Item 1.01. Entry into a Material Definitive Agreement.
Placement Agent Agreement
On
October 7, 2020, American Resources Corporation (the
“Company”) entered into a Placement Agent Agreement
(the “Agreement”) with Kingswood Capital Markets
(“Kingswood”), a division of Benchmark Investments,
Inc. as the placement agent, with respect to the issuance and sale
of an aggregate of 5,200,000 shares (the “Shares”) of
Class A Common stock, par value $0.0001 per share (the
“Common Stock”) to accredited investors (each, an
“Investor” and collectively, the
“Investors”). The public offering price for each Share
was $2.50. The gross proceeds of the offering, before deducting
underwriter discounts and commissions and other offering expenses,
are $13,000,000.
The
Common Stock are being offered and sold to the public pursuant to
the Company’s registration statement on Form S-3, (File No.
333-230786), which was declared effective with the U.S. Securities
and Exchange Commission (“SEC”) on June 4, 2019. A
preliminary prospectus supplement relating to the offering was
filed with the SEC on October 9, 2020 and is available on the
SEC’s web site at http://www.sec.gov. Copies of the final
prospectus supplement may be obtained from Kingswood Capital
Markets, division of Benchmark Investments, Inc., 17 Battery Place, New York, NY 10004, Attention:
Syndicate Department, or via email at syndicate@kingswoodcm.com or
telephone at (212) 404-7002.
Pursuant
to the Agreement, the Company agreed to pay Kingswood a cash fee
equal to 6% of the aggregate gross proceeds received by the Company
from the sale of the Shares at the Closing. The Company has also
agreed to pay Kingswood a non-accountable expense reimbursement
relating to the offering of up to 1% of the gross proceeds received
by the Company from the sale of the Shares at the
Closing.
The
Agreement contains customary representations, warranties and
agreements by the Company, customary conditions to closing,
indemnification obligations of the Company and Kingswood, including
for liabilities under the Securities Act of 1933, as amended, other
obligations of the parties and termination provisions. The
representations, warranties and covenants contained in the
Agreement were made only for purposes of such agreement and as of
specific dates, were solely for the benefit of the parties to such
Agreement and may be subject to limitations agreed upon by the
contracting parties, including being qualified by confidential
disclosures exchanged between the parties in connection with the
execution of the Agreement. The offering is expected to close on or
about October 9, 2020 (the “Closing
Date”).
A copy
of the Placement Agent Agreement is included herewith as Exhibit
1.1 to this Current Report on Form 8-K and is incorporated herein
by reference.
A copy
of the legal opinion of Law Office of Clifford J. Hunt, P.A.
relating to the legality of the issuance and sale of the Shares is
filed as Exhibit 5.1 to this Current Report on Form
8-K.
The
Company’s press releases, dated October 7, 2020 and October
9, 2020, announcing the pricing of the offering and the closing of
the offering are attached as Exhibits 99.1 and 99.2, respectively,
to the Current Report on Form 8-K.
This
report does not constitute an offer to sell or the solicitation of
an offer to buy, and these securities cannot be sold in any state
or jurisdiction in which this offer, solicitation, or sale would be
unlawful prior to registration or qualification under the
securities laws of any state or jurisdiction. Any offer will be
made only by means of a prospectus, including a prospectus
supplement, forming a part of the effective registration
statement.
This
report contains forward-looking statements. Forward-looking
statements include, but are not limited to, statements that express
our intentions, beliefs, expectations, strategies, predictions or
any other statements related to our future activities, or future
events or conditions. These statements are based on current
expectations, estimates and projections about our business based,
in part, on assumptions made by management and involve a number of
risks and uncertainties, many of which are beyond the control of
the Company including the substantial doubt relating to the
Company’s ability to continue as a going concern. These
statements are not guarantees of future performances and involve
risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from
what is expressed or forecasted in the forward-looking statements
due to numerous factors, including those risks discussed in our
Annual Report on Form 10-K and in other documents that we file from
time to time with the SEC. Any forward-looking statements speak
only as of the date on which they are made, and we do not undertake
any obligation to update any forward-looking statement to reflect
events or circumstances after the date of this report, except as
required by law.