Material Agreement Form 8 K

Item 1.01 Entry into a Material Definitive Agreement.

On August 26, 2024, 5E Advanced Materials, Inc., a Delaware corporation (the "Company"), entered into a securities purchase agreement (the "Purchase Agreement") with the purchaser named therein (the "Purchaser"), providing for the issuance and sale by the Company of an aggregate of: (i) 5,333,333 shares (the "Shares") of the Company's common stock, $0.01 par value per share (the "Common Stock"), (ii) Series A warrants to purchase up to an aggregate of up to 5,333,333 shares of Common Stock (the "Series A Warrants") and (iii) Series B warrants to purchase an aggregate of 5,333,333 shares of Common Stock (the "Series B Warrants" and, collectively with the Series A Warrants, the "Warrants"). The Shares and Warrants were offered and sold on a combined basis for consideration equating to $0.75 for one Share and two Warrants. The exercise price for each of the Warrants is $0.7981 per share.

The Shares were offered pursuant to an effective shelf registration statement on Form S-3 (File No. 333-276162) (the "Registration Statement") and a related prospectus supplement filed with the Securities and Exchange Commission (the "Registered Direct Offering"). The Warrants were sold in a concurrent private placement (the "Private Placement"), exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act").

The Series A Warrants and the Series B Warrants are initially exercisable on February 27, 2025. The Series A Warrants will expire on February 27, 2030 and the Series B Warrants will expire on February 27, 2027. The Warrants contain standard adjustments to the exercise price including for stock splits, stock dividends, rights offerings and pro rata distributions. The Warrants also include certain rights upon the occurrence of a "fundamental transaction" (as described in the Warrants), including the right of the holder thereof to receive from the Company or a successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of Common Stock in such fundamental transaction in the amount of the Black Scholes value (as described in the Warrants) of the unexercised portion of the Warrant on the date of the consummation of such fundamental transaction.

Pursuant to the Securities Purchase Agreement, the Company agreed to file a registration statement to register for resale the shares of common stock issuable upon exercise of the Warrants, and to use its commercially reasonable efforts to keep such registration statement continuously effective under the Securities Act until the earlier of (i) the date that the purchaser no longer owns warrants or shares of common stock issuable upon exercise thereof and (ii) the date on which no warrants are outstanding and all shares of common stock issuable upon exercise thereof may be sold pursuant to Rule 144 under the Securities Act without regard to volume limitations.

Additionally, the Company agreed not to issue any shares of common stock (or securities exercisable or exchangeable for common stock) for a period of 90 days following the closing of the offering, or to enter into any "variable rate transactions" for one year following the closing of the offering, in each case as further described in the Purchase Agreement and subject to certain exceptions set forth therein.

The Warrants include cashless exercise rights to the extent the resale of the shares of Common Stock underlying the Warrants is not registered under the Securities Act.

Under the terms of the Warrants, a holder will not be entitled to exercise any portion of any such Warrant if, upon giving effect to such exercise, the aggregate number of shares of Common Stock beneficially owned by the holder (together with its affiliates, any other persons acting as a group together with the holder or any of the holder's affiliates, and any other persons whose beneficial ownership of Common Stock would or could be aggregated with the holder's for purposes of Section 13(d) or Section 16 of the Securities Exchange Act of 1934, as amended) would exceed 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of such Warrant, which percentage may be increased at the holder's election upon 61 days' notice to the Company subject to the terms of such Warrants, provided that such percentage may in no event exceed 9.99%.

On August 26, 2024, in connection with the foregoing transactions, the Company entered into a placement agency agreement (the "Placement Agreement") with Maxim Group LLC (the "Placement Agent") pursuant to which the Placement Agent served as the exclusive placement agent in connection with the Registered Direct Offering and the Private Placement. The Company agreed to pay the Placement Agent a fee in cash equal to 7.0% of the aggregate gross proceeds from the sale of the Shares and the Warrants. The Company also agreed to reimburse the Placement Agent for out-of-pocket expenses, including the reasonable fees of legal counsel not to exceed $100,000.

The Purchase Agreement and the Placement Agreement contain customary representations, warranties, covenants, indemnification obligations of the Company, the Purchaser and the Placement Agent, and other obligations of the parties. The representations, warranties and covenants contained therein were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties thereto, and may be subject to limitations agreed upon by the contracting parties.

The foregoing descriptions of the Placement Agreement, the Purchase Agreement, the Series A Warrants and the Series B Warrants do not purport to be complete and are qualified in their entirety by reference to the full text thereof, which are included as Exhibits 1.1, 10.1, 4.1, and 4.2 hereto, respectively, and are incorporated by reference herein.

A copy of the legal opinion of Latham & Watkins LLP relating to the validity of the issuance and sale of the Shares in the Registered Direct Offering is filed as Exhibit 5.1 to this Current Report on Form 8-K and is filed with reference to, and is hereby incorporated by reference into, the Registration Statement.

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