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 JUNE 30,2000
------------
COMMISSION FILE NO. 0-20975
-------
TENGASCO, INC.
--------------
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
TENNESSEE 87-0267438
------------------------------ ---------------------------------
STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION
603 MAIN AVENUE, SUITE 500, KNOXVILLE, TN 37902
-----------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(865-523-1124)
--------------
(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: 8,613,352 COMMON SHARES AT JUNE 30,
2000.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): YES [_] NO _X_
This Amendment on Form 10-QSB/A amends Item 1 of Part 1 of the previously filed
quarterly report on Form 10-QSB of Tengasco, Inc. and Subsidiaries for the three
month and six month periods ended June 30, 2000 to correct the net loss
attributable to common shareholders per share basic and diluted disclosures on
the accompanying Consolidated Statements of Loss. This Amendment also reflects
dividends on preferred stock in the accompanying Consolidated Statements of
Loss. Weighted average shares of common stock outstanding were also restated to
appropriately reflect timing and duration of stock transactions having an effect
on the calculation. These items were inadvertently omitted on the previously
filed June 30, 2000 10-QSB.
In accordance with Rule 12B-15 of the Securities Exchange Act of 1934, this
Amendment sets forth the complete text to Item 1 of Part I of our Form 10-QSB
for the three months and six months ended June 30, 2000.
TENGASCO, INC.
TABLE OF CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
* CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2000 AND
DECEMBER 31, 1999.......................................... 3-4
* CONSOLIDATED STATEMENTS OF LOSS FOR THE THREE AND SIX
MONTHS ENDED JUNE 30, 2000 AND 1999........................ 5
* CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY FOR THE
SIX MONTHS ENDED JUNE 30, 2000............................. 6
* CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS
ENDED JUNE 30, 2000 AND 1999............................... 7
* NOTES TO CONSOLIDATED FINANCIAL STATEMENTS................. 8-9
PART II. OTHER INFORMATION
* SIGNATURE.................................................. 10
2
TENGASCO, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
JUNE 30, DECEMBER 31,
2000 1999
(UNAUDITED)
----------- -----------
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS ................... $ 568,300 $ 420,590
ACCOUNTS RECEIVABLE, NET .................... 610,507 533,983
OTHER CURRENT ASSETS ........................ 259,753 259,753
----------- -----------
TOTAL CURRENT ASSETS .......................... 1,438,560 1,214,326
OIL AND GAS PROPERTIES, NET
(ON THE BASIS OF FULL COST
ACCOUNTING) ................................. 9,242,796 8,444,036
PIPELINE FACILITIES, AT COST .................. 4,853,423 4,212,842
PROPERTY AND EQUIPMENT, NET ................... 575,719 574,895
RESTRICTED CASH ............................... 0 625,000
OTHER ......................................... 96,613 111,613
----------- -----------
$16,207,111 $15,182,712
=========== ===========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
TENGASCO, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDER'S EQUITY
JUNE 30, DECEMBER 31,
2000 1999
(UNAUDITED)
----------- -----------
CURRENT LIABILITIES
NOTES PAYABLE .............................. $ 0 $ 750,000
CURRENT MATURITIES OF LONG-TERM DEBT ....... 1,346,809 1,025,085
ACCOUNTS PAYABLE-TRADE ..................... 680,834 651,909
ACCRUED LIABILITIES ........................ 119,376 193,595
------------ ------------
TOTAL CURRENT LIABILITIES .................... 2,147,019 2,620,589
LONG TERM DEBT, LESS CURRENT MATURITIES ...... 2,774,887 3,119,293
------------ ------------
TOTAL LIABILITIES ............................ 4,921,906 5,739,882
------------ ------------
PREFERRED STOCK
CONVERTIBLE REDEEMABLE PREFERRED;
REDEMPTION VALUE $2,938,900 AND
$1,988,900; SHARES OUTSTANDING
29,389 AND 19,889
STOCKHOLDER'S EQUITY ......................... 2,938,900 1,988,900
------------ ------------
COMMON STOCK, $.001 PER VALUE,
50,000,000 SHARES AUTHORIZED ............. 8,785 8,533
ADDITIONAL PAID-IN CAPITAL ................. 22,186,507 20,732,759
ACCUMULATED DEFICIT ........................ (13,848,987) (13,287,362)
------------ ------------
8,346,305 7,453,930
------------ ------------
TOTAL STOCKHOLDERS' EQUITY ................... 8,346,305 7,453,930
------------ ------------
$ 16,207,111 $ 15,182,712
============ ============
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
TENGASCO, INC.
CONSOLIDATED STATEMENTS OF LOSS
(UNAUDITED)
RESTATED
FOR THE FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
---------------------- ------------------------
2000 1999 2000 1999
---------- ---------- ---------- -----------
OIL AND GAS REVENUES .......... $1,270,283 $ 724,888 $2,450,195 $ 1,020,536
---------- ---------- ---------- -----------
COSTS AND OTHER DEDUCTIONS
PRODUCTIONS COSTS AND TAXES . 799,736 642,888 1,255,561 879,989
DEPLETION, DEPRECIATION
AND AMORTIZATION .......... 63,000 27,100 126,000 154,200
INTEREST EXPENSE ............ 105,225 257,245 204,158 301,454
GENERAL AND ADMINISTRATIVE
COSTS ..................... 549,192 467,242 1,115,022 1,214,292
LEGAL AND ACCOUNTING ........ 132,364 194,193 199,141 377,644
---------- ---------- ---------- -----------
TOTAL COSTS AND OTHER
DEDUCTIONS .................. 1,649,517 1,588,668 2,899,882 2,927,579
---------- ---------- ---------- -----------
NET LOSS ...................... (379,234) (863,780) (449,687) (1,907,043)
---------- ---------- ---------- -----------
DIVIDENDS ON PREFERRED STOCK .. 72,160 -- 111,938 --
---------- ---------- ---------- -----------
NET LOSS ATTRIBUTABLE TO
COMMON SHAREHOLDERS ........ $ (451,394) $ (863,780) $ (561,625) $(1,907,043)
---------- ---------- ---------- -----------
NET LOSS ATTRIBUTABLE TO
COMMON SHAREHOLDERS PER
SHARE BASIC AND DILUTED ..... $ (0.05) $ (0.10) $ (0.07) $ (0.24)
---------- ---------- ---------- -----------
WEIGHTED AVERAGE SHARES
OUTSTANDING ................. 8,691,985 8,260,641 8,639,002 7,846,179
---------- ---------- ---------- -----------
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
TENGASCO, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(UNAUDITED)
COMMON STOCK ADDITIONAL
----------------- PAID IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT
--------- ------ ----------- ------------
BALANCE DECEMBER 31, 1999 ....... 8,532,882 $8,533 $20,732,759 $(13,287,362)
COMMON STOCK ISSUED IN .......... 215,747 215 1,231,785 0
PRIVATE PLACEMENTS
COMMON STOCK ISSUED ............. 27,769 28 171,972 0
ON CONVERSION OF DEBT
CONVERSION OF PREFERRED ......... 8,818 9 49,991 0
TO COMMON STOCK
PAYMENT OF DIVIDENDS ON
CONVERTIBLE PREFERRED STOCK ..... 0 0 0 (111,938)
NET LOSS FOR THE SIX MONTHS
ENDED JUNE 30, 2000 ............. 0 0 0 (449,687)
--------- ------ ----------- ------------
BALANCE, JUNE 30, 2000 .......... 8,785,216 $8,785 $22,186,507 $(13,848,987)
========= ====== =========== ============
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6
TENGASCO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED JUNE 30 ........................... 2000 1999
----------- -----------
OPERATING ACTIVITIES
NET LOSS ......................................... $ (449,687) $(1,907,043)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
USED IN OPERATING ACTIVITIES:
DEPLETION, DEPRECIATION AND AMORTIZATION ......... 126,000 154,200
CHANGES IN ASSETS AND LIABILITIES
ACCOUNTS RECEIVABLE ............................ (76,524) (372,168)
OTHER CURRENT ASSETS ........................... 15,000 0
ACCOUNTS PAYABLE ............................... 28,925 414,154
ACCRUED LIABILITIES ............................ (74,219) (129,272)
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES .............. (430,505) (1,840,129)
----------- -----------
INVESTING ACTIVITIES
PURCHASES OF PROPERTY AND EQUIPMENT .............. (824) (178,941)
ADDITIONS TO OIL AND GAS PROPERTIES .............. (798,760) (606,844)
ADDITIONS TO PIPELINE FACILITIES ................. (640,581) (41,695)
DECREASE IN RESTRICTED CASH ...................... 625,000 0
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES .............. (815,165) (827,480)
----------- -----------
FINANCING ACTIVITIES
PROCEEDS FROM BORROWINGS ......................... 795,595 215,595
REPAYMENTS OF BORROWINGS ......................... (1,694,277) (294,983)
DIVIDENDS ON CONVERTIBLE REDEEMABLE
PREFERRED STOCK ................................ (111,938) 0
PROCEEDS FROM PRIVATE PLACEMENTS OF
COMMON STOCK ................................... 1,454,000 1,537,736
PROCEEDS FROM PRIVATE PLACEMENT OF
PREFERRED STOCK ................................ 950,000 688,900
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES .......... 1,393,380 2,147,248
----------- -----------
NET CHANGE IN CASH AND CASH
EQUIVALENTS ................................... 147,710 (520,361)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ..... 420,590 913,194
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD ........... $ 568,300 $ 392,833
=========== ===========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7
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 six months ended June 30, 2000 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2000. For
further information, refer to the Company's consolidated financial
statements and footnotes thereto for the year ended December 31, 1999,
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 1998 and the first quarter of
1999. 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 were not exercisable.
In December, 1999, Morita Properties, Inc., an affiliate of Mr. Morita,
purchased for the sum of $625,000 a 25% working interest on a turnkey basis
in two wells, Laura Jean Lawson #1 and Stephen Lawson #2, both of which are
in the Swan Creek Field, and a 50% working interest in a third well,
Springdale Land Company #1, which is a wildcat step-out well located
approximately ten miles from the existing production. In January and March
2000, Morita Properties, Inc. purchased for the sum of $250,000 on a
turnkey basis a 12.5% working interest in the Stephen Lawson #3 well, a 25%
working interest in the Laura Jean Lawson #2 well, and in April 2000,
Morita Properties, Inc. purchased for the sum of $125,000 a 25% working
interest in the R.D. Helton #2 well, all of which are in the Swan Creek
Field. The purchases of these interests were concluded before the
respective wells were drilled and the purchaser assumed all the attendant
risks involved in normal and customary drilling operations, including the
risk of a dry hole. The Company received fair market value for the
interests conveyed and the sale of such interests was required to raise
funds to allow drilling operations to continue.
8
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 accrued interest at the rate of 9.5% per annum for the
period December 1998 to May 1999. After May 1999, the interest rate became
9.0% per annum. There was a balloon payment of $1,865,078 due in January
2000. The seller financing portion of the purchase price has been
refinanced by Arvest United Bank of Edmund, Oklahoma as evidenced by a note
dated November 23, 1999 in the amount of $1,883,650 to be paid in monthly
installments of principle and interest over a three year period. 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.
4. In accordance with SFAS No. 128, "Earnings Per Share", basic and diluted
loss per share are based on 8,691,985 weighted average shares outstanding
for the quarter ended June 30, 2000 and 8,260,641 weighted average shares
outstanding for the quarter ended June 30, 1999. Weighted average shares
outstanding for the six months ended June 30, 2000 and 1999 were 8,639,002
and 7,846,149, respectively. There were 475,827 potential weighted common
shares outstanding at June 30, 2000 and 1999 primarily 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.
Per share disclosures have been restated in this Form 10-QSB/A for weighted
average common shares outstanding and dividends on preferred stock for the
three months and six months ended June 30, 2000.
5. The accompanying Consolidated Statements of Loss have been restated to
reflect dividends on preferred stock and net loss attributable to common
shareholders. Per share disclosures have been calculated using these
figures in accordance with SFAS 128.
6. Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 133, "Accounting for Derivatives and Hedging Activities", as
amended, establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives), and for hedging
activities. Presently, the Company does not entered into derivative
contracts either to hedge existing risks or for speculative purposes.
Accordingly, the Company does not expect adoption of this new standard on
January 1, 2001, to affect its financial statements.
9
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: September 10, 2001 TENGASCO, INC.
By: s/HAROLD G. MORRIS
----------------------------------------
Harold G. Morris, President
By: s/MARK A. RUTH
----------------------------------------
Mark A. Ruth, Chief Financial Officer
10