Item 1.01 Entry into a Material Definitive Agreement.
Purchase Agreement
On October 23, 2017, Contango ORE, Inc. (the "Company") completed the issuance and sale of an aggregate of 553,672 shares of common stock, par value $0.01 per share, of the Company (the "Common Stock") at a purchase price of $19.00 per share of Common Stock, in a private placement (the "Private Placement") to certain purchasers (the "Purchasers") pursuant to a Stock Purchase Agreement dated as of October 23, 2017 (the "Purchase Agreement"), by and among the Company and each Purchaser. The Private Placement resulted in approximately $10.5 million of gross proceeds and approximately $10.0 million of net proceeds. The Company will use the net proceeds from the Private Placement to fund its exploration and development program and for general corporate purposes. Petrie Partners Securities, LLC ("Petrie") acted as sole placement agent in connection with the Private Placement and received a placement agent fee equal to 6.50 percent (6.50%), which was reduced to 3.25 percent (3.25%) for existing stockholders and other Purchasers referred by those existing stockholders, or a total of $0.5 million in placement agent fees.
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(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.
A copy of the Purchase Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein. The description of the Purchase 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 Purchase Agreement.
Registration Rights Agreement
Pursuant to a Registration Rights Agreement dated as of October 23, 2017 (the "Registration Rights Agreement"), by and among the Company and the Purchasers, the Company agreed to file up to two demand registration statements with the Securities and Exchange Commission at any time after one year after the Private Placement but before three years after the Private Placement in order to register the resale of the shares of Common Stock. In addition, the Registration Rights Agreement granted certain piggyback rights to the Purchasers.
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
Brad Juneau, the Company's President and Chief Executive Officer, purchased 13,200 shares of Common Stock, or $250,800, in the Private Placement on the same terms and conditions as all other Purchasers.