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Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on April 15, 2014, as amended on May 7, 2014, Armco Metals Holdings, Inc. entered into a Share Exchange Agreement with Draco Resources Inc. (“Draco”), Draco’s parent company Metawise Group Inc. (“Metawise”) and the Metawise shareholders pursuant to which we initially agreed acquire 100% of the outstanding capital stock of Draco from Metawise in exchange for 12,750,000 shares (giving proforma effect to a 1:10 reverse stock split of our outstanding common stock) and a warrant to purchase an additional 3,000,000 shares (post-split) of our common stock. At closing we agreed to issue an aggregate of 1,200,000 shares (post-split) of our common stock to two entities as a finders fee. On August 25, 2014 we entered into Amendment No. 2 to the Share Exchange Agreement with Draco, Metawise and Metawise’s shareholders. Under the terms of Amendment No. 2, we agreed to acquire 40% of the outstanding capital stock of Draco from Metawise in exchange solely for 51,000,000 shares of our common stock and the compensation payable to the two finders at closing is now 4,800,000 shares of our common stock. On September 22, 2014 we entered into Amendment No. 3 to the Share Exchange Agreement with Draco, Metawise and Metawise’s shareholders under which we have further modified the terms of the transaction to reduce the percentage of Draco we are seeking to acquire to 31.37% of the outstanding capital stock of Draco from Metawise in exchange solely for 40,000,000 shares of our common stock. At closing, these shares will represent approximately 39.95% of our current outstanding shares of common stock.
The foregoing description of the terms and conditions of Amendment No. 3 to the Share Exchange Agreement is qualified in its entirety by reference to a form of the agreement which is filed as Exhibit 10.1 to this report.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1
Form of Amendment No. 3 to Share Exchange Agreement dated September 22, 2014 by and among Armco Metals Holdings, Inc., Draco Resources Inc., Metawise Group Inc., Songqiang Chen, Jian Fang, Changli Yan, Hongye Chen, Fajie Wang, Tong Huang, Honglin Zhang and Hongbing Lin.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ARMCO METALS HOLDINGS, INC.
Date: September 23, 2014
By: /s/ Kexuan Yao
Kexuan Yao, CEO and Chairman of the Board
2
Exhibit 10.1
Amendment No. 3 to SHARE EXCHANGE AGREEMENT
THIS AMENDMENT NO.3 TO SHARE EXCHANGE AGREEMENT (the "Amendment No. 2") is made and entered on September 22, 2014 by and among Armco Metals Holdings, Inc., a Nevada corporation ("AMCO"), Draco Resources, Inc., a California corporation ("Draco Resources"), Metawise Group Inc., a California corporation ("Metawise") and Songqiang Chen, Jian Fang, Changli Yan, Hongye Chen, Fajie Wang, Tong Huang, Honglin Zhang and Hongbin Lin (collectively the "Shareholders"), refer to the Share Exchange Agreement ("Agreement")signed on April 15, 2014, the Amendment to Share Exchange Agreement signed on May 7, 2014 (the "Amendment No.1") and the Amendment to Share Exchange Agreement signed on August 25, 2014 (the "Amendment No. 2").
NOW THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained in Share Exchange Agreement, Amendment No. 1 and Amendment No. 2, the parties hereto agree as follows:
1. The clause regarding the share exchange under Recitals of the Agreement and the Amendment No. 2 is hereby amended below. The Parties agree to delete Recitals B in the Agreement and the Amendment No. 2 and replace it with:
B. Upon the approval of the Amendment to AMCO's Articles of Incorporation to increase the number of AMCO's authorized shares of common stock from 74,000,000 shares to 200,000,000 shares, AMCO desires to acquire 31.37% of the Draco Resources Shares from the Shareholders in exchange for 40,000,000 shares of its common stock (the "AMCO Shares").
2. The clause regarding the share exchange under Recitals of the Agreement and the Amendment No. 2 is hereby amended below. The Parties agree to delete Recitals C in the Agreement and the Amendment No. 2 and replace it with:
C. The Shareholders desire to exchange 31.37% of its Draco Resources Shares for the AMCO Shares upon the terms and conditions set forth herein.
3. The amount of AMCO shares distributed to the Shareholders is hereby amended below.
Shareholder's Name
Ownership%
Songqiang Chen
39.6424%
(15,856,960 AMCO shares)
Jian Fang
13.7255%
(5,490,200 AMCO shares)
Changli Yan
12.5490%
( 5,019,600 AMCO shares)
Hongye Chen
11.7647%
( 4,705,880 AMCO shares)
Fajie Wang
11.7647%
( 4,705,880 AMCO shares)
Honglin Zhang
4.8941%
( 1,957,640 AMCO shares)
Tong Huang
4.4047%
( 1,761,880 AMCO shares)
Hongbing Lin
1.2549%
( 501,960 AMCO shares)
Total AMCO Shares: 40,000,000
1
IN WITNESS WHEREOF, the parties have executed this Amendment to SHARE EXCHANGE AGREEMENT on the date first above written.
