Item 7.01. Regulation FD Disclosure.
As previously disclosed, on May 27, 2020 (the "Petition Date"), the Company 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." The Debtors will continue to operate their businesses as
"debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in
accordance with the applicable provisions of the Bankruptcy Code and orders of
the Bankruptcy Court.
On July 20, 2020, the Debtors filed with the Bankruptcy Court their monthly
operating report for the period beginning May 27, 2020 and ending June 30, 2020
(the "Monthly Operating Report"). The Monthly Operating Report is attached
hereto as Exhibit 99.1 and is incorporated herein by reference. This Current
Report on Form 8-K (including the exhibit hereto) (this "Form 8-K") will not be
deemed an admission as to the materiality of any information disclosed herein.
The Monthly Operating Report and other documents filed with the Bankruptcy Court
are available for inspection at https://dm.epiq11.com/case/tuesdaymorning/info.
Documents and other information available on such website are not part of this
Form 8-K and are not deemed to be incorporated by reference in this Form 8-K.
The information furnished in this Item 7.01 of this Current Report on Form 8-K
and the Monthly Operating Report attached hereto as Exhibit 99.1 shall not be
deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liabilities of such section, and
shall not be deemed to be incorporated by reference into the filings of the
Company under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended.
Cautionary Statement Regarding the Monthly Operating Report
The Company cautions investors and potential investors not to place undue
reliance upon the information contained in the Monthly Operating Report, which
was not prepared for the purpose of providing the basis for an investment
decision relating to any of the securities of the Company. The Monthly Operating
Report is limited in scope, covers a limited time period and has been prepared
solely for the purpose of complying with the monthly reporting requirements of
the Bankruptcy Court. The Monthly Operating Report was not audited or reviewed
by independent accountants, was not prepared in accordance with generally
accepted accounting principles, is in a format prescribed by applicable
bankruptcy laws or rules, and is subject to future adjustment and
reconciliation. There can be no assurance that, from the perspective of an
investor or potential investor in the Company's securities, the Monthly
Operating Report is complete. Results set forth in the Monthly Operating Report
should not be viewed as indicative of future results.
Cautionary Statement Regarding Trading in the Company's Common Stock
The Company cautions that trading in the Company's common stock during the
pendency of the Chapter 11 Cases is highly speculative and poses substantial
risks. Trading prices for the Company's common stock may bear little or no
relationship to the actual recovery, if any, by holders of the Company's common
stock in the Chapter 11 Cases.
As previously disclosed, the Bankruptcy Court has issued an order designed to
assist the Debtors in preserving certain net operating losses and other tax
attributes by establishing, among other things, notification and hearing
procedures (the "Procedures") relating to proposed transfers of the Company's
common stock and the taking of worthless stock deductions. The Procedures, among
other things, restrict transfers involving, and require notice of the holdings
of and proposed transactions by any person or "entity" (as defined the
applicable U.S. Treasury Regulations) owning or seeking to acquire ownership of
4.5% or more of the Company's common stock. The Bankruptcy Court order provides
that any actions in violation of the Procedures (including the notice
requirements) would be null and void ab initio, and (a) the person or entity
making such a transfer would be required to take remedial actions specified by
the Debtors to appropriately reflect that such transfer of the Company's common
stock is null and void ab initio and (b) the person or entity making such a
declaration of worthlessness with respect to the Company's common stock would be
required to file an amended tax return revoking such declaration and any related
deduction to reflect that such declaration is void ab initio.
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Cautionary Notice Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the
meaning of the federal securities laws and the Private Securities Litigation
Reform Act of 1995, which are based on management's current expectations,
estimates and projections. Forward looking statements also include statements
regarding the Company's plans with respect to the Chapter 11 Cases, the
Company's plan to continue its operations while it works to complete the Chapter
11 process, the Company's debtor-in-possession financing and other statements
regarding the Company's proposed reorganization, strategy, future operations,
performance and prospects. These forward-looking statements are subject to risks
and uncertainties that could cause the Company's actual results to differ
materially from the expectations expressed in the Company's forward-looking
statements. These risks, uncertainties and events also include, but are not
limited to, the following: the Company's ability to obtain timely approval of
the Bankruptcy Court with respect to motions filed in the Chapter 11 Cases;
pleadings filed that could protract the Chapter 11 Cases; the Bankruptcy Court's
rulings in the Chapter 11 Cases, and the outcome of the Chapter 11 Cases
generally; the Company's ability to comply with the restrictions imposed by the
terms and conditions of the DIP ABL Credit Agreement, including the Company's
ability to maintain certain minimum liquidity requirements and obtain approval
of a plan of reorganization or sale of all of its assets by agreed upon
deadlines; the length of time that the Company will operate under Chapter 11
protection and the continued availability of operating capital during the
pendency of the Chapter 11 Cases; the Company's ability to continue to operate
its business during the pendency of the Chapter 11 Cases; employee attrition and
the Company's ability to retain senior management and other key personnel due to
the distractions and uncertainties; the effectiveness of the overall
restructuring activities pursuant to the Chapter 11 Cases and any additional
strategies the Company may employ to address its liquidity and capital
resources; the actions and decisions of creditors and other third parties that
have an interest in the Chapter 11 Cases; risks associated with third parties
seeking and obtaining authority to terminate or shorten the Company's
exclusivity period to propose and confirm one or more plans of reorganization,
for the appointment of a Chapter 11 trustee or to convert the Chapter 11
proceeding to a Chapter 7 proceeding; increased legal and other professional
costs necessary to execute the Company's restructuring; the Company's ability to
maintain relationships with suppliers, customers, employees and other third
parties as a result of the Chapter 11 Cases; the trading price and volatility of
the Company's common stock and the effects of the delisting from The Nasdaq
Stock Market; litigation and other risks inherent in a bankruptcy process; the
effects and length of the novel coronavirus pandemic; and the other factors
listed in the Company's filings with the Securities and Exchange Commission.
Except as may be required by law, the Company disclaims any obligation to update
any forward-looking statements to reflect events or circumstances after the date
on which the statements were made or to reflect the occurrence of unanticipated
events. Investors are cautioned not to place undue reliance on any
forward-looking statements.
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