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) July 25, 2002
BILLSERV, INC.
(Exact name of Registrant as Specified in its Charter)
Nevada 0-30152 98-0190072
(State or Other Jurisdiction (Commission file Number) (IRS Employer
of Incorporation) Identification No.)
211 North Loop 1604 East, Suite 200
San Antonio, Texas 78232
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (210) 402-5000
Item 5. Other Events and Regulation FD Disclosure.
On July 25, 2002, we completed the transaction under an agreement with
Laurus Master Fund, Ltd. to make a $1.5 million investment in us in exchange for
a 7% convertible note and a three-year warrant to purchase 300,000 shares of our
common stock at exercise prices of $0.936 for the first 150,000 shares, $0.975
for the next 50,000 shares, and $1.17 for the remaining 100,000 shares. Laurus
may convert the convertible note at any time into shares of our common stock at
a fixed conversion price of $0.78, subject to certain restrictions in the
purchase agreement.
We may pay the principal of and interest on the convertible note, which
has a one-year term, in cash, shares of our common stock or a combination of
cash and stock. If we use our common stock to pay the note, the conversion price
will be the lesser of (i) $0.78 and (ii) 88% of the average of the 7 lowest
closing prices during the 22 trading days prior to the date we give notice of
payment. We make no payments until November 1, 2002, at which time we will pay
interest and one-ninth of the principal on the first business day of each
calendar month and on the maturity date of July 1, 2003. If the monthly payments
are made in cash, it will be at an additional 5% interest rate. We granted
Laurus a security interest in our assets.
We have agreed to file with the Securities and Exchange Commission, and
have declared effective by November 25, 2002, a registration statement
registering the resale of the shares of our common stock issuable upon
conversion or payment of the note and exercise of the warrant.
We intend to use the proceeds of the investment for general corporate
purposes.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Exhibit 10.1 -- Securities Purchase Agreement relating to the purchase
and sale of the convertible note and the warrant, including the forms of the
convertible note and the warrant.
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.
BILLSERV, INC.
Date: July 31, 2002 BY: /s/ Terri A. Hunter
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Terri A. Hunter
Chief Financial Officer