Item 1.01 Entry into a Material Definitive
Agreement.
On February 15, 2019, American Resources Corporation (the
“Company” “we,” “our” or
“us”) entered into an underwriting agreement (the
“Underwriting Agreement”) with Maxim Group LLC
(“Maxim” or the “Underwriter”), relating to
a public offering (the “Offering”) of 1,000,000 shares
of Company Class A Common Stock (the “Common Stock”),
par value $0.0001 per share. Under the terms of the Underwriting
Agreement, the Company also granted Maxim an overallotment option,
which is exercisable for up to 45 days following the date of the
Underwriting Agreement, to purchase up to 150,000 Option Shares of
Common Stock (the “Overallotment Option”). Maxim acted
as the sole book-running manager in the Offering.
The Offering was made pursuant to the Company’s effective
registration statement on Form S-1 (File No. 333-226042) initially
filed by the Company with the Securities and Exchange Commission
(“SEC”) on July 2, 2018, as amended to date (the
“Registration Statement”) and declared effective on
February 14, 2019, and a final prospectus filed with the SEC on
February 15, 2019.
The closing of the Offering occurred on February 20, 2019. The
aggregate gross proceeds from the sale of the Common Stock offered
by us in this Offering are $4.0 million (or approximately $4.6
million if Maxim’s Overallotment Option to purchase
additional shares is exercised in full), based on an offering price
to the public of $4.00 per share of Common Stock, and before
deducting the estimated underwriting discounts and commissions and
estimated offering expenses payable by us. We intend to use the net
proceeds from the Offering to initiate coal production on certain
permits that we own, act upon certain acquisition opportunities,
and for general corporate purposes, including working
capital.
The Underwriting Agreement also contains representations,
warranties, indemnification and other provisions customary for
transactions of this nature. Pursuant to the Underwriting
Agreement, the Company has agreed to indemnify the Underwriter
against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, and liabilities arising from
breaches of representations and warranties contained in the
Underwriting Agreement, or to contribute to payments that the
Underwriter may be required to make in respect of those
liabilities. The Underwriting Agreement also contains customary
representations, warranties, and conditions precedent to closing.
In addition,, pursuant to the Underwriting Agreement, the Company,
its directors, certain officers and each owner of at least 5% of
the Company’s outstanding shares of Common Stock, agreed,
subject to certain exceptions, not to offer, issue or sell any
shares of Common Stock or securities convertible into or
exercisable or exchangeable for shares of Common Stock for a period
of one hundred eighty (180) days following February 15, 2019,
without the prior written consent of Maxim.
The Underwriting Agreement is filed as Exhibit 1.1 hereto and is
incorporated into this Item 1.01 by reference. The foregoing
description of the Underwriting Agreement is qualified in its
entirety by reference to the full text of the Underwriting
Agreement.
The Company also agreed to issue to the Underwriter a warrant (the
“Underwriter Warrant”) to purchase up to 70,000 shares
(the “Warrant Shares”) of Company Series A Common
Stock. The Underwriter Warrant shall be exercisable, in whole or in
part, at any time and from time to time commencing on August 15,
2019 through and including the Expiration Date of February 15,
2021. The Warrant Exercise Price is $4.40 per share; however, the
Warrant also may be exercised on a cashless basis as specified in
the Warrant. The Exercise Price and number of Warrant Shares are
subject to adjustment from time to time in the event of stock
dividends stock splits, merger or consolidation, or other
fundamental transactions.
Copies of the Underwriting Agreement and the Underwriter Warrant
issued in connection with the Offering are filed herewith as
Exhibits 1.1 and 4.1, respectively, and are incorporated herein by
reference. The foregoing description of the Offering by the
Company and the documentation related thereto does not purport to
be complete and is qualified in its entirety by reference to such
Exhibits.