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CANARGO
ENERGY CORPORATION
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(Name
of Issuer)
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Common
Stock, $0.10 par value
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(Title
of Class of Securities)
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137225108
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(CUSIP
Number)
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Andrew
Morris
c/o
Persistency Capital, LLC
1270
Avenue of the America, Suite 2100
New
York, NY 10020
(212)
554 1830
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(Name,
Address and Telephone Number of Person Authorized
to
Receive Notices and Communications)
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December
5, 2008
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(Date
of Event Which Requires Filing of this Statement)
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If
the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of ss.240.13D-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box [ ].
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Note: Schedules
filed in paper format shall include a signed original and five copies of
the schedule, including all exhibits. See § 240.13d-7
for other parties to whom copies are to be sent.
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* The
remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
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The
information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
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CUSIP
No.
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137225108
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||||||
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1.
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NAME
OF REPORTING PERSONS
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||||||
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I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
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Persistency
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|||||||
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2.
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CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
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||||||
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(a)
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[_]
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||||||
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(b)
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[X]
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||||||
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3.
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SEC
USE ONLY
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||||||
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4.
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SOURCE
OF FUNDS
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||||||
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WC
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|||||||
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5.
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CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
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[_]
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|||||
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6.
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CITIZENSHIP
OR PLACE OF ORGANIZATION
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||||||
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Cayman
Islands, B.W.I.
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NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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7.
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SOLE
VOTING POWER
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||||||
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8.
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SHARED
VOTING POWER
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||||||
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63,220,000
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9.
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SOLE
DISPOSITIVE POWER
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||||||
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10.
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SHARED
DISPOSITIVE POWER
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||||||
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63,220,000
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|||||||
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11.
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AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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63,220,000
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12.
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CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
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13.
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PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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19.9
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14.
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TYPE
OF REPORTING PERSON
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||||||
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CO
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|||||||
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CUSIP
No.
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137225108
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||||||
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1.
|
NAME
OF REPORTING PERSONS
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||||||
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I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
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|||||||
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Persistency
Capital, LLC (1)
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2.
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CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
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||||||
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(a)
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[_]
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||||||
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(b)
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[X]
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||||||
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3.
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SEC
USE ONLY
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||||||
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4.
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SOURCE
OF FUNDS
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||||||
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AF
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|||||||
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5.
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CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
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[_]
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|||||
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6.
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CITIZENSHIP
OR PLACE OF ORGANIZATION
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Delaware,
USA
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NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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|||||||
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7.
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SOLE
VOTING POWER
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||||||
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8.
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SHARED
VOTING POWER
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||||||
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63,220,000
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|||||||
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9.
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SOLE
DISPOSITIVE POWER
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||||||
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10.
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SHARED
DISPOSITIVE POWER
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||||||
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63,220,000
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|||||||
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11.
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AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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||||||
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63,220,000
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|||||||
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12.
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CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
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||||||
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13.
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PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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||||||
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19.9
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|||||||
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14.
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TYPE
OF REPORTING PERSON
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||||||
| CO | |||||||
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CUSIP
No.
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137225108
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|||||
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1.
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NAME
OF REPORTING PERSONS
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|||||
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I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
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||||||
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Andrew
Morris (2)
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||||||
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2.
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CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
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|||||
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(a)
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[_]
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|||||
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(b)
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[X]
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3.
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SEC
USE ONLY
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|||||
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4.
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SOURCE
OF FUNDS
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|||||
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AF
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||||||
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5.
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CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
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[_]
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6.
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CITIZENSHIP
OR PLACE OF ORGANIZATION
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United
Kingdom
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NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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||||||
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7.
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SOLE
VOTING POWER
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63,220,000
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8.
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SHARED
VOTING POWER
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|||||
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9.
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SOLE
DISPOSITIVE POWER
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|||||
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63,220,000
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||||||
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10.
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SHARED
DISPOSITIVE POWER
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|||||
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11.
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AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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|||||
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63,220,000
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||||||
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12.
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CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
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|||||
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13.
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PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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|||||
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19.9
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||||||
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14.
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TYPE
OF REPORTING PERSON
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| IN, HC | ||||||
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CUSIP
No.
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137225108
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|||
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Item
1.
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Security
and Issuer.
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Canargo
Energy Corporation
P.O.
Box 291, St. Peter Port
Guernsey,
GY1 3RR, British Isles
Common
Stock, par value $0.10 per shares (the “Shares”)
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Item
2.
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Identity
and Background.
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(a)
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Persistency
(the “Fund”), Persistency Capital, LLC (“Persistency Capital”), the
investment manager of the Fund, and Andrew Morris, the managing member of
Persistency Capital (each of the Fund, Persistency Capital and Andrew
Morris may be referred to herein as a “Reporting Person” and collectively
may be referred to as “Reporting Persons”).
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(b)
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The
business office of the Reporting Persons is 1270 Avenue of
the
Americas,
Suite 2100, New York, NY 10020, U.S.A.
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(c)
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Persistency
is an investment fund, Persistency Capital, LLC is the
investment
manager of Persistency and Andrew Morris is the managing member of
Persistency Capital, LLC.
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(d)
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None
of the Reporting Persons has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) during the last
five years.
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(e)
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None
of the Reporting Persons has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction during the last
five years, and no Reporting Person is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or State securities laws or finding any
violation with respect to such laws.
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Item
3.
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Source
and Amount of Funds or Other Consideration.
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With
respect to all Reporting Persons, the source of funds used in making
the
purchases
was the working capital of Persistency.
The
total cost for the Notes, which are convertible into the Common Shares
reported by the Reporting Persons was the $10.0 million.
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Item
4.
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Purpose
of Transaction.
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The
Reporting Persons purchased the Notes, which may be converted into shares
of the Issuer’s Common Stock, based on the Reporting Persons' belief that
the Notes, when purchased, represented an attractive investment
opportunity. The number of shares of Common Stock reported on
this report reflect the aggregate number of shares of Common Stock into
which the Notes may be converted as a result of an adjustment to the
conversion ratio set forth in the Note Agreement resulting from the
issuance of additional shares of Common Stock by the Company on December
5, 2008.
The
Reporting Persons believe that notwithstanding the number of shares of
Common Stock reported on this Schedule 13D, the actual number of shares of
Common Stock into which the Notes are convertible may be greater than
those reported herein because the Issuer is contractually obligated to use
its commercially reasonable efforts to seek to obtain shareholder approval
to remove a restriction contained in the Note purchase agreement that
prevents the Reporting Persons from acquiring in excess of 19.9% of the
outstanding Common Stock of the Issuer, including upon conversion of the
Notes. In addition, the terms of the Notes provide that the
conversion price of the Notes will be adjusted to account for any
discounts, fees, costs and expenses incurred in connection with certain
issuances of equity securities by the Issuer.
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| The Reporting Persons may communicate with the management and board of directors of the Issuer regarding the Issuer’s business and other strategic and financial considerations, and may recommend or propose certain actions to the Issuer. In addition, in connection with their investment in the Issuer, the Reporting Persons may engage in communications with members of management and the board of directors of the Issuer with respect to the types of corporate action that may be covered in paragraphs (a) through (j) of Item 4 of Schedule 13D. The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer's financial position, conditions in the industry sector in which the Company operates and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, making proposals to the Issuer concerning changes to the capitalization, ownership structure or operations of the Issuer, selling some or all of the issuers assets, or changing their intention with respect to any and all matters referred to in this Item 4. | ||||
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The
Reporting Persons reserve the right to effect transactions that would
change the number of shares they may be deemed to beneficially
own.
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Item
5.
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Interest
in Securities of the Issuer.
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(a,
b)
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As
of the date hereof Persistency may be deemed to beneficially own
63,220,000 Shares constituting 19.9% of the Shares of the Issuer, based
upon 254,455,693 Shares outstanding as of December 5, 2008.
Persistency
has the sole power to vote or direct the vote of 0 Shares; has the shared
power to vote or direct the vote of 63,220,000 Shares; has sole power to
dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 63,220,000 Shares.
Persistency
specifically disclaims beneficial ownership in the Shares Reported herein
except to the extent of its pecuniary interest therein.
As
of the date hereof Persistency Capital, LLC may be deemed to beneficially
own 63,220,000 Shares constituting 19.9% of the Shares of the
Issuer, based upon 254,455,693 Shares outstanding as of December 5,
2008.
Persistency
Capital, LLC has the sole power to vote or direct the vote of 0 Shares;
has the shared power to vote or direct the vote of 63,220,000 shares; has
sole power to dispose or direct the disposition of 0 Shares; and has
shared power to dispose or direct the disposition of 63,220,000
Shares.
Persistency
Capital, LLC specifically disclaims beneficial ownership in the Shares
Reported herein except to the extent of its pecuniary interest
therein.
As
of the date hereof Andrew Morris may be deemed to beneficially
own 63,220,000 Shares constituting 19.9% of the Shares of the Issuer,
based upon 254,455,693 Shares outstanding as of December 5,
2008.
Andrew
Morris has the sole power to vote or direct the vote of 0 Shares; has the
shared power to vote or direct the vote of 63,220,000 Shares; has sole
power to dispose or direct the disposition of 0 Shares; and has shared
power to dispose or direct the disposition of 63,220,000
Shares.
Andrew
Morris specifically disclaims beneficial ownership in the Shares Reported
herein except to the extent of its pecuniary interest
therein.
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(c)
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The
trading dates, number of Shares purchased and sold and price per share for
all transactions in the Shares by the Reporting Persons since the
Reporting Persons’ most recently filed Schedule 13G are set forth in
Exhibit B. All such transactions were effected in transactions
with brokers.
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Item
6.
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Contracts,
Arrangements, Understandings or Relationships with Respect
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to
Securities of the Issuer.
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The
Reporting Persons hold an aggregate principal amount of the Issuer’s 12%
Subordinated Convertible Guaranteed Notes, due June 28, 2010 (the “Notes”)
of $10.6 million and five million warrants, which by their terms are
convertible, in the aggregate, into 63,220,000 shares of the Issuers
common stock within 60 days.
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Item
7.
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Material
to be Filed as Exhibits.
|
||
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Exhibit
A: Joint Filing Agreement.
Exhibit
B: Transactions in the Shares by the Reporting Persons since the Reporting
Persons’ most recently filed Schedule 13G.
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Persistency.
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||
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By:
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/s/
Andrew Morris
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Name:
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Andrew
Morris
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Title:
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Authorized
Signatory
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Persistency
Capital, LLC
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By:
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/s/
Andrew Morris
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Name:
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Andrew
Morris
|
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Title:
|
Managing
Member
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/s/
* Andrew Morris
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Andrew
Morris
|
||
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December
12, 2008
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|
Persistency.
|
||
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By:
|
/s/
Andrew Morris
|
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Name:
|
Andrew
Morris
|
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Title:
|
Authorized
Signatory
|
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Persistency
Capital, LLC
|
||
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By:
|
/s/
Andrew Morris
|
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|
Name:
|
Andrew
Morris
|
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Title:
|
Managing
Member
|
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/s/
* Andrew Morris
|
||
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Andrew
Morris
|
||
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December
12, 2008
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Date
of
Transaction
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Number
of Shares
Purchase/(Sold)
|
Price of Shares
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June
28, 2006
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$10,000,000,
principal amount of notes
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$10,000,000
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June
28, 2007
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$600,000
principal amount of notes
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Paid
in Kind interest payment
|