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) March 26, 2008
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 1.01 Entry
into a Material Definitive Agreement.
On March
26, 2008 (the “Closing Date”), LML Payment Systems Inc. (“LML” or the
“Corporation”) entered into a definitive Securities Purchase Agreement (the
“Securities Purchase Agreement”) with Millennium Partners, LLP, an institutional
investor based in New York City, New York (the “Purchaser”). Under
the Securities Purchase Agreement, LML and the Purchaser completed a private
placement transaction on the Closing Date (the “Transaction”) pursuant to which
the Purchaser acquired 4,000,000 common shares, without par value (the “Common
Stock”), of LML for an aggregate purchase price (the “Purchase Price”) of
$7,200,000, or $1.80 per share.
LML also
entered into a Registration Rights Agreement dated the Closing Date with the
Purchaser (the “Registration Rights Agreement”). Under the
Registration Rights Agreement, LML has agreed that by the earlier of (i) the
15th calendar day following the date LML files on Edgar its form 10-K for the
fiscal year ended March 31, 2008, and (ii) one hundred (100) calendar days after
the Closing Date (the “Filing Deadline”), that LML will prepare and file with
the Securities and Exchange Commission (the “SEC”) a Registration Statement on
Form S-1 (or, if LML is then eligible, on Form S-3) covering the resale of the
Common Stock sold to the Purchaser. Once the Registration Statement
is declared effective by the SEC, LML has agreed to cause the Registration
Statement to remain effective for up to six years from the effective date of the
Registration Statement, or less if the shares may be freely sold without
registration.
If LML
fails to file the Registration Statement by the Filing Deadline or if the
Registration Statement fails to be declared effective by the SEC within a
certain time period after filing (each, an “Event”), then LML has agreed to pay
the Purchaser liquidated damages in cash on each such Event date (and on each
monthly anniversary of each such Event date until the applicable Event is cured)
in an amount equal to 1.0% of the Purchase Price of the Purchaser’s Common Stock
then held by the Purchaser. The maximum aggregate liquidated damages
payable to the Purchaser under the Registration Rights Agreement is six percent
(6%) of the aggregate Purchase Price paid by the Purchaser pursuant to the
Securities Purchase Agreement. The Registration Statement also grants
“piggyback” registration rights to the Purchaser.
Ladenburg
Thalmann & Co., Inc. acted as placement agent and financial advisor to LML
in connection with the Transaction (the “Placement Agent”). In
consideration thereof, LML paid the Placement Agent on the Closing Date a
placement fee in the amount $468,000 (6.5% of the aggregate Purchase Price of
the Common Stock sold to the Purchaser) and issued to the Placement Agent
warrants to acquire 400,000 shares of LML’s Common Stock (the
“Warrants”). The Warrants are exercisable by the Placement Agent at
$3.40 per share and are exercisable for a period of five years from the Closing
Date.
The
summaries of the Securities Purchase Agreement, the Registration Rights
Agreement and the Warrants set forth above do not purport to be complete and are
qualified in their entirety by reference to the full text of such agreements,
copies of which are filed herewith as exhibits and are incorporated herein by
reference.
Item 3.02 Unregistered
Sales of Equity Securities.
The
information set forth under Item 1.01 relating to the issuance of shares of
LML’s Common Stock to the Purchaser and the issuance of the Warrants to the
Placement Agent pursuant to the Transaction is incorporated herein by
reference. LML’s issuance of these securities was made in reliance
upon an exemption from registration provided by Section 4(2) of the Securities
Act of 1933, as amended (the “Securities Act”), and/or Regulation D promulgated
thereunder. At the time of issuance, the Purchaser and the Placement
Agent each represented to LML that it was an accredited investor as defined in
Rule 501(a) of the Securities Act and that such securities were being acquired
for investment purposes.
Item
7.01 Regulation FD Disclosure.
On March
26, 2008, LML issued a press release regarding the Transaction. A
copy of the press release is furnished as Exhibit 99.1.
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.
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.
|
(d)
|
Exhibits
|
|
10.1
|
Securities
Purchase Agreement dated as of March 26, 2008, between LML Payment Systems
Inc. and Millennium Partners, L.P.
|
|
10.2
|
Registration Rights Agreement
dated as of March 26, 2008, between LML Payment Systems Inc. and
Millennium Partners, L.P.
|
|
10.3
|
Warrant
dated as of March 26, 2008, between LML Payment Systems Inc. and Ladenburg
Thalmann & Co., Inc.
|
|
99.1
|
News
release relating to the Transaction issued by LML on March 26,
2008.
|
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.
LML
PAYMENT SYSTEMS INC.
/s/ Carolyn
Gaines____________________________
By: Carolyn
Gaines
Corporate
Secretary
Date: April
1, 2008