UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
INFORMATION STATEMENT PURSUANT TO SECTION 14(f)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14f-1 THEREUNDER
Digicorp
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(Name of Registrant as Specified In Its Charter)
Utah 000-50774 41-2052984
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(State or other jurisdiction (IRS Employer (Commission
of incorporation) File Number) Identification No.)
100 Wilshire Boulevard, Suite 1500
Santa Monica, California 90401
(Address of principal executive offices)
1206 West South Jordan Parkway, Unit B
South Jordan, Utah 84095
(Former address of principal executive offices)
(310) 752-1416
(Registrant's telephone number, including area code)
Digicorp
100 Wilshire Boulevard, Suite 1500
Santa Monica, California 90401
INFORMATION STATEMENT PURSUANT TO
SECTION 14(f) OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14f-1 THEREUNDER
This Information Statement is being mailed on or about July 1, 2005, by
Digicorp (the "Company") to the holders of record of shares of its common stock
as of the close of business on July 1, 2005. This information statement is
provided to you for information purposes only. We are not soliciting proxies in
connection with the items described in this Information Statement. You are urged
to read this Information Statement carefully. You are not, however, required to
take any action.
You are receiving this Information Statement in connection with the
appointment of three new members to the Company's Board of Directors, in
connection with a change in control of the Company. On December 29, 2004, the
directors of the Company along with several other shareholders sold 2,229,527
shares of common stock of the Company, representing 22.3% of the Company's
outstanding shares of common stock on such date, to Franklin Capital Corporation
(n/k/a Patient Safety Technologies, Inc.) ("PST"). The directors of the Company,
Gregg B. Colton, Don J. Colton, Norman Sammis and Glenn W. Stewart, sold 80% of
their holdings of the common stock of the Company to PST at $.135 per share.
Another shareholder who was not a principal shareholder or director of the
Company sold all of his shares to PST at $.145 per share. The aggregate amount
of funds used to purchase the shares of the Company's common stock was
approximately $301,998. The source for such funds was PST's working capital. The
directors and shareholders agreed to sell an additional 1,224,000 shares of
common stock of the Company to PST upon the shares being registered with the
Securities and Exchange Commission. Prior to the acquisition and change of
control, PST owned 327,500 shares of common stock of the Company.
Pursuant to the stock purchase agreement with PST, Melanie Glazer was
appointed as Chairman of the Board of Directors of the Company on December 30,
2004, following the resignation of Glenn W. Stewart, Norman Sammis and Don J.
Colton as directors of the Company. The effective date of the resignation of
Glenn W. Stewart, Norman Sammis and Don J. Colton is December 30, 2004. The
present directors of the Company consist of Melanie Glazer and Gregg B. Colton.
Effective April 26, 2005, Gregg B. Colton resigned from his positions as
President, Chief Executive Officer and Chief Financial Officer of the Company.
On April 26, 2005, the Board of Directors of the Company appointed the following
officers: (a) Milton C. Ault, III - Chief Executive Officer; (b) Kathryn
Macenzie Queen - President of Operations; and (c) Lynne Silverstein - Secretary.
The information contained in this Information Statement concerning each
person chosen for the Company's Board of Directors has been furnished to the
Company by each individual, and the Company assumes no responsibility for the
accuracy, completeness or fairness of any of that information.
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CERTAIN INFORMATION REGARDING THE COMPANY
Changes in the Company's Board of Directors - Pursuant to the stock
purchase agreement with PST, Melanie Glazer was appointed as Chairman of the
Board of Directors of the Company on December 30, 2004, after Glenn W. Stewart,
Norman Sammis and Don J. Colton resigned as directors of the Company. The
effective date of the resignation of Glenn W. Stewart, Norman Sammis and Don J.
Colton is December 30, 2004. The present directors of the Company consist of
Melanie Glazer and Gregg B. Colton. The Board of Directors has approved the
following director nominees for appointment to the Board to fill the current
vacancies on the Board: Darrell Grimsley and Milton "Todd" Ault, III. In
addition, approximately ten days after the date the Company mails this
Information Statement to shareholders. Gregg B. Colton is expected to resign
from the Board of Directors. The Board of Directors has approved Alice Campbell
as a director nominee to fill the vacancy created by Mr. Colton's resignation.
Description of Capital Stock
The Company's authorized capital stock consists of 50,000,000 shares of
common stock at a par value of $0.001 per share. As of June 29, 2005, there were
12,684,033 shares of the Company's common stock issued and outstanding held by
approximately 290 stockholders of record.
Holders of the Company's common stock are entitled to one vote for each
share on all matters submitted to a stockholder vote. Holders of common stock do
not have cumulative voting rights. Therefore, holders of a majority of the
shares of common stock voting for the election of directors can elect all of the
directors. Holders of the Company's common stock representing a majority of the
voting power of the Company's capital stock issued, outstanding and entitled to
vote, represented in person or by proxy, are necessary to constitute a quorum at
any meeting of stockholders. A vote by the holders of a majority of the
Company's outstanding shares is required to effectuate certain fundamental
corporate changes such as liquidation, merger or an amendment to the Company's
articles of incorporation.
Holders of the Company's common stock are entitled to share in all
dividends that the board of directors, in its discretion, declares from legally
available funds. There are no limitations or restrictions upon the rights of the
Board of Directors to declare dividends out of any funds legally available
therefore. In the event of a liquidation, dissolution or winding up, each
outstanding share entitles its holder to participate pro rata in all assets that
remain after payment of liabilities and after providing for each class of stock,
if any, having preference over the common stock. The Company's common stock has
no pre-emptive rights, no conversion rights and there are no redemption
provisions applicable to the Company's common stock.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information, as of June 29, 2005
with respect to the beneficial ownership of the outstanding common stock by (i)
any holder of more than five (5%) percent; (ii) each of the named executive
officers, directors and director nominees; and (iii) our directors, director
nominees and named executive officers as a group. Except as otherwise indicated,
each of the stockholders listed below has sole voting and investment power over
the shares beneficially owned.
Common Stock Percentage of
Name of Beneficial Owner (1) Beneficially Owned (2) Common Stock (2)
- ----------------------------------------------------------------------------------------
Alice Campbell 0 22.0%
Gregg Colton 1,459,087 (4) 11.5%
Darrell Grimsley 0 *
Lynne Silverstein 0 22.0%
Milton "Todd" Ault, III 2,787,027 (5) 22.0%
Melanie Glazer 110,500 *
Patient Safety Technologies, Inc. 2,787,027 22.0%
Bodnar Capital Management, LLC (3) 5,941,176 37.9%
- ----------------------------------------------------------------------------------------
All named executive officers, directors 2,897,527 (5) 22.0%
and director nominees as a group (6
persons)
* Less than 1%
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(1) Except as otherwise indicated, the address of each beneficial owner
is c/o Digicorp, 100 Wilshire Boulevard, Suite 1500, Santa Monica,
California 90401.
(2) Applicable percentage ownership is based on 12,684,033 shares of
common stock outstanding as of June 29, 2005, together with
securities exercisable or convertible into shares of common stock
within 60 days of June 29, 2005 for each stockholder. Beneficial
ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
that are currently exercisable or exercisable within 60 days of June
29, 2005 are deemed to be beneficially owned by the person holding
such securities for the purpose of computing the percentage of
ownership of such person, but are not treated as outstanding for the
purpose of computing the percentage ownership of any other person.
(3) Includes 3,000,000 shares of common stock issuable upon exercise of
outstanding common stock purchase warrants. Steven Bodnar has voting
and investment control over the securities owned by Bodnar Capital
Management, LLC.
(4) Includes 180,000 shares owned by Vernal Western Drilling, of which
Mr. Colton is a principal shareholder and President.
(5) Includes 2,787,027 shares owned directly by PST. Mr. Ault is
chairman and chief executive officer of PST.
Directors, Director Nominees and Executive Officers
Below are the names and certain information regarding the Company's
current executive officers, directors and director nominees. The Company plans
to appoint the below director nominees to its Board of Directors approximately
ten days after the date the Company mails this Information Statement to
shareholders. None of the Company's directors, director nominees, officers or
affiliates is involved in a proceeding adverse to the Company or has a material
interest adverse to the Company.
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Name Age Position
- ----------------------------------------------------------------------------------------------------
Milton "Todd" Ault, III 35 Chief Executive Officer, Principal Financial
Officer, Principal Accounting Officer and
Director Nominee
- ----------------------------------------------------------------------------------------------------
Kathryn Macenzie Queen 27 President of Operations
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Lynne Silverstein 33 Secretary
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Melanie Glazer 63 Chairman
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Gregg B. Colton 52 Director
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Darrell Grimsley 39 Director Nominee
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Alice Campbell 55 Director Nominee
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Background of Executive Officers, Directors and Director Nominees
Officers are elected annually by the Board of Directors (subject to the
terms of any employment agreement), at our annual meeting, to hold such office
until an officer's successor has been duly appointed and qualified, unless an
officer sooner dies, resigns or is removed by the Board.
BACKGROUND OF EXECUTIVE OFFICERS AND DIRECTORS
Milton "Todd" Ault, III, Chief Executive Officer, Principal Financial
Officer, Principal Accounting Officer and Director Nominee. Mr. Ault was
appointed Chief Executive Officer of the Company on April 26, 2005. Mr. Ault
also serves in the capacities of Principal Financial Officer and Principal
Accounting Officer of the Company. Since May 26, 2005, Mr. Ault has served as
interim Chief Executive Officer and as a director of IPEX, Inc., a Nevada
corporation whose common stock is quoted on the OTC Bulletin Board. In addition,
Mr. Ault is currently the Chairman and Chief Executive Officer of Patient Safety
Technologies, Inc., a Delaware corporation whose common stock is traded on the
American Stock Exchange ("PST"). Mr. Ault has served as a director of PST since
June 23, 2004. Mr. Ault is also a manager of Franklin Capital Properties, a
wholly owned subsidiary of PST, and has held that position since Franklin
Capital Properties' inception in December 2004. In addition, Mr. Ault co-founded
Ault Glazer & Company Investment Management LLC ("Ault Glazer") in 1998 and is
currently the controlling and managing member and Chief Investment Officer of
Ault Glazer, a private investment management firm headquartered in Santa Monica,
California. From July 1998 until December 2004, Mr. Ault was a registered
representative of Strome Securities, L.P., a NASD registered broker-dealer.
Prior to founding Ault Glazer, Mr. Ault served as a portfolio manager and
regional institutional financial advisor for Prudential Securities from February
1996 to July 1998. From November 1992 until February 1996, Mr. Ault served as an
institutional account executive for Dean Witter Reynolds.
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Kathryn Macenzie Queen, President of Operations. From approximately
November 2004 until May 2005, Ms. Queen was employed by PST where she advised
and assisted the company's executive officers on investment banking and related
matters. From 2002 until November 2004, Ms. Queen worked in various positions in
the entertainment industry. Ms. Queen has held positions at Salomon Smith
Barney, Morgan Stanley and Mutual of New York. Ms. Queen graduated in 2002 from
the Fisher College of Business at the Ohio State University with a B.A. in
Economics, a B.S. in Finance and a B.S. in Accounting.
Lynne Silverstein, Secretary. Ms. Silverstein is currently the President
and Secretary of PST. In addition, Ms. Silverstein has been Chief Executive
Officer of Ault Glazer since October 2003. Prior thereto, she was Director of
Operations of Ault Glazer since January 2001, having joined Ault Glazer in
January 1999 as a Manager. From February 1996 to October 1998 she was employed
by STV Communications, a media content and preview kiosk company, serving as
Marketing Director since February 1998. Ms. Silverstein received her B.S. in
Communications from the University of Miami.
Melanie Glazer, Chairman. Mrs. Glazer co-founded Ault Glazer in 1998 where
is a non-managing member and where she currently serves as an analyst. Ms.
Glazer is also a manager of Franklin Capital Properties, a wholly owned
subsidiary of PST, and has held that position since Franklin Capital Properties'
inception in December 2004. In 1989, Mrs. Glazer established her own realty
company, Morris Glazer Realty, which she ran successfully until 2003. Mrs.
Glazer joined Dobson & Johnson, Inc. in 1986, where she was a real estate broker
until 1990. Mrs. Glazer received her Bachelor of Art degree in History in 1964
from George Peabody College, part of Vanderbilt University.
Gregg B. Colton, Director. Mr. Colton served as our President, Treasurer
and Director for approximately 15 years until December 30, 2004. Mr. Colton is
currently employed with Pioneer Oil and Gas a publicly traded company as its
Vice President, Secretary, General Counsel and a member of the Board of
Directors. Mr. Colton has been employed with the Pioneer Oil and Gas since it
commenced business in 1981. Mr. Colton earned his BA from the University of Utah
in 1976 and a Juris Doctor and a Master of Business Administration from Brigham
Young University in 1981.
Darrell Grimsley, Director Nominee. Mr. Grimsley has been a practicing
attorney during the last five years. From May 1, 1999 to present, Mr. Grimsley
has been managing member of D.W. Grimsley, Jr., LLC, a law firm practicing in
the areas of credit, toxic torts, employment law, due diligence reporting and
business consulting and advising. From October 1, 2003, Mr. Grimsley has been
managing member of The Bankruptcy Group, LLC a law firm focusing on business and
consumer bankruptcy law.
Alice Campbell, Director Nominee. Since October 22, 2004, Ms. Campbell has
been a director of PST. Since 2001, Ms. Campbell has been, and is currently, an
investigator and consultant, specializing in research and litigation services,
financial investigations and computer forensics, for major companies and law
firms throughout the United States. Ms. Campbell is a certified fraud
specialist, as well as a certified instructor for the Regional Training Center
of the United States Internal Revenue Service and for the National Business
Institute. From 1979 to 2001, Ms. Campbell served as a special agent for the
United States Treasury Department where she conducted criminal investigations
and worked closely with the United States Attorney's Office and with several
federal agencies, including the Internal Revenue Service, Federal Bureau of
Investigation, Secret Service, Customs Service, State Department, Drug
Enforcement Agency, Bureau of Alcohol, Tobacco and Firearms and U.S. Postal
Service. Ms. Campbell received her B.A. from the University of North Carolina,
Chapel Hill and has attended various specialized schools dealing with financial
matters.
Ms. Silverstein is the daughter of Melanie Glazer, our current Chairman
and a director. Except for Ms. Silverstein and Mrs. Glazer, there are no family
relationships between any of our directors, executive officers or persons
nominated or charged to become a director or executive officer.
The Company does not currently have a standing audit, nominating or
compensation committee of the Board of Directors, or any committee performing
similar functions. Melanie Glazer participates in the consideration of Director
Nominees. Mrs. Glazer is an independent director, as defined by the rules of the
American Stock Exchange.
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Shareholder Communications
The Board of Directors will not adopt a procedure for shareholders to send
communications to the Board of Directors until it has reviewed the merits of
several alternative procedures. The Board of Directors has not adopted a
procedure to recommend nominees for the Board of Directors.
Executive Compensation
The following table sets forth information concerning the total
compensation that we have paid or that has accrued on behalf of our principal
executive officer and other executive officers with annual compensation
exceeding $100,000 during the years ended June 30, 2004, 2003 and 2002. On April
26, 2005, Milton "Todd" Ault, III was appointed Chief Executive Officer.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
-------------------------------------------
Annual Compensation Awards Payouts
------------------------------------- ------------------------------ ------------
Other Securities All
Annual Restricted Underlying Other
Name and Compen- Stock Award(s) Options/ LTIP Compen-
Principal Position Year Salary ($) Bonus ($) sation ($) ($) SARs (#) Payouts ($) sation ($)
- --------------------------- --------- ------------- ---------- ------------ ----------------- ------------ ------------ ------------
Gregg B. Colton, 2004 -0- -0- -0- -0- -0- -0- -0-
Former President 2003 -0- -0- -0- -0- -0- -0- -0-
2002 -0- -0- -0- -0- -0- -0- -0-
Compensation of Directors
No director currently receives any cash compensation for their service as
a director. All directors are reimbursed for their reasonable out-of-pocket
expenses incurred in connection with their duties to us.
Certain Relationships and Related Transactions
In September 2003, we sold Vernal Western Drilling a total of 400,000
shares of common stock for $4,000 cash ($0.01/share). The proceeds were used to
partially pay for our audits and related expenses for the fiscal year ended June
30, 2004. Vernal Western Drilling is a privately held company owned 50% by Don
J. Colton, our former Vice President, former Secretary, and a former director,
and 50% by Gregg B. Colton, our former President, former Treasurer and a current
director.
During approximately the past four years, we used office space owned
two-thirds by Don J. Colton and Gregg B. Colton. The office space was used free
of charge and there are no liabilities owed in connection with the use of such
space.
Management believes the above transactions were on terms at least as
favorable as could be obtained from unrelated third parties.
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who beneficially own more
than ten percent of a registered class of the Company's equity securities to
file with the SEC initial reports of ownership and reports of change in
ownership of common stock and other equity securities of the Company. Officers,
directors and greater than ten percent stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company under Rule 16a-3(e) during the fiscal year ended June
30, 2004, and Forms 5 and amendments thereto furnished to us with respect to the
fiscal year ended June 30, 2004, the Company believes that during the fiscal
year ended June 30, 2004, the Company's executive officers, directors and all
persons who own more than ten percent of a registered class of the Company's
equity securities complied with all Section 16(a) filing requirements.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this Information Statement to be signed on its behalf by the undersigned,
thereunto duly authorized.
Digicorp
By: /s/ Milton Ault
-----------------------------------
Milton "Todd" Ault, III
Chief Executive Officer
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