Item 1.01. Entry into a Material Definitive Agreement
On July 31, 2014, American DG Energy Inc. (the "Company") entered into an
underwriting agreement (the "Underwriting Agreement") with Aegis Capital Corp
related to an underwritten offering of 2,650,000 shares of the Company's common
stock (the "Common Stock") at a per share price of $1.51 and warrants to
purchase 2,650,000 shares of Common Stock at a per warrant price of $0.0001 (the
"Warrants," and together with the Common Stock, the "Securities"). The Warrants
will be exercisable at an exercise price of $1.8875 per share and will expire
three years from the date of issuance. The Company expects to receive gross
proceeds of approximately $4.0 million from the sale of the Securities, before
deducting the underwriting discounts and commissions, and other estimated
offering expenses payable by it and excluding any proceeds from the future
exercise of the Warrants, if any. The Company has also granted to the
underwriters participating in the sale of the Securities a 45-day option to
purchase up to an additional 15% of the shares of Common Stock and/or the
Warrants to cover over-allotments, if any.
The Company intends to use the net proceeds for working capital purposes in
connection with the development and installation of current and new energy
systems, such as its cogeneration systems and chillers, and for general
The Common Stock and the Warrants are being offered by the Company pursuant to
an effective shelf registration statement on Form S-3, which was initially filed
with the Securities and Exchange Commission on October 4, 2013 and declared
effective on January 6, 2014 (File No. 333-191580). A final prospectus
supplement and final accompanying base prospectus are being filed with the
Securities and Exchange Commission.
The Company expects that the closing of the sale of the Securities will take
place on August 6, 2014, subject to the satisfaction of customary closing
A copy of the Underwriting Agreement is attached as Exhibit 1.1 hereto and is
incorporated herein by reference. A copy of the form of Warrant is attached as
Exhibit 4.1 and is incorporated herein by reference. The foregoing descriptions
of the Underwriting Agreement and Warrant do not purport to be complete and are
qualified in their entirety by reference to such exhibits.
A copy of the legal opinion and consent of Sullivan & Worcester LLP relating to
the validity of the Common Stock and Warrants to be issued in the offering is
attached as Exhibit 5.1 hereto.
Item 8.01. Other Events
The Company issued a press release announcing the pricing of the sale of the
Securities. The full text of the press release is attached as Exhibit 99.1
hereto and is incorporated herein by reference.