Current Report Filing (8-k)
January 04 2021 - 4:04PM
Edgar (US Regulatory)
0000878726
false
--06-30
TUESDAY MORNING CORP/DE
0000878726
2020-12-31
2020-12-31
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): December 31, 2020
TUESDAY MORNING CORPORATION
(Exact name of registrant as specified
in charter)
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Delaware
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0-19658
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75-2398532
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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6250 LBJ Freeway
Dallas, Texas
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75240
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(Address of principal executive offices)
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(Zip Code)
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(972) 387-3562
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(Registrant’s telephone number, including area code)
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Not applicable
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(Former name or former address, if changed since last report)
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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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the
Act: None
Indicate by check mark whether the registrant is an emerging
growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2
of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by
check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
As previously disclosed, on May 27, 2020
(the “Petition Date”), Tuesday Morning Corporation and certain of its direct and indirect subsidiaries (collectively
with the Company, the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of
the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Northern District
of Texas, Dallas Division (the “Bankruptcy Court”). The Chapter 11 Cases are being administered jointly under the caption
“In re: Tuesday Morning Corporation, et. al., Case No. 20-31476-HDH-11.”
On December 23, 2020, as previously disclosed,
the Bankruptcy Court entered an order confirming the Company’s Revised Second Amended Joint Plan of Reorganization under
Chapter 11 of the Bankruptcy Code (the “Plan of Reorganization”). On December 31, 2020 (the “Effective Date”),
all of the conditions precedent to the Plan of Reorganization were satisfied.
Pursuant to the Plan of Reorganization,
each outstanding share of the Company’s common stock as of the “rights offering/exchange determination date”
will be exchanged (the “Exchange”) for (1) one new share of the Company’s stock and (2) a share purchase right
entitling the holder to purchase its pro rata portion of shares available to eligible holders in the Rights Offering (as defined
below). As previously disclosed, the Company anticipates the “rights offering/exchange determination date” will be
the close of business on January 4, 2021. In accordance with the Plan of Reorganization, the Company will conduct a $40 million
rights offering (the “Rights Offering”), under which eligible holders of the Company’s common stock may purchase
up to $24 million of shares of the Company’s common stock at a purchase price of $1.10 per share, and Osmium Partners, LLC
or its affiliates (the “Backstop Party”), may purchase up to $16 million of shares of the Company’s common stock
at a purchase price of $1.10 per share. Pursuant to a backstop commitment agreement, the Backstop Party has agreed to purchase
all unsubscribed shares in the Rights Offering. The Rights Offering will remain open until 4:00 central time, on February 1, 2021.
Following the Exchange, the CUSIP Number
for the Company’s common stock will be 89904V 101. The Company’s common stock is registered under Section 12(g) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Company will remain subject to the periodic
reporting requirements under the Exchange Act.
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Item 1.01
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Entry into a Material Definitive Agreement.
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ABL Facility
On December 31, 2020, the Company and its
subsidiaries entered into a Credit Agreement (the “ABL Credit Agreement”) with JPMorgan Chase Bank, N.A., Wells Fargo
Bank, N.A. and Bank of America, N.A. (collectively, the “Lenders”), which provides for a revolving credit facility
in an aggregate amount of $110 million (the “ABL Facility”). The ABL Credit Agreement includes conditions to borrowings,
representations and warranties, affirmative and negative covenants, and events of default customary for financings of this type
and size. The ABL Credit Agreement requires the Company to maintain a minimum fixed charge coverage ratio if borrowing availability
falls below certain minimum levels.
Under the terms of the ABL Credit Agreement,
amounts available for advances would be subject to a borrowing base as described in the ABL Credit Agreement. Under the ABL Credit
Agreement, borrowings under the ABL Facility initially will bear interest at a rate equal to the adjusted LIBOR rate plus a spread
of 2.75% or the CB rate plus a spread of 1.75%.
The ABL Facility is secured by a first priority
lien on all present and after-acquired tangible and intangible assets of the Company and its subsidiaries other than certain collateral
that secures the Notes (as defined below). The commitments of the Lenders under the ABL Facility will terminate and outstanding
borrowings under the ABL Facility will mature on the third anniversary of the closing of the ABL Facility.
The foregoing summary of the ABL Credit
Agreement is qualified in its entirety by reference to the full text of the ABL Credit Agreement, a copy of which is attached hereto
as Exhibit 10.1 and incorporated by reference herein.
TCM Credit Agreement
On December 31, 2020, the Company and Tensile
Capital Partners Master Fund LP (“TCM”) entered into a Credit Agreement (the “TCM Credit Agreement”). Pursuant
to the TCM Credit Agreement, TCM provided a term loan of $25 million to the Company (the “Loan”).
Pursuant to the terms of the TCM Credit
Agreement, the Loan has a maturity of 48 months from the date of issuance and bears interest at a rate of 14% per annum, with interest
payable in-kind. Under the terms of the TCM Credit Agreement, the Loan is secured by a second lien on the collateral securing the
ABL Facility and a first lien on certain other assets of the Company as described in the TCM Credit Agreement. The Loan is subject
to optional prepayment after the first anniversary of the date of issuance at prepayment price equal to the greater of (1) the
original principal amount of the Loan plus accrued interest thereon, and (2) 125% of the original principal amount of the Loan.
The Loan is subject to mandatory prepayment in connection with a change of control of the Company as described in the TCM Credit
Agreement. The TCM Credit Agreement also includes customary covenants and events of default.
The foregoing summary of the TCM Credit
Agreement is qualified in its entirety by reference to the full text of the TCM Credit Agreement, a copy of which is attached hereto
as Exhibit 10.2 and incorporated by reference herein.
Sale Leaseback
On December 31, 2020, in accordance with
that certain purchase and sale agreement, dated as of December 7, 2020 (the “Purchase and Sale Agreement”), among the
Company and certain subsidiaries and PBV – 14303 Inwood, LP (the “Purchaser”), the Company completed the sale
of its Dallas headquarters and warehouse facilities (the “Properties”) to the Purchaser for an aggregate purchase price
of $70.25 million.
In connection with the closing of the sale
of the Properties, on December 31, 2020, the Company and certain subsidiaries and the Purchaser entered into lease agreements under
which the Company will lease the Properties following the close of the sale under the Purchase and Sale Agreement. The lease agreement
of the headquarters facility (the “Headquarters Facility Lease Agreement”) will be for a term of 10 years and the lease
of the warehouse facilities (the “Warehouse Facility Lease Agreement”) will be for an initial term of 2.5 years with
an option to extend the warehouse facilities lease for one additional year.
The foregoing summary is qualified in its
entirety by reference to the full text of the Purchase and Sale Agreement, Headquarters Facility Lease Agreement and Warehouse
Facility Lease Agreement, copies of which are attached hereto as Exhibits 2.1, 10.3 and 10.4, respectively, and incorporated by
reference herein.
Indemnification Agreement
In connection with the Effective Date, the
Company adopted an updated form of director indemnification agreement (the “Indemnification Agreement”). The Indemnification
Agreement provides generally that the Company will indemnify its directors to the fullest extent permitted under applicable law.
A copy of the Indemnification Agreement is attached hereto as Exhibit 10.5.
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Item 2.01
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Completion of Acquisition or Disposition of Assets.
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The information set forth under the heading
“Sale Leaseback” in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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The information set forth in Item 1.01 of
this Current Report on Form 8-K is incorporated herein by reference.
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Item 3.03
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Material Modification to Rights of Security Holders.
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The information set forth in Item 5.03 of
this Current Report on Form 8-K is incorporated herein by reference.
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Item 5.03
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Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal Year.
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In accordance with the terms of the Plan
of Reorganization, effective as of December 31, 2020, the Company’s amended and restated certificate of incorporation (the
“Amended and Restated Certificate of Incorporation”) and the Company’s amended and restated bylaws (the “Amended
and Restated Bylaws”) became effective.
Through the Amended and Restated Bylaws,
the Company’s prior bylaws were amended to provide that the number of directors that will initially constitute the board
of directors at the Effective Date is nine.
Through the Amended and Restated Certificate
of Incorporation, the Company’s prior certificate of incorporation was amended by (1) increasing the number of authorized
shares of common stock from 100 million shares to 200 million shares, (2) adding a provision restricting the issuance of non-voting
equity securities as required by Section 1123 of the Bankruptcy Code, and (3) adding a provision designed to assist the Company
in preserving certain tax attributes (the “Tax Benefits”), as discussed below.
In order to continue to assist the Company
in preserving the Tax Benefits, the Amended and Restated Certificate of Incorporation imposes certain restrictions on the transferability
and ownership of the Company’s capital stock (the “Ownership Restrictions”). Subject to certain exceptions, the
Ownership Restrictions restrict (i) any transfer that would result in any person acquiring 4.5% or more of the Company’s
common stock, (ii) any transfer that would result in an increase of the ownership percentage of any person already owning 4.5%
or more of the Company’s common stock, or (iii) any transfer during the five-year period following the Effective Date that
would result in a decrease of the ownership percentage of any person already owning 4.5% or more of the Company’s common
stock. Pursuant to the Amended and Restated Certificate of Incorporation, any transferee receiving shares of common stock that
would result in a violation of the Ownership Restrictions will not be recognized as a stockholder of the Company or entitled to
any rights of stockholders. The Amended and Restated Certificate of Incorporation allows the Ownership Restrictions to be waived
by the Company’s board of directors on a case by case basis. The board of directors has taken action to waive the restrictions
with respect to sales of shares acquired in the Rights Offering by the Backstop Party.
The Ownership Restrictions will remain in
effect until the earliest of (i) the repeal of Section 382 of the Internal Revenue Code or any successor statute if the board of
directors determines the Ownership Restrictions are no longer necessary for preservation of the Tax Benefits, (ii) the beginning
of a taxable year in which the board of directors determines no Tax Benefits may be carried forward, or (iii) such other date as
shall be established by the board of directors.
The foregoing summary is qualified in its
entirety by reference to the full text of the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws,
copies of which are attached hereto as Exhibits 3.1 and 3.2, respectively, and incorporated by reference herein.
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Item 9.01
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Financial Statements and Exhibits.
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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.
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TUESDAY MORNING CORPORATION
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Date: January 4, 2021
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By:
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/s/ Bridgett C. Zeterberg
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Bridgett C. Zeterberg
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Executive Vice President Human Resources,
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General Counsel and Corporate Secretary
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