SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
January 6, 2013
AllDigital Holdings, Inc.
(Exact Name of Registrant as Specified in its
|(State or other jurisdiction of incorporation or organization)
||IRS Employer Identification Number|
|220 Technology Drive, Suite 100, Irvine, California
|(Address of Principal Executive Offices)
Registrant’s Telephone Number, Including Area
(Former name, former address, and formal fiscal
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))|
||Entry Into a Material Definitive Agreement.|
On January 6, 2013, AllDigital Holdings, Inc., a Nevada corporation
(“AllDigital”) entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”)
with Broadcast International, Inc., a Utah corporation (“Broadcast International”) and Alta Acquisition Corporation,
a Nevada corporation and wholly-owned subsidiary of Broadcast International (“Merger Sub”). Pursuant to the terms and
subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into AllDigital, and AllDigital
will survive as a wholly-owned subsidiary of Broadcast International (the “Merger”). The respective boards of directors
of Broadcast International and AllDigital have approved the Merger Agreement and the transactions contemplated thereby.
At the effective time of the Merger (the “Effective Time”),
each outstanding share of AllDigital capital stock will be converted into the right to receive that number of shares of Broadcast
International common stock as determined pursuant to the exchange ratio described in the Merger Agreement (the “Exchange
Ratio”). In addition, at the Effective Time: (i) all outstanding options to purchase AllDigital common stock will be assumed
by Broadcast International and converted into options to purchase shares of Broadcast International common stock, in each case
appropriately adjusted based on the Exchange Ratio; and (ii) all outstanding warrants to purchase shares of AllDigital common stock
will be assumed by Broadcast International and converted into warrants to purchase shares of Broadcast International common stock,
in each case appropriately adjusted based on the Exchange Ratio. No fractional shares of Broadcast International common stock will
be issued in the Merger. Following the consummation of the transactions contemplated by the Merger Agreement, former stockholders
of AllDigital are expected to own approximately 54% of the combined company, calculated on a fully-diluted basis, and current stockholders
of Broadcast International are expected to own approximately 46% of the combined company, calculated on a fully-diluted basis.
The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue
Code of 1985, as amended.
The Merger Agreement provides that, immediately following the Effective
Time, the board of directors of the combined company will consist of Donald A. Harris, William A. Boyd, Paul Summers, David Williams
and an independent director to be selected by AllDigital and Broadcast International. In connection with the Merger, Broadcast
International will seek to amend its articles of incorporation to: (i) effect a reverse stock split of Broadcast International
common stock at a ratio of 1 post-reverse share for 10 pre-reverse shares; (ii) increase the number of authorized shares of Broadcast
International common stock; and (iii) change the name of Broadcast International to “AllDigital Broadcasting, Inc.”
(together, the “Charter Amendment”).
The completion of the Merger is subject to various customary conditions,
including, among other things: (i) the approval of the respective stockholders of Broadcast International and AllDigital, (ii)
subject to certain materially exceptions, the accuracy of the representations and warranties made by each of Broadcast International
and AllDigital and the compliance by each of Broadcast International and AllDigital with their respective obligations under the
Merger Agreement; and (iii) the declaration of the effectiveness by the Securities and Exchange Commission (the “SEC”)
of the Registration Statement on Form S-4 (the “Registration Statement”) to be filed by Broadcast International in
connection with the Merger.
The Merger Agreement contains customary representations, warranties
and covenants, including covenants obligating each of Broadcast International and AllDigital to continue to conduct their respective
businesses in the ordinary course, to provide reasonable access to each other’s information and to use reasonable best efforts
to have the Registration Statement declared effective by the SEC. The Merger Agreement also contains a customary “no solicitation”
provisions pursuant to which, prior to the completion of the Merger, neither AllDigital nor Broadcast International may solicit
or engage in discussions with any third party regarding another acquisition proposal unless such party has received an unsolicited,
bona fide written proposal that the recipient’s board of directors determines is or would reasonably be expected to result
in a superior proposal. Each of Broadcast International and AllDigital is obligated to duly call and hold a special meeting of,
or solicit written consents from, its stockholders to obtain the necessary stockholder approval of the transaction.
The Merger Agreement contains certain termination rights in favor
of each of Broadcast International and AllDigital. Additionally, the Merger Agreement provides that, in connection with certain
terminations of the Merger Agreement, depending upon the circumstances surrounding the termination, one party may be required to
pay the other party a termination fee of $100,000 and issue the other party an amount of shares of common stock equal to 4% of
the fully diluted common stock of the party obligated to pay the termination fee.
The forgoing summary of the Merger Agreement and the Merger does
not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, a copy of
which is attached hereto as Exhibit 2.1 and is incorporated by reference herein.
The Merger Agreement has been provided pursuant to applicable rules
and regulations of the SEC in order to provide investors and stockholders with information regarding its terms. However, it is
not intended to provide any other factual information about AllDigital, Broadcast International, their respective subsidiaries
and affiliates of any other party. In particular, the representation, warranties and covenants contained in the Merger Agreement
have been made only for the purpose of the Merger Agreement and, as such, are intended solely for the benefit of the parties to
the Merger Agreement. In many cases, the representations, warranties and covenants are subject to limitations agreed upon by the
parties and are qualified by certain disclosures exchanged by the parties in connection with the execution of the Merger Agreement.
Furthermore, many of the representations and warranties in the Merger Agreement are the result of a negotiated allocation of contractual
risk among the parties and, taken in isolation, do not necessarily reflect facts about AllDigital, Broadcast International, their
respective subsidiaries and affiliates or any other party. Likewise, any reference to materiality contained in the representations
and warranties may not correspond to concepts of materiality applicable to investors or stockholders. Finally, information concerning
the subject matter of the representation and warranties may change after the date of the Merger Agreement and these changes may
not be fully reflected in Broadcast International’s public disclosures.
AS A RESULT OF THE FOREGOING, INVESTORS ARE ENCOURAGED NOT TO RELY
ON THE REPRESENTATIONS, WARRANTIES AND COVENANTS CONTAINED IN THE MERGER AGREEMENT, OR ON ANY DESCRIPTIONS THEREOF, AS ACCURATE
CHARACTERIZATIONS OF THE STATE OF FACTS OR CONDITION OF BROADCAST INTERNATIONAL OR ANY OTHER PARTY. INVESTORS AND STOCKHOLDERS
ARE LIKEWISE CAUTIONED THAT THEY ARE NOT THIRD-PARTY BENEFICIARIES UNDER THE MERGER AGREEMENT AND DO NOT HAVE ANY DIRECT RIGHTS
OR REMEDIES PURSUANT OT THE MERGER AGREEMENT.
On January 6, 2013, concurrently with the execution of the Merger
Agreement, certain stockholders of Broadcast International (collectively, the “Key Broadcast International Stockholders”)
entered into voting agreements in favor of AllDigital (collectively, the AllDigital Voting Agreements”). Pursuant to the
AllDigital Voting Agreements, the Key Broadcast International Stockholders have agreed, among other things, to vote all shares
of capital stock of Broadcast International beneficially owned by them in favor of the approval of the Charter Amendment, the issuance
of Broadcast International common stock in connection with the Merger, and any actions required in furtherance thereof. The shares
of Broadcast International common stock beneficially owned by the Key AllDigital Stockholders constitutes approximately 7.3% of
the total issued and outstanding shares of Broadcast International common stock. The terms of the AllDigital Voting Agreements
are substantially similar to the terms of the Broadcast International Voting Agreements, discussed above.
On January 6, 2013, concurrently with the execution of the Merger
Agreement, certain stockholders of AllDigital (collectively, the “Key AllDigital Stockholders’) entered into voting
agreements in favor of Broadcast International (collectively, the “Broadcast International Voting Agreements”). Pursuant
to the Broadcast International Voting Agreements, the Key AllDigital Stockholders have agreed, among other things, to vote all
shares of capital stock of AllDigital beneficially owned by them in favor of the Merger and the adoption of the Merger Agreement
and the approval of the transactions contemplated by the Merger Agreement, and any actions required in furtherance thereof. The
outstanding shares of the capital stock of AllDigital owned by the Key AllDigital Stockholders constitutes approximately 24.4%
of the total outstanding voting power of AllDigital. The Broadcast International Voting Agreements will terminate upon the earliest
to occur of: (i) the termination of the Merger Agreement in accordance with its terms; or (ii) the date on which the Merger becomes
The foregoing summary of the Broadcast International Voting Agreements
and the AllDigital Voting Agreements does not purport to be complete and is subject to, and qualified in its entirety by, the full
text of the form of voting agreements, copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2 and are incorporated
by reference herein.
Professional Services Agreement.
On January 6, 2013, concurrently with the execution of the Merger
Agreement, Broadcast International and AllDigital entered into a Professional Services Agreement (the “Professional Services
Agreement”) pursuant to which AllDigital and Broadcast International agreed, among other things, that AllDigital would provide
management support services, deal desk services, platform management services, operations management services, and accounting services
to Broadcast International. Broadcast International will pay a monthly fee to AllDigital in an amount to be determined following
an initial evaluation period of 30 days for which AllDigital will be paid $60,000. The Executive Committee of Broadcast International’s
Board of Directors will monitor AllDigital’s performance under the Professional Services Agreement and Broadcast International
has certain termination rights if AllDigital fails to perform its obligations.
The foregoing summary of the Professional Services Agreement does
not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Professional Services Agreement,
a copy of which is attached hereto as Exhibit 10.3 and is incorporated by reference herein.
Forward Looking Statements
Statements in this Current Report on Form 8-K (the “Form 8-K”)
regarding the proposed Merger, the timing, conditions to and anticipated completion of the proposed Merger, the expected ownership
of the combined company and the combined company’s board of directors constitute “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not purely statements of historical
fact should also be considered to constitute forward-looking statements. There are a number of important factors that could cause
actual results or events to differ materially from those indicated by such forward-looking statements, including the risk that
Broadcast International and AllDigital may not be able to complete the proposed Merger and other risks and uncertainties more fully
described in AllDigital’s Annual Report on Form 10-K for the year ended December 31, 2011 and its Quarterly Report on Form
10-Q for the quarter ended September 30, 2012, each as filed with the SEC, as well as the other filings that Broadcast International
makes with the SEC. Investors and security holders are also urged to read the risk factors set forth in the joint proxy statement/prospectus
carefully when they are available.
In addition, the statements made in this Form 8-K reflect our expectations
and beliefs as of the date of the filing of the Form 8-K. We anticipate that subsequent events and developments will cause our
expectations and beliefs to change. However, while we may elect to update these forward-looking statements publicly at some point
in the future, we specifically disclaim any obligation to do so, whether as a result of new information, future events or otherwise.
These forward-looking statements should not be relied upon as representing our views as of any date after the date of filing of
this Form 8-K.
Important Merger Information and Additional Information and Where
to Find It
This Form 8-K does not constitute an offer to sell or the solicitation
of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed Merger, Broadcast
International will file relevant materials with the SEC, including the filing of the Registration Statement containing a joint
proxy statement/prospectus/information statement of Broadcast International and AllDigital. Investors and security holders are
strongly urged to read the joint proxy statement/prospectus/information statement when it becomes available and other document
filed with the SEC by Broadcast International, because they will contain important information about Broadcast International, AllDigital
and the proposed Merger. The joint proxy statement/prospectus/information statement and other documents that will be filed
by Broadcast International with the SEC will be available free of charge at the SEC’s website, www.sec.gov, or by
directing a request when such a filings are made to AllDigital Holdings, Inc., 220 Technology Drive, Suite 100, Irvine, California
92618, Attention: Investor Relations.
AllDigital, Paul Summers, AllDigital’s Chairman of the Board and
Chief Executive Officer, John Walpuck, AllDigital’s Chief Financial Officer, and certain of AllDigital’s other executive officers
and directors may be deemed to be participants in the solicitation of proxies from the shareholders of AllDigital and Broadcast
International in favor of the Merger. The other executive officers and directors of AllDigital who may be participants in the
solicitation of proxies in connection with the Merger have not been determined as of the date of this filing. Information about
the interests of Mr. Summers, Mr. Walpuck and AllDigital’s other executive officers and directors in AllDigital is set forth in
the AllDigital’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, which was filed with the SEC on
March 30, 2012. Investors and security holders may obtain more detailed information regarding the direct and indirect interests
of Mr. Summers, Mr. Walpuck and AllDigital’s other executive officers and directors in the merger by reading the joint proxy statement/information
statement/prospectus when it becomes available.
||Regulation FD Disclosure.|
On January 7, 2013, AllDigital and Broadcast International issued
a press release entitled “AllDigital Holdings and Broadcast International agree to merge, paving the way for a revolution
in digital broadcasting” announcing their entry into the Merger Agreement and discussing the proposed Merger. A copy of the
press release is furnished herewith as Exhibit 99.1.
Beginning on January 7, 2013, Broadcast International and AllDigital
made available to interested parties a Merger FAQ relating to the Merger Agreement and the Proposed Merger. A copy of the Merger
FAQ is furnished herewith as Exhibit 99.2.
||Financial Statements and Exhibits.|
|2.1*||Agreement and Plan of Merger and Reorganization, dated as of January 6, 2012, by and
among Broadcast International, Inc., AllDigital, Inc., and Alta Acquisition Corporation.
|10.1||Form of Voting Agreement, dated January 6, 2013, among AllDigital, Inc. and certain
stockholders of Broadcast International, Inc.
|10.2||Form of Voting Agreement, dated January 6, 2013, among Broadcast International, Inc.
and certain stockholders of AllDigital, Inc.
|10.3||Professional Services Agreement, dated January 6, 2013, among AllDigital, Inc. and
Broadcast International, Inc.
|99.1**||AllDigital Holdings, Inc. and Broadcast International, Inc. press release dated January
7, 2013 entitled “AllDigital Holdings and Broadcast International agree to merge, paving the way for a revolution in digital
|99.2**||Merger FAQ dated January 7, 2013
|*||The schedules and exhibits to this agreement are omitted pursuant to Item 601(b)(2)
of Regulation S-K. Broadcast International agrees to furnish supplementally a copy of any omitted schedule and exhibit to the
SEC upon request.
The information furnished in this Current Report under Item 7.01
and Exhibits 99.1 and 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities
and Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
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.
|Date: January 7, 2013
||ALLDIGITAL HOLDINGS, INC. |
||a Nevada corporation|
||/s/ Paul Summers|
||Chief Executive Officer|