Company: GULTU
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001641172-25-001201
Chunk: 8

Company: Gulf Coast Ultra Deep Royalty Trust
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 8
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alty Trust
units at a price of $0.25 per Royalty Trust unit so long as HOGA tenders payment within 30 days following the end of such nine-month
period. See Part I, Items 1. and 2. “ Business and Properties - The Royalty Trust - The Royalty Trust Agreement - 
HOGA Call Rights” of this Form 10-K. In addition, Royalty Trust unitholders may incur brokerage charges in connection with the
resale of the Royalty Trust units, which in some cases could exceed the proceeds realized by a holder from the resale of its Royalty
Trust units.

“ Penny
Stock” rules may make buying or selling the Royalty Trust units difficult.

Trading
in the Royalty Trust units is subject to material limitations as a consequence of regulations that limit the activities of broker-dealers
effecting transactions in “penny stocks.” Pursuant to Rule 3a51-1 under the Exchange Act, the Royalty Trust units are a “penny
stock” because (i) they are not listed on any national securities exchange, (ii) they have a market price of less than $5.00 per
unit, and (iii) their issuer (the Trust) has net tangible assets less than $2,000,000 (if the issuer has been in business for at least
three years) or $5,000,000 (if the issuer has been in business for less than three years). Rule 15g-9 promulgated under the Exchange
Act imposes limitations upon trading activities on “penny stocks,” which makes selling the Royalty Trust units more difficult
compared to selling securities that are not “penny stocks.” Rule 15a-9 restricts the solicitation of sales of “penny
stocks” by broker-dealers unless the broker first (i) obtains from the purchaser information concerning his or her financial situation,
investment experience, and investment objectives, (ii) reasonably determines that the purchaser has sufficient knowledge and experience
in financial matters that the person is capable of evaluating the risks of investing in “penny stocks,” and (iii) delivers
and receives back from the purchaser a manually signed written statement acknowledging the purchaser’s investment experience and
financial sophistication.

Rules
15g-2 through 15g-6 promulgated under the Exchange Act require broker-dealers who engage in transactions in “penny stocks”
first to provide their customers with a series of disclosures and documents,