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.