Item 1.01
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Entry into a Material Definitive Agreement.
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Share Exchange Agreement
On
December 17, 2018, American Electric Technologies, Inc. (the Company) entered into a Share Exchange Agreement (the Share Exchange Agreement) with JCH Crenshaw Holdings, LLC, a Texas limited liability company
(JCH), LNG Investment Company, LLC, a Texas limited liability company (Holdings), AEGIS NG LLC, a Texas limited liability company (AEGIS), Stabilis Energy, LLC, a Texas limited liability company
(Stabilis), PEG Partners, LLC, a Delaware limited liability company (PEG), and Prometheus Energy Group, Inc., a Delaware corporation (Prometheus). Stabilis and its subsidiaries, including Prometheus and PEG, are
Texas-based, privately-held small-scale liquefied natural gas (LNG) producers and distributors. Each of the Company, Holdings, AEGIS, Stabilis, PEG and Prometheus is individually referred to herein as a Party and, collectively, the
Parties.
Share Exchange Consideration
Pursuant to the Share Exchange Agreement, the Parties will enter into a business combination transaction by which (i) Holdings shall
contribute 100% of the membership interests in Stabilis to the Company, (ii) AEGIS shall contribute its 20% membership interest in PEG to the Company, and (iii) in consideration and exchange therefor, the Company shall issue to Holdings
and AEGIS shares of the common stock of the Company (Common Stock) in an aggregate amount sufficient to cause Holdings and AEGIS to own collectively 89% of the then issued and outstanding shares of the Common Stock (collectively, the
Share Exchange). Following the Share Exchange, each of Stabilis, Prometheus and PEG will continue its respective legal existence as a wholly-owned, direct or indirect subsidiary of the Company.
In connection with the completion of the Share Exchange, the name of the Company will be changed to Stabilis Energy, Inc. (hereinafter
referred to as Stabilis Energy), and an application will be made to continue trading of its common stock on the Nasdaq Capital Market under the symbol SLNG.
Governance
In the Share Exchange
Agreement, the parties have agreed to certain governance-related matters upon completion of the Share Exchange. Jim Reddinger, current Chief Executive Officer of Stabilis, will serve as President and Chief Executive Officer of Stabilis Energy, Casey
Crenshaw, a current director and beneficial stockholder of the Company, will serve as its Executive Chairman and Andy Puhala, current Chief Financial Officer of Stabilis, will serve as Chief Financial Officer of Stabilis Energy The board of
directors of Stabilis Energy will consist of nine directors, of whom three are current Company directors, including Mr. Crenshaw, and six will be new directors designated by Stabilis.
Conditions to the Share Exchange
The
completion of the Share Exchange is subject to the satisfaction or waiver of certain conditions, including, among others (i) the approval of the issuance of Common Stock pursuant to the Share Exchange Agreement and approval of amendments to the
articles of incorporation of the Company related to the Share Exchange by the stockholders of the Company; (ii) the absence of final and
non-appealable
governmental restraints or prohibitions preventing
the completion of the share exchange; and (iii) the conversion by JCH, an investment vehicle owned and controlled by Mr. Crenshaw, of its 1,000,000 shares of Series A Preferred Stock of the Company. The obligation of each of the Company
and the owners of Stabilis to complete the Share Exchange is also conditioned on, among other things, the absence of any material adverse effect on the other parties, the truth and correctness of the representations and warranties made by the other
parties in the Share Exchange Agreement (subject to certain materiality and material adverse effect qualifiers), and the performance by the other parties in all material respects of their obligations under the Share Exchange
Agreement.