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): April 2, 1999
DIVERSICON HOLDINGS CORP.
(Exact name of registrant as specified in its charter)
Delaware 0-27542 11-3157259
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
290 Wild Avenue, Staten Island, New York 10314
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 718-761-6100
NA
(Former name or former address, if changed since last report.)
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Item 1. Changes in Control of Registrant.
On April 2, 1999, Diversicon Holdings Corp. (the Company") entered into a
Common Stock Subscription Agreement with Drel Investments Limited, a corporation
organized under the laws of the Bahamas ("Drel") pursuant to which Drel acquired
3,700,000 shares of the Company's Common Stock, par value $.001 (the "Shares")
for a purchase price of $1,850,000. This transaction (the "Transaction")
resulted in a change in control of the Company.
The purchase price for the Shares was paid by delivery of a cash payment of
$3,700 and a promissory note of Drel in the principal amount of $1,846,300 (the
"Note"), which is secured by a pledge of the acquired Shares pursuant to a
Pledge and Escrow Agreement. The Note bears interest at the rate of 7% per annum
and is payable in full on or before July 14, 1999.
Drel has informed the Company that it is presently negotiating to borrow
funds from private and public lending institutions located outside of the United
States and part of these proceeds shall be used to pay the Note. Drel has
informed the Company that no formal agreement has been reached with any such
proposed lenders.
Drel is owned by two foreign corporations, Capital Services Limited ("CSL")
and Argosy Industries Limited ("Argosy"), each of which owns 50% of the issued
and outstanding capital stock of Drel. CSL is controlled by Mr. Daniel Catalfumo
and Mr. Richard Rosso each of whom (through affiliated entities) has a 50%
beneficial interest in CSL. Argosy is controlled by Mr. Lucien Vergier and Mr.
Etienne Vergier, each of whom has a 50% beneficial interest in Argosy. Lucien
Vergier has become a director of the Company, effective as of April 1, 1999.
As a result of the Transaction, Drel owns 48% of the issued and outstanding
Shares of the Company. In addition, Mr. Catalfumo and Mr. Rosso may each be
deemed to be the beneficial owner of up to 5,948,000 Shares of the Company,
constituting approximately 75.2% of the Company's issued and outstanding Common
Stock. Such Shares include (i) the 3,700,000 Shares owned of record by Drel
(included due to the relationship of said individuals to Drel described above,
and the voting arrangement described below), (ii) 2,038,000 Shares owned of
record by BBS Holdings, LLC ("BBS"), a Delaware limited liability company
(included due to Mr. Catalfumo and Mr. Rosso each being a Manager of BBS, each
having an indirect 10% membership interest in BBS, and each being a party
(through affiliated entities) to an Operating Agreement that provides that BBS
will vote all of its Shares of the Company in favor of Mr. Catalfumo and Mr.
Rosso as directors of the Company), and (iii) 210,000 Shares owned directly by
each of Mr. Catalfumo and Mr. Rosso. However, Mr. Catalfumo and Mr. Rosso both
disclaim beneficial ownership of (i) 2,775,000 (75%) of the Shares owned by Drel
and (ii) 1,834,200 (90%) of the Shares owned by BBS, and this report shall not
be deemed an admission that either of said individuals is the beneficial owner
of such Shares for purposes of Section 16 or for any other purpose.
As a result of the Transaction, Lucien Vergier and Etienne Vergier may each
be deemed to be the beneficial owner of up to 3,700,000 Shares of the Company,
constituting approximately 48.0% of the Company's issued and outstanding Common
Stock. Such Shares are comprised of the 3,700,000 Shares owned of record by Drel
(included due to the relationship of said individuals to Drel described above,
and the voting arrangement described below). However, Lucien Vergier and Etienne
Vergier both disclaim beneficial ownership of 2,775,000 (75%) of the Shares
owned by Drel, and this report shall not be deemed an admission that either or
said individuals is the beneficial owner of such Shares for purposes of Section
16 or for any other purpose.
Prior to the Transaction, the largest shareholder of the Company was BBS,
which owns 2,038,000 Shares of the Company. Messrs. Catalfumo and Rosso each
beneficially own (indirectly) a ten (10%) percent membership interest in BBS and
are managers of BBS.
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Messrs. Catalfumo and Rosso, Mr. Lucien Vergier, and Mr. Etienne Vergier
are currently negotiating the terms of a Shareholders Agreement that will
include, among other things, provisions related to the transfer or voting of the
Shares of the Company owned by Drel. Pending the completion of such
negotiations, the parties have an oral arrangement pursuant to which they agree
that the Shares owned by Drel will be voted in favor of each of said parties as
a director of the Company and that the transfer of such Shares will require
unanimous consent of said parties.
Item 5. Other Events.
In March 1999, the Company, together with Daniel Catalfumo, Richard Rosso
and two entities affiliated with Messrs. Catalfumo or Rosso, commenced a law
suit in the Supreme Court of the State of New York against Curtis J. Bernhardt,
Anthony DiMatteo, LD Trust, and June Masaki (with PlayCo. Capital Corp. and BBS
Holdings, LLC having been named as nominal defendants). The action alleges,
among other things, that the defendants have (i) engaged in a fraudulent, and at
times criminal, scheme to wrest control of the Company and its plaintiffs
through acts of deceit, theft and other improper conduct, and (ii)
misappropriated corporate assets for their own personal use. The plaintiffs are
seeking money damages, reformation of the Stock Purchase Agreement pursuant to
which BBS acquired a controlling interest in the Company, and injunctive relief.
Mr. DiMatteo is currently a director of the Company. He served as an officer of
the Company until March 31, 1999. Messrs. Bernhardt and DiMatteo are managers of
BBS, a principal stockholder of the Company, and collectively own (directly or
indirectly) an eighty (80%) membership interest in BBS. See "Item 1 - Changes in
Control of Registrant" above.
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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 thereunto duly authorized.
DIVERSICON HOLDINGS CORP.
By: /s/ Daniel Catalfumo
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Daniel Catalfumo
President
Dated: April 16, 1999
