sec document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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) February 19, 2005
-----------------
--------------------
TIDEL TECHNOLOGIES, INC.
------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-17288 75-2193593
-------- ------- ----------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
2900 Wilcrest, Suite 205, Houston, TX 77042
---------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (713) 783-8200
--------------
N/A
-------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On February 19, 2005, the registrant and its wholly-owned subsidiary
Tidel Engineering, L.P. ("Engineering" and together with the registrant, the
"Sellers") entered into an asset purchase agreement with NCR Texas LLC, a single
member Delaware limited liability company ("NCR") that is a wholly-owned
subsidiary of NCR Corporation, a Maryland corporation, for the sale of the
registrant's ATM business (the "Asset Purchase Agreement"). The purchase price
for the ATM business of the Sellers is ten million one hundred seventy five
thousand dollars ($10,175,000) plus the assumption of certain liabilities
related to the ATM business, subject to certain adjustments as provided in the
Asset Purchase Agreement (the "Purchase Price"). The Purchase Price is also
subject to adjustment based upon the actual value of the assets delivered, to
the extent the value of the assets delivered is 5% greater than or less than a
predetermined value as stated in the Asset Purchase Agreement. The Asset
Purchase Agreement contains customary representations, warranties, covenants and
indemnities.
The proceeds of the sale of the Sellers' ATM business will be
applied towards the repayment of the registrant's outstanding loans from Laurus
Master Fund ("Laurus"). However, even after the application of net proceeds
towards the repayment of the loans, Laurus may continue to hold warrants to
purchase up to 4,750,000 shares of the registrant's common stock, and will have
a contractual right to receive a significant percentage of the proceeds of any
subsequent sale of all or substantially all of the equity interests and/or other
assets of the registrant in one or more transactions, pursuant to the Asset
Sales Agreement, as more fully described in the registrant's Current Report on
Form 8-K dated December 3, 2004. The registrant has retained Stifel, Nicolaus &
Company, Inc. to sell the remainder of the registrant's business, as required
pursuant to the Securities Purchase Agreement between the registrant and Laurus
dated November 26, 2004, which was filed as Exhibit 10.1 to the registrant's
Current Report on Form 8-K dated December 3, 2004.
The closing of the transaction is subject to several conditions,
including stockholder approval. The Sellers do not contemplate seeking
stockholder approval until the Registrant is current in its reporting
requirements under the Securities Exchange Act of 1934, as amended. Pursuant to
contractual arrangements with its lenders, the Registrant is required to be
current no later than July 31, 2005, after which time the Registrant would
contemplate seeking stockholder approval for this transaction. The Registrant
believes that the transaction will likely not close prior to the fourth quarter
of 2005.
Following the closing of the transactions under the Asset Purchase
Agreement, it is contemplated that approximately 50% of the Registrant's
employees would become employees of NCR, including two executives (one of whom
is presently a director of the registrant), subject to their reaching mutually
satisfactory agreements with NCR.
Pursuant to the Asset Purchase Agreement, until the earlier of the
closing of the transactions contemplated thereby or termination of the Asset
Purchase Agreement (the "Exclusivity Period"), the Sellers have agreed not to
communicate with potential buyers, other than to say that they are contractually
obligated not to respond. The Sellers are obligated to forward any
communications to NCR. In the event that the Sellers breach these provisions,
pursuant to the terms of the Asset Purchase Agreement, the Sellers are obligated
to pay a $2,000,000 fee to NCR (the "Fee"). Also as provided in the Asset
Purchase Agreement, under certain limited circumstances the Sellers may consider
an unsolicited offer that the registrant's board of directors (the "Board")
deems to be financially superior. However, immediately following the execution
of a definitive agreement for the transaction contemplated by such superior
offer, NCR is to be paid the Fee.
The Asset Purchase Agreement also contains a provision restricting
the Sellers from owning or managing any business similar to the ATM business for
a period of five years after the closing of the transactions contemplated by the
Asset Purchase Agreement, and restricting Sellers from soliciting or hiring any
employees of NCR for a period of two years after the closing.
Either party may terminate the Asset Purchase Agreement without
liability for certain reasons including if the Closing has not occurred by
December 31, 2005. In addition, NCR may terminate the Asset Purchase Agreement
if (i) NCR has not entered into employment agreements with at least two of the
Sellers' key employees by March 21, 2005, or (ii) Sellers have not obtained the
consent of the landlord for the transfer of the lease for its Dallas, Texas
facility to NCR by March 21, 2005; in each case such termination must be made no
later than March 31, 2005.
PRECAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS
-----------------------------------------------------------
THIS FORM 8-K CONTAINS STATEMENTS THAT CONSTITUTE FORWARD-LOOKING STATEMENTS,
INCLUDING STATEMENTS AS TO ANTICIPATED OR EXPECTED RESULTS, BELIEFS, OPINIONS
AND FUTURE FINANCIAL PERFORMANCE, WITHIN THE MEANING OF SECTION 21(E) OF THE
SECURITIES EXCHANGE ACT OF 1934. THE STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES, INCLUDING BUT NOT LIMITED TO THE REGISTRANT'S FINANCIAL POSITION
AND WORKING CAPITAL AVAILABILITY, ABILITY TO REPAY ITS INDEBTEDNESS, THE LEVELS
OF ORDERS WHICH ARE RECEIVED AND CAN BE SHIPPED IN A QUARTER; CUSTOMER ORDER
PATTERNS AND SEASONALITY; COSTS OF LABOR, RAW MATERIALS, SUPPLIES AND EQUIPMENT;
TECHNOLOGICAL CHANGES; COMPETITION AND COMPETITIVE PRESSURES ON PRICING; CHANGES
IN THE COMPANY'S RELATIONSHIPS WITH CUSTOMERS OR SUPPLIERS; ACCEPTANCE OF THE
REGISTRANT'S PRODUCT AND TECHNOLOGY INTRODUCTIONS IN THE MARKETPLACE;
UNANTICIPATED LITIGATION, CLAIMS OR ASSESSMENTS; THE REGISTRANT'S ABILITY TO
REDUCE COSTS AND EXPENSES AND IMPROVE INTERNAL OPERATING EFFICIENCIES; THE
ECONOMIC CONDITION OF THE ATM INDUSTRY AND THE POSSIBILITY THAT IT IS A MATURE
INDUSTRY; THE FUTURE TRADING MARKET FOR THE REGISTRANT'S SECURITIES; AND
ECONOMIC CONDITIONS IN THE UNITED STATES AND WORLDWIDE. THE REGISTRANT
UNDERTAKES NO DUTY TO UPDATE ANY OF THE STATEMENTS SET FORTH IN THIS RELEASE.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits
Exhibit Number Description
-------------- -----------
99.1 Press Release dated February 25, 2005
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 hereunto duly authorized.
TIDEL TECHNOLOGIES, INC.
(Registrant)
Date: February 25, 2005
By: /s/ Mark Levenick
------------------------------
Name: Mark Levenick
Title:Interim Chief Executive Officer