Item 1.01. Entry into a Material Definitive Agreement.
Purchase Agreements
Contango ORE, Inc. (the “Company”) entered into Stock Purchase Agreements dated as of June 14, and June 17, 2021 (the “Purchase Agreements”) for the sale of
an aggregate of 523,809 shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”) at a purchase price of $21.00 per share of Common Stock, in a private placement (the “Private Placement”) to certain accredited investors
(the “Purchasers”). The Purchase Agreements include customary representations, warranties, and covenants by the Purchasers and the Company, and an indemnity from the Company in favor of the Purchasers.
The Private Placement closed on June 17 and 18, 2021. The Private Placement resulted in approximately $11.0 million of gross proceeds and approximately $10.9 million of net proceeds to the Company.
The Company will use the net proceeds from the Private Placement to fund its exploration and development program and for general corporate purposes.
The shares sold in the Private Placement were issued in reliance on an exemption from registration under the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof. The bases for the
availability of this exemption include the facts that the issuance was a private transaction which did not involve a public offering and the shares were offered and sold to a limited number of purchasers.
Copies of the Purchase Agreements are filed as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8-K and are incorporated by reference herein. The description of the Purchase Agreements in
this Current Report on Form 8-K is a summary and is qualified in its entirety by reference to the complete text of the Purchase Agreements.
Registration Rights Agreement
Pursuant to a Registration Rights Agreement dated as of June 17, 2021 (the “Registration Rights Agreement”), by and among the Company and one of the Purchasers, the Company agreed to file up to one
registration statement with the Securities and Exchange Commission upon demand from the Purchaser at any time after December 31, 2021, but before three years after the Private Placement, in order to register the resale of the shares of Common Stock.
The Registration Rights Agreement also granted certain piggyback rights to the purchaser. Further, the Registration Rights Agreement provides a preemptive right for the Purchaser to acquire its proportionate share of securities offered in certain
offerings by the Company on the terms set by the Company in those offerings. The preemptive rights expire when the purchaser and its affiliates hold less than 5% of the outstanding Common Stock Equivalents (as defined in the Registration Rights
Agreement).
A copy of the Registration Rights Agreement is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated by reference herein. The description of the Registration Rights Agreement in
this Current Report on Form 8-K is a summary and is qualified in its entirety by reference to the complete text of the Registration Rights Agreement.
Relationships
Rick Van Nieuwenhuyse, the Company’s President and Chief Executive Officer, purchased 47,619 shares of Common Stock, for a purchase price of approximately $1,000,000, in the Private Placement
pursuant to a Purchase Agreement dated June 17, 2021, on the same terms and conditions as all other purchasers, except that Mr. Nieuwenhuyse did not receive any of the rights under the Registration Rights Agreement. The Private Placement to Mr.
Nieuwenhuyse closed on June 18, 2021.