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): March 23, 2006
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)
4143 Glencoe Avenue, Marina Del Rey, CA 90292
(Address of principal executive offices) (zip code)
(310) 728-1450
(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.
Revolving Line of Credit Agreement with AGB Acquisition Fund
Effective March 23, 2006 Digicorp (the "Company") entered into a Revolving
Line of Credit Agreement (the "Revolving Line of Credit") with Ault Glazer
Bodnar Acquisition Fund, LLC ("AGB Acquisition Fund"). The Revolving Line of
Credit allows the Company to request advances totaling an aggregate of up to
$150,000 from AGB Acquisition Fund. The initial term of the Revolving Line of
Credit is for a period of six months and may be extended for one or more
additional six-month periods upon mutual agreement of the parties.
Each advance under the Revolving Line of Credit will be evidenced by a
secured promissory note and a security agreement. The secured promissory notes
issued pursuant to the Revolving Line of Credit must be repaid with interest at
the Prime Rate as published in the Wall Street Journal from time to time within
180 days from issuance and will be convertible into shares of the Company's
common stock at the option of AGB Acquisition Fund at a price, for each
respective promissory note issued pursuant to an advance, equal to the lesser of
(i) $1.35 (the closing price of the Company's common stock on the date of
execution of the Revolving Line of Credit) or (ii) the share price of the
Company's common stock offered in the Company's next round of financing in a
private placement offering completed while the principal balance of the
respective promissory note is outstanding.
The obligations of the Company pursuant to such secured promissory notes
will be secured by all of the Company's assets, inventory, accounts, equipment,
chattel paper, patents, trademarks, copyrights, contract rights, documents,
instruments, deposit accounts, investment property (including equity interests
of subsidiaries), general intangibles and other personal property and fixtures,
other than equipment and its subsidiaries and first mortgage liens on all of the
real property of the Company and its subsidiaries, including any after-acquired
property during the term of the Revolving Line of Credit.
Certain Relationships with AGB Acquisition Fund
Ault Glazer Bodnar & Company Investment Management, LLC ("AGB & Company
IM") is the managing member of AGB Acquisition Fund. The managing member of AGB
& Company IM is Ault Glazer Bodnar & Company, Inc. ("AGB & Company"). The
Company's Chief Financial Officer, William B. Horne, is also Chief Financial
Officer of AGB & Company. The Company's management believes the Revolving Line
of Credit is on terms at least as favorable as could be obtained from an
unrelated third party.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
See Item 1.01 above.
Item 3.02 Unregistered Sales of Equity Securities.
See Item 1.01 above.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
Number Description
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4.1 Revolving Line of Credit Agreement dated and effective as of
March 23, 2006 by and between Ault Glazer Bodnar Acquisition Fund
LLC and Digicorp.
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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: March 28, 2006 By: /s/ Jay Rifkin
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Name: Jay Rifkin
Title: Chief Executive Officer
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