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U. S. Securities and Exchange Commission
Washington, D. C. 20549
Form 10-QSB/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended March 31, 1998
Commission File No. 0-20975
Tengasco, Inc.
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(Exact name of small business issuer as specified in its charter)
Tennessee 87-0267438
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
603 Main Avenue, Suite 500, Knoxville, TN 37902
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(Address of principal executive offices)
(423) 523-1124
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(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 7,284,801 common shares at
March 31, 1998.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
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TENGASCO, INC.
Notes to Consolidated Financial Statements
1. The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB
and Item 310 (b) of Regulation S-B. Accordingly, they do not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of only normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31, 1998 are
not necessarily indicative of the results that may be expected for the
year ended December 31, 1998. For further information, refer to the
company's consolidated financial statements and footnotes thereto for the
year ended December 31, 1997, included in Form 10-KSB.
2. The Company has issued fully paid 25% working interests in four wells in
the Swan Creek Field to a Director which were paid for in part by
crediting the Director $235,000 for placement fees in connection with
private placements of the Company's common stock which occurred during
the fourth quarter of 1997 and the first quarter of 1998. If, however, it
is determined that a well(s) at the time of completion of the drilling is
not economically feasible and as such is subsequently plugged and
abandoned, the Director has 30 days, after written notice from the
Company, to convert amounts paid for that well(s) to restricted shares of
the Company's common stock at 70% of its then current market value. To
date, two of the four wells in which the Director has a participation
interest are producing, therefore his options for these wells are not
exercisable. If the options to convert the remaining well interests to
the Company's common stock should become exercisable, the Company will
recognize a charge to compensation expense for the difference between the
market value of the stock on the date the option is exercisable and the
amount paid by the Director for the working interest in these wells.
3. On December 18, 1997, the Company entered into an asset purchase
agreement in which certain producing oil and gas properties located in
the state of Kansas were acquired from A.F.G. Energy, Inc.("AFG"). The
agreement, which was effective as of December 31, 1997, closed on March
5, 1998. The Company paid $2,990,253 in cash and entered into a note
payable agreement with AFG in the amount of $2,500,000. The note will
accrue interest at 9% per annum and is due in 23 monthly installments of
principal and interest of $79,500 with a balloon payment of $983,773 due
in February, 2000. The total note balance due at March 31, 1998 is
$2,430,500 with a current portion payable of $763,375 and a long term
amount of $1,667,125.
4. In accordance with ("SFAS") No. 128, "Earnings Per Share", basic and
diluted loss per share are based on 7,071,506 weighted average shares
outstanding for the quarter ended March 31, 1998 and 5,712,287 weighted
average shares outstanding for the quarter ended March 31, 1997. There
were 517,502 and 948,670 potential weighted common shares outstanding at
March 31, 1998 and March 31, 1997 respectively related to common stock
options and warrants. These shares were not included in the computation
of the diluted loss per share amount because the Company was in a net
loss position and, thus, any potential common shares were anti-dilutive.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
Dated: August 27, 1998 TENGASCO, INC.
By: /s/ Robert M. Carter
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Robert M. Carter, President
By: /s/ William F. Stenken
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William F. Stenken,
Chief Accounting Officer
