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) July 12, 2000
DIALYSIS CORPORATION OF AMERICA
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(Exact name of registrant as specified in its charter)
Florida 0-8527 59-1757642
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
27 Miller Avenue, Lemoyne, Pennsylvania 17043
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (717) 730-6164
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Item 5. Other Events
On July 12, 2000, the Company made a $140,000 loan at 10% per annum
interest to MainStreet IPO.com Inc. ("MainStreet") for working capital
purposes. The term of the loan is the earlier of July 11, 2001, or the
failure of the Company's public shareholders to have approved the proposed
merger with MainStreet on or prior to November 1, 2000. The loan is
convertible into common stock of MainStreet at $1.23 per share, subject to
certain adjustments, and is secured by 300,000 shares of Linux Global
Partners, Inc. ("Linux") owned by MainStreet, which is being held in escrow.
Any indebtedness of MainStreet to any of its affiliates, currently there is
a $1,300,000 loan due to Joseph M. Salvani, Chairman of the Board, Chief
Executive Officer and President of MainStreet, is subordinated to the loan
of the Company.
As previously reported, the Company had entered into a merger agreement
with MainStreet in October, 1999, pursuant to which the Company would become
a wholly-owned subsidiary of MainStreet, with shareholders of the Company
receiving MainStreet common stock. Immediately prior to the merger, the
Company will be selling all of its assets and operations to and having its
liabilities assumed by a subsidiary of its parent, Medicore, Inc. ("Medicore"
or the "Parent").
The Company has incorporated into MainStreet's registration statement
filed with the SEC in February, 2000, its proxy statement for submission to
the public shareholders of the Company to approve the proposed merger with
MainStreet and sale of the dialysis operations to Medicore. However, there
may not be any solicitation of shareholders until the SEC declares the
MainStreet registration effective. The staff of the SEC had provided
substantial comments to that registration statement, and advised MainStreet
that its initial advertising and proposed operations required MainStreet to
have been registered as a broker-dealer. The delay in amending the regis-
tration and proceeding with the proposed transactions is due to MainStreet's
ongoing dialogue with the staff to insure its proposed operations are in
compliance with federal securities laws. There is no assurance that
MainStreet's proposed business plans will satisfy the SEC staff's concerns.
There can also be no assurance that the proposed sale of the Company's
operations to its Parent and the merger with MainStreet will be presented to
the Company's shareholders, since the proxy statement is part of MainStreet's
registration statement, which has to be amended and re-filed with adequate
responses to the SEC's comments, and which registration statement is subject
to being declared effective by the SEC.
There are a variety of related party transactions. Thomas K. Langbein,
Chairman of the Board and Chief Executive Officer of the Company and
Medicore, of which Parent company he is also the President, is the sole
owner and principal of Todd & Company, Inc. ("Todd"), a small broker-dealer
registered with the SEC, which had an agreement with MainStreet pursuant to
which it received slightly less than 10% of the equity in MainStreet. Mr.
Langbein, together with the other officers and directors of the Company and
Medicore, have received registration rights with respect to their MainStreet
shares that they presently own, which is only Mr. Langbein, as well as shares
they are to receive pursuant to the proposed merger transaction if approved
by shareholders of the Company. Certain officers and directors of the
Company and Medicore have options to acquire the Company's common stock,
which will be exchangeable into MainStreet common stock, at prices below
current market prices, and may exercise certain substantial portions of
those options with long-term promissory notes consistent with terms of the
options or options plans, which in past experience the Company and its
Parent have forgiven.
In the first quarter of this year, Medicore acquired an 8% interest in
Linux, and loaned that company $2,000,000 at 10% annual interest. Medicore
borrowed the funds from the Company for its loan to Linux. Mr. Langbein
became a director of Linux in January, 2000.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits
(99) Additional Exhibits
(i) Loan and Security Agreement between the Company and
MainStreet IPO.com Inc. dated July 12, 2000.
(ii) Secured Convertible Promissory Note for $140,000 issued to
the Company by MainStreet IPO.com Inc. dated July 12, 2000.
(iii) Subordination Agreement among the Company, MainStreet
IPO.com Inc., and Joseph M. Salvani dated July 12, 2000.
(iv) Escrow Agreement between and among the Company, MainStreet
IPO.com Inc. and Lawrence E. Jaffe, Esq. dated July 12,
2000.
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.
DIALYSIS CORPORATION OF AMERICA
/s/ Thomas K. Langbein
By-----------------------------------
THOMAS K. LANGBEIN, Chairman
of the Board and Chief Executive
Officer
Dated: July 19, 2000
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EXHIBIT INDEX
(99) Additional Exhibits
(i) Loan and Security Agreement between the Company and MainStreet
IPO.com Inc. dated July 12, 2000.
(ii) Secured Convertible Promissory Note for $140,000 issued to the
Company by MainStreet IPO.com Inc. dated July 12, 2000.
(iii) Subordination Agreement among the Company, MainStreet IPO.com Inc.,
and Joseph M. Salvani dated July 12, 2000.
(iv) Escrow Agreement between and among the Company, MainStreet IPO.com
Inc. and Lawrence E. Jaffe, Esq. dated July 12, 2000.
