SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT ON FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 15, 1998
CANARGO ENERGY CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-9147 91-0881481
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1580, 727-7th Avenue SW, Calgary, Alberta T2P 0Z5
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 403-777-1185
Fountain Oil Incorporated
1400 Broadfield Blvd., Suite 100, Houston, Texas 77084
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(Former name or former address, if changed since last report)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
In connection with the Registrant's acquisition of all of the common
shares of CanArgo Oil and Gas Inc., formerly known as CanArgo Energy Inc.
("CAOG"), a majority of the directors of Registrant changed. In accordance with
the Amended and Restated Combination Agreement between Registrant and CAOG dated
as of February 2, 1998 (the "Combination Agreement"), Michael Binnion, J.F.
Russell Hammond, Peder Paus and David Robson were elected as directors of
Registrant effective July 15, 1998 to succeed Einar Bandlien, Stanley D.
Heckman, Eugene J. Meyers and Oistein Nyberg, who resigned. Messrs. Binnion,
Hammond and Robson had been directors of CAOG.
For more information regarding this change in the composition of the
Registrant's Board of Directors, see Registrant's Registration Statement on Form
S-3, as amended, File No. 333-48287 (the "Registration Statement"), which is
incorporated herein by reference.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective July 15, 1998, Registrant and CAOG consummated a transaction
(the "Transaction") pursuant to the Combination Agreement whereby the Registrant
became the owner of all of CAOG's common shares and approximately 9,975,000
shares of the Registrant's Common Stock, par value ten cents ($0.10) per share
("Common Stock"), are issuable to the former holders of CAOG's common stock and
persons who prior to the Transaction were entitled to receive shares of CAOG's
common stock without the payment of additional consideration on the basis of an
exchange ratio of 0.8 share of Registrant's Common Stock (as presently
constituted following a one-for-two reverse stock split effective July 15, 1998)
for each CAOG common share outstanding or issuable immediately prior to the
Transaction. Completion of the transaction was approved by Registrant's
stockholders, CAOG's shareholders and the Ontario Court (General Division).
The consideration was determined on the basis of negotiations between
Registrant and CAOG, which resulted in a conclusion that in a business
combination involving the Registrant and CAOG approximately equal value should
be accorded each of the two constituent companies on a fully diluted basis.
The principal physical assets acquired by Registrant through the
Transaction are oil and gas properties located in the Republic of Georgia,
utilized by CAOG in the business of oil and gas exploration and production.
Registrant intends to continue such use.
For more information regarding the Transaction, the Combination
Agreement, the nature and amount of consideration paid in the Transaction, the
process and principles by which the amount of such consideration was determined,
CAOG and CAOG's assets, see the Registration Statement, which is incorporated
herein by reference.
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ITEM 5. OTHER EVENTS
On July 15, 1998, Registrant amended its Certificate of Incorporation
(i) to change its name from Fountain Oil Incorporated to CanArgo Energy
Corporation and (ii) to effect a one-for-two reverse stock split.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Incorporated herein by reference to the Registration Statement, in
which they are included, are: the consolidated balance sheet of CAOG as at
December 31, 1997 and the consolidated statements of operations and deficit and
cash flows for the six month period then ended audited by Ernst & Young,
Chartered Accountants; the unaudited consolidated balance sheet of CAOG as at
March 31, 1998 and the consolidated statements of operations and deficit and
cash flows for the three month period then ended; the balance sheet of
Ninotsminda Oil Company Limited ("NOC") as at June 30, 1997 and December 31,
1996 and the statements of operations and retained earnings and cash flows for
the six month period ended June 30, 1997 and the period from October 24, 1995 to
December 31, 1996 audited by Ernst & Young, Chartered Accountants; and the
unaudited balance sheet of NOC as at March 31, 1997 and the statements of
operations and retained earnings and cash flows for the three month period then
ended.
(b) The pro forma financial information required by this Item is
incorporated herein by reference to the Registration Statement, in which it is
included.
(c) Exhibits
2(1) Amended and Restated Combination Agreement between Fountain Oil
Incorporated and CanArgo Energy Inc. dated as of February 2, 1998
(Incorporated herein by reference from the Registration Statement, in
which it is included).
2(2) Voting, Support and Exchange Trust Agreement (Incorporated herein by
reference from the Registration Statement, in which it is included).
3(1) Registrant's Certificate of Incorporation and amendments thereto.
23(1) Consent of PricewaterhouseCoopers LLP independent accountants.
23(2) Consent of Ernst & Young, Chartered Accountants, Calgary, Canada.
23(3) Consent of Ernst & Young, Chartered Accountants, Limassol, Cyprus.
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SIGNATURES
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Pursuant to the requirement 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.
CANARGO ENERGY CORPORATION
Date: July 24, 1998 By: /s/Susan E. Palmer
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Susan E. Palmer
Corporate Secretary
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EXHIBIT INDEX
FILED WITH
EXHIBIT THIS
NUMBER EXHIBIT REPORT
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2(1) Amended and Restated Combination Agreement between
Fountain Oil Incorporated and CanArgo Energy Inc.
dated as of February 2, 1998 (Incorporated herein by
reference from Form S-3 Registration Statement,
File No. 333-48287 filed on June 9, 1998).
2(2) Voting, Support and Exchange Trust Agreement
(Incorporated herein by reference as Annex G from
Form S-3 Registration Statement, File No. 333-48287
filed on June 9, 1998).
3(1) Registrant's Certificate of Incorporation and
amendments thereto. X
23(1) Consent of PricewaterhouseCoopers LLP independent
accountants. X
23(2) Consent of Ernst & Young, Chartered Accountants,
Calgary, Canada. X
23(2) Consent of Ernst & Young, Chartered Accountants,
Limassol, Cyprus. X