SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 29, 2000
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Tidel Technologies, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-17288 75-2193593
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(State or other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
5847 San Felipe, Suite 900, Houston, Texas 77057
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (713) 783-8200
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(Former Name or Former Address, If Changed Since Last Report)
Item 5. Other Events.
I. Issuance of 6% Convertible Debentures Due September 8, 2004
On September 29, 2000, Tidel Technologies, Inc. (the "Registrant")
consummated the purchase by an institutional investor (the "Purchaser") of
$3,000,000 aggregate principal amount of convertible debentures due September 8,
2004 (the "Debentures"). The Debentures bear interest at the per annum rate of
6%, which is payable quarterly, and at the election of the Registrant, is
payable in cash or in shares of the Registrant's Common Stock, $.01 par value
(the "Common Stock"). The proceeds of sale of the Debentures will be used for
working capital purposes.
The Debentures are convertible from and after issuance into shares of
Common Stock initially at a price of $9.50 per share (the "Conversion Price").
The number of shares issuable upon conversion and the Conversion Price are
subject to adjustment as a result of, among other things, stock dividends,
distributions, subdivisions, combinations or reclassifications of the Common
Stock, the issuance of certain rights, options, warrants or other Common Stock
equivalents and certain business combinations involving the Registrant. The
Registrant may require conversion of all or a portion of the then outstanding
principal amount of the Debentures if, among other things, the market price of
the Common Stock exceeds 150% of the then applicable Conversion Price for 20
trading days in a period of 30 consecutive trading days at any time after the
date on which the Registration Statement (as hereinafter defined) is declared
effective by the Securities and Exchange Commission (the "Commission").
Conversion of the Debentures is subject to certain restrictions based on the
percentage of the aggregate number of shares of Common Stock the holders of the
Debentures would beneficially own as a result of such conversion.
The holders of the Debentures also have a "Put Right" to require the
Registrant to prepay all or a portion of the then outstanding principal amount
of and interest on the Debentures on each of the 270th day and 540th day
following the date of issuance of the Debentures (each such date, a "Put Date").
Not later than the 60th day following a Put Date (a "Put Payment Date"), the
Registrant is obligated to pay the holders exercising their Put Right an amount
of cash equal to the principal amount of the Debentures to be prepaid, plus all
accrued and unpaid interest thereon (the "Put Price"). No later than 20 trading
days prior to the applicable Put Date, the Registrant may deliver a written
notice (the "Registrant Notice") to the holders of the Debentures indicating its
intention not to pay in excess of a maximum dollar amount in cash as part of any
subsequent Put Price (the "Maximum Cash Amount"), in which case the Registrant
is required to (i) pay to the holders exercising their Put Right the Maximum
Cash Amount and (ii) deliver to the holders exercising their Put Right no later
than the third trading day following the applicable Put Date a number of shares
of Common Stock equal to the quotient obtained by dividing (A) the difference
between the Put Price and the Maximum Cash Amount by (B) the average of the
closing prices for the shares of Common Stock for the five trading days
preceding the Put Date. If the Registrant does not timely deliver a Registrant
Notice, it must pay the entire Put Price in cash.
The Debentures provide for various events of default that would entitle
their holders to require the immediate prepayment of the full principal amount
thereof together with interest and other amounts owing in respect thereof at a
premium. Such events of default include the Registrant's
failure to pay the principal amount of, or liquidated damages in respect of, the
Debentures when such payments become due, or accrued interest on the Debentures
within three days of the applicable interest payment date, the Registrant's
failure to make any payment with respect to any indebtedness greater than
$750,000 to a third party, the failure of the Common Stock to be quoted or
listed for trading on the Nasdaq Stock Market, the American Stock Exchange or
the New York Stock Exchange for three consecutive trading days or an aggregate
of ten trading days, the sale or disposition of all or in excess of 50% of the
Registrant's assets, a merger or consolidation where the Registrant is not the
surviving entity, the acquisition of in excess of 40% of the voting power of the
Common Stock, the failure of the Registration Statement to be declared effective
by the Commission on or prior to the 150th day after the issuance of the
Debentures, the lapse of the effectiveness of the Registration Statement or the
inability of the holders of the Debentures to resell their registrable
securities for more than five consecutive trading days or an aggregate of
fifteen trading days, the Registrant's failure to deliver certificates of Common
Stock to holders of the Debentures prior to the fifth trading day after a
Conversion Date, the Registrant's failure to deliver payments in cash pursuant
to certain "Buy-In" rights of the holders of the Debentures within five days
after notice to the Registrant of a Buy-In is deemed delivered, the Registrant's
breach of any material term of the Debentures or the other agreements entered
into in connection with the Debentures, and the institution of bankruptcy
proceedings (subject to certain cure periods).
In connection with the financing, the Registrant issued to the
Purchaser five-year warrants (the "Warrants") to purchase up to 63,158 shares of
Common Stock at an exercise price equal to $9.80 per share. Exercise of the
Warrants is subject to certain restrictions on the aggregate number of shares of
Common Stock holders of the Warrants would beneficially own as a result of such
exercise. The number of shares of Common Stock issuable upon exercise of the
Warrants and the exercise price of the Warrants are subject to antidilutive
adjustments similar to those contained in the Debentures.
The Registrant agreed with the Purchaser to prepare and file with the
Commission a registration statement relating to the resale of the shares of
Common Stock issuable upon conversion of the Debentures and exercise of the
Warrants (the "Registration Statement"). The Registration Statement was filed
with the Commission on October 6, 2000.
II. Third Amendment to Credit Agreement
On September 29, 2000, the Registrant, Tidel Engineering, L.P. and The
Chase Manhattan Bank amended that certain Credit Agreement dated April 9, 1999
in order to permit the issuance of the Debentures and to modify certain
financial covenants.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
4.1 Convertible Debenture dated September 29, 2000
4.2 Common Stock Purchase Warrant dated September 29, 2000
10.1 Convertible Debenture Purchase Agreement dated September 29,
2000
10.2 Joinder and Amendment to Registration Rights Agreement dated
September 29, 2000 by and between the Registrant, Acorn
Investment Trust on behalf of its series Acorn Fund and
Montrose Investments Ltd.
10.3 Subordination Agreement dated September 29, 2000 by and among
the Registrant, Acorn Investment Trust on behalf of its series
Acorn Fund, Tidel Engineering, L.P., Montrose Investments Ltd.
and The Chase Manhattan Bank
10.4 Third Amendment to Credit Agreement dated September 29, 2000
by and among the Registrant, Tidel Engineering, L.P. and The
Chase Manhattan Bank
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SIGNATURE
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 hereunto duly authorized.
TIDEL TECHNOLOGIES, INC.
Dated: November 1, 2000 By: /s/ James T. Rash
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Name: James T. Rash
Title: Chairman and Chief Executive
Officer
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