Item 1.01. Entry into a Material Definitive Agreement.
On June
7, 2021, American Resources Corporation (the “Company”)
entered into a securities purchase agreement (the “Purchase
Agreement”) with accredited investors (each, an
“Investor” and collectively, the
“Investors”). providing for the issuance of (i)
8,600,000 shares of the Company’s Class A common stock, par
value $0.0001 per share (the “Shares”) and (ii)
warrants, with a term of 5 years, to purchase an aggregate of up to
4,300,000 shares of Common Stock (the “Warrants
Shares”) at an exercise price of $3.50 per share (the
“Warrants”). The Shares, Warrants and Warrant Shares
are collectively referred to as the “Securities”.
Pursuant to the Purchase Agreement, the Investors are purchasing
the Securities for an aggregate purchase price of
$30,100,000.
Pursuant
to the Purchase Agreement, an aggregate of 8,600,000 Shares were
issued to the Investors in a registered direct offering (the
“Offering”) and registered under the Securities Act of
1933, as amended (the “Securities Act”), pursuant to a
prospectus supplement to the Company’s currently effective
registration statement on Form S-3, (File No. 333-230786), which
was declared effective with the U.S. Securities and Exchange
Commission (“SEC”) on June 4, 2019. A preliminary
prospectus supplement relating to the offering was filed with the
SEC on June 8, 2021 and is available on the SEC’s web site at
http://www.sec.gov. Copies of the final prospectus supplement may
be obtained from Kingswood Capital Markets, division of Benchmark
Investments, LLC, 17 Battery Place,
New York, NY 10004, Attention: Syndicate Department, or via email
at syndicate@kingswoodcm.com or
telephone at (212) 404-7002.
The
Offering was conducted pursuant to a placement agent agreement,
dated June 7, 2021 (the “Placement Agent Agreement”),
between the Company and Kingswood Capital Markets, division of
Benchmark Investments, LLC. The
Placement Agent has agreed to use its “reasonable best
efforts” to solicit offers to purchase the Shares and the
Purchase Warrants. The Placement Agent has no obligation to
purchase any of the Securities or to arrange for the purchase or
sale of any specific number or dollar amount of Securities. The
Company has agreed to pay the Placement Agent a fee equal to 6% of
the aggregate purchase price paid by Investors placed by the
Placement Agent and certain expenses.
The
Company expects the Offering to close on or about June 9, 2021,
subject to the satisfaction of
customary closing conditions in the Purchase Agreement. The
Purchase Agreement contains customary representations, warranties
and agreements of the Company and the Investors and customary
indemnification rights and obligations of the parties thereto. The
Investors have previously invested in securities of the Company or
otherwise had pre-existing relationships with the Placement Agent;
the Company did not engage in general solicitation or advertising
with regard to the issuance and sale of the securities. The
Investors represented that they are accredited investors and
purchased the Securities for investment and not with a view to
distribution.
The foregoing description of the Placement Agent Agreement, the
Purchase Agreement, and the Warrants are qualified in their
entirety by reference to the full text of such Placement Agent
Agreement, Purchase Agreement, and Warrants, the forms of which are
attached as Exhibits 10.1, 10.2, and 4.1, respectively, to this
Current Report on Form 8-K and which are incorporated herein in
their entirety by reference. The Company is filing the opinion of
its counsel, Clifford J. Hunt, P.A., relating to the legality of the issuance and
sale of the Shares as Exhibit 5.1.
The
Company’s press releases, dated June 7, 2021 and June 9,
2021, announcing the pricing of the offering and the closing of the
offering are attached as Exhibits 99.1 and 99.2, respectively, to
the Current Report on Form 8-K.
This
report does not constitute an offer to sell or the solicitation of
an offer to buy, and these securities cannot be sold in any state
or jurisdiction in which this offer, solicitation, or sale would be
unlawful prior to registration or qualification under the
securities laws of any state or jurisdiction. Any offer will be
made only by means of a prospectus, including a prospectus
supplement, forming a part of the effective registration
statement.
This
report contains forward-looking statements. Forward-looking
statements include, but are not limited to, statements that express
our intentions, beliefs, expectations, strategies, predictions or
any other statements related to our future activities, or future
events or conditions. These statements are based on current
expectations, estimates and projections about our business based,
in part, on assumptions made by management and involve a number of
risks and uncertainties, many of which are beyond the control of
the Company including the substantial doubt relating to the
Company’s ability to continue as a going concern. These
statements are not a guarantee of future performances and involve
risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from
what is expressed or forecasted in the forward-looking statements
due to numerous factors, including those risks discussed in our
Annual Report on Form 10-K and in other documents that we file from
time to time with the SEC. Any forward-looking statements speak
only as of the date on which they are made, and we do not undertake
any obligation to update any forward-looking statement to reflect
events or circumstances after the date of this report, except as
required by law.
