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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):
FEBRUARY 8, 1999
MONARCH DENTAL CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 0-22835 51-0363560
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
4201 SPRING VALLEY ROAD, SUITE 320, DALLAS, TEXAS 75244
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
972-702-7446
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ITEM 5. OTHER EVENTS.
On February 8, 1999, Monarch Dental Corporation (the "Company") was
served with a Notice and Demand for Arbitration on behalf of four limited
partnerships who were among the principal stockholders of Valley Forge Dental
Associates, Inc. ("Valley Forge") in the merger which closed on September 10,
1998, all of which are associated with Foster Management Company of Valley
Forge, Pennsylvania (collectively, the "Former Principal Stockholders"). In the
Notice and Demand for Arbitration, the Former Principal Stockholders assert
claims based on alleged misrepresentations and/or non- disclosures by Monarch in
connection with the Valley Forge transaction and seek damages in an amount not
less than $8 million. The Company believes that these claims are without merit
and intends to defend them vigorously, including seeking an award of its legal
fees, costs and expenses. The Company believes that the defense of the claims
could involve significant litigation-related expenses but that it will not have
a material adverse effect on its financial condition or results of operations;
however, there can be no assurance that this will be the case.
The Nasdaq Stock Market, Inc. ("NASDAQ") has advised the Company that
the Company will not remain eligible for continued listing on the Nasdaq
National Market system ("NMS") unless its common stock demonstrates compliance
with NASDAQ's $5 minimum bid price during the period ending May 5, 1999. Should
the Company fail to satisfy this requirement, the Company intends to request a
hearing as permitted by applicable NASDAQ procedures. In the event that NASDAQ
denies continued NMS listing following such a hearing, the Company expects that
it would seek listing on The Nasdaq SmallCap Market. The Company may also
consider actions to preserve NMS listing, including a reverse stock split,
although no assurance can be given that such actions will be effective or that
NMS listing will not cease during or after the second quarter.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 19, 1999 MONARCH DENTAL CORPORATION
By: /S/ GARY W. CAGE
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By: Gary W. Cage
Title: Chief Executive Officer
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