STATEMENTS AND EXHIBITS
The following is filed as an exhibit to this report:
Exhibit Title of Document
Number
5.1 Certificate of Designation of Series C Convertible Preferred
Stock, filed herewith.
10.1 Joint Venture and Revenue Sharing Agreement between the Company.
and 81 Logistics Group LLC dated July 10, 2020, filed herewith
10.2 All Small Mentor-Protégé Agreement between 27 Health Inc. and
Innovative Regulatory Risk Advisors LLC dated August 6, 2020, filed
herewith.
10.3 Exxon Mobil (Seller) and 81 Logistics Group (Buyer) Letter
Agreement dated September 1, 2020, filed herewith
99.1 Press Release issued by the Company dated September 10, 2020,
filed herewith.
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