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) December 30, 2009
PAYMENT
DATA SYSTEMS, INC.
(Exact
name of registrant as specified in its charter)
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NEVADA
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000-30152
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98-0190072
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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12500
SAN PEDRO, SUITE 120, SAN ANTONIO, TEXAS
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78216
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area
code (210) 249-4100
(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):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
ITEM
8.01 OTHER EVENTS.
On
November 12, 2009, we commenced legal action against our customers Access
Insurance Holdings, Inc., Access General Agency, Inc., Access General Insurance
Agency of California, Inc., Access General Agency of Pennsylvania, Inc., Access
General Agency of Florida, Inc., Access General Insurance Agency of Texas, Inc.,
Access General Agency of Arizona, Inc. and Access Adjusting Services, Inc.
(collectively referred to as “Access General”), in the 285th
Judicial District Court of Bexar County, Texas. We alleged that Access
General breached the terms of its services agreements with us by violating the
exclusivity provisions contained therein and sought to recover economic damages
and attorneys' fees.
On
December 30, 2009, we entered into a settlement agreement with Access General.
Under the terms of the settlement, Access General agreed to pay us $150,000 and
we dismissed the pending litigation, with prejudice, and both parties released
all claims against each other. Access General also agreed to pay us for actual
chargeback amounts and associated fees as incurred. Additionally, Access General
agreed to pay us monthly minimum processing fees of $33.00 a month for each of
the associated merchant accounts until June 30, 2010. We agreed to indemnify
Access General against any third party early termination fees. On December 30,
2009, we received payment of $150,000 from Access General in accordance with the
terms of the settlement. We do not expect to incur any additional expenses
associated with this litigation.
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.
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.
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Payment Data Systems,
Inc.
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(Registrant)
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Date January 6, 2010
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/s/ Michael R. Long
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(Signature)
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Michael R. Long
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Chief Executive Officer and Chief Financial
Officer
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