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) November 14, 2005
PAYMENT DATA SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
NEVADA 000-30152 98-0190072
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
12500 SAN PEDRO, SUITE 120, SAN ANTONIO, TEXAS 78216
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (210) 249-4100
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(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 (see General Instruction A.2. 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 (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))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On November 14, 2005, we entered into a Trademark and Domain Name Purchase
Agreement with Alivio, Holdings, LLC whereby we agreed to sell the bills.com
domain name and related trademark rights to Alivio for $950,000. We retained all
our other assets related to bills.com, including our existing subscriber base,
and will continue to offer online payment processing services under a new domain
name, billx.com. We also agreed to execute a Bill Payment Services Agreement and
Non-Competition Agreement with Alivio to be delivered at the closing of the
sale. We will provide online payment processing services to Alivio for the
bills.com domain name under the Bill Payment Services Agreement and we will be
restricted from providing debt management services such as those currently
offered by Alivio under the Non-Competition Agreement, but we will not be
restricted from providing any services that we currently offer. The Trademark
and Domain Name Purchase Agreement is filed as Exhibit 10.1 to this current
report on Form 8-K.
The foregoing description of the terms and conditions of the Agreement are
qualified in their entirety by, and made subject to, the more complete
information set forth in the Trademark and Domain Name Purchase Agreement
included on this Form 8-K as Exhibit 10.1, and incorporated herein by reference.
This report contains forward-looking statements that involve risks and
uncertainties. We generally use words such as "believe," "may," "could," "will,"
"intend," "expect," "anticipate," "plan," and similar expressions to identify
forward-looking statements. You should not place undue reliance on these
forward-looking statements. Our actual results could differ materially from
those anticipated in the forward-looking statements for many reasons including
our ability to implement our business plan, our ability to raise additional
funds and manage our substantial debts, consumer acceptance of our products, our
ability to broaden our customer base, and other risks described in our reports
filed with the Securities and Exchange Commission from time to time. Although we
believe the expectations reflected in the forward-looking statements are
reasonable, they relate only to events as of the date on which the statements
are made, and our future results, levels of activity, performance or
achievements may not meet these expectations. We do not intend to update any of
the forward-looking statements after the date of this document to conform these
statements to actual results or to changes in our expectations, except as
required by law.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
The pro forma effects of the disposition of the assets described in this current
report on Form 8-K are limited to adjustments to the income statement for the
year ended December 31, 2004 and the balance sheet at September 30, 2005 for the
sales proceeds and gain on the disposal of the assets. Assuming the disposition
was consummated at the beginning of the fiscal year ended December 31, 2004, net
loss for the year then ended would have been reduced from $1,514,531 to $564,531
by the $950,000 gain on the disposal of the assets that would have been included
in net other income (expense) and net loss per share would have been reduced
from $0.07 per share to $0.03 per share on both a basic and diluted basis.
Assuming the disposition was consummated on September 30, 2005, cash at that
date would have increased from $254,190 to $1,204,190 by the sales proceeds of
$950,000 and accumulated deficit at that date would have been reduced from
$48,165,695 to $47,215,695 by the $950,000 gain on the disposal of the assets.
EXHIBIT NO. DOCUMENT DESCRIPTION
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10.1 Trademark and Domain Name Purchase Agreement between the Company
and Alivio, Holdings, LLC, dated November 14, 2005.
SIGNATURE
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.
Payment Data Systems, Inc.
(Registrant)
Date November 16, 2005
/s/ Michael R. Long
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(Signature)
Michael R. Long
Chief Executive Officer and Chief
Financial Officer