U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: September 28, 2006
TIDELANDS OIL & GAS CORPORATION
-------------------------------
(Exact Name of registrant as specified in its Charter)
Nevada 0-29613 66-0549380
---------------------- ------------------ ------------------
State of Incorporation Commission File No. I.R.S. Employer
Identification No.
1862 West Bitters Rd. San Antonio, TX 78248
---------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, ( 210 ) 764 - 8642
----------- ------------- -----------
(Registrant's former name and address)
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 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 (17CFR 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
Item 2.04 Triggering Event that Accelerates or Increases a Direct
Financial Obligation or an Obligation under an Off Balance
Sheet Arrangement
Item 3.02 Unregistered Sales of Equity Securities
Tidelands Oil & Gas Corporation has entered into a Waiver and Amendment
Agreement with its Convertible Debenture Holders ("Holders") settling events of
default.
On September 26, 2006, Palisades Master Fund, L.P. ("Palisades") gave the
Company its notice of election accelerating payment of the Palisades Debenture
at the Mandatory Default Amount asserting a cross default event triggered by the
RHP Master Fund, Ltd. Notice of Default Event received by the Company on
September 20, 2006, as disclosed in the Current Report filed on Form 8-K on
September 25, 2006.
Palisades demanded immediate payment of its Debenture at the Mandatory Default
Amount of $5,597,687.
On September 28, 2006, Company entered into a Waiver and Amendment Agreement
(the, "Agreement") with Palisades and all of the remaining Holders, which
include Crescent International, Ltd., Double U Master Fund, L.P., JGB Capital,
L.P. and Nite Capital, L.P.
In consideration of this Agreement, all existing events of default known to the
Holders have been waived in consideration of the issuance of 2,828,304 common
shares. The Company will issue the shares as follows: Palisades: 2,000,000;
Crescent International, Ltd.: 304,375; Double U Master Fund, L.P.:152,179; JGB
Capital,L.P.: 250,000; and Nite Capital, L.P.: 121,750.
Palisades has withdrawn its Notice of Default and demand for the $5,597,687
Debenture prepayment.
The Company relied on Section 4(2) as the securities transaction exemption
afforded by the Securities Act of 1933, as amended ("Securities Act") in regard
to the issuance of these shares. These are restricted securities and may not be
resold absent registration under the Securities Act or exempt from registration.
These shares will be incorporated as additional underlying shares in our
original Agreements with the named Holders.
Transaction Background:
On January 20, 2006, Tidelands Oil & Gas Corporation ("Company") entered into
Securities Purchase Agreements (the "Agreements") with seven accredited
investors(collectively, "Holders"). The original Holders included Palisades
Master Fund, L.P., PEF Advisors, Crescent International, Ltd., Double U Master
Fund, L.P., JGB Capital, L.P. and Nite Capital, L.P., and RHP Master Fund, Ltd.
Palisades subsequently acquired PEF Advisors interests in the Agreements.
The Company sold $6,569,750 Dollars, in the aggregate principal amount, of
discounted convertible debentures ("Debentures") due January 20, 2008 and Series
A and Series B Warrants to purchase common stock ("Warrants") for an aggregate
payment of $5,396,098 after deduction for the interest discount. The Company
filed a Current Report on Form 8-K on January 25, 2006, disclosing the
transactions. Copies of the transaction documents were attached to the Current
Report as Exhibits 10.1-10.5.
The Company had agreed to register the common shares underlying the Debentures
and Warrants with the Securities and Exchange Commission (the "SEC") thereby
permitting the Holders to resell the underlying common shares upon conversion or
exercise of the Debentures and Warrants.
The Company prepared a registration statement on Form SB-2 and filed it with the
SEC on July 7, 2006 and amended the same on Form S-1/A on August 23 and
September 14, 2006. On September 15, 2006, the registration statement became
effective. Our registration statement filing delays are attributed to the
Company's decision to delay registration statement filing pending clearance from
the SEC relating to the SEC staff review and comments affecting our financial
statements for the years ending 2004 and 2005.
The registration provisions of the Agreements required the Company to have the
registration statement declared effective by the Securities and Exchange
Commission on, or before June 20, 2006, ("Effectiveness Deadline"), or pay
liquidated damages until the registration statement was declared effective. On
June 20, 2006, the company was obligated to pay liquidated damages to the
Holders. Failure to timely pay these liquidated damage sums constitutes an event
of default. As of September 22, 2006, the Company has paid all of the
Effectiveness Deadline liquidated damage sums to each Holder, albeit untimely.
However, prior to these payments, on September 20, 2006, one Holder, RHP Master
Fund, Ltd. ("RHP") gave the Company its notice of election accelerating payment
of the RHP Debenture at the Mandatory Default Amount.
Under the Debenture terms defining default events, Holders may elect to declare
their respective principal Debenture amounts, together with other amounts owing
to the date of acceleration, immediately due and payable in cash at the
Mandatory Default Amount.
Item 9.01 Financial Statements and Exhibits
Exhibits
10 Waiver and Amendment Agreement dated September 28, 2006
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.
TIDELANDS OIL & GAS CORPORATION
Dated: September 28, 2006
/s/Michael Ward
-------------------------------
By: Michael Ward
Title: President, CEO