Q. How does the ASX determine who is under escrow? A. Following the guidelines in Chapter 9. The point of all this is twofold: First, so that people can't just make up silly companies with made up paper assets, and dump the shares on the public then run off to Tahiti.
Secondly, which is the case here, the public float is so small (only 20 million shares out of 350 million issued and outstanding) so that overwhelming quantities of shares do not get dumped into the public market and damage the price. If you dump 330 million shares into a public float of 20 million shares, the stock goes to zero.
It's all for the best.
Q. I understand that related parties are usually included, but does this also include people who have purchased shares from related parties?
A. 9B.10 would make it seem so, whether consideration was paid or not.
Q. From what I have seen of the share register, it appears that the almost ALL members bought shares, or were given shares, from a related party....
A. Yup. That's my case. I expect to be restricted.
Q. Also, do the Shareholders who are under escrow have to agree to the escrow conditions? Or does the EOF Board agree on their behalf?
A. One agrees to the restriction and escrow conditions in the same way one agrees to being arrested. It's just happening, there's no negotiation. Restricted securities are simply marked in the Link system with a "restrictive" legend clearly stating that you may not resell them in the public marketplace until a specified date. So in my case, I own my securities, they are held in the custodial possession of Link, and they will be marked with a "restrictive legend" that will automatically release my securities on the day the restriction expires.
