Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On October 20, 2009, ZST Digital Networks, Inc. (the "Company") entered into a Stock Option Agreement with John Chen, M.D. (the "Agreement"), in connection with Mr. Chen's appointment as the Company's Chief Financial Officer effective on October 20, 2009 (the "Effective Date"). Pursuant to the Agreement, Dr. Chen was granted options to purchase 25,000 shares of the Company's common stock at an exercise price of $8.00 per share (the "Options"). The Options will be immediately exercisable but, to the extent they are exercised, will be subject to a repurchase right of the Company which will lapse as follows: 50% of the Options and shares will vest six (6) months after the Effective Date and the remaining 50% will vest twelve (12) months after the Effective Date.

The Options will expire five (5) years from the grant date, provided, however, that Dr. Chen remains continuously employed by the Company during the five-year period. If Dr. Chen is terminated without Cause (as defined in the Agreement) or Dr. Chen terminates his employment for Good Reason (as defined in the Agreement), then all Options or shares, as applicable, that are not vested will immediately vest on the date of termination. All Options that are vested at the time of termination of employment must be exercised within thirty (30) days of termination, provided, however, that the Options may be immediately cancelled by the Company if Dr. Chen terminates his employment upon providing thirty (30) days written notice to the Company or if Dr. Chen's employment is terminated for Cause.

On October 20, 2009, the Company issued a press release announcing the grant of the Options to Dr. Chen. A copy of the press release is attached hereto as Exhibit 99.1 and the information therein is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On October 20, 2009, the Company issued a press release announcing the pricing of its public offering of 3,125,000 shares of the Company's common stock. A copy of the press release is attached hereto as Exhibit 99.2 and the information therein is incorporated herein by reference.

The information reported under Item 7.01 in this Current Report on Form 8-K, including Exhibit 99.2 attached hereto, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01 Financial Statements and Exhibits.

Exhibit Number Description 10.1 Stock Option Agreement dated October 20, 2009 by and between the Company and John Chen. 99.1 Press Release dated October 20, 2009. 99.2 Press Release dated October 20, 2009.

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