Document:

EXHIBIT
        10.1

       

      
        Contact:

        David
          Zigdon

        CFO

        (972)
          3-6455004

        davidz@radcom.com

      

      

      FOR
        IMMEDIATE RELEASE

      

      RADCOM
        REPORTS FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2005

      -
        Continued
        Strong Momentum: Sales Reach $5.9M, 3rd Straight Quarter

      With
        Above-40% YOY Growth -

      --
        3rd
        Consecutive Profitable Quarter with $0.03 EPS -

      

      TEL-AVIV,
        Israel—October 31, 2005-- RADCOM Ltd. (RADCOM) (NASDAQ: RDCM) today announced
        unaudited financial results for the third quarter and nine months ended
        September 30, 2005. 

      

      Financial
        Results

       

      Revenues
        for the third quarter of 2005 were $5,908,000, an increase of 42% compared
        to
        $4,155,000 in the third quarter of 2004. Net income for the third quarter
        of
        2005 was $492,000, or $0.03 per ordinary share (basic and diluted), compared
        to
        a net loss of $(184,000), or $(0.01) per ordinary share (basic and diluted),
        for
        the third quarter of 2004. 

      

      Revenues
        for the nine months ended September 30, 2005 were $15,762,000, an increase
        of
        44% compared to $10,977,000 for the first nine months of 2004. Net income
        for
        the first nine months of 2005 was $729,000, or $0.05 per ordinary share (basic
        and diluted), compared to a net loss of $(1,435,000), or $(0.11) per ordinary
        share (basic and diluted), for the first nine months of 2004. 

      

      Comments
        of Management

       

      Commenting
        on the results, Arnon Toussia-Cohen, President and CEO of RADCOM, said, “The
        momentum of the past two years intensified during the third quarter, delivering
        42% revenue growth year-over-year and an 8% net margin, while boosting our
        cash
        and securities above $10 million. The pace of our growth has increased during
        the past three quarters, driven by our success in penetrating major 3G cellular
        and VoIP service providers worldwide and our rising strength in the U.S.,
        which
        contributed approximately half of our sales for the third quarter. As such,
        we
        are now positioned as a ‘player’ in the high-potential 3G and VoIP monitoring
        market segments.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “To
        strengthen our market position, we have recently combined our two monitoring
        products into a single platform named Omni-Q. This unique product is designed
        to
        provide comprehensive monitoring, troubleshooting and trend analysis to both
        wireline and wireless providers. In parallel, to meet the anticipated needs
        of
        the market, we continue developing our triple-play and next-generation
        convergence capabilities.”

      

      The
        following statement is forward-looking in nature, and actual results may
        differ
        materially. See below under “Risks Regarding Forward Looking
        Statements”.

      

      Revenues
        for the fourth quarter of 2005 are expected to be between $6.3 million and
        $6.8
        million. 

       

      A
        teleconference to discuss the results will be held today, October 31st, at
        9:00
        a.m. Eastern Time. To participate, please call 1-800-230-1059 from the U.S.,
        or
        +1-612-332-0932 from international locations, approximately five minutes
        before
        the call is scheduled to begin. A replay of the call will be available from
        10:20 AM Eastern Time on October 31st until midnight November 7th. To access
        the
        replay, please call 1-800-475-6701 from the U.S., or +1-320-365-3844 from
        international locations, and use the access code 798472.

       

      The
        conference call can also be accessed online at www.radcom.com.

      

      ###

      

      RADCOM
        develops, manufactures, markets and supports innovative network test and
        service
        monitoring solutions for communications service providers and equipment vendors.
        The company specializes in Next Generation Cellular as well as Voice, Data
        and
        Video over IP networks. Its solutions are used in the development and
        installation of network equipment and in the maintenance of operational
        networks. The company’s products facilitate fault management, network service
        performance monitoring and analysis, troubleshooting and pre-mediation. For
        more
        information, please visit www.RADCOM.com.

      

      Risks
        Regarding Forward Looking Statements

      Certain
        statements made herein that use the words ``estimate,'' ``project,'' ``intend,''
        ``expect”, ''believe`` and similar expressions are intended to identify
        forward-looking statements within the meaning of the Private Securities
        Litigation Reform Act of 1995. These forward-looking statements involve known
        and unknown risks and uncertainties which could cause the actual results,
        performance or achievements of the Company to be materially different from
        those
        which may be expressed or implied by such statements, including, among others,
        changes in general economic and business conditions and specifically, decline
        in
        demand to the Company's products, inability to timely develop and introduce
        new
        technologies, products and applications and loss of market share and pressure
        on
        prices resulting from competition. For additional information regarding these
        and other risks and uncertainties associated with the Company's business,
        reference is made to the Company's reports filed from time to time with the
        Securities and Exchange Commission. The Company does not undertake to update
        forward-looking statements. 

       

      

      (Financial
        tables follow)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      RADCOM
        Ltd.

      
        Consolidated
          Statements of Operations

        (1000's
          of U.S. dollars, except per share data)

      

      
         

        
          	 	 	
                  Three
                    months ended 

                  September
                    30,

                	 	
                  Nine
                    months ended 

                  September
                    30,

                	 
	 	 	
                  2005

                	 	
                  2004

                	 	
                  2005

                	 	
                  2004

                	 
	 	 	
                  (unaudited)

                	 	
                  (unaudited)

                	 	
                  (unaudited)

                	 	
                  (unaudited)

                	 
	
                  Sales
                    

                	 	 	
                  5,908
                    

                	 	 	
                  4,155
                    

                	 	 	
                  15,762

                	 	 	
                  10,977
                    

                	 
	
                  Cost
                    of sales

                	 	 	
                  2,009
                    

                	 	 	
                  1,294
                    

                	 	 	
                  5,201

                	 	 	
                  3,515

                	 
	
                  Gross
                    profit 

                	 	 	
                  3,899

                	 	 	
                  2,861
                    

                	 	 	
                  10,561

                	 	 	
                  7,462

                	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Research
                    and development, gross

                	 	 	
                  1,459
                    

                	 	 	
                  1,355
                    

                	 	 	
                  4,290
                    

                	 	 	
                  3,856
                    

                	 
	
                  Less
                    - royalty-bearing participation

                	 	 	
                  450
                    

                	 	 	
                  400
                    

                	 	 	
                  1,334

                	 	 	
                  1,302

                	 
	
                  Research
                    and development, net

                	 	 	
                  1,009

                	 	 	
                  955
                    

                	 	 	
                  2,956
                    

                	 	 	
                  2,554

                	 
	
                  Sales
                    and marketing 

                	 	 	
                  2,064
                    

                	 	 	
                  1,693
                    

                	 	 	
                  5,800
                    

                	 	 	
                  5,099
                    

                	 
	
                  General
                    and administrative

                	 	 	
                  403
                    

                	 	 	
                  421
                    

                	 	 	
                  1,236

                	 	 	
                  1,292

                	 
	
                  Total
                    operating expenses

                	 	 	
                  3,476
                    

                	 	 	
                  3,069
                    

                	 	 	
                  9,992
                    

                	 	 	
                  8,945

                	 
	
                  Operating
                    income (loss)

                	 	 	
                  423

                	 	 	
                  (208

                	
                  )

                	 	
                  569

                	 	 	
                  (1,483

                	
                  )

                
	
                  Financing
                    income, net

                	 	 	
                  69
                    

                	 	 	
                  24
                    

                	 	 	
                  160

                	 	 	
                  48
                    

                	 
	
                  Net
                    income (loss)

                	 	 	
                  492

                	 	 	
                  (184

                	
                  )

                	 	
                  729

                	 	 	
                  (1,435

                	
                  )

                
	
                  Basic
                    net income (loss) per ordinary share

                	 	 	
                  0.03

                	 	 	
                  (0.01

                	
                  )

                	 	
                  0.05

                	 	 	
                  (0.11

                	
                  )

                
	
                  Diluted
                    net income (loss) per ordinary share

                	 	 	
                  0.03

                	 	 	
                  (0.01

                	
                  )

                	 	
                  0.05

                	 	 	
                  (0.11

                	
                  )

                
	
                  Weighted
                    average number of 

                  ordinary
                    shares used in 

                  computing
                    basic net income 

                  (loss)
                    per ordinary share

                	 	 	
                  14,822,308

                	 	 	
                  14,400,680

                	 	 	
                  14,634,873
                    

                	 	 	
                  13,130,849
                    

                	 
	
                  Weighted
                    average number of 

                  ordinary
                    shares used in 

                  computing
                    diluted net income 

                  (loss)
                    per ordinary share

                	 	 	
                  16,154,640

                	 	 	
                  14,400,680

                	 	 	
                  16,152,875

                	 	 	
                  13,130,849

                	 

        

      

      

      (Additional
        table to follow)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        RADCOM
          Ltd.

        Consolidated
          Balance Sheets

        (1000's
          of U.S. dollars) 

      
        	 	 	
                As
                  of

              	 	
                As
                  of

              	 
	 	 	
                September
                  30, 2005

              	 	
                December
                  31, 2004

              	 
	
                Current
                  Assets

              	 	
                (unaudited)

              	 	
                (unaudited)

              	 
	
                Cash
                  and cash equivalents 

              	 	 	
                9,150

              	 	 	
                6,558

              	 
	
                Marketable
                  securities

              	 	 	
                1,000

              	 	 	
                1,992

              	 
	
                Trade
                  receivables, net 

              	 	 	
                5,893
                  

              	 	 	
                5,341

              	 
	
                Inventories
                  

              	 	 	
                2,239
                  

              	 	 	
                2,400
                  

              	 
	
                Other
                  current assets 

              	 	 	
                538
                  

              	 	 	
                880
                  

              	 
	
                Total
                  Current Assets

              	 	 	
                18,820
                  

              	 	 	
                17,171
                  

              	 
	 	 	 	 	 	 	 	 
	
                Assets
                  held for severance benefits

              	 	 	
                1,854

              	 	 	
                1,784

              	 
	
                 

              	 	 	 	 	 	 	 
	
                Property
                  and equipment, net

              	 	 	
                1,146

              	 	 	
                1,174

              	 
	
                 

              	 	 	 	 	 	 	 
	
                Total
                  Assets

              	 	 	
                21,820

              	 	 	
                20,129

              	 
	 	 	 	

              	 	 	

              	 
	
                Liabilities
                  and Shareholders' Equity

              	 	 	 	 	 	 	 
	
                Current
                  Liabilities 

              	 	 	 	 	 	 	 
	
                Trade
                  payables 

              	 	 	
                1,795

              	 	 	
                2,027

              	 
	
                Current
                  deferred revenue

              	 	 	
                1,247

              	 	 	
                889

              	 
	
                Other
                  payables and accrued expenses 

              	 	 	
                3,690

              	 	 	
                4,204

              	 
	
                Total
                  Current Liabilities

              	 	 	
                6,732

              	 	 	
                7,120

              	 
	 	 	 	 	 	 	 	 
	
                Long-Term
                  Liabilities 

              	 	 	 	 	 	 	 
	
                Long-term
                  deferred revenue

              	 	 	
                1,217
                  

              	 	 	
                583
                  

              	 
	
                Liability
                  for employees’ severance pay benefits

              	 	 	
                2,427

              	 	 	
                2,402

              	 
	
                Total
                  Long-Term Liabilities

              	 	 	
                3,644

              	 	 	
                2,985

              	 
	 	 	 	 	 	 	 	 
	
                Total
                  Liabilities

              	 	 	
                10,376

              	 	 	
                10,105

              	 
	 	 	 	 	 	 	 	 
	
                Shareholders'
                  Equity 

              	 	 	 	 	 	 	 
	
                Share
                  capital 

              	 	 	
                105

              	 	 	
                101

              	 
	
                Additional
                  paid-in capital

              	 	 	
                44,383

              	 	 	
                43,698

              	 
	
                Accumulated
                  other comprehensive loss

              	 	 	
                (11

              	
                )

              	 	
                (13

              	
                )

              
	
                Accumulated
                  deficit

              	 	 	
                (33,033

              	
                )

              	 	
                (33,762

              	
                )

              
	
                Total
                  Shareholders' Equity

              	 	 	
                11,444
                  

              	 	 	
                10,024

              	 
	 	 	 	 	 	 	 	 
	
                Total
                  Liabilities and Shareholders' Equity

              	 	 	
                21,820

              	 	 	
                20,129October 17, 2005

VIA FEDERAL EXPRESS
AND FACSIMILE (310) 752-1486
----------------------------
Digicorp
100 Wilshire Boulevard, Suite 1750
Santa Monica, CA 90401
Attn: William B. Horne, CEO

      Re:   Exchange of Warrants

Dear Will:

      This letter documents the agreement among Bodnar Capital  Management,  LLC
("Bodnar  Capital")  and  Digicorp to cancel  certain  warrants  owned by Bodnar
Capital in exchange for the issuance by Digicorp of a  replacement  warrant,  as
further described below. Pursuant to a Subscription Agreement dated May 18, 2005
between  Digicorp and Bodnar  Capital  (the  "Subscription  Agreement"),  Bodnar
Capital  purchased  2,941,176 shares of Digicorp's common stock ("Common Stock")
and warrants to purchase an  aggregate of 3,000,000  shares of Common Stock with
exercise prices ranging from $0.25 to $1.50 per share (the "May Warrants").

      Bodnar Capital and Digicorp hereby agree to cancel all of the May Warrants
in exchange  for the  issuance  by  Digicorp  to Bodnar  Capital of a warrant to
purchase  500,000  shares of Common  Stock with an  exercise  price of $0.01 per
share  exercisable  for a period of five years (the "October  Warrant").  Bodnar
Capital is  delivering  herewith the original May Warrants for  cancellation  by
Digicorp. Upon receipt of the original May Warrants,  Digicorp shall immediately
issue and deliver the October Warrant to Bodnar Capital.

      Bodnar Capital and Digicorp hereby  represent and warrant that each of the
representations  and warranties of each respective party contained in Articles I
and II of the  Subscription  Agreement  are true  and  correct  in all  material
respects on and as of the date of this letter.

      If you agree with the foregoing,  please indicate your approval of same by
signing this letter in the space provided below.

                                                    Very truly yours,

                                                    /s/ Steven J. Bodnar
                                                    ----------------------------
                                                    Steven J. Bodnar
                                                    Managing Member

ACCEPTED AND AGREED TO:

Digicorp

/s/ William B. Horne      (10/27/05)
------------------------------------
William B. Horne
Chief Executive Officer

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