This preliminary prospectus supplement and the accompanying
prospectus relate to an effective registration statement under the
Securities Act of 1933, but the information in this prospectus
supplement is not complete and may be changed. This prospectus
supplement and the accompanying prospectus are not an offer to sell
the securities and we are not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted.
PRELIMINARY PROSPECTUS SUPPLEMENT
|
SUBJECT TO COMPLETION
|
DATED AUGUST 21, 2019
|
PROSPECTUS SUPPLEMENT
|
Filed Pursuant to Rule 424(b)(5)
|
(To Prospectus dated June 4, 2019)
|
Registration No. 333-230786
|
shares of Class A Common Stock
Warrants to Purchase shares of Class A Common Stock
————————————————————
We are
offering shares of our Class A Common Stock (or the “Common
Stock”)
and
warrants (the “Warrants”) to purchase up to shares of
Common Stock. Each share of Common Stock we sell in this offering
will be accompanied by a Warrant to purchase shares of Common Stock
at an exercise price of $ per share. Each share of Common Stock and
accompanying Warrant are being sold at a combined purchase price of
$ . The shares of Common Stock and Warrants can only be purchased
together in this offering but will be issued separately and will be
immediately separable upon issuance.
This
prospectus supplement also relates to the offering of the shares of
Common Stock issuable upon exercise of the Warrants.
The
proceeds to us before expenses in this offering will be $ . We
estimate the total expenses of this offering will be
$30,000.
Our
Common Stock is quoted on The Nasdaq Capital Market under the
symbol “AREC”. On August 19, 2019, the last reported
sales price for our Common Stock on The Nasdaq Capital Market was
$2.20 per share.
We are
an “emerging growth company” as defined in the
Jumpstart Our Business Startups Act of 2012 and, as such, have
elected to comply with certain reduced public company reporting
requirements for this prospectus supplement and future
filings.
Investing
in our securities involves a high degree of risk. See “Risk
Factors” beginning on page S-5 of this prospectus supplement
for a discussion of information that should be considered in
connection with an investment in our securities.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of
these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
|
Per Share of
Common Stock and Accompanying Warrant
|
|
Public offering
price
|
$
|
$
|
Underwriting
discounts
(1)
|
$
|
$
|
Proceeds to us
before expenses
(2)
|
$
|
$
|
(1)
We have agreed to
reimburse the underwriter for expenses incurred by it in an amount
not to exceed $100,000. See “Underwriting” for
additional disclosure regarding total underwriting
compensation.
(2)
The amount of the
offering proceeds to us presented in this table does not give
effect to the exercise, if any, of the Warrants.
(3)
We have granted the
underwriter an option for a period of 45 days to purchase up to
additional shares of Common Stock and/or additional Warrants. If
the underwriter exercises this option in full, the underwriting
discounts payable by us will be $ and the total proceeds to us,
before expenses, will be $ .
The underwriter expects to deliver the shares of Common Stock and
the Warrants to investors on or about August , 2019.
MAXIM GROUP LLC
Lead Bookrunning Manager
The date of this prospectus supplement is
August ___
, 2019
TABLE OF CONTENTS
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Page
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Prospectus Supplement
|
ii
|
ABOUT
THIS PROSPECTUS SUPPLEMENT
|
ii
|
SUMMARY
|
S-1
|
RISK
FACTORS
|
S-3
|
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
S-4
|
USE OF
PROCEEDS
|
S-4
|
DILUTION
|
S-5
|
CAPITALIZATION
|
S-6
|
DESCRIPTION
OF THE SECURITIES WE ARE OFFERING
|
S-6
|
UNDERWRITING
|
S-8
|
LEGAL
MATTERS
|
S-11
|
EXPERTS
|
S-11
|
WHERE
YOU CAN FIND MORE INFORMATION
|
S-11
|
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
|
S-11
|
Prospectus
|
|
|
|
ABOUT
THIS PROSPECTUS
|
1
|
SUMMARY
|
|
RISK
FACTORS
|
2
|
FORWARD-LOOKING
STATEMENTS
|
2
|
OUR
COMPANY
|
3
|
DILUTION
|
4
|
USE OF
PROCEEDS
|
4
|
DESCRIPTION
OF CLASS A COMMON STOCK
|
4
|
DESCRIPTION
OF WARRANTS
|
8
|
DESCRIPTION
OF UNITS
|
11
|
PLAN OF
DISTRIBUTION
|
13
|
LEGAL
MATTERS
|
14
|
EXPERTS
|
14
|
WHERE
YOU CAN FIND MORE INFORMATION
|
14
|
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
|
15
|
Neither we nor the underwriters have authorized anyone to provide
any information or to make any representations other than those
contained or incorporated by reference in this prospectus
supplement, the accompanying prospectus or in any free writing
prospectuses we have authorized for use in connection with this
offering. We take no responsibility for, and can provide no
assurance as to the reliability of, any other information that
others may give you. This prospectus supplement and the
accompanying prospectus together constitute an offer to sell only
the securities offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information
contained in this prospectus supplement, the accompanying
prospectus and any free writing prospectuses that we have
authorized for use in connection with this offering is current only
as of its date. Our business, financial condition, results of
operations and prospects may have changed since those dates. You
should read this prospectus supplement, the accompanying
prospectus, the documents incorporated by reference herein and
therein, and any free writing prospectus that we have authorized
for use in connection with this offering when making your
investment decision. You should also read and consider the
information in the documents we have referred you to in the section
of the accompanying prospectus titled “Incorporation of
Certain Information by Reference.”
About this prospectus supplement
This
prospectus supplement and the accompanying prospectus form part of
a registration statement on Form S-3 that we filed with
the Securities and Exchange Commission, or SEC, utilizing a
“shelf” registration process. This document contains
two parts. The first part consists of this prospectus supplement,
which provides you with specific information about this offering.
The second part, the accompanying prospectus, provides more general
information, some of which may not apply to this offering.
Generally, when we refer only to the “prospectus,” we
are referring to both parts combined. This prospectus supplement
may add, update or change information contained in the accompanying
prospectus. To the extent that any statement we make in this
prospectus supplement is inconsistent with statements made in the
accompanying prospectus or any documents incorporated by reference
herein or therein, the statements made in this prospectus
supplement will be deemed to modify or supersede those made in the
accompanying prospectus and such documents incorporated by
reference herein and therein. You should read this prospectus
supplement and the accompanying prospectus, including the
information incorporated by reference herein and therein, and any
related free writing prospectus that we have authorized for use in
connection with this offering.
You
should rely only on the information that we have included or
incorporated by reference in this prospectus supplement, the
accompanying prospectus and any related free writing prospectus
that we may authorize to be provided to you. We have not authorized
any dealer, salesman or other person to give any information or to
make any representation other than those contained or incorporated
by reference in this prospectus supplement, the accompanying
prospectus or any related free writing prospectus that we may
authorize to be provided to you. You must not rely upon any
information or representation not contained or incorporated by
reference in this prospectus supplement, the accompanying
prospectus or any related free writing prospectus. This prospectus
supplement, the accompanying prospectus and any related free
writing prospectus do not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the
registered securities to which they relate, nor do this prospectus
supplement, the accompanying prospectus or any related free writing
prospectus constitute an offer to sell or the solicitation of an
offer to buy securities in any jurisdiction to any person to whom
it is unlawful to make such offer or solicitation in such
jurisdiction.
You
should not assume that the information contained in this prospectus
supplement, the accompanying prospectus or any related free writing
prospectus is accurate on any date subsequent to the date set forth
on the front of the document or that any information we have
incorporated by reference herein or therein is correct on any date
subsequent to the date of the document incorporated by reference,
even though this prospectus supplement, accompanying prospectus or
any related free writing prospectus is delivered, or securities are
sold, on a later date.
This
prospectus supplement contains or incorporates by reference
summaries of certain provisions contained in some of the documents
described herein, but reference is made to the actual documents for
complete information. All of the summaries are qualified in their
entirety by the actual documents. Copies of some of the documents
referred to herein have been or will be filed or have been or will
be incorporated by reference as exhibits to the registration
statement of which this prospectus supplement forms a part, and you
may obtain copies of those documents as described in this
prospectus supplement under the heading “Where You Can Find
More Information.”
|
|
|
|
SUMMARY
This summary highlights information contained in other parts of
this prospectus supplement. Because it is only a summary, it does
not contain all of the information that you should consider before
investing in shares of our common stock and it is qualified in its
entirety by, and should be read in conjunction with, the more
detailed information appearing elsewhere in this prospectus
supplement, the accompanying prospectus, any applicable free
writing prospectus and the documents incorporated by reference
herein and therein. You should read all such documents carefully,
especially the risk factors and our financial statements and the
related notes included or incorporated by reference herein or
therein, before deciding to buy shares of our common stock. Unless
the context requires otherwise, references in this prospectus to
“AREC,” the “Company,” “we,”
“us” and “our” refer to American Resources
Corporation.
Overview
We are
a producer of primarily high-quality, metallurgical coal in eastern
Kentucky. Through its wholly-owned subsidiary Quest Energy, AREC
has coal mining and coal processing operations substantially all
located in eastern Kentucky. A majority of our domestic and
international target customer base includes blast furnace steel
mills and coke plants, as well as international metallurgical coal
consumers, domestic electricity generation utilities, and other
industrial customers.
AREC
currently has six coal mining and processing operating
subsidiaries: McCoy Elkhorn Coal LLC (doing business as McCoy
Elkhorn Coal Company) (McCoy Elkhorn), Knott County Coal LLC (Knott
County Coal), Deane Mining, LLC (Deane Mining) and Wyoming County
Coal LLC (Wyoming County), Quest Processing LLC (Quest Processing)
located in eastern Kentucky and western West Virginia within the
Central Appalachian coal basin, and ERC Mining Indiana Corporation
(ERC) located in southwest Indiana within the Illinois coal basin.
The coal deposits under control by the Company are generally
comprise of metallurgical coal (used for steel making), pulverized
coal injections (used in the steel making process) and high-BTU,
low sulfur, low moisture bituminous coal used for a variety of uses
within several industries, including industrial customers,
specialty products and thermal coal used for electricity
generation.
Current Production
We
achieved initial commercial production of metallurgical coal in
September 2016 from our McCoy Elkhorn Mine #15 and from our McCoy
Elkhorn Carnegie 1 Mine in March 2017. In October 2017 we achieved
commercial production of thermal coal from our Deane Mining Access
Energy Mine and from our Deane Mining Razorblade Surface Mine in
May 2018. We believe that we will be able to take advantage of
recent increases in U.S. and global benchmark metallurgical and
thermal coal prices and intend to opportunistically increase the
amount of our projected production that is directed to the export
market to capture favorable differentials between domestic and
global benchmark prices. We commenced operations of two out of four
of our internally owned preparation plants in July of 2016 (Bevins
#1 and Bevins #2 Prep Plants at McCoy Elkhorn), with a third
preparation plant commencing operation in October 2017 (Mill Creek
Prep Plant at Deane Mining). Pursuant to the definitions in
Paragraph (a) (4) of the Securities and Exchange Commission's
Industry Guide 7, our coal has not been classified as either
“proven” or “probable” and as a result, do
not have any “proven” or “probable”
reserves under such definition, and our company and its business
activities are deemed to be in the exploration stage until mineral
reserves are defined on our properties.
Our Company Background
We
began our Company on October 2, 2013 and changed our name from
Natural Gas Fueling and Conversion Inc. to NGFC Equities, Inc. on
February 25, 2015, and then changed our name from NGFC Equities,
Inc. to American Resources Corporation on February 17, 2017. On
January 5, 2017, ARC executed a Share Exchange Agreement between
the Company and Quest Energy Inc., a private company incorporated
in the State of Indiana with offices at 9002 Technology Lane,
Fishers IN 46038, and due to the fulfillment of various conditions
precedent to closing of the transaction, the control of the Company
was transferred to the Quest Energy shareholders on February 7,
2017 resulting in Quest Energy becoming a wholly-owned subsidiary
of ARC. Our telephone number is (317) 855-9926 and our website
address is
www.americanresourcescorp.com
. Neither
our website nor any information contained on, or accessible
through, our website is part of this prospectus.
Recent Developments
In June
2019, we sought to raise capital in the form of a $35 million
private offering of units, each unit consisting of Senior
Convertible Debentures due 2022 and warrants to purchase Common
Stock. In August 2019, we terminated the offering and discontinued
all activities in connection with the unit placement.
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|
|
|
|
|
|
|
|
|
|
SUMMARY OF OFFERING TERMS
|
|
|
|
|
|
|
|
Common Stock offered by the Company
|
|
shares
of Common Stock.
|
|
|
|
|
|
|
|
Total warrants offered by the Company
|
|
Warrants
to purchase up to shares of Common Stock (with a Warrant to
purchase shares of Common Stock being issued in connection with
each share of Common Stock issued in this offering). Each Warrant
will have an exercise price of $ per share of Common Stock and will
expire on the 60-month anniversary of the date of issuance. Each
Warrant will be exercisable immediately upon issuance. The exercise
price of the Warrant will be subject to adjustment in the event we
issue additional Common Stock or securities convertible into Common
stock at a purchase price that is less than the then-current
exercise price of the Warrant, subject to certain exceptions. A
holder will not have the right to exercise any portion of the
Warrant if the holder (together with its affiliates) would
beneficially own in excess of 4.99% (or, at the election of the
purchaser, 9.99%), of the number of shares of our Common Stock
outstanding immediately after giving effect to the exercise, as
such percentage ownership is determined in accordance with the
terms of the Warrants. This prospectus supplement also relates to
the offering of the shares of Common Stock issuable upon exercise
of such Warrants. See “Description of Securities We are
Offering—Warrants” for a discussion on the terms of the
Warrants.
|
|
|
|
|
|
|
|
Combined offering price per share of Common Stock and accompanying
Warrant
|
|
$
|
|
|
|
|
|
|
|
Common Stock outstanding immediately prior to this
offering
|
|
23,367,197
|
|
|
|
|
|
|
|
Common Stock to be outstanding immediately after this
offering
|
|
shares (assuming no exercise of any of
the Warrants offered hereby).
|
|
|
|
|
|
|
|
Use of proceeds
|
|
We estimate that the net proceeds from this offering will be
approximately $ after deducting underwriting discounts and other
estimated offering expenses payable by us (assuming no exercise of
any of the Warrants offered hereby). The Company will use the
proceeds of this offering to initiate coal production on certain
permits the Company owns, act upon certain acquisition
opportunities, particularly those that are in close proximity to
our current operations, capital expenditures, the repayment of
indebtedness outstanding, working capital, and other general
corporate purposes. We have not yet made final investment decisions
with respect to any of these potential projects and we cannot
currently allocate specific percentages of the net proceeds that we
may use for the purposes described above.
|
|
|
|
|
|
|
|
Listing and trading symbol
|
|
“AREC”.
The Warrants will not be listed
for trading on any national securities
exchange.
|
|
|
|
|
|
|
|
Risk factors
|
|
You should carefully read and consider the information set forth
under the heading “Risk Factors” and all other
information set forth in this prospectus before deciding to invest
in our common stock.
|
|
|
|
|
|
|
|
Implications of being an emerging growth company
As a company with less than $1.07 billion in revenue during
our last fiscal year, we qualify as an “emerging growth
company” as defined in the Jumpstart Our Business Startups
Act of 2012, or the JOBS Act. For so long as we remain an emerging
growth company, we are permitted and intend to rely on exemptions
from specified disclosure requirements that are applicable to other
public companies that are not emerging growth companies. These
exemptions include:
●
not
being required to comply with the auditor attestation requirements
in the assessment of our internal control over financial
reporting;
●
not
being required to comply with any requirement that may be adopted
by the Public Company Accounting Oversight Board regarding
mandatory audit firm rotation or a supplement to the
auditor’s report providing additional information about the
audit and the financial statements;
●
reduced
disclosure obligations regarding executive compensation;
and
●
exemptions
from the requirements of holding a nonbinding advisory vote on
executive compensation and shareholder approval of any golden
parachute payments not previously approved.
We may take advantage of these provisions until December 31,
2019. We may choose to take advantage of some, but not all, of the
available exemptions. We have taken advantage of some reduced
reporting burdens in this prospectus supplement, the accompanying
prospectus and the documents incorporated by reference herein and
therein. Accordingly, such information may be different than the
information you receive from other public companies in which you
hold stock.
In addition, the JOBS Act provides that an emerging growth company
can take advantage of an extended transition period for complying
with new or revised accounting standards. This provision allows an
emerging growth company to delay the adoption of some accounting
standards until those standards would otherwise apply to private
companies. We have irrevocably elected not to avail ourselves of
this exemption from new or revised accounting standards and,
therefore, we will be subject to the same new or revised accounting
standards as other public companies that are not emerging growth
companies.
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|
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RISK FACTORS
Investing in our securities involves a high degree of risk. Before
making an investment decision, you should carefully consider the
discussion of risks and uncertainties under the heading “Risk
Factors” contained in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2018, which is incorporated by
reference in this prospectus supplement and the accompanying
prospectus, and under similar headings in our subsequently filed
quarterly reports on Form 10-Q and annual reports on Form 10-K, as
well as the other risks and uncertainties described in any
applicable free writing prospectus and in the other documents
incorporated by reference in this prospectus supplement and the
accompanying prospectus. See the sections entitled “Where You
Can Find More Information” and “Incorporation of
Certain Information by Reference” in this prospectus
supplement and the accompanying prospectus. The risks and
uncertainties we discuss in the documents incorporated by reference
in this prospectus are those we currently believe may materially
affect us. Additional risks and uncertainties not presently known
to us or that we currently believe are immaterial also may also
materially and adversely affect our business, financial condition
and results of operations.
Risks related to this offering
Management will have broad discretion as to the use of the proceeds
from this offering, and we may not use the proceeds
effectively.
Our management will have broad discretion with respect to the use
of proceeds of this offering, including for any of the purposes
described in the section of this prospectus supplement titled
“Use of Proceeds.” You will be relying on the judgment
of our management regarding the application of the proceeds of this
offering. The results and effectiveness of the use of proceeds are
uncertain, and we could spend the proceeds in ways that you do not
agree with or that do not improve our results of operations or
enhance the value of our common stock. Our failure to apply these
funds effectively could have a material adverse effect on our
business, delay the development of our product candidates and cause
the price of our common stock to decline.
You will experience immediate and substantial dilution in the net
tangible book value per share of the common stock you
purchase.
Since the public offering price for our common stock in this
offering is substantially higher than the net tangible book value
per share of our common stock outstanding prior to this offering,
you will suffer immediate and substantial dilution in the net
tangible book value of the common stock you purchase in this
offering. Based on the public offering price of $
per share and accompanying Warrant,
investors purchasing shares of common stock in this offering will
incur immediate dilution of $
per share in the as adjusted net tangible book
value. If the underwriters exercise their option to purchase
additional shares, you will experience additional dilution. See the
section titled “Dilution” below for a more detailed
discussion of the dilution you will incur if you purchase shares in
this offering.
There is no public market for the Warrants being offered in this
offering.
There
is no established public trading market for the Warrants being
offered in this offering, and we do not expect a market to develop.
In addition, we do not intend to apply to list the Warrants on any
securities exchange or nationally recognized trading system,
including The Nasdaq Capital Market. Without an active market, the
liquidity of the Warrants will be limited.
Holders of Warrants purchased in this offering will have no rights
as holders of Common Stock until such holders exercise their
Warrants and acquire our Common Stock.
Until
holders of Warrants acquire shares of our Common Stock upon
exercise of the Warrants, holders of Warrants will have no rights
with respect to the shares of our Common Stock underlying such
Warrants. Upon exercise of the Warrants, the holders will be
entitled to exercise the rights of a holder of Common Stock only as
to matters for which the record date occurs after the exercise
date.
Future sales of our common stock by us or our existing stockholders
could cause the market price of our common stock to decline
significantly, even if our business is doing well.
Sales of a substantial number of shares of our common stock in the
public market could occur at any time. These sales, or the
perception in the market that such sales may occur, could reduce
the market price of our common stock.
We, our executive officers and directors have entered
into lock-up agreements with the underwriters under which
we and they have agreed, subject to certain exceptions, not to
sell, directly or indirectly, any shares of our common stock
without the permission of the underwriters for a period of
90
days following the date of this
prospectus supplement. We refer to such period as
the lock-up period. When the lock-up period
expires, we, our executive officers and directors will be able to
sell shares of common stock in the public market, subject to
compliance with applicable securities laws restrictions. In
addition, the underwriters may, in their sole discretion, release
all or some portion of the shares of common stock subject
to lock-up agreements at any time and for any reason.
Sales of a substantial number of such shares of common stock upon
expiration of the lock-up or otherwise, the perception
that such sales may occur, or early release of these agreements,
could cause the market price of our common stock to fall or make it
more difficult for you to sell your common stock at a time and
price that you deem appropriate.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement (including any documents incorporated by
reference herein) contains statements with respect to us which
constitute “forward-looking statements” within the
meaning of Section 27A of the Securities Act, and Section 21E of
the Securities Exchange Act of 1934, as amended, and are intended
to be covered by the “safe harbor” created by those
sections. Forward-looking statements, which are based on certain
assumptions and reflect our plans, estimates and beliefs, can
generally be identified by the use of forward-looking terms such as
“believes,” “expects,” “may,”
“will,” “should,” “could,”
“seek,” “intends,” “plans,”
“estimates,” “anticipates” or other
comparable terms. These forward-looking statements include, but are
not limited to, statements concerning future events, our future
financial performance, business strategy and plans and objectives
of management for future operations. Our actual results could
differ materially from those discussed in the forward-looking
statements. Factors that could cause or contribute to these
differences include those discussed in “Risk Factors”
in this prospectus supplement and the documents incorporated by
reference herein.
We
caution readers not to place undue reliance upon any such
forward-looking statements, which speak only as of the date they
are made. We disclaim any obligation, except as specifically
required by law and the rules of the SEC, to publicly update or
revise any such statements to reflect any change in company
expectations or in events, conditions or circumstances on which any
such statements may be based, or that may affect the likelihood
that actual results will differ from those set forth in the
forward-looking statements.
You
should read this prospectus supplement, the accompanying
prospectus, and the documents that we incorporate by reference
herein and therein and have filed as exhibits to the registration
statement of which this prospectus supplement is part, completely
and with the understanding that our actual future results may be
materially different from what we expect. You should assume that
the information appearing in this prospectus supplement is accurate
as of the date on the cover of this prospectus supplement only. Our
business, financial condition, results of operations and prospects
may change. We may not update these forward-looking statements,
even though our situation may change in the future, unless we have
obligations under the federal securities laws to update and
disclose material developments related to previously disclosed
information. We qualify all of the information presented in this
prospectus supplement, and particularly our forward-looking
statements, by these cautionary statements.
USE OF PROCEEDS
We
estimate the proceeds to us before expenses from this offering will
be $ (assuming no exercise of any of the Warrants offered hereby),
based on a public offering price of $ per share of Common Stock and
accompanying Warrant. We estimate the total expenses of this
offering will be $30,000. We intend to use the net proceeds from
this offering to initiate coal production on certain permits the
Company owns, act upon certain acquisition opportunities,
particularly those that are in close proximity to our current
operations, capital expenditures, the repayment of indebtedness
outstanding, working capital, and other general corporate purposes.
We have not yet made final investment decisions with respect to any
of these potential projects and we cannot currently allocate
specific percentages of the net proceeds that we may use for the
purposes described above.
If a
Warrant holder elects to exercise the Warrants issued in this
offering, we may also receive proceeds from the exercise of the
Warrants. We cannot predict when or if the Warrants will be
exercised. It is possible that the Warrants may expire and may
never be exercised.
DILUTION
If you
invest in this offering, your ownership interest will be
immediately diluted to the extent of the difference between the
public offering price per share and the as adjusted net tangible
book value per share after giving effect to this offering. We
calculate net tangible book value per share by dividing the net
tangible book value, which is the total tangible assets less total
liabilities, by the number of outstanding shares of our common
stock. Dilution represents the difference between the portion of
the amount per share paid by purchasers of shares in this offering
and the as adjusted net tangible book value per share of our Common
Stock immediately after giving effect to this offering. Our net
tangible book value as of June 30, 2019 was approximately
$10,727,983, or $0.46 per share.
After
giving effect to the sale of
shares of common stock in this offering at the public offering
price of $ per share
of common stock, and after deducting the underwriting discount and
estimated offering expenses payable by us, our as adjusted net
tangible book value would have been approximately
$ million, or
approximately $ per
share of common stock, as of June 30, 2019. This represents an
immediate increase in net tangible book value of approximately
$ per share to
existing stockholders and an immediate dilution of approximately
$ per share to new
investors.
The
following table illustrates this per share dilution based on shares
outstanding as of June 30, 2019:
Public offering
price per share
|
$
|
Historical net
tangible book value per share as of June 30, 2019
|
$
0.46
|
Increase in net
tangible book value per share after this offering
|
$
|
As-Adjusted Net
tangible book value per share as of June 30, 2019 after this
offering
|
$
|
Dilution per share
to investors participating in this offering
|
$
|
The above
discussion and table excludes common stock
equivalents.
To the
extent that any of these options or warrants are exercised or we
issue additional shares of common stock in the future, there will
be further dilution to investors participating in this
offering.
CAPITALIZATION
The
following table summarizes our capitalization and cash and cash
equivalents as of June 30, 2019 and our capitalization as of June
30, 2019 on an as-adjusted basis, based on a public offering price
of $ per share of Common Stock and accompanying Warrant (excluding
any proceeds that may be received, and shares of Common Stock that
may be issued, upon exercise of the Warrants). You should read the
following table in conjunction with “Use of Proceeds”
in this prospectus supplement and our consolidated financial
statements and the notes thereto incorporated by reference in this
prospectus supplement and the accompanying prospectus:
|
As of June 30,
2019 (unaudited)
|
|
|
|
Cash & Cash
Equivalents
|
$
1,129,790
|
|
|
|
|
Long Term
Debt
|
4,826,451
|
|
Reclamation
Liability
|
19,180,605
|
|
Total Long Term
Debt and Reclamation Liability:
|
$
24,007,056
|
|
|
|
|
Class A Common
stock, $0.0001 par value, 230,000,000 shares authorized, 23,367,197
shares issued and outstanding, actual and issued and outstanding,
as adjusted
|
2,337
|
|
Additional paid in
capital
|
86,367,056
|
|
Accumulated
deficit
|
(75,641,410
)
|
|
Total
stockholders’ equity
|
10,727,983
|
|
Total
capitalization
|
65,768,216
|
|
The above discussion and table excludes common stock
equivalents.
To the extent that any of these options or warrants are exercised
or we issue additional shares of common stock in the future, there
will be further dilution to investors participating in this
offering.
DESCRIPTION OF THE SECURITIES WE ARE OFFERING
General
As of the date of this prospectus, under our amended and restated
articles of incorporation, as amended, we have the authority to
issue 230,000,000 shares of Common Stock, par value $0.0001 per
share, and 30,000,000 shares of preferred stock, par value $0.0001
per share. As of August 19, 2019, there were 23,367,197 shares of
our Common Stock issued and outstanding and no shares of preferred
stock issued and outstanding.
We are offering shares of our Common Stock together with Warrants
to purchase up to an aggregate of shares of our Common Stock. Each
share of our Common Stock is being sold together with Warrant to
purchase one share of Common Stock. The shares of our Common Stock
and related Warrants will be issued separately. We are also
registering the shares of our Common Stock issuable from time to
time upon exercise of the Warrants offered hereby.
Common Stock
Each outstanding share of Common Stock entitles the holder to one
vote, either in person or by proxy, on all matters submitted to a
vote of stockholders, including the election of directors. There is
no cumulative voting in the election of directors. Subject to
preferences which may be applicable to any outstanding shares of
preferred stock from time to time, holders of our common stock have
equal ratable rights to such dividends as may be declared from time
to time by our Board of Directors out of funds legally available
therefor. In the event of any liquidation, dissolution or
winding-up of our affairs, holders of common stock will be entitled
to share ratably in our remaining assets after provision for
payment of amounts owed to creditors and preferences applicable to
any outstanding shares of preferred stock. All outstanding shares
of Common Stock are fully paid and nonassessable.
Warrants
The following summary of certain terms and provisions of the
warrants offered hereby is not complete and is subject to, and
qualified in its entirety by, the provisions of the Warrant.
Prospective investors should carefully review the terms and
provisions of the form of Warrant for a complete description of the
terms and conditions of the Warrants.
Exercisability.
The
Warrants are exercisable on the date of issuance, and at any time
thereafter up to five years from the initial exercise date, at
which time any unexercised Warrants will automatically be exercised
through a cashless exercise. The Warrants will be exercisable, at
the option of each holder, in whole or in part by delivering to us
a duly executed exercise notice and, at any time a registration
statement registering the issuance of the shares of Common Stock
underlying the Warrants under the Securities Act is effective and
available for the issuance of such shares, or an exemption from
registration under the Securities Act is available for the issuance
of such shares, by payment in full in immediately available funds
for the number of shares of Common Stock purchased upon such
exercise. If a registration statement registering the issuance of
the shares of Common Stock underlying the Warrants under the
Securities Act is not effective or available and an exemption from
registration under the Securities Act is not available for the
issuance of such shares, the holder may, in its sole discretion,
elect to exercise the Warrant through a cashless exercise, in which
case the holder would receive upon such exercise the net number of
shares of Common Stock determined according to the formula set
forth in the Warrant. No fractional shares of Common Stock will be
issued in connection with the exercise of a Warrant. In lieu of
fractional shares, we will at our option, either pay the holder an
amount in cash equal to the fractional amount multiplied by the
exercise price or issue a full share in lieu of the fractional
share.
Exercise Limitation.
A
holder will not have the right to exercise any portion of the
Warrant if the holder (together with its affiliates) would
beneficially own in excess of 4.99% (or, upon election of the
holder, 9.99%) of the number of shares of our Common Stock
outstanding immediately after giving effect to the exercise, as
such percentage ownership is determined in accordance with the
terms of the Warrants. However, any holder may increase or decrease
such percentage, provided that any increase will not be effective
until the 61st day after such election.
Exercise Price.
The
Warrants will have an exercise price of $ per share. The exercise
price is subject to appropriate adjustment in the event of certain
stock dividends and distributions, stock splits, stock
combinations, reclassifications or similar events affecting our
common stock and also upon any distributions of assets, including
cash, stock or other property to our stockholders. Additionally, if
and whenever we issue or sell, or are deemed to have issued or
sold, any shares of Common Stock (including the issuance or sale of
shares of Common Stock owned or held by or for our account, but
excluding any “excluded securities” issued or sold or
deemed to have been issued or sold) for a consideration per share
less than a price equal to the exercise price in effect immediately
prior to such issuance or sale or deemed issuance or sale then,
immediately after such issuance, the exercise price then in effect
shall be reduced to an amount equal to the lower
price.
Transferability.
Subject
to applicable laws, the Warrants may be offered for sale, sold,
transferred or assigned without our consent.
Exchange Listing.
There is
no established trading market for the Warrants and we do not expect
a market to develop. In addition, we do not intend to apply for the
listing of the Warrants on any national securities exchange or
other trading market. Without an active trading market, the
liquidity of the Warrants will be limited.
Fundamental Transactions.
If a fundamental transaction occurs, then
the holder may elect to exercise the Warrant effective at closing
of the fundamental transaction and receive the same consideration
as the holder would have been entitled to had the holder exercised
the Warrant immediately prior to closing of the fundamental
transaction or the holder may require that the successor entity
will succeed to, and be substituted for us, and may exercise every
right and power that we may exercise and will assume all of our
obligations under the Warrants with the same effect as if such
successor entity had been named in the Warrant itself. If holders
of our Common Stock are given a choice as to the securities, cash
or property to be received in a fundamental transaction, then the
holder shall be given the same choice as to the consideration it
receives upon any exercise of the Warrant following such
fundamental transaction.
Rights as a Stockholder.
Except as otherwise
provided in the Warrants or by virtue of such holder’s
ownership of shares of our Common Stock, the holder of a warrant
does not have the rights or privileges of a holder of our common
stock, including any voting rights, until the holder exercises the
Warrant
.
UNDERWRITING
We have
entered into an underwriting agreement with Maxim Group LLC
(“Maxim” or the “Underwriter”) acting as
the sole book-running manager and underwriter for this offering.
Subject to the terms and conditions of the underwriting agreement,
the Underwriter has agreed to purchase, and we have agreed to sell
to the Underwriter, the number of shares of Common Stock and
Warrants at the public offering price, less the underwriting
discounts, as set forth on the cover page of this prospectus
supplement.
The
underwriting agreement provides that the obligation of the
Underwriter to pay for and accept delivery of the shares of Common
Stock and Warrants offered by this prospectus supplement are
subject to the approval of certain legal matters by the
Underwriter’s counsel and to other conditions. The
Underwriter is obligated to take and pay for all of the shares of
Common Stock and Warrants offered by this prospectus supplement if
any such shares of Common Stock and Warrants are taken, other than
those shares of Common Stock and/or Warrants covered by the
over-allotment option described below.
Over-Allotment Option
We have
granted to the Underwriter an option, exercisable not later than 45
days after the effective date of the underwriting agreement, to
purchase up to additional shares of Common Stock and/or additional
Warrants to purchase an aggregate of shares of Common Stock, at the
public offering price less the underwriting discounts set forth on
the cover page of this prospectus supplement. We will be obligated,
pursuant to the option, to sell these additional shares of Common
Stock and/or Warrants to the Underwriter to the extent the option
is exercised. If any additional shares of Common Stock and/or
accompanying Warrants are purchased, the Underwriter will offer the
additional shares of Common Stock and/or Warrants on the same terms
as those on which the other shares of Common Stock and Warrants are
being offered hereunder.
Compensation
We have
agreed to sell shares of Common Stock and Warrants to the
Underwriter at a discount equal to 8.0% of public offering price of
the Common Stock and Warrants. The Underwriter proposes to offer
the shares of Common Stock and Warrants directly to the public at
the public offering price set forth on the cover of this prospectus
supplement. In addition, the Underwriter may offer some of the
shares of Common Stock and Warrants to other securities dealers at
such price less a concession of up to % or $ per share. After the
offering to the public, the offering price and other selling terms
may be changed by the Underwriter without changing the proceeds we
will receive from the Underwriter. The following table summarizes
the public offering price, underwriting discounts and proceeds
before expenses to us assuming both no exercise and full exercise
of the Underwriter’s option to purchase additional shares of
Common Stock and/or Warrants.
|
Per Share and
accompanying Warrant
|
Total
Without
Over-Allotment
|
Total
With
Over-Allotment
|
Public Offering
price
|
$
|
$
|
$
|
Underwriting
discounts
|
$
|
$
|
$
|
Proceeds to us
before expenses
|
$
|
$
|
$
|
We
estimate the total expenses of this offering, including
registration, filing and listing fees, printing fees and legal and
accounting expenses, but excluding underwriting discounts, will be
approximately $30,000, all of which are payable by us. Pursuant to
the underwriting agreement, we have agreed not to enter into any
agreement to issue or announce the issuance or proposed issuance of
any Common Stock or Common Stock Equivalents for a period of 90
days following the final closing of the offering.
Lock-Up Agreements
We and
each of our officers and directors have agreed, subject to certain
exceptions, not to offer, issue, sell, contract to sell, encumber,
grant any option for the sale of or otherwise dispose of any shares
of our Common Stock and warrants to purchase shares of Common Stock
or other securities convertible into or exercisable or exchangeable
for shares of our Common Stock for a period of 90 days after the
date of the underwriting agreement without the prior written
consent of the Underwriter. The Underwriter may in its sole
discretion and at any time without notice release some or all of
the shares subject to lock-up agreements prior to the expiration of
the lock-up period. When determining whether or not to release
shares from the lock-up agreements, the Underwriter will consider,
among other factors, the security holder’s reasons for
requesting the release, the number of shares for which the release
is being requested and market conditions at the time.
Right of First Refusal
We have
agreed to grant the representative for the Nine (9) month period
following the closing of this offering, a right of first refusal to
act as lead managing underwriter and book runner for any and all
future public or private equity, equity-linked or debt (excluding
commercial bank debt) offerings during such Nine (9) month period
of the Company, or any successor to or any subsidiary of the
Company.
Price Stabilization, Short Positions and Penalty Bids
In
connection with this offering, the Underwriter may engage in
transactions that stabilize, maintain or otherwise affect the price
of our Common Stock. Specifically, the Underwriter may over-allot
in connection with this offering by selling more shares of Common
Stock or Warrants than are set forth on the cover page of this
prospectus supplement. This creates a short position in our Common
Stock or Warrants for the Underwriter’s own account. The
short position may be either a covered short position or a naked
short position. In a covered short position, the number of shares
of Common Stock or Warrants over-allotted by the Underwriter is not
greater than the number of shares of Common Stock or Warrants that
they may purchase in the over-allotment option. In a naked short
position, the number of shares of Common Stock or Warrants involved
is greater than the number of shares of Common Stock or Warrants in
the over-allotment option. To close out a short position, the
Underwriter may elect to exercise all or part of the over-allotment
option. The Underwriter may also elect to stabilize the price of
our Common Stock or Warrants or reduce any short position by
bidding for, and purchasing, Common Stock or Warrants in the open
market. The Underwriter may also impose a penalty bid. This occurs
when a particular underwriter or dealer repays selling concessions
allowed to it for distributing a security in this offering because
the underwriter repurchases that security in stabilizing or short
covering transactions. Additionally, the Underwriter may bid for,
and purchase, shares of our Common Stock or warrants in market
making transactions, including “passive” market making
transactions as described below. These activities may stabilize or
maintain the market price of our Common Stock or Warrants at a
price that is higher than the price that might otherwise exist in
the absence of these activities. The Underwriter is not required to
engage in these activities, and may discontinue any of these
activities at any time without notice. These transactions may be
effected on Nasdaq, in the over-the-counter market, or otherwise.
In connection with this offering, the Underwriter and selling group
members, if any, or their affiliates may engage in passive market
making transactions in our Common Stock or Warrants immediately
prior to the commencement of sales in this offering, in accordance
with Rule 103 of Regulation M under the Exchange Act. Rule 103
generally provides that:
●
a passive market
maker may not effect transactions or display bids for our Common
Stock or Warrants in excess of the highest independent bid price by
persons who are not passive market makers;
●
net purchases by a
passive market maker on each day are generally limited to 30% of
the passive market maker’s average daily trading volume in
our Common Stock or Warrants during a specified two-month prior
period or 200 shares of Common Stock or Warrants, whichever is
greater, and must be discontinued when that limit is reached;
and
●
passive market
making bids must be identified as such.
Other Terms
We have
agreed to reimburse the Underwriter for all reasonable
out-of-pocket expenses up to $100,000, including but not limited to
reasonable legal fees, incurred by the Underwriter in connection
with the offering. If the offering is not consummated, we have
agreed to reimburse the Underwriter for its actual expenses, not to
exceed $100,000.
Our Relationship with the Underwriter
The
Underwriter and its affiliates have engaged, and may in the future
engage, in investment banking transactions and other commercial
dealings in the ordinary course of business with us or our
affiliates. The Underwriter has received, or may in the future
receive, customary fees and commissions for these transactions. As
of the date hereof, Maxim holds warrants to purchase up to 80,500
shares of Common Stock at an exercise price of $4.40 per share,
which are exercisable until February 15, 2021.
In
addition, in the ordinary course of its business activities, the
Underwriter and its affiliates may make or hold a broad array of
investments and actively trade debt and equity securities (or
related derivative securities) for their own account and for the
accounts of their customers. Such investments and securities
activities may involve securities and/or instruments of ours or our
affiliates. The Underwriter and its affiliates may also make
investment recommendations and/or publish or express independent
research views in respect of such securities or financial
instruments and may hold, or recommend to clients that they
acquire, long and/or short positions in such securities and
instruments.
Indemnification
We have
agreed to indemnify the Underwriter against liabilities relating to
the offering arising under the Securities Act and the Exchange Act,
liabilities arising from breaches of some or all of the
representations and warranties contained in the underwriting
agreement, and to contribute to payments that the Underwriter may
be required to make for these liabilities.
Electronic Distribution
A
prospectus supplement and accompanying base prospectus in
electronic format may be made available on a website maintained by
the Underwriter. The Underwriter may agree to allocate a number of
shares of Common Stock and Warrants to underwriters for sale to
their online brokerage account holders. In connection with the
offering, the Underwriter may distribute prospectus supplements and
accompanying base prospectuses electronically. No forms of
electronic prospectus other than prospectus supplements and
accompanying base prospectuses that are printable as Adobe®
PDF will be used in connection with this offering. The Underwriter
has informed us that it does not expect to confirm sales of shares
of Common Stock and Warrants offered by this prospectus supplement
to accounts over which it exercises discretionary authority. Other
than the prospectus supplement in electronic format, the
information on the Underwriter’s website and any information
contained in any other website maintained by the Underwriter is not
part of this prospectus supplement or the registration statement of
which this prospectus forms a part, has not been approved and/or
endorsed by us or the Underwriter in its capacity as underwriter
and should not be relied upon by investors.
Foreign Regulatory Restrictions on Purchase of Securities Offered
Hereby Generally
No
action has been or will be taken in any jurisdiction (except in the
United States) that would permit a public offering of the
securities offered by this prospectus supplement and accompanying
base prospectus, or the possession, circulation or distribution of
this prospectus supplement and accompanying base prospectus or any
other material relating to us or the securities offered hereby in
any jurisdiction where action for that purpose is required.
Accordingly, the securities offered hereby may not be offered or
sold, directly or indirectly, and neither of this prospectus
supplement and accompanying base prospectus nor any other offering
material or advertisements in connection with the securities
offered hereby may be distributed or published, in or from any
country or jurisdiction except in compliance with any applicable
rules and regulations of any such country or jurisdiction. The
Underwriter may arrange to sell securities offered by this
prospectus supplement and accompanying base prospectus in certain
jurisdictions outside the United States, either directly or through
affiliates, where it is permitted to do so. The foregoing does not
purport to be a complete statement of the terms and conditions of
the underwriting agreement. A copy of the underwriting agreement is
included as an exhibit to our Current Report on Form 8-K filed with
the SEC in connection with this offering and incorporated by
reference into the Registration Statement of which this prospectus
supplement forms a part. See “Where You Can Find More
Information.”
LEGAL MATTERS
The
validity of the securities offered hereby will be passed upon by
Law Office of Clifford J. Hunt, P.A. The law firm’s
principal, Clifford J. Hunt, Esquire, is the beneficial owner of
1,721 shares of our Common Stock. The Underwriter is being
represented by Loeb & Loeb LLP, New York, NY.
EXPERTS
The
consolidated financial statements of American Resources Corporation
as of December 31, 2018 and 2017 and for each of the years then
ended incorporated by reference in this prospectus and in the
registration statement of which this prospectus forms a part have
been so included in reliance on the report of MaloneBailey, LLP, an
independent registered public accounting firm, as set forth in
their report which is incorporated by reference in this prospectus
and elsewhere in the registration statement, given on the authority
of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file
annual, quarterly and current reports, proxy statements and other
information with the SEC. Through our website at
www.americanresourcescorp.com
, you may
access, free of charge, our filings, as soon as reasonably
practical after we electronically file them with or furnish them to
the SEC. The information contained on, or accessible through, our
website is not incorporated by reference in, and is not a part of
this prospectus or any accompanying prospectus supplement. Our SEC
filings are also available to the public from the SEC’s
website at
www.sec.gov
.
This
prospectus is part of a registration statement on Form S-3 that we
filed with the SEC to register the securities to be offered hereby.
This prospectus does not contain all of the information included in
the registration statement, including certain exhibits and
schedules. You may obtain the registration statement and exhibits
to the registration statement from the SEC at the address listed
above or from the SEC’s website listed above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC
allows us to incorporate by reference the information we file with
the SEC, which means that we can disclose important information to
you by referring you to those documents. The information that we
incorporate by reference is considered to be part of this
prospectus. Information that we file with the SEC in the future and
incorporate by reference in this prospectus automatically updates
and supersedes previously filed information as
applicable.
We
incorporate by reference into this prospectus the following
documents filed by us with the SEC, other than any portion of any
such documents that is not deemed “filed” under the
Exchange Act in accordance with the Exchange Act and applicable SEC
rules:
●
our Annual Report
on Form 10-K for the year ended December 31, 2018, filed with the
SEC on April 3, 2019;
●
our Annual Report
on Form 10-KA for the year ended December 31, 2018, filed with the
SEC on May 30, 2019;
●
our Quarterly
Reports on Form 10-Q for the quarter ended March 31, 2019, filed
with the SEC on May 16, 2019;
●
our Quarterly
Report on Form 10-QA for the quarter end March 31, 2019 filed with
the SEC on May 30, 2019;
●
our Quarterly
Report on Form 10-Q for the quarter end June 30, 2019 filed with
the SEC on August 12, 2019;
●
our Current Reports
on Form 8-K or Form 8-K/A, filed on January 3, 2019, February 20,
2019, February 22, 2019, March 8, 2019, April 17, 2019, April 26,
2019, May 3, 2019, May 29, 2019, June 5, 2019, June 11, 2019, June
14, 2019, June 17, 2019, June 18, 2019, June 27, 2019, July 22,
2019, and August 13, 2019.
●
the description of
our Common Stock contained in our registration statement on Form
8-A filed on February 14, 2019 pursuant to Section 12 of the
Exchange Act, including any subsequent amendment or report filed
for the purpose of updating that description.
In
addition, all documents subsequently filed by us pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering, will be deemed to be incorporated
herein by reference and to be a part of this registration statement
from the date of filing of such documents.
This
prospectus does not, however, incorporate by reference any
documents or portions thereof, whether specifically listed above or
furnished by us in the future, that are not deemed
“filed” with the SEC, including information
“furnished” pursuant to Items 2.02, 7.01 and 9.01 of
Form 8-K.
Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained herein or in any subsequently filed document
that is also incorporated by reference herein modifies or replaces
such statement. Any statements so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this prospectus.
Any
information incorporated by reference herein is available to you
without charge upon written or oral request. If you would like a
copy of any of this information, please submit your request to us
at the following address:
American
Resources Corporation
Attn:
Gregory Q. Jensen
9002
Technology Lane
Fishers,
IN 4038
(317)
855-9926
AMERICAN RESOURCES CORPORATION
Shares of Class A Common Stock
and
Warrants to Purchase Shares of Class A Common
Stock
————————————————————
Prospectus Supplement
Lead Book-Running Manager
Maxim Group LLC
PROSPECTUS
AMERICAN RESOURCES CORPORATION
$100,000,000
Common Stock
Warrants
Units
————————————————————
We are
American Resources Corporation (“ARC” or the
“Company”), a corporation incorporated under the laws
of the State of Florida. This prospectus relates to the public
offer and sale of our Class A Common Stock, warrants and units that
we may offer and sell from time to time, in one or more series or
issuances and on terms that we will determine at the time of the
offering, any combination of the securities described in this
prospectus, up to an aggregate amount of $100,000,000.
This
prospectus provides you with a general description of the
securities we may offer and sell. We will provide specific terms of
any offering in a supplement to this prospectus. Any prospectus
supplement may also add, update, or change information contained in
this prospectus. You should carefully read this prospectus and the
applicable prospectus supplement, as well as the documents
incorporated by reference in this prospectus before you invest in
any of our securities.
We may
offer the securities from time through public or private
transactions, and in the case of our Common Stock, on or off the
Nasdaq Capital Market, at prevailing market prices or at privately
negotiate prices. These securities may be offered and sold in the
same offering or in separate offerings, to or through underwriters,
dealers and agents, or directly to purchasers. The names of any
underwriters, dealers, or agents involved in the sale of our
securities registered hereunder and any applicable fees,
commissions, or discounts will be described in the applicable
prospectus supplement. Our net proceeds from the sale of securities
will also be set forth in the applicable prospectus
supplement.
This
prospectus may not be used to consummate a sale of our securities
unless accompanied by the applicable prospectus
supplement.
Our
Common Stock is listed on the Nasdaq Capital Market under the
symbol “AREC”.
As of
April 5, 2019, the aggregate market value of our outstanding Common
Stock held by non-affiliates was approximately $47,912,448, which
was calculated based on 11,629,235 shares of outstanding Common
Stock held by non-affiliates and on a price per share of $4.12, the
closing price of our Common Stock on April 5, 2019. Pursuant to
General Instruction I.B.6 of Form S-3, in no event will we sell the
shelf securities in a public primary offering with a value
exceeding more than one-third of the aggregate market value of our
Common Stock held by non-affiliates in any 12-month period so long
as the aggregate market value of our outstanding Common Stock held
by non-affiliates remains below $75 million. During the 12 calendar
months prior to and including the date of this prospectus, we have
not offered or sold any securities pursuant to General Instruction
I.B.6 of Form S-3.
Investing
in our securities involves a high degree of risk. See “Risk
Factors” beginning on page 1 of this prospectus for a
discussion of information that should be considered in connection
with an investment in our securities.
————————————————————
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
The date of this prospectus is June 4, 2019.
TABLE OF CONTENTS
|
Page
|
|
|
ABOUT
THIS PROSPECTUS
|
1
|
RISK
FACTORS
|
2
|
FORWARD-LOOKING
STATEMENTS
|
2
|
OUR
COMPANY
|
3
|
DILUTION
|
4
|
USE OF
PROCEEDS
|
4
|
DESCRIPTION
OF CLASS A COMMON STOCK
|
4
|
DESCRIPTION
OF WARRANTS
|
8
|
DESCRIPTION
OF UNITS
|
11
|
PLAN
OF DISTRIBUTION
|
13
|
LEGAL
MATTERS
|
14
|
EXPERTS
|
14
|
WHERE
YOU CAN FIND MORE INFORMATION
|
14
|
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
|
15
|
ABOUT THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission, or the SEC, utilizing a
“shelf” registration process. Under this shelf
registration process, we may sell the securities described in this
prospectus in one or more offerings, up to a total dollar amount of
$100,000,000. This prospectus provides you with general information
regarding the securities we may offer. We will provide a prospectus
supplement that contains specific information about any offering by
us with respect to the securities registered
hereunder.
The
prospectus supplement also may add, update, or change information
contained in the prospectus. You should read both this prospectus
and the prospectus supplement related to any offering as well as
additional information described under the headings “Where
You Can Find More Information” and “Incorporation of
Certain Information by Reference.”
We are
offering to sell, and seeking offers to buy, securities only in
jurisdictions where offers and sales are permitted. The information
contained in this prospectus and in any accompanying prospectus
supplement is accurate only as of the dates set forth on their
respective covers, regardless of the time of delivery of this
prospectus or any prospectus supplement or of any sale of our
securities. Our business, financial condition, results of
operations, and prospects may have changed since those dates. We
have not authorized anyone to provide you with information
different from that contained or incorporated by reference in this
prospectus or any accompanying prospectus supplement or any
“free writing prospectus.” You should rely only on the
information contained or incorporated by reference in this
prospectus or any accompanying prospectus supplement or related
“free writing prospectus.” To the extent there is a
conflict between the information contained in this prospectus and
the prospectus supplement, you should rely on the information in
the prospectus supplement, provided that if any statement in one of
these documents is inconsistent with a statement in another
document having a later date — for example, a document
incorporated by reference into this prospectus or any prospectus
supplement — the statement in the document having the later
date modifies or supersedes the earlier statement.
Unless
the context otherwise requires, the terms “Company,”
“we,” “us,” or “our” refer to
American Resources Corporation, a Florida corporation, and its
consolidated subsidiaries.
Investing in our
securities involves a high degree of risk. Before making an
investment decision, you should carefully consider the discussion
of risks and uncertainties under the heading “Risk
Factors” contained in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2018, which is incorporated by
reference in this prospectus, and under similar headings in our
subsequently filed quarterly reports on Form 10-Q and annual
reports on Form 10-K, as well as the other risks and uncertainties
described in any applicable prospectus supplement or free writing
prospectus and in the other documents incorporated by reference in
this prospectus. See the sections entitled “Where You Can
Find More Information” and “Incorporation of Certain
Information by Reference” in this prospectus. The risks and
uncertainties we discuss in the documents incorporated by reference
in this prospectus are those we currently believe may materially
affect us. Additional risks and uncertainties not presently known
to us or that we currently believe are immaterial also may also
materially and adversely affect our business, financial condition
and results of operations.
FORWARD-LOOKING STATEMENTS
This
prospectus, any applicable prospectus supplement and the documents
and information incorporated by reference herein and therein may
contain “forward-looking statements.” Forward-looking
statements may include, but are not limited to, statements relating
to our objectives, plans and strategies as well as statements,
other than historical facts, that address activities, events, or
developments that we intend, expect, project, believe or anticipate
will or may occur in the future. These statements are often
characterized by terminology such as “may,”
“will,” “should,” “expects,”
“plans,” “anticipates,”
“could,” “intends,” “target,”
“projects,” “contemplates,”
“believes,” “estimates,”
“predicts,” “potential,” “goal”
or “continue” or the negative of these terms or other
similar expressions.
Forward-looking
statements are based on assumptions and assessments made in light
of our experience and perception of historical trends, current
conditions, expected future developments and other factors believed
to be appropriate. Forward-looking statements are not guarantees of
future performance and are subject to risks and uncertainties, many
of which are outside of our control. You should not place undue
reliance on these forward-looking statements, which reflect our
view only as of the date of this prospectus, and we undertake no
obligation to update these forward-looking statements in the
future, except as required by applicable law.
Factors
could cause actual results to differ materially from those
indicated by the forward-looking statements include those factors
described under the caption “Risk Factors” in our
Annual Report on Form 10-K for the fiscal year ended December 31,
2018, which is incorporated by reference in this prospectus, and
under similar headings in our subsequently filed quarterly reports
on Form 10-Q and annual reports on Form 10-K, as well as the other
risks and uncertainties described in any applicable prospectus
supplement or free writing prospectus and in the other documents
incorporated by reference in this prospectus.
OUR COMPANY
Overview
We are
a producer of primarily high-quality, metallurgical coal in eastern
Kentucky. We began our Company on October 2, 2013 and changed our
name from Natural Gas Fueling and Conversion Inc. to NGFC Equities,
Inc. on February 25, 2015, and then changed our name from NGFC
Equities, Inc. to American Resources Corporation on February 17,
2017. On January 5, 2017, ARC executed a Share Exchange Agreement
between the Company and Quest Energy Inc., a private company
incorporated in the State of Indiana with offices at 9002
Technology Lane, Fishers IN 46038, and due to the fulfillment of
various conditions precedent to closing of the transaction, the
control of the Company was transferred to the Quest Energy
shareholders on February 7, 2017 resulting in Quest Energy becoming
a wholly-owned subsidiary of ARC. Through its wholly-owned
subsidiary Quest Energy, which is an Indiana corporation founded in
June 2015, ARC was able to acquire coal mining and coal processing
operations, substantially all located in eastern Kentucky. A
majority of our domestic and international target customer base
includes blast furnace steel mills and coke plants, as well as
international metallurgical coal consumers, domestic electricity
generation utilities, and other industrial customers.
ARC
currently has six coal mining and processing operating
subsidiaries: McCoy Elkhorn Coal LLC (doing business as McCoy
Elkhorn Coal Company) (McCoy Elkhorn), Knott County Coal LLC (Knott
County Coal), Deane Mining, LLC (Deane Mining) and Wyoming County
Coal LLC (Wyoming County), Quest Processing LLC (Quest Processing)
located in eastern Kentucky and western West Virginia within the
Central Appalachian coal basin, and ERC Mining Indiana Corporation
(ERC) located in southwest Indiana within the Illinois coal basin.
The coal deposits under control by the Company are generally
comprise of metallurgical coal (used for steel making), pulverized
coal injections (used in the steel making process) and high-BTU,
low sulfur, low moisture bituminous coal used for a variety of uses
within several industries, including industrial customers,
specialty products and thermal coal used for electricity
generation.
Current Production
We
achieved initial commercial production of metallurgical coal in
September 2016 from our McCoy Elkhorn Mine #15 and from our McCoy
Elkhorn Carnegie 1 Mine in March 2017. In October 2017 we achieved
commercial production of thermal coal from our Deane Mining Access
Energy Mine and from our Deane Mining Razorblade Surface Mine in
May 2018. We believe that we will be able to take advantage of
recent increases in U.S. and global benchmark metallurgical and
thermal coal prices and intend to opportunistically increase the
amount of our projected production that is directed to the export
market to capture favorable differentials between domestic and
global benchmark prices. The Company commenced operations of two
out of four of its internally owned preparation plants in July of
2016 (Bevins #1 and Bevins #2 Prep Plants at McCoy Elkhorn), with a
third preparation plant commencing operation in October 2017 (Mill
Creek Prep Plant at Deane Mining). Pursuant to the definitions in
Paragraph (a) (4) of the Securities and Exchange Commission's
Industry Guide 7, our coal has not been classified as either
“proven” or “probable” and as a result, do
not have any “proven” or “probable”
reserves under such definition, and our company and its business
activities are deemed to be in the exploration stage until mineral
reserves are defined on our properties.
Our Company Background
We
began our Company on October 2, 2013 and changed our name from
Natural Gas Fueling and Conversion Inc. to NGFC Equities, Inc. on
February 25, 2015, and then changed our name from NGFC Equities,
Inc. to American Resources Corporation on February 17, 2017. On
January 5, 2017, ARC executed a Share Exchange Agreement between
the Company and Quest Energy Inc., a private company incorporated
in the State of Indiana with offices at 9002 Technology Lane,
Fishers IN 46038, and due to the fulfillment of various conditions
precedent to closing of the transaction, the control of the Company
was transferred to the Quest Energy shareholders on February 7,
2017 resulting in Quest Energy becoming a wholly-owned subsidiary
of ARC. Our telephone number is (317) 855-9926 and our website
address is
www.americanresourcescorp.com
. Neither
our website nor any information contained on, or accessible
through, our website is part of this prospectus.
DILUTION
We will
set forth in a prospectus supplement the following information
regarding any material dilution of the equity interests of
investors purchasing securities in an offering under this
prospectus and the related prospectus supplement:
●
the net tangible
book value per share of our equity securities before and after the
offering;
●
the amount of the
increase in such net tangible book value per share attributable to
the cash payments made by purchasers in the offering;
and
●
the amount of the
immediate dilution from the public offering price which will be
absorbed by such purchasers.
USE OF PROCEEDS
Except
as may be otherwise set forth in any prospectus supplement
accompanying this prospectus, we will use the net proceeds we
receive from sales of securities offered hereby for general
corporate purposes, which may include capital expenditures,
acquisitions, the repayment of indebtedness outstanding from time
to time and for working capital, and repurchases of our Common
Stock or other securities. When specific securities are offered,
the prospectus supplement relating thereto will set forth our
intended use of the net proceeds that we receive from the sale of
such securities.
DESCRIPTION OF COMMON STOCK
This
section describes the general terms of our Class A Common Stock,
par value $0.0001 per share, which may also be referred to herein
as “Common Stock”. A prospectus supplement may provide
information that is different from this prospectus. If the
information in the prospectus supplement with respect to our Common
Stock being offered differs from this prospectus, you should rely
on the information in the prospectus supplement. A copy of our
amended and restated articles of incorporation, as amended, has
been incorporated by reference from our filings with the SEC as an
exhibit to the registration statement of which this prospectus
forms a part. Our Common Stock and the rights of the holders of our
Common Stock are subject to the applicable provisions of the
Florida Business Corporation Act, which we sometimes refer to in
this section as “Florida law,” our amended and restated
articles of incorporation, as amended, our bylaws, the rights of
the holders of our preferred stock, if any, and the agreements
described below.
Under
our amended and restated articles of incorporation, as amended, we
have the authority to issue 230,000,000 shares of Common Stock, par
value $0.0001 per share, and 30,000,000 shares of preferred stock,
par value $0.0001 per share. As of March 31, 2019, there were
23,148,556 shares of our Common Stock issued and outstanding and no
shares of preferred stock issued and outstanding.
Effective
January 18, 2017, we amended our articles of incorporation to
create a new Series A Preferred Stock. Effective February 20, 2017,
we amended our articles of incorporation to change our name to
American Resources Corporation. Effective March 21, 2017, we
amended our articles of incorporation to create a new Series B
Preferred Stock. Effective November 8, 2018 we amended our articles
of incorporation to create a new Series C Preferred Stock and
modify the Series A Preferred Stock voting ratio.
The
table below presents earnings per share as previously reported in
our Annual Report on Form 10-K for the year ended December 31,
2018.
|
|
|
|
|
Earnings Per
Share
|
|
|
Basic and
diluted:
|
|
|
As previously
reported
|
$
(3.69
)
|
$
(16.39
)
|
The
following description of our Common Stock, and any description of
our Common Stock in a prospectus supplement, may not be complete
and is subject to, and qualified in its entirety by reference to,
Florida law and the actual terms and provisions contained in our
amended and restated articles of incorporation and our bylaws, each
as amended from time to time.
Voting Rights
The
holders of our Common Stock are generally entitled to one vote for
each share held on all matters submitted to a vote of the
shareholders and do not have any cumulative voting rights. Unless
otherwise required by Florida law, once a quorum is present,
matters presented to shareholders, except for the election of
directors, will be approved by a majority of the votes cast. The
election of directors is determined by a plurality of the votes
cast.
Dividends
Holders
of our Common Stock are entitled to receive dividends if, as and
when declared by the board of directors, or the Board, out of funds
legally available for that purpose, subject to preferences that may
apply to any preferred stock that we issue.
Liquidation Rights
In the
event of our dissolution or liquidation, after satisfaction of all
our debts and liabilities and distributions to the holders of any
preferred stock that we may issue in the future, of amounts to
which they are preferentially entitled, the holders of Common Stock
will be entitled to share ratably in the distribution of assets to
the shareholders.
Other Provisions
There
are no cumulative, subscription or preemptive rights to subscribe
for any additional securities which we may issue, and there are no
redemption provisions, conversion provisions or sinking fund
provisions applicable to the Common Stock. The rights of holders of
Common Stock are subject to the rights, privileges, preferences and
priorities of any class or series of preferred stock that may be
issued in the future.
Our
amended and restated articles of incorporation, as amended, and
bylaws do not restrict the ability of a holder of our Common Stock
to transfer his or her shares of our Common Stock.
Shares of Common Stock Reserved for Issuance
As of
March 31, 2019, we had reserved for issuance:
●
an aggregate of
5,957,532 shares of our Common Stock issuable upon the exercise of
outstanding warrants and employee options;
Preferred Stock
Under
our amended and restated articles of incorporation, as amended, we
are authorized to issue up to 30,000,000 shares of preferred stock,
par value $0.0001 per share, in one or more series. We are
authorized to issue preferred stock with such designation, rights
and preferences as may be determined from time to time by our
Board. Accordingly, the Board is empowered, without shareholder
approval, to issue preferred stock with dividend, liquidation,
conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of our Common Stock
and, in certain instances, could adversely affect the market price
of our Common Stock. As of March 31, 2019, there are no shares of
preferred stock issued or outstanding.
Series A Preferred Stock
On
January 18, 2017, we designated 5,000,000 shares of preferred stock
as Series A Preferred Stock, par value $0.0001 per share, which may
be issued from time to time by the board of directors. As of March
31, 2019, there are no shares of Series A Preferred stock issued or
outstanding.
Series C Preferred Stock
On
November 8, 2018, we designated 20,000,000 shares of preferred
stock as Series C Preferred Stock, par value $0.0001 per share,
which may be issued from time to time by the board of directors. As
of March 31, 2019, there are no shares of Series C Preferred stock
issued or outstanding.
Anti-takeover Effects of our Amended and Restated Articles of
Incorporation and Bylaws
As
described above, our amended and restated articles of
incorporation, as amended, provide that our Board may issue
preferred stock with such designation, rights and preferences as
may be determined from time to time by our Board. Our preferred
stock could be issued quickly and utilized, under certain
circumstances, as a method of discouraging, delaying or preventing
a change in control of the Company or make removal of management
more difficult. Our amended and restated articles of incorporation,
as amended, and our bylaws provide that special meetings may be
called only by a unanimous vote of the Board.
Florida Anti-Takeover Statute
As a
Florida corporation, we are subject to certain anti-takeover
provisions that apply to public corporations under Florida law.
Pursuant to Section 607.0901 of the Florida Business Corporation
Act, a publicly held Florida corporation may not engage in a broad
range of business combinations or other extraordinary corporate
transactions with an interested shareholder without the approval of
the holders of two-thirds of the voting shares of the corporation
(excluding shares held by the interested shareholder),
unless:
●
the transaction is
approved by a majority of disinterested directors before the
shareholder becomes an interested shareholder;
●
the interested
shareholder has owned at least 80% of the corporation’s
outstanding voting shares for at least five years preceding the
announcement date of any such business combination;
●
the interested
shareholder is the beneficial owner of at least 90% of the
outstanding voting shares of the corporation, exclusive of shares
acquired directly from the corporation in a transaction not
approved by a majority of the disinterested directors;
or
●
the consideration
paid to the holders of the corporation’s voting stock is at
least equal to certain fair price criteria.
An
interested shareholder is defined as a person who together with
affiliates and associates beneficially owns more than 10% of a
corporation’s outstanding voting shares. We have not made an
election in our amended and restated articles of incorporation, as
amended, to opt out of Section 607.0901.
In
addition, we are subject to Section 607.0902 of the Florida
Business Corporation Act, which prohibits the voting of shares in a
publicly held Florida corporation that are acquired in a control
share acquisition unless (i) our Board approved such acquisition
prior to its consummation or (ii) after such acquisition, in lieu
of prior approval by our Board, the holders of a majority of the
corporation’s voting shares, exclusive of shares owned by
officers of the corporation, employee directors or the acquiring
party, approve the granting of voting rights as to the shares
acquired in the control share acquisition. A control share
acquisition is defined as an acquisition that immediately
thereafter entitles the acquiring party to 20% or more of the total
voting power in an election of directors.
Indemnification
Both
our amended and restated articles of incorporation, as amended, and
bylaws provide for indemnification of our directors and officers to
the fullest extent permitted by Florida law.
Listing
Our
Common Stock is listed on the Nasdaq Capital Market under the
symbol “AREC”.
Transfer Agent and Registrar
The
transfer agent and registrar for our Common Stock is Vstock
Transfer, LLC located at 18 Lafayette Place Woodmere, NY 11598,
phone number 212-828-8436.
DESCRIPTION OF WARRANTS
General
We may
issue warrants to purchase shares of Common Stock. The warrants may
be issued independently or together with shares of Common Stock
offered by this prospectus and may be attached to or separate from
those shares of Common Stock.
While
the terms we have summarized below will generally apply to any
future warrants we may offer under this prospectus, we will
describe the particular terms of any warrants that we may offer in
more detail in the applicable prospectus supplement. The terms of
any warrants we offer under a prospectus supplement may differ from
the terms we describe below.
We may
issue the warrants under a warrant agreement, which we will enter
into with a warrant agent to be selected by us. Each warrant agent
will act solely as our agent under the applicable warrant agreement
and will not assume any obligation or relationship of agency or
trust with any holder of any warrant. A single bank or trust
company may act as warrant agent for more than one issue of
warrants. A warrant agent will have no duty or responsibility in
case of any default by us under the applicable warrant agreement or
warrant, including any duty or responsibility to initiate any
proceedings at law or otherwise, or to make any demand upon us. Any
holder of a warrant may, without the consent of the related warrant
agent or the holder of any other warrant, enforce by appropriate
legal action its right to exercise, and receive the Common Stock
purchasable upon exercise of, its warrants.
We will
incorporate by reference into the registration statement of which
this prospectus forms a part the form of warrant agreement,
including a form of warrant certificate, that describes the terms
of the series of warrants we are offering before the issuance of
the related series of warrants. The following summaries of material
provisions of the warrants and the warrant agreements are subject
to, and qualified in their entirety by reference to, all the
provisions of the warrant agreement applicable to a particular
series of warrants. We urge you to read the applicable prospectus
supplements related to the warrants that we sell under this
prospectus, as well as the complete warrant agreements that contain
the terms of the warrants.
We will
set forth in the applicable prospectus supplement the terms of the
warrants in respect of which this prospectus is being delivered,
including, when applicable, the following:
●
the title of the
warrants;
●
the aggregate
number of the warrants;
●
the price or prices
at which the warrants will be issued;
●
the designation,
number, and terms of shares of Common Stock purchasable upon
exercise of the warrants;
●
the date, if any,
on and after which the warrants and the related Common Stock will
be separately transferable;
●
the price at which
each share of Common Stock purchasable upon exercise of the
warrants may be purchased;
●
the date on which
the right to exercise the warrants will commence and the date on
which such right will expire;
●
the minimum or
maximum amount of the warrants that may be exercised at any one
time;
●
any information
with respect to book-entry procedures;
●
the effect of any
merger, consolidation, sale, or other disposition of our business
on the warrant agreement and the warrants;
●
any other terms of
the warrants, including terms, procedures, and limitations relating
to the transferability, exchange, and exercise of such
warrants;
●
the terms of any
rights to redeem or call, or accelerate the expiration of, the
warrants;
●
the date on which
the right to exercise the warrants begins and the date on which
that right expires;
●
the material U.S.
federal income tax consequences of holding or exercising the
warrants; and
●
any other specific
terms, preferences, rights, or limitations of, or restrictions on,
the warrants.
Unless
specified in an applicable prospectus supplement, warrants will be
in registered form only.
A
holder of warrant certificates may exchange them for new
certificates of different denominations, present them for
registration of transfer, and exercise them at the corporate trust
office of the warrant agent or any other office indicated in the
applicable prospectus supplement. Until any warrants are exercised,
holders of the warrants will not have any rights of holders of the
underlying Common Stock, including any rights to receive dividends
or to exercise any voting rights, except to the extent set forth
under the heading “Warrant Adjustments”
below.
Exercise of Warrants
Each
warrant will entitle the holder to purchase for cash shares of
Common Stock at the applicable exercise price set forth in, or
determined as described in, the applicable prospectus supplement.
Warrants may be exercised at any time up to the close of business
on the expiration date set forth in the applicable prospectus
supplement. After the close of business on the expiration date,
unexercised warrants will become void.
Warrants may be
exercised by delivering to the corporation trust office of the
warrant agent or any other officer indicated in the applicable
prospectus supplement (a) the warrant certificate properly
completed and duly executed and (b) payment of the amount due upon
exercise. As soon as practicable following exercise, we will
forward the shares of Common Stock. If less than all of the
warrants represented by a warrant certificate are exercised, a new
warrant certificate will be issued for the remaining warrants. If
we so indicate in the applicable prospectus supplement, holders of
the warrants may surrender securities as all or a part of the
exercise price for the warrants.
Amendments and Supplements to the Warrant Agreements
We may
amend or supplement a warrant agreement without the consent of the
holders of the applicable warrants to cure ambiguities in the
warrant agreement, to cure or correct a defective provision in the
warrant agreement, or to provide for other matters under the
warrant agreement that we and the warrant agent deem necessary or
desirable, so long as, in each case, such amendments or supplements
do not materially and adversely affect the interests of the holders
of the warrants.
Warrant Adjustments
Unless
the applicable prospectus supplement states otherwise, the exercise
price of, and the number of shares of Common Stock covered by a
warrant will be adjusted proportionately if we subdivide or combine
our Common Stock. In addition, unless the prospectus supplement
states otherwise, if we, without payment:
●
issue capital stock
or other securities convertible into or exchangeable for Common
Stock, or any rights to subscribe for, purchase, or otherwise
acquire Common Stock, as a dividend or distribution to holders of
our Common Stock;
●
pay any cash to
holders of our Common Stock other than a cash dividend paid out of
our current or retained earnings;
●
issue any evidence
of our indebtedness or rights to subscribe for or purchase our
indebtedness to holders of our Common Stock; or
●
issue Common Stock
or additional stock or other securities or property to holders of
our Common Stock by way of spinoff, split-up, reclassification,
combination of shares, or similar corporate
rearrangement,
then
the holders of warrants will be entitled to receive upon exercise
of the warrants, in addition to the shares of Common Stock
otherwise receivable upon exercise of the warrants and without
paying any additional consideration, the amount of stock and other
securities and property such holders would have been entitled to
receive had they held the Common Stock issuable under the warrants
on the dates on which holders of those securities received or
became entitled to receive such additional stock and other
securities and property.
Except
as stated above, the exercise price and number of securities
covered by a warrant, and the amounts of other securities or
property to be received, if any, upon exercise of those warrants,
will not be adjusted or provided for if we issue those securities
or any securities convertible into or exchangeable for those
securities, or securities carrying the right to purchase those
securities or securities convertible into or exchangeable for those
securities.
Holders
of warrants may have additional rights under the following
circumstances:
●
certain
reclassifications, capital reorganizations, or changes of the
Common Stock;
●
certain share
exchanges, mergers, or similar transactions involving us and which
result in changes of the Common Stock; or
●
certain sales or
dispositions to another entity of all or substantially all of our
property and assets.
If one
of the above transactions occurs and holders of our Common Stock
are entitled to receive stock, securities, or other property with
respect to or in exchange for their shares of Common Stock, the
holders of the warrants then outstanding, as applicable, will be
entitled to receive upon exercise of their warrants the kind and
amount of shares of stock and other securities or property that
they would have received upon the applicable transaction if they
had exercised their warrants immediately before the
transaction.
Outstanding Warrants and Options
As of
March 31, 2019, we had outstanding:
●
an aggregate of
5,275,702 of our Common Stock issuable upon the exercise of
outstanding warrants with exercise prices ranging from
$
$0.01
to $
$11.44
per share and expiration dates ranging from April 29, 2019 to
January 24, 2024; and
●
an aggregate of
681,830 of our Common Stock issuable upon the exercise of
outstanding employee and director options with an exercise price of
$1.00 per share and an expiration date of September 10,
2025.
DESCRIPTION OF UNITS
The
following description, together with the additional information we
include in any applicable prospectus supplement, summarizes the
material terms and provisions of the units that we may offer under
this prospectus. Units may be offered independently or together
with Common Stock and warrants offered by any prospectus
supplement, and may be attached to or separate from those
securities. While the terms we have summarized below will generally
apply to any future units that we may offer under this prospectus,
we will describe the particular terms of any series of units that
we may offer in more detail in the applicable prospectus
supplement. The terms of any units offered under a prospectus
supplement may differ from the terms described below.
We will
incorporate by reference into the registration statement of which
this prospectus forms a part the form of unit agreement, including
a form of unit certificate, if any, that describes the terms of the
series of units we are offering before the issuance of the related
series of units. The following summaries of material provisions of
the units and the unit agreements are subject to, and qualified in
their entirety by reference to, all the provisions of the unit
agreement applicable to a particular series of units. We urge you
to read the applicable prospectus supplements related to the units
that we sell under this prospectus, as well as the complete unit
agreements that contain the terms of the units.
General
We may
issue units consisting of Common Stock and warrants. Each unit will
be issued so that the holder of the unit is also the holder of each
security included in the unit. Thus, the holder of a unit will have
the rights and obligations of a holder of each included security.
The unit agreement under which a unit is issued may provide that
the securities included in the unit may not be held or transferred
separately, at any time, or at any time before a specified
date.
We will
describe in the applicable prospectus supplement the terms of the
series of units, including the following:
●
the designation and
terms of the units and of the securities comprising the units,
including whether and under what circumstances those securities may
be held or transferred separately;
●
any provisions of
the governing unit agreement that differ from those described
below; and
●
any provisions for
the issuance, payment, settlement, transfer, or exchange of the
units or of the securities comprising the units.
The
provisions described in this section, as well as those described
under “Description of Common Stock” and
“Description of Warrants,” will apply to each unit and
to any Common Stock or warrant included in each unit,
respectively.
Issuance in Series
We may
issue units in such amounts and in such numerous distinct series as
we determine.
Enforceability of Rights by Holders of Units
Each
unit agent, if any, will act solely as our agent under the
applicable unit agreement and will not assume any obligation or
relationship of agency or trust with any holder of any unit. A
single bank or trust company may act as unit agent for more than
one series of units. A unit agent will have no duty or
responsibility in case of any default by us under the applicable
unit agreement or unit, including any duty or responsibility to
initiate any proceedings at law or otherwise, or to make any demand
upon us. Any holder of a unit, without the consent of the related
unit agent or the holder of any other unit, may enforce by
appropriate legal action its rights as holder under any security
included in the unit.
Title
We, the
unit agent, and any of their agents may treat the registered holder
of any unit certificate as an absolute owner of the units evidenced
by that certificate for any purposes and as the person entitled to
exercise the rights attaching to the units so requested, despite
any notice to the contrary.
PLAN OF DISTRIBUTION
We may
sell securities to one or more underwriters or dealers for public
offering and sale by them, or we may sell the securities to
investors directly or through agents. The applicable prospectus
supplement will set forth the terms of the particular offering and
the method of distribution and will identify any firms acting as
underwriters, dealers or agents in connection with the offering,
including:
●
the name or names
of any underwriters;
●
the respective
amounts underwritten;
●
the nature of any
material relationship between us and any underwriter;
●
the nature of the
obligation of the underwriter(s) to take the
securities;
●
the purchase price
of the securities;
●
any underwriting
discounts and other items constituting underwriters’
compensation;
●
any initial public
offering price and the net proceeds we will receive from such
sale;
●
any discounts or
concessions allowed or reallowed or paid to dealers;
and
●
any securities
exchange or market on which the securities offered in the
prospectus supplement may be listed.
We may
distribute our securities from time to time in one or more
transactions at a fixed price or prices, which may be changed, or
at prices determined as the prospectus supplement specifies,
including in “at-the-market” offerings.
Any
underwriting discounts or other compensation which we pay to
underwriters or agents in connection with the offering of our
securities, and any discounts, concessions or commissions which
underwriters allow to dealers, will be set forth in the prospectus
supplement. Underwriters may sell our securities to or through
dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and
commissions from the purchasers for whom they may act as agents.
Underwriters, dealers and agents that participate in the
distribution of our securities may be deemed to be underwriters
under the Securities Act and any discounts or commissions they
receive from us and any profit on the resale of our securities they
realize may be deemed to be underwriting discounts and commissions
under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from us, will be
described in the applicable supplement to this prospectus. Unless
otherwise set forth in the supplement to this prospectus relating
thereto, the obligations of the underwriters or agents to purchase
our securities will be subject to conditions precedent and the
underwriters will be obligated to purchase all our offered
securities if any are purchased. The public offering price and any
discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
Any
Common Stock sold pursuant to this prospectus and applicable
prospectus supplement will be approved for trading, upon notice of
issuance, on the Nasdaq Capital Market.
Underwriters and
their controlling persons, dealers and agents may be entitled,
under agreements entered into with us, to indemnification against
and contribution toward specific civil liabilities, including
liabilities under the Securities Act.
An
underwriter may engage in over-allotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with
securities laws. Over-allotment involves sales in excess of the
offering size, which creates a short position. Stabilizing
transactions permit bidders to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum.
Short covering transactions involve purchases of the securities in
the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters to reclaim a
selling concession from a dealer when the securities originally
sold by the dealer are purchased in a covering transaction to cover
short positions. Those activities may cause the price of the
securities to be higher than it would otherwise be. The
underwriters may engage in these activities on any exchange or
other market in which the securities may be traded. If commenced,
the underwriters may discontinue these activities at any
time.
Certain
of the underwriters and their affiliates may be customers of,
engage in transactions with, and perform services for, us and our
subsidiaries in the ordinary course of business.
LEGAL MATTERS
The
validity of the securities offered hereby will be passed upon by
Law Office of Clifford J. Hunt, P.A. The law firm’s
principal, Clifford J. Hunt, Esquire, is the beneficial owner of
1,721 shares of our Common Stock
EXPERTS
The
consolidated financial statements of American Resources Corporation
as of December 31, 2018 and 2017 and for each of the years then
ended incorporated by reference in this prospectus and in the
registration statement of which this prospectus forms a part have
been so included in reliance on the report of MaloneBailey, LLP, an
independent registered public accounting firm, as set forth in
their report which is incorporated by reference in this prospectus
and elsewhere in the registration statement, given on the authority
of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file
annual, quarterly and current reports, proxy statements and other
information with the SEC. Through our website at
www.americanresourcescorp.com
, you may
access, free of charge, our filings, as soon as reasonably
practical after we electronically file them with or furnish them to
the SEC. The information contained on, or accessible through, our
website is not incorporated by reference in, and is not a part of
this prospectus or any accompanying prospectus supplement. You also
may read and copy any document we file with the SEC at the
SEC’s public reference room at 100 F Street, N.E.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. Our SEC filings
are also available to the public from the SEC’s website at
www.sec.gov
.
This
prospectus is part of a registration statement on Form S-3 that we
filed with the SEC to register the securities to be offered hereby.
This prospectus does not contain all of the information included in
the registration statement, including certain exhibits and
schedules. You may obtain the registration statement and exhibits
to the registration statement from the SEC at the address listed
above or from the SEC’s website listed above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC
allows us to incorporate by reference the information we file with
the SEC, which means that we can disclose important information to
you by referring you to those documents. The information that we
incorporate by reference is considered to be part of this
prospectus. Information that we file with the SEC in the future and
incorporate by reference in this prospectus automatically updates
and supersedes previously filed information as
applicable.
We
incorporate by reference into this prospectus the following
documents filed by us with the SEC, other than any portion of any
such documents that is not deemed “filed” under the
Exchange Act in accordance with the Exchange Act and applicable SEC
rules:
●
our Annual Report
on Form 10-K for the year ended December 31, 2018, filed with the
SEC on April 3, 2019;
●
our Annual Report
on Form 10-KA for the year ended December 31, 2018, filed with the
SEC on May 30, 2019;
●
our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2019, filed
with the SEC on May 1562019;
●
our Quarterly
Report on Form 10-Q for the quarter end March 31, 2019 filed with
the SEC on May 30, 2019;
●
our Current Reports
on Form 8-K or Form 8-K/A, filed on May 1, 2018, May 15, 2018, June
1, 2018, July 26, 2018, September 10, 2018, September 25, 2018,
October 30, 2018, November 13, 2018, November 15, 2018, January 3,
2019, February 20, 2019, February 22, 2019, March 8, 2019, April
17, 2019, April 26, 2019, May 3, 2019 and May 29, 2019;
and
●
the description of
our Common Stock contained in our registration statement on Form
8-A filed on February 14, 2019 pursuant to Section 12 of the
Exchange Act, including any subsequent amendment or report filed
for the purpose of updating that description.
In
addition, all documents subsequently filed by us (including all
documents subsequently filed by us after the date of this
registration statement and prior to the effectiveness of this
registration statement) pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act prior to the termination of the offering,
will be deemed to be incorporated herein by reference and to be a
part of this registration statement from the date of filing of such
documents.
This
prospectus does not, however, incorporate by reference any
documents or portions thereof, whether specifically listed above or
furnished by us in the future, that are not deemed
“filed” with the SEC, including information
“furnished” pursuant to Items 2.02, 7.01 and 9.01 of
Form 8-K.
Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained herein or in any subsequently filed document
that is also incorporated by reference herein modifies or replaces
such statement. Any statements so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this prospectus.
Any
information incorporated by reference herein is available to you
without charge upon written or oral request. If you would like a
copy of any of this information, please submit your request to us
at the following address:
American
Resources Corporation
Attn:
Gregory Q. Jensen
9002
Technology Lane
Fishers,
IN 4038
(317)
855-9926
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