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)
June 30, 2003
AVALON DIGITAL MARKETING SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-28403 77-0511097
(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
5255 N. Edgewood Drive, Suite 250, Provo, Utah 84604
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 225-7073
ITEM 2. - ACQUISITION OR DISPOSITION OF ASSETS
On June 30, 2003, Avalon Digital Marketing Systems, Inc. (the
"Registrant") completed the sale of all of its assets used in connection with or
otherwise related to the Registrant's e-mail marketing services utilizing its
Radical Mail, Messenger, Control Commerce and Launchpad proprietary software
applications and the technology of the business formerly known as MindArrow to
Silverpop Systems, Inc. ("Silverpop") pursuant to an Asset Purchase Agreement,
dated June 30, 2003, by and between the Registrant and Silverpop (the "Purchase
Agreement"). The assets sold included, among other things, tangible personal
property, accounts receivable, software and the intellectual property rights
contained therein, and business contracts. In exchange for the sale of such
assets, the Registrant received $1,242,275.68 in cash, of which $200,000 is
subject to certain indemnity holdback provisions. Silverpop also assumed certain
obligations of the Registrant in the aggregate amount of $407,213. The purchase
price and other terms of the asset sale were determined in arms-length
negotiations between the parties. In addition, Friend & Company provided a
fairness opinion regarding the purchase consideration in connection with the
sale of the assets.
A copy of the Purchase Agreement is attached to this report as Exhibit
2.1 and is incorporated herein by reference. The description of the Purchase
Agreement is only a summary of some of its principal terms.
The press releases announcing the Registrant's intent to sell the above
referenced assets to Silverpop and announcing the closing of the asset sale are
attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by
reference.
ITEM 7. - FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
2.1(a) Asset Purchase Agreement, dated June 30,
2003, by and between Avalon Digital Marketing
Systems, Inc. and Silverpop Systems, Inc.
99.1 Press Release, dated as of May 19, 2003, entitled "Avalon Digital
Announces Restructuring: Silverpop Systems to Acquire Certain
Assets."
99.2 Press Release, dated July 9, 2003, entitled "Avalon Digital
Announces Sale of Certain Assets."
(a) Pursuant to Item 601(b)(2) of Regulation S-K, the schedules to
such agreement have been omitted. The Registrant agrees to
supplementally furnish a copy of such schedules to the
Commission upon request.
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.
AVALON DIGITAL SYSTEMS, INC.
July 14, 2003 /s/ Robert Webber
--------------------------------------------
Robert Webber, Chief Executive Officer
EXHIBITS INDEX
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
2.1(a) Asset Purchase Agreement, dated June 30,
2003, by and between Avalon Digital Marketing
Systems, Inc. and Silverpop Systems, Inc.
99.1 Press Release, dated as of May 19, 2003, entitled "Avalon Digital
Announces Restructuring: Silverpop Systems to Acquire Certain
Assets."
99.2 Press Release, dated July 9, 2003, entitled "Avalon Digital
Announces Sale of Certain Assets."
(a) Pursuant to Item 601(b)(2) of Regulation S-K, the schedules to
such agreement have been omitted. The Registrant agrees to
supplementally furnish a copy of such schedules to the
Commission upon request.