PAYMENT DATA SYSTEMS, INC. (NASDAQ:PYDS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On February 12, 2019, we entered into a placement agency agreement with Maxim Group LLC, or the Placement Agent, to which the Placement Agent agreed to serve as the sole placement agent, on a “reasonable best efforts” basis, in connection with the registered direct public offering of 769,230 shares of our common stock, par value $0.001, at an offering price of $2.60 per share through the Placement Agent, or the Registered Direct Offering. Also on February 12, 2019, to effect the Registered Direct Offering, we entered into a share purchase agreement with an institutional investor named in the pages thereto to which we agreed to issue and sell the shares directly to the investor at the offering price.
We expect to receive aggregate net proceeds, after deducting Placement Agent fees and other estimated expenses related to the Registered Direct Offering, in the amount of approximately $1.8 million. We intend to use the net proceeds from this offering for general corporate purposes, potential strategic acquisitions and working capital.
The closing of the Registered Direct Offering is expected to take place on February 14, 2019, subject to customary closing conditions.
The shares of common stock are being offered and sold to the public to our shelf registration statement on Form S-3 (File No. 333-221178) initially filed with the Securities and Exchange Commission on October 27, 2017, and declared effective on December 6, 2017. A prospectus supplement relating to the Registered Direct Offering is expected to be filed with the Commission on February 13, 2019.
The share purchase agreement contains customary representations, warranties and agreements by us and customary conditions to closing. Under the share purchase agreement, we have agreed not to enter into any agreement to issue or announce the issuance or proposed issuance of any common stock or common stock equivalents for a period of 30 days following the closing of the offering.
to the placement agency agreement, we have agreed to pay the Placement Agent a cash placement fee equal to 6% of the aggregate gross proceeds raised in this offering from sales arranged for by the Placement Agent. Subject to certain conditions, we also have agreed to reimburse all travel and other out-of-pocket expenses of the Placement Agent in connection with this offering, including but not limited to legal fees, up to a maximum of $40,000.
If we elect to terminate this offering for any reason, other than the Placement Agent’s material failure to provide the placement services, and, if within one month following the termination, we complete any financing of equity, equity-linked or debt or other capital raising activity, then we will be required to pay to the Placement Agent upon the closing of the financing the cash placement fee described above.
The placement agency agreement contains customary representations, warranties and agreements by us and customary conditions to closing. We have agreed to indemnify the Placement Agent against certain liabilities, including liabilities under the Securities Act of 1933, as amended, and liabilities arising from breaches of representations and warranties contained in the Placement Agreement, or to contribute to payments that the Placement Agent may be required to make in respect of those liabilities.
The description of the Registered Direct Offering does not purport to be complete and is qualified in its entirety by reference to the complete text of the share purchase agreement by and among us and the investor,
dated February 12, 2019, and the placement agency agreement by and among us and Maxim Group LLC, dated February 12, 2019, which are filed as Exhibits10.1 and 10.2, respectively,to this Current Report on Form 8-K and are incorporated herein by reference.
The prospectus supplement relating to the Registered Direct Offering will be filed with the Securities and Exchange Commission and will be available on the Commission’s web site at http://www.sec.gov. Copies of the prospectus supplement may also be obtained from Maxim Group LLC, 405 Lexington Avenue, New York, NY 10174, at (212) 895-3745.
This report does not constitute an offer to sell or the solicitation of an offer to buy, and these securities cannot be sold in any state or jurisdiction in which this offer, solicitation, or sale would unlawful prior to registration or qualification under the securities laws of any state or jurisdiction. Any offer will be made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement.
This report contains forward-looking statements. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements related to its future activities or future events or conditions. The words “continue,” “will,” “bring,” “believe,” “estimate,” “expect,” “intend,” “plan,” “expand,” “should,” “likely,” and similar expressions as they relate to us or our management are intended to identify these forward-looking statements. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performances and involve risks, uncertainties and assumptions that are difficult to predict.Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including risks related to the realization of the anticipated opportunities from the Singular acquisition, management of our growth, the loss of key resellers, the relationships with the Automated Clearinghouse network, bank sponsors, third-party card processing providers and merchants, the loss of key personnel, growing competition in the electronic commerce market, the security of the Company’s software, hardware and information, and compliance with complex federal, state and local laws and regulations, and other risks detailed from time to time in its filings with the SEC, including those risks discussed in the Company’s Annual Report on Form 10-K and in other documents that we file from time to time with the SEC. Any forward-looking statement speaks only as of the date as of which such statement is made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances, including unanticipated events, after the date as of which such statement was made.
Item 9.01Financial Statements and Exhibits.
PAYMENT DATA SYSTEMS INC Exhibit
EX-10.1 2 pyds_placementagencyagmt21.htm EXHIBIT 10.1 Exhibit Exhibit 10.1 February 12,…
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About PAYMENT DATA SYSTEMS, INC. (NASDAQ:PYDS)
Payment Data Systems, Inc. is engaged in the business of processing electronic payments for other companies, including a range of automated clearing house (ACH) processing, credit, prepaid card and debit card-based processing. The Company is an integrated payment solutions provider offering a range of services to merchants, billers, banks, service bureaus, and card issuers. It operates through two operating entities: Payment Data Systems, Inc. and FiCentive, Inc. Payment Data Systems, Inc. provides integrated electronic payment processing services to merchants and businesses, including credit and debit card-based processing services and transaction processing through the ACH network. Its ACH processing services enable merchants or businesses to both disburse and collect funds electronically using e-checks to transfer funds instead of traditional paper checks. The Company provides prepaid card processing services for merchants and consumers through its subsidiary, FiCentive, Inc.
