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) June 30,
2007
LML
PAYMENT SYSTEMS INC.
(Exact
name of registrant as specified in its charter)
Yukon
Territory
(State
or
other jurisdiction of incorporation)
0-13959
(Commission
File Number)
98-0209289
(IRS
Employer Identification No.)
1680-1140
West Pender Street, Vancouver, BC V6E 4G1
(Address
of principal executive offices and Zip Code)
(604)
689-4440
Registrant’s
telephone number, including area code
Not
Applicable
(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:
[
]
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 2.01 Completion
of Acquisition or Disposition of Assets.
On
June
30, 2007, LML Payment Systems Inc. (“LML” or the “Corporation”) closed the
previously announced acquisition of all of the outstanding
capital stock of Beanstream Internet Commerce Inc. (“Beanstream”), a leading
provider of authentication and Internet payment processing solutions based
in
Victoria, British Columbia, Canada. The acquisition of the
outstanding stock of Beanstream was made pursuant to an Arrangement Agreement
dated as of April 30, 2007 between LML and Beanstream (the “Arrangement
Agreement”). The following description of the Arrangement Agreement
does not purport to be complete and is qualified in its entirety by reference
to
the complete terms of the Arrangement Agreement, a copy of which was previously filed
as
Exhibit 2.1 to a Form 8-K filed by LML on May 4, 2007 and is incorporated herein
by reference.
The
purchase price paid by LML at closing to the holders of Beanstream’s common
stock (the “Shareholders”) for the outstanding capital stock of Beanstream was
$CDN19.5 million, which consisted of (i) $CDN7.6 million in cash paid by LML,
(ii) $CDN5.0 million in a two-year promissory note issued by LML, and (iii)
$CDN6.9 million in LML common stock paid by LML through the issuance of
1,963,555 shares of its common stock.
Under
the
terms of the Arrangement Agreement, the purchase price paid by LML at closing
was denominated in Canadian dollars. Because the U.S. dollar is the
functional currency of LML’s operations (since substantially all of LML’s
operations are conducted in the U.S.), LML effectively paid the Beanstream
purchase price in U.S. dollars that were then converted into Canadian dollars
based on the applicable U.S./Canadian currency exchange rates. Based
on these applicable currency exchange rates, LML effectively paid a purchase
price of $US17.9 million for the outstanding capital stock of Beanstream, which
consisted of (i) $US7.1 million in cash, (ii) $US4.7 million in a two-year
promissory note, and (iii) $US6.1 million in LML common stock.
The
per
share price of the LML common stock issued at closing (for purposes of
determining how many shares of LML common stock were to be issued) was $US3.123
($CDN3.503 per share, which (as required by the Arrangement Agreement) was
equal
to the volume weighted average of the closing price for the purchase of one
share of LML common stock as reported on the NASDAQ Stock Exchange during the
ten trading days immediately before the execution date of the Arrangement
Agreement (which was April 30, 2007).
In
addition to the purchase price paid at closing, the Arrangement Agreement also
provides that the Shareholders can receive as an earn out up to an additional
$CDN2.0 million if certain revenue milestones are reached by the first
anniversary of the closing. The earn out, if achieved, would be
payable through the issuance of shares of LML common stock, with such earn
out
shares to have a per share price, for purposes of determining how many shares
would be issuable, equal to the volume weighted average of the closing price
for
the purchase of one share of LML common stock as reported on the NASDAQ Stock
Exchange during the ten trading days immediately before the earn out record
date.
Since
LML’s common stock trades in U.S. dollars (on the NASDAQ Stock Exchange), the
actual number of shares of LML stock that would be required to be issued
pursuant to any earn out would depend both on the weighted average closing
price
of LML’s common stock and on the U.S./Canadian currency exchange rate in effect
as of the earn out date. In addition, if the earn out per share price
is less than the closing date per share price of LML’s common stock, then LML
has the option to pay all or any portion of the earn out in cash in lieu of
issuing shares of its common stock.
Item 3.02 Unregistered
Sales of Equity Securities.
In
connection with the closing of the Beanstream transaction, LML is required
to
issue 144,933 shares of its common stock as a finder’s fee to a British Columbia
company retained by LML to assist with identifying potential
acquisitions. The shares will be issued as soon as practicable after
the closing of the Beanstream transaction. Such shares of LML common
stock are being offered and sold in reliance upon the exemption from the
registration requirements of Section 5 of the Securities Act of 1933, as amended
(the “Securities Act”), available under Section 4(2) of the Securities
Act.
Item
7.01 Regulation FD Disclosure.
On
July
2, 2007, LML issued a press release regarding the closing of the Beanstream
acquisition. A copy of the press release is furnished as Exhibit 99.1
hereto.
Pursuant
to the rules and regulations of the SEC, the information set forth in this
Item
7.01 and in the attached Exhibit 99.1 is deemed to be furnished and shall not
be
deemed to be “filed” under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).
Item
9.01 Financial Statements and Exhibits.
(a)
Financial Statements of Business Acquired.
As
permitted by Item 9.01(a)(4) of Form 8-K, LML will, if required, file the
financial statements required by Item 9.01(a)(1) of Form 8-K pursuant to an
amendment to this Current Report on Form 8-K not later than seventy one (71)
calendar days after the date this current report must be filed.
(b)
Pro Forma Financial Information.
As
permitted by Item 9.01(b)(2) of Form 8-K, LML will, if required, file the pro
forma financial information required by Item 9.01(b)(1) of Form 8-K pursuant
to
an amendment to this Current Report on Form 8-K not later than seventy one
(71)
calendar days after the date this current report must be filed.
(d)
Exhibits.
In
accordance with General Instruction B.2 of Form 8-K, the information set forth
in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed
to be “filed” for purposes of the Exchange Act.
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99.1
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News
release relating to the closing of the Beanstream transaction issued
by
LML on July 2, 2007.
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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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LML
PAYMENT SYSTEMS INC.
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/s/
Carolyn L. Gaines
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Carolyn
L.Gaines
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Corporate
Secretary
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July
5, 2007
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Exhibit
Index
The
following is a list of the Exhibits filed or furnished herewith.
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99.1
|
News
release relating to the closing of the Beanstream transaction issued
by
LML on July 2, 2007.
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