ADGL AllDigital Holdings Inc (CE)

 

 

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): April 30, 2015

 

AllDigital Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Nevada		333-141676		20-5354797
(State or other jurisdiction of incorporation or organization)		Commission File Number		IRS Employer Identification Number

 

6 Hughes, Suite 200, Irvine, California		92618
(Address of Principal Executive Offices)		(Zip Code)

 

(949) 250-7340

Registrant’s Telephone Number, Including Area Code:

 

 

(Former name, former address, and formal fiscal year, 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 3.02 Unregistered Sales of Equity Securities.

 

Securities Purchase Agreement and Security Agreement

 

On April 23, 2015, AllDigital Holdings, Inc. (the “Company”) entered into a Securities Purchase Agreement with Philip N. Kaplan pursuant to which the Company issued and sold an aggregate of $150,000 in principal of its 5% Senior Secured Convertible Notes (the “Notes”) to Mr. Kaplan for an aggregate purchase price of $150,000. On April 30, 2015, the Company entered into a Securities Purchase Agreement with Morris Cottle, Trustee of the Ralph Wanger 2001 Family Irrevocable Perpetuities Trust (the “Wanger Trust”), pursuant to which the Company issued and sold an aggregate of $100,000 in principal of its Notes to the Wanger Trust for an aggregate purchase price of $100,000. Morris Cottle, in his capacity as trustee of the Wanger Trust, has sole voting and dispositive power over the securities held by the Wanger Trust. In connection with the sale of the Notes, Mr. Kaplan and the Wanger Trust became parties to a Security Agreement between certain holders of the Notes and Richard P. Stevens, II, as collateral agent (“Security Agreement”). The aggregate gross proceeds of $250,000, less expenses, have been allocated to general corporate purposes.

 

The Notes are convertible into an aggregate of up to 1,666,667 shares of the Company’s common stock. The Notes have a maturity date of December 31, 2016 (“Maturity Date”). The Notes will bear interest at the rate of five percent (5%) per annum payable quarterly on the fifth (5th) day after the last business day of each calendar quarter. After the Maturity Date, and until the outstanding principal and accrued interest on the Notes has been paid, the Notes will bear interest at a rate of 1.0% per month. The outstanding principal under the Notes is convertible at any time prior to repayment, in whole or in part, into shares of the Company’s common stock at a conversion price of $0.15 per share, subject to adjustment for stock splits, stock dividends and recapitalizations. All accrued interest on the Notes shall be paid in cash upon any conversion of the Notes. The Notes are secured under the terms of the Security Agreement by a first priority lien on all of the Company’s tangible and intangible assets.

 

The issuance and sale of the Notes were made in reliance upon the exemption from registration available under Section 4(2) of the Securities Act, among others, as transactions not involving a public offering. This exemption was claimed on the basis that these transactions did not involve any public offering and the purchasers in each offering were accredited or sophisticated and had sufficient access to the kind of information registration would provide. In each case, appropriate investment representations were obtained and the Notes were and the certificates evidencing any shares which may be issued upon conversion of the Notes will be issued with restrictive legends. Each of the investors were given adequate access to sufficient information about the Company to make an informed investment decision.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Mark Walsh and David Williams resigned as members of the board of directors (the “Board”) of the Company effective April 30, 2015. In connection with their resignation, on April 30, 2015, Mr. Walsh and Mr. Williams were granted stock options to purchase 50,000 shares of the Company’s common stock at an exercise price equal to $0.08 per share, which vested immediately upon grant. These stock options will terminate on April 30, 2016. In addition, the outstanding stock options granted to Mr. Walsh and Mr. Williams prior to April 30, 2015 (“Existing Stock Options”) were amended to extend the termination of the Existing Stock Options upon termination of each optionees service to the Company from 90 days after such termination to 12 months after such termination.

 

On April 30, 2015, Philip N. Kaplan and Leonard Wanger were appointed as members of the Board. Mr. Kaplan was also appointed as Chairman of the Board. Both Mr. Kaplan and Mr. Wanger were also appointed to a newly created audit committee of the Board.

 

 

In connection with Mr. Kaplan and Mr. Wanger’s appointments, both Mr. Kaplan and Mr. Wanger were each granted, pursuant to the Company’s Director Compensation Plan and the Company’s Amended and Restated 2011 Stock Incentive Plan, stock options to purchase 50,000 shares of the Company’s common stock at an exercise price equal to $0.08 per share which vest over a period of 4 years, with 1/4^th of the shares of the Company’s common stock underlying the stock options vesting on the one year anniversary of the grant and 1/36^th of the remaining options vesting over the succeeding three year period. The options have a term of ten years.

 

The information set forth above under the heading “Securities Purchase Agreement and Security Agreement” in Item 3.02 of this report is hereby incorporated by reference.

 

Item 8.01 Other Events.

 

On April 30, 2015, the Company issued a press release announcing the resignations of Mark Walsh and David Williams and the appointments of Philip N. Kaplan and Leonard Wanger as members of the Board as described in Item 5.02, above. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

99.1	Press release dated April 30, 2015.

 

 

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.

 

Date: May 06, 2015	ALLDIGITAL HOLDINGS, INC.
	a Nevada corporation
	By:	/s/ Michael Linos
	Name:	Michael Linos
	Title:	President and Chief Executive Officer

 

 

 

 

Industry Veterans Join AllDigital Board of Directors

 

Philip N. Kaplan and Leonard Wanger Bring Deep Operations and Technology Growth Experience

 

IRVINE, CA—April 30, 2015 (GLOBE NEWSWIRE) — AllDigital Holdings, Inc. (“AllDigital”) (ADGL) is pleased to announce the addition of two new board members, with industry veteran Philip N. Kaplan joining as board chairman, and hedge fund manager Leonard Wanger joining as board member and audit committee chair. They join AllDigital’s board at an important time when management looks to complete its fundraising and the company’s strategic shift to a high-growth, recurring revenue-based business model.

 

“When I took over as CEO of AllDigital last year, it was my pledge to recruit the very best, most talented and relevant leaders to join AllDigital’s board of directors. Both Phil and Len have the background, experience and career success necessary to help take AllDigital to the next level and beyond. Phil will become our Chairman of the Board and Len will provide leadership on the finance and audit committees. As we move forward with our product pivot to focus on AllDigital Brevity, it’s a huge benefit to have the active participation of such experienced business and technology leaders,” said Michael F. Linos, CEO and President of AllDigital.

 

“I believe the AllDigital team has positioned itself well to give its clients breakthrough file transport and formatting capabilities. I look forward to working with Len Wanger to support Michael Linos and the AllDigital team in building the company’s scale and value, as we have done together before,” said Mr. Kaplan.

 

“I’m excited to join the board and to support a talented AllDigital team as it looks to execute on a number of critical initiatives,” said Mr. Wanger.

 

Further background on Mr. Kaplan and Mr. Wanger follows.

 

Philip N. Kaplan

 

Mr. Kaplan has over 25 years diverse business operations expertise in early-stage and high growth technology companies. He has overseen as principal executive more than twelve M&A transactions and four successful exits from both publicly traded and privately held companies. He has served for over a decade as a board member for public and private technology growth companies.

 

Mr. Kaplan currently serves as the managing partner of two family businesses in the technology consulting and residential real estate sectors, and as board member of online action sports company Surfline.com. He most recently served as CEO of dbtech, a private equity owned healthcare IT company. Previously, Mr. Kaplan served as an executive officer of three different NASDAQ-listed technology companies, including Chief Operating Officer and board member of healthcare IT company Quality Systems, Inc. (NASDAQ: QSII), Chief Strategy Officer of Internap Network Services Corporation (NASDAQ: INAP), and President and Chief Operating Officer of VitalStream (NASDAQ:VSTH), which Mr. Kaplan co-founded and sold to Internap Network Services Corporation.

 

 

Leonard Wanger

 

Mr. Wanger is an experienced hedge fund manager and a successful investor and operator with more than 25 years of experience at founding, funding, and exiting from emerging technology companies. He has more than 5 years of experience as a board member of publicly traded companies, including 5 years as audit committee financial expert. He was a director and chairman of the audit committee at VitalStream.

 

Mr. Wanger was a portfolio manager and securities analyst at William Harris Investors and has served as an outside advisor to Acorn Funds and Wanger Asset Management, providing analysis on companies in software, computer graphics, and biotechnology. He served as Director of Engineering for MDL Information Systems (a Reed Elsevier company), and as Director of Engineering for Interactive Simulations, Inc., a venture-backed start-up providing molecular modeling software for the pharmaceutical industry that was purchased by MDL in 1999.

 

Current AllDigital board members David Williams and Mark Walsh will be stepping down from the board concurrent with Messrs. Kaplan and Wanger joining the board such that the AllDigital board of directors will remain its current size of 4 board members.

 

About AllDigital

 

AllDigital engineers software and hardware solutions to accelerate and optimize the distribution of digital video. AllDigital is the developer of AllDigital Brevity, a software and hardware-based solution designed to move digital video files at high speeds, with patented technology to optimize the digital workflow by encoding digital video files during high-speed transmission.

 

For more information about AllDigital (OTCBB: ADGL) visit www.alldigital.com.

 

Contact Information:   Email: ir@alldigital.com      Phone: 949.250.0701 x101

 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

 

With the exception of historical information, the matters discussed in this press release including management completing its fundraising, the company’s strategic shift to a high-growth, recurring revenue-based business model, and management’s position that the additional board members have the background and experience necessary to help take AllDigital to the next level and beyond, are forward looking statements that involve a number of risks and uncertainties. The actual future results and performance of AllDigital and AllDigital Brevity could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, unexpected product implementation delays; adverse economic and market conditions; lack of capital necessary to fund new product development; the inability to achieve operational improvements; and other events, factors and risks previously and from time to time disclosed in AllDigital’s filings with the Securities and Exchange Commission including, specifically, those factors set forth in the “Risk Factors” section contained in AllDigital’s Form 10-K filed with the Securities and Exchange Commission on April 20, 2015. AllDigital expressly disclaims any obligation to update or revise any forward-looking statements found herein to reflect any changes in expectations or results or any change in events.