UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report (date of earliest event reported): February 11, 1998
TRANS ENERGY, INC.
(Exact Name of Registrant as Specified in its Charter)
NEVADA 0-23530 93-0997412
State or Other (Commission (IRS Employer
Jurisdiction) File Number) Identification
Number)
210 Second Street, P.O. Box 393, St. Mary's, West Virginia 26170
(Address of Principal Executive Offices and Principal Place of Business)
Registrant's Telephone Number, Including Area Code: (304) 684-7053
<PAGE>
FORM 8-K
Item 1. Change in Control of Registrant.
See Item 5 below.
Item 2. Acquisition or Disposition of Assets.
See Item 5 below.
Item 5. Other Events
On February 11, 1998, Trans Energy, Inc. (the "Company")
entered into a Letter of Intent with Natural Gas Technologies, Inc.
("NGT") which memorializes the agreement in principle between the
parties to enter into a merger transaction. Under the terms of the
proposed merger, NGT, a Texas based oil and gas development
company, will merge with and into the Company with the Company
being the surviving corporate entity. The Company will issue
approximately 16,989,645 shares of its authorized but previously
unissued common stock to the shareholders of NGT in exchange for
their NGT share. As a result of the merger, the current NGT
shareholders will own approximately 75% of the combined entity.
The merger is subject to the approval of the Company's
shareholders and the Company is presently preparing to hold a
meeting of its shareholders within the next several weeks. The
Company intends to prepare a joint proxy statement and a
registration statement pursuant to Form S-4 to register the
securities to be issued under the terms of the merger. Following
the completion of the merger, the Company will have oil and gas
properties and production in the Appalachian, Rocky Mountain and
Permian basins. Pending finalization of the merger, both the
Company and NGT will continue to be operated in the ordinary course
of business as separate entities. During this period, Loren E.
Bagley, President of the Company and Mike Stewart, Vice President
of NGT shall act as a special operating committee to coordinate all
significant operations of the Company and NGT.
Item 7. Financial Statements and Exhibits.
Financial statements required under this Item 7 will be filed
upon completion but no later than sixty (60) days from the date
this report is filed as provided in Item 7(a)(4).
(c) Exhibits included herewith:
Exhibit 2.1 Letter of Intent
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange
Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
TRANS ENERGY, INC.
Date: February 20, 1998 By /S/ Loren E. Bagley
LOREN E. BAGLEY, President,
Chief Executive Officer and
Principal Financial Officer
Trans Energy, Inc.
210 Second Street, P. 0. Box 393
St. Marys, West Virginia 26170
February 11, 1998
Mr. Brent Wagman
Natural Gas Technologies, Inc.
16775 Addison Road, Suite 300
Dallas, TX 75248
Re: Proposal for Merger between Trans Energy, Inc. ("Trans
Energy") and Natural Gas Technologies, Inc. ("NGT")
Dear Loren:
This letter of intent ("LOI") is intended to memorialize the
parties binding understanding regarding the merger of NGT with and
into Trans Energy (the "Merger") whereby the separate corporate
existence of NGT shall cease and Trans Energy shall be surviving
corporation in the Merger. The principal terms of the Merger shall
be set forth in this LOI, however, the parties agree to proceed to
prepare a merger agreement ("Merger Agreement"), which when and if
completed and executed, shall form the basis of our definitive
agreement. This LOI and any agreement between the parties with
respect to the subject matter hereof shall terminate and be null
and void if the Merger Agreement is not executed by the parties by
February 20, 1998.
1. Structure of Merger. The Merger shall be structured as a
tax-free reorganization under Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended. The Merger shall
be accomplished by way of the exchange and cancellation of
all of the issued and outstanding shares of common stock,
$.001 par value, of NGT for the number of shares of Trans
Energy common stock, $.001 par value, which, after issuance
thereof, represent 75% of the total number of issued and
outstanding shares of Trans Energy's common stock. Such
shares of Trans Energy common stock shall be distributed pro
rata to the NGT shareholders. Based upon 5,663,215 shares of
Trans Energy common stock currently issued and outstanding,
the NGT shareholders would receive in the Merger 16,989,645
shares of Trans Energy common stock.<PAGE>
Mr. Brent Wagman
February 11, 1998
Page 2
2. Assets and Liabilities. On the effective date of the Merger
all of the assets and liabilities of NGT shall automatically
become assets and liabilities of Trans Energy. except with
regard to the Lyric Energy, Inc. shares owned by NGT which
shall be sold prior to the effective date of the Merger as set
forth below.
3. Representation and Warranties of NGT and Trans Energy. The
Merger Agreement shall contain customary representations,
warranties, covenants and conditions for a merger of this
type, and such other terms and conditions as may be mutually
agreed upon by the parties.
4. Actions of the Parties Pending Closing. From the date of
execution of this LOI until the effective date of the Merger,
NGT and Trans Energy shall continue to be operated in the
ordinary course of business as separate entities, provided,
however, that an operating committee (the "Committee")
consisting of Loren Bagley and Mike Stewart shall be formed to
oversee all such operations and any expenditure or commitment
by either party in excess of $20,000 shall require approval of
the Committee. Notwithstanding the foregoing, NGT shall have
the right prior to the effective date of the Merger to issue
up to a maximum of 1.6 million shares of NGT common stock to
third parties in exchange for fair consideration, as
determined in the sole discretion of NGT.
5. Conditions Precedent.
a. Approval of the shareholders of both parties is required
for completion of the Merger. The parties shall
cooperate to prepare a Joint Proxy and Information
Statement and Registration Statement all on Form S-4
(collectively, the "Registration Statement") to be
delivered to the shareholders of each party and filed
with the Securities and Exchange Commission ("SEC"). The
Companies shall also cooperate in responding to any
comments of the SEC regarding the Registration Statement.
The Registration Statement shall be prepared and filed
with the SEC as soon as reasonably possible after
execution of the Merger Agreement.
b. NGT shall use its best efforts to sell all of the common
stock of Lyric Energy, Inc. owned by it for fair
consideration prior to the effective date of the Merger.
c. NGT shall either purchase or cause the holders of its
Class A preferred stock to convert such preferred stock
into common stock of NGT prior to<PAGE>
Mr. Brent Wagman
February 11, 1998
Page 3
the effective date of the Merger.
d. Trans Energy shall have successfully restructured all of
its indebtedness which is personally guaranteed by
officers or directors of it to eliminate such personal
guarantees prior to the effective date of the Merger.
6. Due Diligence Matters; Full Disclosure. The parties shall
afford each other and their respective representatives,
counsel, agents and employees reasonable access to their
respective businesses, properties, books, files, records,
insurance policies and the like for the purpose of inspection
and examination thereof and the parties shall fully,
completely and accurately answer any questions with respect
thereto,
7. Confidentiality, Nonsolicitation. The terms of the Merger
and this LOI (including, but not limited to the identity of
the parties) shall be held by the parties hereto in strict
confidence and shall not be disclosed to anyone other than to
legal counsel for the parties and other agents and
representatives of the parties who need to know such
information in connection with the Merger. Subject to the
requirements of applicable law, no party shall make any news
releases or other public disclosure with respect to this LOI
or the Merger without the prior written consent of the other
party. In addition, after the date hereof neither party
shall directly solicit entertain or encourage inquiries or
proposals to enter into any agreement or negotiate with any
third party to sell or participate in any merger or
consolidation with respect to the business and/or assets of
either party.
S. Sundance LLC. The parties acknowledge that they are the sole
owners of Sundance LLC, which after the Merger shall be a
wholly owned entity of Trans Energy. NGT has paid certain
costs and expenses of Sundance LLC, half of which costs and
expenses are the obligation of Trans Energy. The parties
agree to perform a final accounting of all such costs and
expenses and Trans Energy shall reimburse NGT with respect to
any amounts owing by it to NGT prior to the effective date of
the Merger.
9. Intercompany Loans. The parties believe that shareholder
approval of the Merger is only a formality and that the
Merger will, therefore, become effective.
Accordingly, to the extent reasonably deemed necessary by the
Committee, the parties agree to make intercompany loans
between them prior to the effective date of the Merger. Such
loans shall however be negotiated on an arms-length basis,
properly documented and secured.
<PAGE>
Mr. Brent Wagman
February 11, 1998
Page 4
10. Closing. The effective date of the Merger shall occur within
five days after all conditions precedent (including
shareholder approval) have been satisfied by the parties and
upon the filing of a Certificate of Merger with the Secretary
of State of Nevada and with the appropriate authority of the
State of Texas.
II. Board of Directors of Trans Energy. Upon the effective date
of the Merger the Board of Directors of Trans Energy shall
consist of seven persons, three of whom prior to such date
shall be named by NGT, three shall be named by Trans Energy
and the seventh shall be named by mutual agreement of NGT and
Trans Energy. Notwithstanding the foregoing, Loren Bagley
shall be the Chairman of the Board of Directors and Michael
Stewart shall be the President and Chief Operating Officer of
Trans Energy.
12. Miscellaneous. Neither party may assign its rights or
obligations under this LOI without the prior written consent
of the other party hereto. This LOI may not be amended or
supplemented except by written agreement of the parties
hereto.
Please indicate your agreement with the foregoing by executing
this LOI in the space provided below and returning it to my
attention by noon today. If I do not receive an executed
counterpart of this LOI by such time., the terms of this LOI
shall be null and void.
Very truly yours.
TRANS ENERGY, INC., a Nevada corporation
By:
Loren E. Bagley, President
Agreed to and accepted this 11th day of February, 1998.
NATURAL GAS TECHNOLOGIES, INC..
a Texas corporation
By:
Brent Wagman, President
