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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Washington, D.C. 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">____________________________________________________________</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">FORM 8-K</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">CURRENT
REPORT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">___________________________________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of Report (Date of earliest event reported):
August 7, 2012</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>KIT DIGITAL, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact Name of Registrant as Specified in
Charter)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 38%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; text-align: center">Delaware</TD>
    <TD STYLE="width: 37%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; text-align: center">001-34437</TD>
    <TD STYLE="width: 25%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; text-align: center">11-3447894</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(State or other jurisdiction</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(Commission File Number)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(IRS Employer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">of incorporation)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Identification No.)</TD></TR>
</TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 79%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">26 West 17<SUP>th</SUP> Street, 2<SUP>nd</SUP> Floor</TD>
    <TD STYLE="width: 21%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; text-align: center"><U>New York, New York</U></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; text-align: center">10011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(Address of principal executive offices)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(Zip Code)</TD></TR>
</TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Registrant's telephone number, including
area code: <U>+1 (646) 553-4845</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">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:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><FONT STYLE="font-family: Wingdings">&#168;</FONT>
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><FONT STYLE="font-family: Wingdings">&#168;</FONT>
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Wingdings">&#168;</FONT>
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR &#9;240.14d-2(b))</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Wingdings">&#168;</FONT>Pre-commencement communications pursuant to Rule 13e-4 (c)
under the Exchange Act (17 CFR &#9;240.13e-4(c))<B><U> </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -1in"><B>CURRENT REPORT
ON FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -1in"><B>KIT digital,
Inc. (the &ldquo;Company&rdquo;)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -1in"><B>August 7,
2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><B>Item 1.01.&#9;Entry into a Material
Definitive Agreement.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Election of Two New Directors and Resignation of Director</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Effective August 7,
2012, pursuant to the Standstill Agreement (described below), Seth W. Hamot and K. Peter Heiland were elected to the Board. <FONT STYLE="color: black">&#9;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt">Seth Hamot, through various entities, owns
approximately 7% of the outstanding shares of the Company. He is the Managing Member of Roark, Rearden &amp; Hamot LLC, the general
partner of Costa Brava Partnership III L.P., an investment fund that typically focuses on companies neglected by research analysts
and with enterprise values ranging from $100 million to $1 billion.&nbsp;The fund invests in balance sheet restructurings, financially
or operationally distressed issuers, securities of bankruptcies and liquidations, and securities of companies facing complicated
legal issues. Mr. Hamot currently serves as the Chairman of the boards of Spy, Inc., a designer and distributor of premium sunglasses
and goggles sold internationally, and ISC8, Inc., a corporation engaged in the design, development, manufacture and sale of cutting-edge
internet security systems and 3D stacked microchips for defense, security and commercial applications.&nbsp;Previously, Mr. Hamot
served as Chairman of the Board of Bradley Pharmaceuticals, a specialty pharmaceutical company with products focused on the dermatology
and gastroenterology markets, until that company was sold in February 2008.&nbsp; Mr. Hamot was also the Chairman of the Board
of TechTeam Global, Inc., a leading provider of IT outsourcing and business process outsourcing services to large and medium businesses,
as well as government organizations, until December 2010, when TechTeam was sold to Stefanini IT Solutions.&nbsp;Mr. Hamot also
served as a director of CCA Industries, Inc. from July 2007 until December 2009, and has served as a director of distressed companies
and on both official and ad hoc creditor committees. Mr. Hamot has a degree in Economics from Princeton University.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt">Peter Heiland, through various entities,
owns approximately 8% of the outstanding shares of the Company. Mr. Heiland, age 50, is a Managing Director of JEC Capital Partners,
LLC (&ldquo;JEC Capital Partners&rdquo;), a technology focused investment firm that was founded in 2009. JEC Capital Partners has
been an investor in several private and public technology companies, recently leading the recovery of shareholder value in Miranda
Technologies. JEC Capital Partners was also a significant shareholder of the GSI Group (NASDAQ: GSIG), participating in the statutory
Equity Committee during the GSI Group&rsquo;s Chapter 11 process, engineering its recapitalization, and remaining active as a board
member in the reorganized company. Prior to founding JEC Capital Partners, Mr. Heiland was the founder and CEO of Integrated Dynamics
Engineering (&ldquo;IDE&rdquo;). IDE designs, manufactures, and sells environmental control systems, robotics, and motion control
systems for semiconductor metrology and lithography equipment. In January of 2008, IDE was acquired by Aalberts Industries (AMS:
AALB).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Effective August 7,
2012, Joseph Mullin, a member of the Board since August 2010, resigned as a director. The resignation did not result from any disagreement
with the Company concerning any matter relating to the Company&rsquo;s operations, policies or practices but was pursuant to the
Standstill Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Following the election
of two new directors and the resignation of one current director, there are now six members on the Company&rsquo;s Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>Board Committee Composition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In connection with these changes to the Board, the Board reconstituted
its committees, which will now be composed as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Nominations &amp; Governance Committee:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 60pt; text-indent: -0.25in">Bill Russell (committee chairman)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-indent: 0.25in">Greg Petersen</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-indent: 0.5in">Peter Heiland</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Audit Committee:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 60pt; text-indent: -0.25in">Greg Petersen (committee chairman)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-indent: 0.5in">Wayne Walker</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 6pt">Bill Russell</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Compensation Committee:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 60pt; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 60pt; text-indent: -0.25in">Greg Petersen (committee chairman)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-indent: 0.25in">Wayne Walker</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-indent: 0.5in">Seth Hamot</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-indent: 0.5in; color: #595959">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-indent: 0.5in; color: #595959">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><B>Standstill Agreement </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">On August 7, 2012, the
Company entered into a Standstill Agreement (the &ldquo;Standstill Agreement&rdquo;) with (i) Mr. Hamot and Costa Brava Partnership
III L.P. and certain parties affiliated with it (collectively &ldquo;Costa Brava&rdquo;) and (ii) Mr. Heiland and JEC Capital Partners
and certain parties affiliated with it (collectively &ldquo;JEC&rdquo;). Under the Standstill Agreement, the Company agreed to
expand the size of the board of directors (the &ldquo;Board&rdquo;) to six (6) directors, appoint Seth Hamont (the &ldquo;Costa
Brava Director&rdquo;) and Peter Heiland (the &ldquo;JEC Director&rdquo;) to serve as directors. The Company also agreed under
the Standstill Agreement to appoint the JEC Director as a member of the Nominating and Corporate Governance Committee of the Board
and the Costa Brava Director as a member of the Compensation Committee and that those Committees would have, as of the appointment
of the Costa Brava Director and the JEC Director to those Committee, the composition referred to above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Under the Standstill
Agreement, the Nominating and Corporate Governance Committee (or a duly constituted subcommittee thereof) will recommend for nomination
and the Board will nominate each of Mr. Hamot and Mr. Heiland (collectively, the &ldquo;Investor Nominees&rdquo;) for election
at the 2012 Annual Meeting and will recommend a vote for the Investor Nominees and solicit proxies from the Company&rsquo;s stockholders
for the election of the Investor Nominees at the 2012 Annual Meeting. In addition, the Standstill Agreement provides that the Nominating
Committee of the Board will recommend for nomination, and the Board will nominate each of, the Investor Nominees for election at
the 2013 annual meeting of stockholders (the &ldquo;2013 Annual Meeting&rdquo;) and any other Later Election Meeting (as defined
below) occurring in 2013 but earlier than the 2013 Annual Meeting and will recommend a vote for the Investor Nominees and solicit
proxies from the Company&rsquo;s stockholders for the election of the Investor Nominees at such 2013 Annual Meeting and any such
other Later Election Meeting, provided with respect to each Investor Nominee that he continues to serve on the Board at the time
of the nominations for Director for such meeting. If either such Investor Nominee is not willing to serve or resigns from the Board
after such nomination, such recommendation need not be made and such proxies need not be solicited with respect to such Investor
Nominee. The Standstill Agreement also provides that the size of the Board shall be fixed at six (6), except as determined by a
vote of the Board of Directors. &ldquo;Later Election Meeting&rdquo; means any annual or special meeting of the stockholders of
the Company held after the 2012 Annual Meeting at which directors are elected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.85pt; text-align: left; text-indent: 37.05pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.85pt; text-align: left; text-indent: 37.05pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.85pt; text-align: left; text-indent: 37.05pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.85pt; text-align: left; text-indent: 37.05pt">Under the
Standstill Agreement, the Company agrees to use its commercially reasonable efforts to hold the 2012 Annual Meeting no later than
December 31, 2012 and each member of Costa Brava and each member of JEC agrees to vote with the Board as follows. Each member of
Costa Brava and each member of JEC agrees to vote and cause to be voted all the shares which he or it owns as of the record date,
either beneficially or as of record, for the 2012 Annual Meeting in favor of each of those individuals recommended for nomination
as directors by the Company&rsquo;s Nominating and Corporate Governance Committee and nominated for election as director by the
Board. At any subsequent annual or special meeting of stockholders of the Company (or adjournments thereof), with respect to each
matter relating to directors or the election of directors (whether removal, replacement, or otherwise, and whether at a meeting
or through a written consent), each member of Costa Brava and each member of JEC, to the extent a Standstill Period (as defined
below) is applicable to them, agree to vote and cause to be voted all shares which he or it owns as of the record date for such
meeting or written consent, either beneficially or as of record, in favor of the election to the Board of those director nominees
recommended by the Board, against the removal of any directors whose removal is not recommended by the Board, and all as otherwise
recommended by the Board in relation to any matters relating to directors or the Board, the members of the Board, the size of the
Board, the constitution or composition of the Board, or otherwise relating to any of the foregoing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Pursuant to the Standstill
Agreement, each of Costa Brava and JEC has agreed that, subject to certain exceptions and conditions, it will abide by certain
standstill provisions. Those standstill provisions apply until immediately after the 2013 annual meeting or such earlier time,
after the 2012 Annual Meeting, that the JEC Director or Costa Brava Director, as applicable, ceases to serve on the Board (the
&ldquo;Standstill Period&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Such customary standstill
provisions include, among others, neither JEC nor Costa Brava: nominating or proposing any candidates for the Board or seeking
the removal or replacement of any director of the Company; submitting a stockholder proposal under Rule 14a-8 of the Securities
Exchange Act of 1934 (as amended, the &ldquo;Exchange Act&rdquo;); filing a proxy or consent statement in opposition to the Company
or otherwise obtaining or soliciting proxies or consents from any stockholders of the Company or participating in or making any
solicitation related to Board matters; entering into any contract, arrangement or understanding with any person with respect to
any securities of the Company; commencing or entering into any tender offer or exchange offer, merger, acquisition or other business
combination or extraordinary transaction involving the Company or any of its subsidiaries; forming, joining or in any way participating
in a &ldquo;group&rdquo; (as defined under the Exchange Act) with respect to the Company or its securities; otherwise acting, alone
or in concert with others, to seek to influence the management, Board or policies of the Company or taking any action to seek the
removal of any member of the Board, change the size of the Board, obtain additional representation on the Board, or taking any
other action related to the management or the Board; making any adverse public statement regarding the Company or the Board; knowingly
causing a public announcement regarding the foregoing or seeking a waiver of the standstill restrictions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Subject to certain limited
exceptions, the standstill provisions regarding the Board and Board related matters will continue to be effective during a &ldquo;cooling
off period&rdquo; of 45 days with respect to each of JEC and Costa Brava after the resignation of its respective director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">The Company has also
agreed to reimburse each of JEC and Costa Brava, up to a limited amount, its respective actual third party expenses incurred in
connection the matters related to its Schedule 13D filings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">The Standstill Agreement
also contains, among other things, customary representations and warranties of the parties, certain provisions as to the JEC Director
and the Costa Brava Director acting as directors of the Company and certain provisions as to resignation of the Costa Brava Director
and the JEC Director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt">If not sooner terminated by mutual agreement
of the parties, the Standstill Agreement and the respective obligations of the parties thereunder will terminate on the earlier
of (x) immediately following the 2013 Annual Meeting and (y) December 31, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">The foregoing description
of the Standstill Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the
Standstill Agreement, a copy of which is attached hereto as Exhibits 10.1 and incorporated herein by reference in its entirety.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 5.02.&#9;Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">The text set forth above
under Item 1.01 is incorporated into this Item by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 8.01.&#9;Other Events.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">Additionally, the Board of Directors unanimously determined to have the entire Board manage the company&rsquo;s
on-going strategic process to a conclusion. The Board, therefore, determined that the Strategic Transaction Committee was no longer
necessary and elected to dissolve the Board&rsquo;s Strategic Transaction Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On August 7, 2012, the Company issued the press release attached
as Exhibit 99.1 to this current report on Form 8-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 9.01.&#9;Financial Statements and Exhibits.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">(d)&#9;<U>Exhibits</U>.
The exhibits listed in the following Exhibit Index are filed as part of this current report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 0.5pt solid">Exhibit
        No.</P></TD>
    <TD STYLE="width: 76%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 0.5pt solid">Description</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: justify">10.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: justify">Standstill Agreement</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: justify">99.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: justify">Press Release</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 3in"><P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2"><B>KIT DIGITAL, INC.</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 50%">Date: August 7, 2012&nbsp;</TD>
    <TD STYLE="width: 4%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 46%">/s/ Barak Bar-Cohen</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">Barak Bar-Cohen<BR>Chief Executive
Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 6pt"><B><U>Exhibit
Index</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 0.5pt solid">Exhibit
        No.</P></TD>
    <TD STYLE="width: 76%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 0.5pt solid">Description</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: justify">10.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: justify">Standstill Agreement</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: justify">99.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: justify">Press Release</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



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{"company-data": {"conformed-name": "KIT digital, Inc.", "cik": "0001076700", "assigned-sic": "8900", "irs-number": "113447894", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-34437", "film-number": "121011568"}, "business-address": {"street1": "26 WEST 17TH STREET", "street2": "2ND FLOOR", "city": "NEW YORK", "state": "NY", "zip": "10011", "phone": "6465534845"}, "mail-address": {"street1": "26 WEST 17TH STREET", "street2": "2ND FLOOR", "city": "NEW YORK", "state": "NY", "zip": "10011"}, "former-company": [{"former-conformed-name": "ROO GROUP INC", "date-changed": "20040312"}, {"former-conformed-name": "VIRILITEC INDUSTRIES INC", "date-changed": "19990326"}]}
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):
August 7, 2012
KIT DIGITAL, INC.
(Exact Name of Registrant as Specified in
Charter)
Delaware
001-34437
11-3447894
(State or other jurisdiction
(Commission File Number)
(IRS Employer
of incorporation)
Identification No.)
26 West 17
th
Street, 2
nd
Floor
New York, New York
10011
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including
area code:
+1 (646) 553-4845
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))
CURRENT REPORT
ON FORM 8-K
KIT digital,
Inc. (the "Company")
August 7,
2012
Item 1.01.	Entry into a Material
Definitive Agreement.
Election of Two New Directors and Resignation of Director
Effective August 7,
2012, pursuant to the Standstill Agreement (described below), Seth W. Hamot and K. Peter Heiland were elected to the Board.
Seth Hamot, through various entities, owns
approximately 7% of the outstanding shares of the Company. He is the Managing Member of Roark, Rearden & Hamot LLC, the general
partner of Costa Brava Partnership III L.P., an investment fund that typically focuses on companies neglected by research analysts
and with enterprise values ranging from $100 million to $1 billion. The fund invests in balance sheet restructurings, financially
or operationally distressed issuers, securities of bankruptcies and liquidations, and securities of companies facing complicated
legal issues. Mr. Hamot currently serves as the Chairman of the boards of Spy, Inc., a designer and distributor of premium sunglasses
and goggles sold internationally, and ISC8, Inc., a corporation engaged in the design, development, manufacture and sale of cutting-edge
internet security systems and 3D stacked microchips for defense, security and commercial applications. Previously, Mr. Hamot
served as Chairman of the Board of Bradley Pharmaceuticals, a specialty pharmaceutical company with products focused on the dermatology
and gastroenterology markets, until that company was sold in February 2008.  Mr. Hamot was also the Chairman of the Board
of TechTeam Global, Inc., a leading provider of IT outsourcing and business process outsourcing services to large and medium businesses,
as well as government organizations, until December 2010, when TechTeam was sold to Stefanini IT Solutions. Mr. Hamot also
served as a director of CCA Industries, Inc. from July 2007 until December 2009, and has served as a director of distressed companies
and on both official and ad hoc creditor committees. Mr. Hamot has a degree in Economics from Princeton University.
Peter Heiland, through various entities,
owns approximately 8% of the outstanding shares of the Company. Mr. Heiland, age 50, is a Managing Director of JEC Capital Partners,
LLC ("JEC Capital Partners"), a technology focused investment firm that was founded in 2009. JEC Capital Partners has
been an investor in several private and public technology companies, recently leading the recovery of shareholder value in Miranda
Technologies. JEC Capital Partners was also a significant shareholder of the GSI Group (NASDAQ: GSIG), participating in the statutory
Equity Committee during the GSI Group's Chapter 11 process, engineering its recapitalization, and remaining active as a board
member in the reorganized company. Prior to founding JEC Capital Partners, Mr. Heiland was the founder and CEO of Integrated Dynamics
Engineering ("IDE"). IDE designs, manufactures, and sells environmental control systems, robotics, and motion control
systems for semiconductor metrology and lithography equipment. In January of 2008, IDE was acquired by Aalberts Industries (AMS:
AALB).
Effective August 7,
2012, Joseph Mullin, a member of the Board since August 2010, resigned as a director. The resignation did not result from any disagreement
with the Company concerning any matter relating to the Company's operations, policies or practices but was pursuant to the
Standstill Agreement.
Following the election
of two new directors and the resignation of one current director, there are now six members on the Company's Board of Directors.
Board Committee Composition
In connection with these changes to the Board, the Board reconstituted
its committees, which will now be composed as follows:
Nominations & Governance Committee:
Bill Russell (committee chairman)
Greg Petersen
Peter Heiland
Audit Committee:
Greg Petersen (committee chairman)
Wayne Walker
Bill Russell
Compensation Committee:
Greg Petersen (committee chairman)
Wayne Walker
Seth Hamot
Standstill Agreement
On August 7, 2012, the
Company entered into a Standstill Agreement (the "Standstill Agreement") with (i) Mr. Hamot and Costa Brava Partnership
III L.P. and certain parties affiliated with it (collectively "Costa Brava") and (ii) Mr. Heiland and JEC Capital Partners
and certain parties affiliated with it (collectively "JEC"). Under the Standstill Agreement, the Company agreed to
expand the size of the board of directors (the "Board") to six (6) directors, appoint Seth Hamont (the "Costa
Brava Director") and Peter Heiland (the "JEC Director") to serve as directors. The Company also agreed under
the Standstill Agreement to appoint the JEC Director as a member of the Nominating and Corporate Governance Committee of the Board
and the Costa Brava Director as a member of the Compensation Committee and that those Committees would have, as of the appointment
of the Costa Brava Director and the JEC Director to those Committee, the composition referred to above.
Under the Standstill
Agreement, the Nominating and Corporate Governance Committee (or a duly constituted subcommittee thereof) will recommend for nomination
and the Board will nominate each of Mr. Hamot and Mr. Heiland (collectively, the "Investor Nominees") for election
at the 2012 Annual Meeting and will recommend a vote for the Investor Nominees and solicit proxies from the Company's stockholders
for the election of the Investor Nominees at the 2012 Annual Meeting. In addition, the Standstill Agreement provides that the Nominating
Committee of the Board will recommend for nomination, and the Board will nominate each of, the Investor Nominees for election at
the 2013 annual meeting of stockholders (the "2013 Annual Meeting") and any other Later Election Meeting (as defined
below) occurring in 2013 but earlier than the 2013 Annual Meeting and will recommend a vote for the Investor Nominees and solicit
proxies from the Company's stockholders for the election of the Investor Nominees at such 2013 Annual Meeting and any such
other Later Election Meeting, provided with respect to each Investor Nominee that he continues to serve on the Board at the time
of the nominations for Director for such meeting. If either such Investor Nominee is not willing to serve or resigns from the Board
after such nomination, such recommendation need not be made and such proxies need not be solicited with respect to such Investor
Nominee. The Standstill Agreement also provides that the size of the Board shall be fixed at six (6), except as determined by a
vote of the Board of Directors. "Later Election Meeting" means any annual or special meeting of the stockholders of
the Company held after the 2012 Annual Meeting at which directors are elected.
3
Under the
Standstill Agreement, the Company agrees to use its commercially reasonable efforts to hold the 2012 Annual Meeting no later than
December 31, 2012 and each member of Costa Brava and each member of JEC agrees to vote with the Board as follows. Each member of
Costa Brava and each member of JEC agrees to vote and cause to be voted all the shares which he or it owns as of the record date,
either beneficially or as of record, for the 2012 Annual Meeting in favor of each of those individuals recommended for nomination
as directors by the Company's Nominating and Corporate Governance Committee and nominated for election as director by the
Board. At any subsequent annual or special meeting of stockholders of the Company (or adjournments thereof), with respect to each
matter relating to directors or the election of directors (whether removal, replacement, or otherwise, and whether at a meeting
or through a written consent), each member of Costa Brava and each member of JEC, to the extent a Standstill Period (as defined
below) is applicable to them, agree to vote and cause to be voted all shares which he or it owns as of the record date for such
meeting or written consent, either beneficially or as of record, in favor of the election to the Board of those director nominees
recommended by the Board, against the removal of any directors whose removal is not recommended by the Board, and all as otherwise
recommended by the Board in relation to any matters relating to directors or the Board, the members of the Board, the size of the
Board, the constitution or composition of the Board, or otherwise relating to any of the foregoing.
Pursuant to the Standstill
Agreement, each of Costa Brava and JEC has agreed that, subject to certain exceptions and conditions, it will abide by certain
standstill provisions. Those standstill provisions apply until immediately after the 2013 annual meeting or such earlier time,
after the 2012 Annual Meeting, that the JEC Director or Costa Brava Director, as applicable, ceases to serve on the Board (the
"Standstill Period").
Such customary standstill
provisions include, among others, neither JEC nor Costa Brava: nominating or proposing any candidates for the Board or seeking
the removal or replacement of any director of the Company; submitting a stockholder proposal under Rule 14a-8 of the Securities
Exchange Act of 1934 (as amended, the "Exchange Act"); filing a proxy or consent statement in opposition to the Company
or otherwise obtaining or soliciting proxies or consents from any stockholders of the Company or participating in or making any
solicitation related to Board matters; entering into any contract, arrangement or understanding with any person with respect to
any securities of the Company; commencing or entering into any tender offer or exchange offer, merger, acquisition or other business
combination or extraordinary transaction involving the Company or any of its subsidiaries; forming, joining or in any way participating
in a "group" (as defined under the Exchange Act) with respect to the Company or its securities; otherwise acting, alone
or in concert with others, to seek to influence the management, Board or policies of the Company or taking any action to seek the
removal of any member of the Board, change the size of the Board, obtain additional representation on the Board, or taking any
other action related to the management or the Board; making any adverse public statement regarding the Company or the Board; knowingly
causing a public announcement regarding the foregoing or seeking a waiver of the standstill restrictions.
4
Subject to certain limited
exceptions, the standstill provisions regarding the Board and Board related matters will continue to be effective during a "cooling
off period" of 45 days with respect to each of JEC and Costa Brava after the resignation of its respective director.
The Company has also
agreed to reimburse each of JEC and Costa Brava, up to a limited amount, its respective actual third party expenses incurred in
connection the matters related to its Schedule 13D filings.
The Standstill Agreement
also contains, among other things, customary representations and warranties of the parties, certain provisions as to the JEC Director
and the Costa Brava Director acting as directors of the Company and certain provisions as to resignation of the Costa Brava Director
and the JEC Director.
If not sooner terminated by mutual agreement
of the parties, the Standstill Agreement and the respective obligations of the parties thereunder will terminate on the earlier
of (x) immediately following the 2013 Annual Meeting and (y) December 31, 2013.
The foregoing description
of the Standstill Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the
Standstill Agreement, a copy of which is attached hereto as Exhibits 10.1 and incorporated herein by reference in its entirety.
Item 5.02.	Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The text set forth above
under Item 1.01 is incorporated into this Item by reference.
Item 8.01.	Other Events.
Additionally, the Board of Directors unanimously determined to have the entire Board manage the company's
on-going strategic process to a conclusion. The Board, therefore, determined that the Strategic Transaction Committee was no longer
necessary and elected to dissolve the Board's Strategic Transaction Committee.
On August 7, 2012, the Company issued the press release attached
as Exhibit 99.1 to this current report on Form 8-K.
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Item 9.01.	Financial Statements and Exhibits.
(d)
Exhibits
.
The exhibits listed in the following Exhibit Index are filed as part of this current report.
Exhibit
        No.
Description
10.1
Standstill Agreement
99.1
Press Release
6
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.
KIT DIGITAL, INC.
Date: August 7, 2012
By:
/s/ Barak Bar-Cohen
Barak Bar-Cohen
Chief Executive
Officer
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Exhibit
Index
Exhibit
        No.
Description
10.1
Standstill Agreement
99.1
Press Release
8