8-K: Current report filing

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): September 19, 2005

Digicorp
(Exact name of registrant as specified in its charter)

Utah 000-33067 87-0398271
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification Number)

100 Wilshire Blvd., Ste. 1500, Santa Monica, CA 90401
(Address of principal executive offices) (zip code)

(310) 752-1477
(Registrant's telephone number, including area code)

Copies to:
Marc J. Ross, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725

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 (see General Instruction A.2. below):

|_| 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 1.01 Entry into a Material Definitive Agreement.

On September 19, 2005, Digicorp (the "Company") entered into an asset
purchase agreement with Philip Gatch, the Company's Chief Technology Officer,
and thereby completed the purchase of certain assets from Mr. Gatch consisting
of the iCodemedia suite of websites and internet properties and all related
intellectual property (the "iCodemedia Assets"). The iCodemedia suite of
websites consists of the websites www.icodemedia.com, www.iplaylist.com,
www.tunecast.com, www.tunebucks.com, www.podpresskit.com and www.tunespromo.com.
The Company plans to use these websites to provide a suite of applications and
services to enable content creators to publish and deliver content to existing
and next generation devices such as the Apple iPod and the Sony PSP. The
iCodemedia Assets are presently under development and constitute nominal assets
of the Company. As consideration for the iCodemedia Assets, the Company issued
Mr. Gatch 1,000,000 shares of the Company's common stock. The number of shares
issued for the iCodemedia Assets was negotiated between the Company and Mr.
Gatch and approved by the Company's Board of Directors. In determining the
number of shares issued for the iCodemedia Assets, the Company's Board
considered the percentage of outstanding shares that the number represents and
the potential significance of the iCodemedia Assets to the Company's future
operations. The issuance of shares of common stock to Mr. Gatch was exempt from
registration requirements pursuant to Section 4(2) of the Securities Act of
1933, as amended.

On September 20, 2005, the Company entered into an employment agreement
with Mr. Gatch documenting the terms of his employment as the Company's Chief
Technology Officer. The term of the employment continues for 36 months from
September 20, 2005 and automatically renews for successive one-year terms unless
either party delivers to the other party written notice of termination at least
30 days before the end of the then current term. Mr. Gatch's base compensation
under the agreement is $95,000 in cash per year and $45,000 in a restricted
stock grants each year. Prior to signing the employment agreement, the Company
granted Mr. Gatch options entitling him to purchase 250,000 shares of the
Company's common stock vesting annually over three years with a strike price of
$0.25 per share, which stock options are reflected in the employment agreement.
Mr. Gatch is also eligible to receive an annual bonus determined by the
Company's chief executive officer based on the performance of the Company. In
addition, Mr. Gatch was granted rights for three years to (a) veto a chief
executive officer candidate as a replacement to Milton "Todd" Ault, III, and (b)
veto a decision to sell the Company or any of its core assets or technologies
related to the iCodemedia Assets in the event the Company sells for less than
$50,000,000. If Mr. Gatch's employment is terminated for any reason, the veto
rights will be forfeited. The agreement also contains customary provisions for
disability, death, confidentiality, indemnification and non-competition. If Mr.
Gatch voluntarily terminates the agreement or if the Company terminates the
agreement for cause, Mr. Gatch will not be entitled to any compensation for the
period between the effective termination date and the end of the employment term
and all unvested restricted stock and stock options will be forfeited. If the
Company voluntarily terminates the agreement without cause, the Company must pay
Mr. Gatch a cash sum equal to (a) all accrued base salary through the date of
termination plus all accrued vacation pay and cash bonuses, if any, plus (b) as
severance compensation, 500,000 unrestricted shares of common stock and $250,000
cash. In the event of a merger, consolidation, sale, or change of control, the
surviving or resulting company is required to honor the terms of the agreement
with Mr. Gatch.

Item 2.01 Completion of Acquisition or Disposition of Assets.

See Item 1.01

Item 3.02 Unregistered Sales of Equity Securities.

See Item 1.01.

1

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

Exhibit Number
Description
- --------------------------------------------------------------------------------
10.1 Asset Purchase Agreement made as of September 19, 2005 by and among
Digicorp and Philip Gatch
10.2 Employment Agreement effective as of September 20, 2005 by and between
Digicorp and Philip Gatch

2

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Digicorp

Dated: September 22, 2005 By:/s/ Milton Ault
------------------------------
Name: Milton "Todd" Ault, III
Title: Chief Executive Officer