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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2 - Amendment No. 4
Registration Statement Under The Securities Act of 1933
TENGASCO, INC.
(Name of small business issuer in its charter)
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<S> <C> <C>
Tennessee 1381 87-0267438
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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603 Main Avenue, Suite 500, Knoxville, Tennessee 37902 (423) 523-1124
(Address and Telephone number of Principal Executive Offices)
603 Main Avenue, Knoxville, Tennessee 37902
(Address of Principal Place of Business or Intended Place of Business)
Mark A. Ruth, 603 Main Avenue, Suite 500, Knoxville,
Tennessee 37902 (423) 523-1124
(Name Address and Telephone number of Agent for Service of Process)
Approximate Date of Proposed Sale to Public: As soon as practicable
after this Registration Statement becomes effective.
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
Title of each class of Dollar Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered offering price per aggregate offering Registration Fee
registered unit price
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Shares of common $1,855,063 $5.375 (1) $1,855,063 $574.24
stock, $0.001 par value
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The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
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(1) This is the average of the closing bid and ask price of the Company's
Common Stock as listed on the OTC Bulletin Board on March 15, 1999
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PROSPECTUS SUPPLEMENT
The following unaudited financial statements of the Company for the
quarter ending March 31, 1999 are hereby incorporated and made a part of this
Prospectus.
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TENGASCO, INC.
TABLE OF CONTENTS
PAGE
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
* Consolidated Balance Sheets as of March 31, 1999 and
December 31, 1998.......................................... 2
* Consolidated Statements of Loss for the three months
ended March 31, 1999 and 1998.............................. 4
* Consolidated Statements of Stockholders Equity for the
three months ended March 31, 1999.......................... 5
* Consolidated Statements of Cash Flows for the three months
ended March 30, 1999 and 1998.............................. 6
* Notes to Consolidated Financial Statements................. 7
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TENGASCO, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
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<CAPTION>
March 31, 1999 December 31, 1998
(Unaudited) (Audited)
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<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 152,047 $ 913,194
Accounts Receivable 105,738 147,050
Other current assets 100,298 100,298
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Total Current Assets 358,083 1,160,542
Oil and gas properties, net (on the basis of full cost
accounting) 8,108,676 7,747,655
Pipeline facilities, at cost 4,052,752 4,019,209
Property and equipment, net 414,050 461,009
Other 138,362 137,362
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$ 13,071,923 $ 13,525,777
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See accompanying notes to consolidated financial statements
2
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TENGASCO, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
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<CAPTION>
March 31, 1999 December 31, 1998
(Unaudited) (Audited)
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<S> <C> <C>
Current Liabilities
Notes payable $ 750,000 $ 1,000,000
Loans payable to affiliates 413,800 413,800
Due to AFG Energy, Inc. (Note 3) 859,833 953,895
Current maturities of long-term debt 54,138 89,135
Accounts payable-trade 403,081 351,567
Accrued liabilities 207,966 281,360
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Total current liabilities 2,688,818 3,089,757
Due to AFG Energy, Inc. (Note 3) 976,207 976,207
Long term debt, less current maturities 2,214,723 2,214,723
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Total liabilities 5,879,748 6,280,687
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Stockholders' equity
Convertible redeemable preferred; redemption value
$800,000; 8,000 shares outstanding 800,000 800,000
Common stock, $.001 per value, 50,000,000 shares
authorized 7,788 7,644
Common stock to be issued 700,000 700,000
Additional paid-in capital 17,286,242 16,796,038
Unamortized stock award (162,500) (162,500)
Accumulated Deficit (11,439,355) (10,496,092)
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7,192,175 7,645,090
Due from stockholder 0 (400,000)
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Total stockholders' equity 7,192,175 7,245,090
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$ 13,071,923 $ 13,525,777
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See accompanying notes to consolidated financial statements
3
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TENGASCO, INC.
CONSOLIDATED STATEMENTS OF LOSS
(UNAUDITED)
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<CAPTION>
For the Three For the Three
Months Ended Months Ended
March 31, 1999 March 31, 1998
(Unaudited) (Unaudited)
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<S> <C> <C>
Oil and gas revenues $ 295,648 $ 610,509
Costs and other deductions
Production Costs and Taxes 237,101 265,487
Depletion, depreciation and amortization 27,100 122,714
Interest expense 44,209 72,716
General and administrative costs 747,050 225,574
Legal and Accounting 183,451 0
Realized loss on sale of investments 0 14,828
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Total costs and other deductions 1,238,911 701,319
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Net loss $ (943,263) $ (90,810)
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BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.12) $ (0.01)
- -------------------------------------------------- ====================== ====================
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See accompanying notes to consolidated financial statements
4
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TENGASCO, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
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<CAPTION>
Convertible Unamortized
Redeemable Common Stock Common Additional Stock
Preferred ------------ Stock Paid In Option Accumulated
Stock Shares Amount Issuable Capital Awards Deficit
----------- ---------- ---------- --------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1998 $ 800,000 7,644,212 $ 7,644 $ 700,000 $ 16,796,038 $ (162,500) $(10,496,092)
Common stock issued in
private placements 153,116 144 490,204 0 0
Amortization of stock
option awards 0 0 0 0 0
Common stock options granted to
non employees 0
Placement fees paid in well
working interests 0
Net loss for the three months
ended March 31, 1999 0 0 0 0 0 0 (943,263)
----------- ---------- ---------- --------- ------------ ------------- ------------
Balance, March 31, 1999 $ 800,000 7,797,328 $ 7,788 $ 700,000 $ 17,286,242 $ (162,500) $(11,439,355)
=========== ========== ========== ========= ============ ============= ============
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See accompanying notes to condensed consolidated financial statements
5
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TENGASCO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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<CAPTION>
Three Months Ended March 31 1999 1998
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<S> <C> <C>
Operating activities
Net loss $(943,263) $ (90,810)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depletion, depreciation and amortization 27,100 122,714
Compensation paid in stock options 0 45,921
Changes in assets and liabilities
Accounts receivable 41,312 (226,870)
Other current assets (1,000) 60,410
Accounts payable 51,514 (1,888)
Accrued liabilities (73,394) 39,560
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Net cash used in operating activities (897,731) (50,963)
Investing activities
Changes to property and equipment 19,859 (40,819)
Changes to oil and gas properties (361,021) (397,795)
Changes to pipeline facilities ( 33,543) (1,081,946)
Net cash used in investing activities (374,705) (1,520,560)
Financing activities
Proceeds from borrowings 400,000 35,485
Repayments of borrowings (379,059) (3,506,357)
Proceeds from issuance of common stock 490,348 973,562
Proceeds from sale of oil and gas properties 0 80,000
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Net cash provided by financing activities 511,289 (2,417,310)
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Net decrease in cash and cash
equivalents (761,147) (3,988,833)
Cash and cash equivalents, beginning of period 913,194 4,451,274
Cash and cash equivalents, end of period $ 152,047 $ 462,441
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See accompanying notes to consolidated financial statements
6
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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, 1999 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1999. For
further information, refer to the company's consolidated financial
statements and footnotes thereto for the year ended December 31, 1998,
included in Form 10-KSB.
2. The Company has issued fully paid 25% working interests in six wells in the
Swan Creek Field to Shigemi Morita, one of the Directors of the Company,
which were paid for in part by crediting Mr. Morita $360,000 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. Mr. Morita was given an option that if it was determined that a well
(s) at the time of completion of the drilling was not economically feasible
and as such was subsequently plugged and abandoned, he had 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. However, all six of the wells in which Mr. Morita has
a participation interest are producing, therefore his options for these
wells are not exercisable.
3. On December 18, 1997, the Company entered into an asset purchase agreement
in which certain producing oil and gas properties and inventory located in
the state of Kansas ("the Kansas Properties") were acquired from AFG
Energy, Inc. ("AFG"). The agreement, which was effective as of December 31,
1997, closed on March 5, 1998, whereby 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 9.5% per annum for the period
December 1998 to May 1999. After May 1999, the interest rate becomes 9.0%
per annum. Monthly interest-only payments are due from December 1998 to May
1999. Monthly installments of principal and interest of $138,349 are due
from June 1999 to December 1999. There is a balloon payment of $983,773 due
in January 2000. The acquisition has been accounted for as a purchase and,
accordingly, the purchase price of $5,490,253 has been allocated to the
assets acquired based on the estimated fair values at the date of
acquisition.
7
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4. In accordance with ("SFAS") No. 128, "Earnings Per Share", basic and
diluted loss per share are based on 7,684,512 weighted average shares
outstanding for the quarter ended March 31, 1999 and 7,181,062 weighted
average shares outstanding for the quarter ended March 31, 1998. There were
475,827 and 497,969 potential weighted common shares outstanding at March
31, 1999 and March 31,1998 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.
5. SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities"
is effective for all fiscal years beginning after June 15, 1999. This
statement requires recognition of all derivative contracts as either assets
or liabilities in the balance sheet and the measurement of them at fair
value. If certain conditions are met, a derivative may be specifically
designated as a hedge, the objective of which is to match the timing of any
gains or losses on the hedge with the recognition of (i) the changes in the
fair value of the hedged asset or liability that are attributable to the
hedged risk or (ii) the earnings effect of the hedged forecasted
transaction. For a derivative not designated as a hedging instrument, the
gain or loss is recognized in income in the period of change. It is not
anticipated that this pronouncement will have any impact on the Company
since the Company does not have any open derivative contracts and it does
not enter into any hedging transactions.
8
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SIGNATURES
In accordance with the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements of filing of Form SB-2 and authorized this
registration statement on its behalf by the undersigned, thereunto duly
authorized, in the City of Knoxville, State of Tennessee on the 12th day of
July, 1999.
Tengasco, Inc.
By: /s/ Malcolm E. Ratliff
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Malcolm E. Ratliff
Chief Executive Officer
In accordance with the requirements of the Securities Act of
1933, this registration statement has been signed by the following persons in
the capacities and on the dates stated.
Signature Title Date
/s/Malcolm E. Ratliff Director; Chief July 12, 1999
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Malcolm E. Ratliff Executive Officer
/s/Allen H. Sweeney Chairman of the Board July 12, 1999
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Allen H. Sweeney
/s/Joseph Earl Armstrong Director July 12, 1999
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Joseph Earl Armstrong
/s/John L. Kidde Director July 12, 1999
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John L. Kidde
/s/James B. Kreamer Director July 12, 1999
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James B. Kreamer
/s/William A. Moffett Director July 12, 1999
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William A. Moffett
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/s/Shigemi Morita Director July 12, 1999
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Shigemi Morita
/s/Robert M. Carter President July 12, 1999
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Robert M. Carter
/s/Mark A. Ruth Principal Financial July 12, 1999
- ---------------------- and Accounting
Mark A. Ruth Officer
/s/Sheila F. Sloan Treasurer July 12, 1999
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Sheila F. Sloan
/s/Elizabeth Wendelken Secretary July 12, 1999
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Elizabeth Wendelken
