PR Newswire
GREENWOOD VILLAGE, Colo., March 17, 2017
GREENWOOD VILLAGE, Colo., March 17, 2017 /PRNewswire/ --
Tengasco, Inc. (NYSE MKT: TGC) announced that its Board of Directors has adopted a Rights Plan intended to help preserve assets
related to the Company's net operating losses. As of December 31, 2016, the Company had cumulative
net operating loss carry forwards of approximately $28.2 million, which are usable in certain
circumstances to offset future U.S. taxable income.
After considering the estimated value of the Company's tax benefits and the potential for limitations to the NOL's occurring
upon an "ownership change", the Board adopted the Rights Plan, which is intended to protect Tengasco's tax
benefits. Tengasco's ability to use these tax benefits would be limited if it were to experience an "ownership change"
under Section 382 of the Internal Revenue Code. This would occur if stockholders that own at least 5% of outstanding common stock
increased their ownership in the Company by more than 50 percentage points within a rolling three-year period. The Rights Plan
reduces the likelihood that changes in Tengasco's investor base would limit Tengasco's future use of its tax benefits. The
Company believes that no ownership change as defined in Section 382 has occurred as of the date of this press release.
To implement the Rights Plan, the Board declared a dividend of one preferred share purchase right for each outstanding share
of its common stock to shareholders of record on March 27, 2017. The rights are further
described in a Registration Statement on Form 8-A filed with the Securities and Exchange Commission today. The rights will become
exercisable if a person acquires 4.95% or more of Tengasco common stock or if a person that already owns 4.95% or more of common
stock acquires additional shares above the percentage currently owned. Tengasco's stockholders that currently own more than
4.95% of the common stock will be "grandfathered" at their current ownership level. If the rights become exercisable, all
holders of rights, other than the person triggering the exercisability of the rights, become entitled to purchase Tengasco stock
at an approximate 50% discount. Rights held by the person triggering the rights will become void and will not be exercisable.
The rights are not taxable to stockholders. The rights will trade with Tengasco's common stock and will expire on the day
after the 2017 annual shareholders meeting unless ratified at the meeting, in which case they would expire in three
years. The Board may terminate the plan or redeem the rights prior to the time they are exercisable.
The statements contained in this release that are not purely historical are forward-looking statements within the meaning of
applicable securities laws.
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SOURCE Tengasco, Inc.
