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) September 1, 2000
MEDICORE, INC.
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(Exact name of registrant as specified in its charter)
Florida 0-6906 59-0941551
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2337 West 76th Street, Hialeah, Florida 33016
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 558-4000
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The statements contained in this Current Report on Form 8-K that are not
historical are forward-looking statements within the meaning of Section 21E
of the Securities Exchange Act of 1934. The Private Securities Litigation
Reform Act of 1995 contains certain safe harbors regarding forward-looking
statements. Such forward-looking statements are subject to substantial risks
and uncertainties that could cause actual results to materially differ from
those expressed in the statements, including, but not limited to those
relating to the completion of the sale of control of Techdyne, Inc. by the
Company to Simclar International, Ltd., any benefits expected from the change
in control, the expected use of proceeds by the Company from such sale, and
other issues discussed periodically in our filings. Many of the circumstances
are beyond our control. Accordingly, you are cautioned not to place too much
reliance on such forward-looking statements which speak only as of the date
made and which the Company undertakes no obligations to revise to reflect
events after the date made.
Item 5. Other Events
The Company entered into a ten year lease with its public subsidiary,
Techdyne, Inc., effective September 1, 2000, leasing to Techdyne approximately
16,000 square feet of space at 2230 West 77th Street, and approximately 12,000
square feet of space at 2200 West 77th Street, Hialeah, Florida. The rental
is $150,000 per annum, and is a net-net lease, with Techdyne responsible for
real estate taxes, assessments, all servicing and utility charges, maintenance,
insurance, including liability and property damage. Techdyne utilizes the
space for operation of light manufacturing for its electronic and electro-
mechanical products, as well as for offices and warehousing.
On December 12, 2000, the Company entered into a Letter of Intent with
Simclar International, Ltd. to sell approximately 3,345,000 shares of its stock
ownership of Techdyne, Inc., representing a 51% interest of Techdyne, to
Simclar at $3.00 per share for approximately $10,035,000. The Company
presently owns 71.3% of Techdyne, and assuming the sale of control is
completed, the Company will own approximately 20% of Techdyne.
Simclar is a private Scottish company engaged in contract manufacturing
with a complete CEM facility, including PCB assembly, sheet metal fabrication,
cable assembly and plastic injection molding through to complete product build.
Its customers are involved in telecomms, including base stations, medical
equipment, rapid transit market, computer peripherals and datacomms. Simclar
has 250,000 square feet of manufacturing capacity and employs 900 people.
Simclar is seeking opportunities to develop and grow, with Techdyne, the
contract manufacturing operations in the US market.
Techdyne, with four domestic and one European location and an affiliate
in China, is an international contract manufacturer of electronic and electro-
mechanical products designed for OEMs and distributors in the data processing,
telecommunications, instrumentation and food preparation equipment industries.
The sale of control as provided for in the Letter of Intent also entails
a change in management of Techdyne, which includes the resignation of a
majority of Techdyne's board of directors, except for Thomas K. Langbein,
Chairman of the Board, CEO and President of the Company, who will continue as
a director of Techdyne until Medicore no longer owns a 10% interest in
Techdyne, and Barry Pardon, President and director of Techdyne, who will
continue in those positions.
Techdyne will be filing a registration statement to cover the resale of
the Company's remaining shares not sold to Simclar, as well as an additional
310,000 shares of common stock held by certain officers and directors of the
Company and Techdyne, which were acquired upon exercise of options. The
Letter of Intent provides that all parties will cooperate with each other to
keep that registration effective,
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and in the filing of all necessary reports under the federal and state
securities laws relating to the sale of control. In the event that
Techdyne fails to keep the registration effective, or within two years from
the closing of the proposed transaction Techdyne's common stock ceases to be
listed on Nasdaq SmallCap Market or is otherwise not quoted on a national
securities exchange, the Company will have the right to sell any of the
remaining shares it holds to Simclar in an amount per share equal to the
greater of $3.00 or the average closing bid price of the common stock in
such market for 20 consecutive trading days ending on the close of business
on the trading day immediately prior to such occurrence.
The Letter of Intent also provides for an agreement for a right of first
refusal to Simclar if the Company receives a bona fide third party offer with
regard to any of its remaining shares, other than an offer from a bona fide
broker-dealer or market maker for less than 50,000 of the remaining shares.
The Letter of Intent provides for certain conditions to the closing,
including among others, due diligence by each party, agreement to basic
representations and warranties, negotiating customary conditions to the
closing, including that Techdyne's stock has to remain listed on Nasdaq
SmallCap Market, customary covenants which include that Simclar will not
finance the purchase price through any pre-arranged sale or encumbrance of
Techdyne's assets, and the business of Techdyne and its subsidiaries being
maintained and conducted in the ordinary course, with certain restrictions
upon extraordinary actions by Techdyne without the prior written consent of
Simclar.
Other than the provisions relating to certain expenses upon termination,
confidentiality and the exclusivity period (the earlier of the closing or
February 17, 2001, as may be extended by mutual agreement), the Letter of
Intent is not intended to bind either the Company or Simclar, and there will
be no legal commitments until a definitive purchase agreement for the sale of
the control position of Techdyne by the Company to Simclar is negotiated and
executed.
Management of the Company, Simclar and Techdyne believe that the change
in control will benefit all participants, and will enable Simclar and
Techdyne to expand their customer bases, broaden their product lines, enter
new geographic areas, enhance manufacturing capabilities, provide greater
efficiencies in equipment, supplies, labor and costs, and enable each to
better serve their combined existing customer base with enhanced product
choices.
The sale of control and related changes in management of Techdyne are
subject to executing a formal purchase agreement, satisfaction of due
diligence by all parties, and the fulfillment of a variety of conditions and
contingencies, including among others receipt of all necessary approvals and
consents, which will include approval of the Company's shareholders.
In addition to the contract manufacturing operations of Techdyne, the
Company is also engaged in the operation of kidney dialysis centers through
its public subsidiary, Dialysis Corporation of America. The Company owns 8%
of Linux Global Partners, which company specializes in Linux software
investments. The Company has also been engaged for the last 18 years in the
distribution of medical products. Techdyne's contract manufacturing
operations at September 30, 2000 represented approximately 69% of Medicore's
assets and 85% of its sales.
Assuming completion of the sale of control of Techdyne to Simclar, the
Company anticipates using the funds to expand its medical supply and dialysis
operations, and to repurchase approximately 1,000,000 shares of its out-
standing common stock at current market prices.
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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
(10) Material Contracts
(i) Lease between the Company and Techdyne, Inc. dated August
29, 2000.
(99) Additional Exhibits
(i) Press release re: Letter of Intent for sale of control of
Techdyne, Inc. by the Company, dated December 14, 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.
MEDICORE, INC.
/s/ Thomas K. Langbein
By----------------------------------
THOMAS K. LANGBEIN, Chairman
of the Board, CEO and President
Dated: December 19, 2000
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EXHIBIT INDEX
(10) Material Contracts
(i) Lease between the Company and Techdyne, Inc. dated August 29, 2000.
(99) Additional Exhibits
(i) Press release re: Letter of Intent for the sale of control of
Techdyne, Inc. by the Company dated December 14, 2000.
