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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-K/A
                                (Amendment No. 2)


(Mark One)
[X]        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE  ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended DECEMBER 31, 2000

                                       OR

[ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from____________ to __________
Commission file number 0-6906

                                 MEDICORE, INC.
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

           FLORIDA                                          59-0941551
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

  2337 WEST 76TH STREET, HIALEAH, FLORIDA                           33016
 (Address of principal executive offices)                         (Zip Code)

        Registrant's telephone number, including area code (305) 558-4000

           Securities registered pursuant to Section 12(b) of the Act:
                                      None

           Securities registered pursuant to Section 12(g) of the Act:

                               TITLE OF EACH CLASS

                          Common Stock, $.01 par value

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No____

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]

         The aggregate market value of the voting stock held by non-affiliates
of the registrant based upon the closing price of the common stock on March 23,
2001 was approximately $3,408,150.

         As of March 21, 2001 the company had outstanding 5,710,540 shares of
common stock.
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<PAGE>
                       DOCUMENTS INCORPORATED BY REFERENCE

         Registrant's Annual Reports, Forms 10-K, for the years ended December
31, 1994, 1995, 1997, and 1998 Part IV, Exhibits.

         Annual Reports for Registrant's Subsidiary, Techdyne, Inc., Forms 10-K
for the years ended December 31, 1991, 1995 and 1997, Part IV, Exhibits.

         Registration Statement of Registrant's Subsidiary, Techdyne, Inc., Form
SB-2, effective September 13, 1995, Registration No. 33-94998-A, Part II, Item
27, Exhibits.

         Registration Statement of Registrant's Subsidiary, Techdyne, Inc., Form
S-3, Effective December 11, 1996, Registration No. 333-15371, Part II, Item 16,
Exhibits.

         Annual Report for Registrant's Subsidiary Dialysis Corporation of
America, Form 10-K for the years ended December 31, 1996, 1997 and 1998, Part
IV, Exhibits.

         Registration Statement of Registrant's Subsidiary, Dialysis Corporation
of America, Form SB-2, effective April 17, 1996, Registration No. 333-80877A,
Part II, Item 27, Exhibits.
<PAGE>
                                 MEDICORE, INC.

                       INDEX TO ANNUAL REPORT ON FORM 10-K
                          YEAR ENDED DECEMBER 31, 2000

                                                                           PAGE

                                     PART I

         Item 1.    Business..............................................   1

         Item 2.    Properties............................................  21

         Item 3.    Legal Proceedings.....................................  23

         Item 4.    Submission of Matters to a Vote

                    of Security Holders...................................  23

                                     PART II

         Item 5.    Market for the Registrant's Common Equity
                    and Related Stockholder Matters.......................  24

         Item 6.    Selected Financial Data...............................  24

         Item 7.    Management's Discussion and Analysis of
                    Financial Condition and Results of Operations.........  25

         Item 7A.   Quantitative and Qualitative
                    Disclosures About Market Risk.........................  33

         Item 8.    Financial Statements and Supplementary Data...........  34

         Item 9.    Changes in and Disagreements with Accountants
                    on Accounting and Financial Disclosure................  34

                                    PART III

         Item 10.   Directors and Executive Officers

                    of the Registrant.....................................  35

         Item 11.   Executive Compensation................................  37

         Item 12.   Security Ownership of Certain

                    Beneficial Owners and Management......................  46

         Item 13.  Certain Relationships and Related Transactions.........  49

                                     PART IV

         Item 14.   Exhibits, Financial Statement Schedules,
                    and Reports on Form 8-K...............................  54
<PAGE>
                                     PART I

             CAUTIONARY NOTICE REGARDING FORWARD-LOOKING INFORMATION

         The statements contained in this Annual Report on Form 10-K that are
not historical are forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
the 1934. The Private Securities Litigation Reform Act of 1995 contains certain
safe harbors regarding forward-looking statements. Certain of the
forward-looking statements include management's expectations, intentions and
beliefs with respect to the growth of our company, the nature of the electronics
industry in which our 71% owned public subsidiary, Techdyne, Inc., is involved
as a manufacturer, the nature of and future development of the dialysis industry
in which our 61% owned public subsidiary, Dialysis Corporation of America, is
engaged, our business strategies and plans for future operations, our needs for
capital expenditures, capital resources, liquidity and operating results, and
similar matters that are not historical facts. See Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations." Words
such as "anticipate," "estimate," "expects," "projects," "intends," "plans" and
"believes," and words and terms of similar import used in connection with any
discussions of future operating or financial performance identify
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 general
economic and business conditions, opportunities pursued or abandoned,
competition, changes in federal and state laws or regulations affecting the
company and our operations, and other factors discussed periodically in our
filings. Many of the foregoing factors are beyond our control. Among the factors
that could cause actual results to differ materially are the factors detailed in
the risks discussed in the "Risk Factors" section included in our Registration
Statement, Form S-3, as filed with the SEC (effective May 15, 1997) and the
Registration Statements of our subsidiaries, Techdyne's Registration Statements
as filed with the SEC, Form SB-2 (effective September 13, 1995) and Form S-3
(effective December 11, 1996), and Dialysis Corporation of America's
Registration Statements, Form SB-2, as filed with the SEC (effective on April
17, 1996), and Form S-3 (effective July 1, 1999). Accordingly, readers 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
obligation to revise to reflect events after the date made.

ITEM 1.  BUSINESS

GENERAL

         Medicore, Inc., incorporated in Florida in 1961, has four business
segments: (i) the medical product division which distributes medical supplies;
(ii) the international contract manufacturing of electronic and
electro-mechanical products, primarily for the data processing,
telecommunications, instrumentation and food preparation equipment industries,
accomplished through our 71.3% owned public subsidiary, Techdyne (Techdyne's
wholly-owned subsidiaries include Lytton Incorporated, Techdyne (Europe)
Limited, and Techdyne (Livingston) Limited); (iii) the operation of kidney
dialysis centers through our 61% owned public subsidiary, Dialysis Corporation
of America; and (iv) the investment in technology companies through our
approximately 10% interest in Linux Global Partners, a private holding company
which invests in developing Linux software companies, to which company we loaned
$2,200,000. See Note 6 and Note 14 to "Notes to Consolidated Financial
Statements."

         On December 11, 2000, we signed a letter of intent to sell a
controlling interest of Techdyne to Simclar International Limited.  The
negotiations continue toward a sale of our entire interest of Techdyne for
approximately $10,000,000 and a percentage of sales over a period of years.  The
proposed transaction is subject to reaching a final agreement and obtaining the
approval of our shareholders.  There is no assurance the proposed transaction
will be so approved or completed.

<PAGE>

         Our executive offices are located at 2337 West 76th Street, Hialeah,
Florida 33016 and at 777 Terrace Avenue, Hasbrouck Heights, New Jersey 07604.
Our telephone number in Florida is (305) 558-4000 and in New Jersey is (201)
288-8220.

         Medical Products


         We design and distribute our lancet line, used to draw blood for
testing, and hand sealer/strippers, used to strip residual blood from tubing,
which product also seals blood bags. We also sell medical supplies, primarily
disposables, both domestically and internationally, to hospitals, blood banks,
laboratories and retail pharmacies. Products distributed include syringes, exam
gloves, prepackaged swabs and bandages and glass tubing products for
laboratories. Our lancets are distributed under the names Producers of Quality
Medical Disposables(TM) and Lady Lite(TM) or under a private label if requested
by the customer. Medical devices are required by the FDA, as a condition of
marketing, to secure a 510(k) premarket notification clearance or a Premarket
Approval Application. A product will be cleared by the FDA under a 510(k) if it
is found to be substantially equivalent in terms of safety, effectiveness and
intended use to another legally marketed product. We received 510(k) clearance
for our lancet line in 1981, and for the sterile products, including the
syringes which we import, in 1999. Our medical products are subject to
continuing FDA oversight, including labeling, "good manufacturing practices," as
defined in FDA regulations, and adverse event reporting, none of which adverse
events have occurred to date. Although we hold three patents related to our
lancets (see "Patents and Trade Names" below), and obtained required FDA
approval relating to the production of lancets, we are no longer manufacturing
these products. As of April 1, 2001, we commenced purchasing lancets from
manufacturers in the Far East. Marketing of medical products is conducted by
independent manufacturer representatives and our employees.


         Electronic Manufacturing Industry


         Techdyne, Inc. is an international contract manufacturer of electronic
and electro-mechanical products, primarily manufactured to customer
specifications and designed for original equipment manufacturers and
distributors in the data processing, telecommunications, instrumentation and
food preparation equipment industries. Approximately 91% of Techdyne sales are
domestic, a substantial amount generated by Techdyne's domestic wholly-owned
subsidiary, Lytton Incorporated, and 9% are effected by Techdyne's wholly owned
subsidiary, Techdyne (Europe) Limited in the European markets and to a limited
extent in the Middle East. Custom-designed products primarily include complex
printed circuit boards, conventional and molded cables and wire harnesses, and
electro-mechanical assemblies. In addition, Techdyne provides original equipment
manufacturers with value-added, turnkey contract manufacturing services and
total systems assembly and integration.


         Original equipment manufacturers are looking more to contract
manufacturers, like Techdyne, to provide a broader scope of value-added
services, including manufacturing, engineering and test services. Another factor
which leads original equipment manufacturers to utilize contract manufacturers
is reduced time-to-market, accomplished by using a contract manufacturer's
established manufacturing expertise with its sophisticated, technically advanced
and automated manufacturing processes. This, coupled with reduced production
costs through economies of scale in materials procurement, improved inventory
management, access to our manufacturing technology, engineering, testing and
related expertise, motivates original equipment manufacturers to work with
electronic contract manufacturers like Techdyne.

         Techdyne's Business Strategy

         Techdyne's objective is to become a stronger competitive force in the
electronics manufacturing services industry. In response to industry trends,
particularly in view of constantly changing and improving technology and,
therefore, shorter product life cycles, Techdyne focuses on product development
and marketing. Techdyne seeks to develop strong, long-term alliances with
major-growth original equipment manufacturers of complex, market leading
products which requires providing high quality, cost-effective manufacturing
services marked by a high degree of customer responsiveness and flexibility.
Therefore, Techdyne's strategy is to focus on leading manufacturers of advanced
electronic products that generally require custom-designed, more complex

                                       2
<PAGE>

interconnect products and short lead-time manufacturing services and to target
other large contract manufacturers as potential customers.

         More emphasis is placed on value-added turnkey business for the
manufacture of complete finished assemblies. This is accomplished with extended
technology, continuous improvement of Techdyne's processes, and early
involvement in the design process using computer-aided design system.

         Products and Services


         Techdyne manufactures approximately 850 products, including complete
turnkey finished products, sub-assemblies, molded and non-molded cable
assemblies, wire harnesses, PCBs, injection molded and electronic assembly
products, for over 100 OEM customers.


                  Printed Circuit Boards


         PCB assemblies are electronic assemblies consisting of a basic printed
circuit laminate with electronic components including diodes, resistors,
capacitors and transistors, inserted and wave soldered. PCBs may be used either
internally within the customer's products or in peripheral devices. The PCBs
produced by Techdyne include pin-through-hole assemblies, low and medium volume
surface mount technology assemblies, and mixed technology PCBs, which include
multilayer PCBs.


         In pin-through-hole assembly production electronic components with pins
or leads are inserted through pre-drilled holes in a PCB and the pins are
soldered to the electrical surface of the PCB. In surface mount technology
production, electronic components are attached and soldered directly onto the
surface of a circuit board rather than inserted through holes. Surface mount
techdnology components are smaller so they can be spaced more closely together
and, unlike pin-through-hole components, surface mount technology components can
be placed on both sides of a PCB. This allows for product miniaturization, while
enhancing the electronic properties of the circuit. Surface mount technology
manufacturing requires substantial capital investment in expensive, automated
production equipment, which requires high usage. Techdyne is utilizing
computerized testing system in order to verify that all components have been
installed properly and meet certain functional standards, that the electrical
circuits have been properly completed, and that the PCB assembly will perform
its intended functions.


         Techdyne's subsidiary, Lytton, with six automated lines, is more
focused on PCB manufacturing, primarily for the food preparation equipment
industry. Techdyne also established a 5,500 square foot manufacturing facility
in Massachusetts in 1997. These expansions resulted in PCB manufacturing
amounting to approximately 56% and 55% of Techdyne's sales revenues in 2000 and
1999, respectively.


                  Cable and Harness Assemblies

         A cable is an assembly of electrical conductors insulated from each
other, twisted around a central core and jacketed. Cables may be molded or
non-molded.

                                       3
<PAGE>

         Techdyne offers a wide range of custom manufactured cable and harness
assemblies for molded and mechanical applications. These assemblies include
multiconductor, ribbon, co-axial cable, and discrete wire harness assemblies.
Techdyne uses advanced manufacturing processes, in-line inspection and
computerized automated test equipment.

         Techdyne maintains a large assortment of standard tooling for
D-Subminiature, DIN connectors and phono connectors. D-Subminiatures are
connectors which are over-molded with the imprint of the customer's name and
part number. DIN connectors are circular connectors consisting of two to four
pairs of wires used for computer keyboards.

         Flat ribbon cable or ribbon cable assemblies are cables with wires
(conductors) on the same plane with connectors at each end. Flat ribbon cables
are used in computer assemblies and instrumentation.


         Discrete cable assemblies are wires with contacts and connectors.
Harnesses are prefabricated wiring with insulation and terminals ready to be
attached to connectors. Techdyne's cable sales comprised approximately 34% and
35% of total sales revenue for 2000 and 1999, respectively.


                  Contract Manufacturing


         Contract manufacturing involves the manufacture of complete finished
assemblies with all sheet metal, power supplies, fans, PCBs as well as complete
sub-assemblies for integration into an OEM's finished products, such as speaker
and lock-key assemblies and diode assemblies that consist of wire, connectors
and diodes that are over-molded, packaged and bar coded for distribution. These
products can be totally designed and manufactured by Techdyne through its CAD
system, engineering and supply procurement. Techdyne develops manufacturing
processes and tooling, and test sequences for new products of its customers, and
provides design and engineering services in the early stages of product
development thereby assuring mechanical and electrical considerations are
integrated with a total system. Alternatively, the customer may provide
specifications and Techdyne will assist in the design and engineering or
manufacture to the customer's specifications.


                  Reworking and Refurbishing


         Customers provide Techdyne with materials and sub-assemblies acquired
from other sources, which the customer has determined, require modified design
or engineering changes. Techdyne redesigns, reworks, refurbishes and repairs
these materials and sub-assemblies. Reworking and refurbishing amounted to
approximately 10% of sales for each of 2000 and 1999.


         Manufacturing

         Components and products are custom designed and developed to fit
specific customer requirements and specifications. Techdyne's goal is to develop
a "partnership" relationship with its customers by providing a total
manufacturing service consisting of computer integrated manufacturing and
engineering services, quick-turnaround manufacturing and prototype development,
materials procurement, inventory management, development of customized
manufacturing processes for that particular customer's needs, and tooling and
test sequences for new products according to a product design received from its
customers, or developed by Techdyne based on customer requirements. Techdyne's
industrial, electrical and mechanical engineers work in close liaison with its

                                       4
<PAGE>

customers' engineering departments from inception through design, prototypes,
production and packaging.

         Techdyne's PCB assembly operations are geared toward advanced surface
mount technology. Lytton increasingly adds to Techdyne's PCB production through
state-of-the-art manufacturing equipment and processes and a highly trained and
experienced engineering and manufacturing workforce.

          Techdyne also offers a wide range of custom manufactured cables and
harnesses for molded and mechanical applications. Techdyne uses advanced
manufacturing processes, in-line inspection and testing to focus on process
efficiencies and quality. The cable and harness assembly process is accomplished
with automated and semi-automated preparation and insertion equipment and manual
assembly techniques.

         Finished turnkey assemblies include the entire manufacturing process
from design and engineering to purchasing raw materials, manufacturing and
assembly of the component parts, testing, packaging and delivery of the finished
product to the customer. By contracting assembly production, original equipment
manufacturers are able to keep pace with continuous and complex technological
changes and improvements by making rapid modifications to their products without
costly retooling and without any extensive capital investments for new or
altered equipment.

         The European manufacturing facility, located in Livingston, Scotland,
focuses on the electronics industry producing primarily wire harnesses,
electro-mechanical assemblies, and molded cables, incorporating multifaceted
design and production capabilities. Significant reductions in sales of Techdyne
(Europe) have resulted in net losses for this subsidiary amounting to $328,000
for 2000, and $577,000 for 1999 and $442,000 for 1998, and management is
evaluating the future prospects for that facility. See "Important Events" below,
and Item 7, "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

         Supplies and Materials Management


         Materials used in Techdyne's operations consist of metals, electronic
components such as cable, wire, resistors, capacitors, diodes, PCBs and plastic
resins. For over six months in 2000, a worldwide shortage of key electronic
components adversely impacted Techdyne's sales and earnings. The shortage has
diminished during the first quarter of 2001.

         Techdyne procures components from a select group of vendors which meet
Techdyne's standards for timely delivery, high quality and cost effectiveness.
Techdyne uses ERP management technologies to manage material pipelines and
vendor base to allow customers to increase or decrease volume requirements
within established frameworks. Techdyne utilizes a computerized system of
material requirements planning, purchasing, sales and marketing functions based
on a Visual Manufacturing software system. See "Business Strategy" above and
Item 7, "Management's Discussion and Analysis of Financial Condition and Results
of Operations."


         Quality and Process Control

         Techdyne's Florida and Texas facilities received from Underwriter's
Laboratories, an independent quality assurance organization, the ISO 9002
quality assurance designation, which is the international standard of quality
with respect to all systems of operations, including, among others, purchasing,
engineering, manufacturing, sales, inventory control and quality. Techdyne
(Europe) has a BS 5750 quality assurance designation from British Standards
Institute. Lytton holds its ISO 9002 quality designation from Eagle
Registrations, Inc. These quality assurance designations are only provided to
those manufacturers which exhibit stringent quality and process control
assurances after extensive evaluation and auditing by these independent quality

                                       5
<PAGE>

assurance organizations. Quality control is essential to the company's
operations since customers demand strict compliance with design and product
specifications, and high quality production is a primary competitive standard
vital to our services. Techdyne's Milford, Massachusetts facility will have a
final assessment for ISO 9002 by Underwriters Laboratories during the second
quarter of 2001. See "Competition" below.

         Product components, assemblies and sub-assemblies manufactured by
Techdyne are thoroughly inspected visually and electronically to assure all
components are made to strict specifications and are functional and safe. Strict
process controls relating to the entire manufacturing process are part of
Techdyne's standard operating procedure. Over the years Techdyne's product and
manufacturing quality have received excellent ratings. Techdyne maintains
regular contact with its customers to assure adequate information exchange and
other activities necessary to assure customer satisfaction and to support its
high

level of quality and on-time delivery. Any adverse change in Techdyne's
excellent quality and process controls could adversely affect its relationships
with customers and ultimately its revenues and profitability.

         Customers

         Techdyne serves a wide range of businesses from emerging growth
companies to multinational original equipment manufacturers involved in a
variety of markets including computer networking systems, computer workstations,
telecommunications, mass data storage systems, instrumentation and food
preparation equipment industries. Techdyne's revenue is distributed over the
following industry segments:

                                            Year Ended December 31,
                            --------------------------------------------------
                            2000                   1999                   1998
                            ----                   ----                   ----
Data processing              15%                    22%                    29%
Telecommunications           22%                    22%                    20%
Instrumentation              19%                    23%                    17%
Food preparation equipment   22%                    17%                    18%


         Techdyne seeks to serve a sufficiently large number of customers to
avoid dependence on any one customer or industry. Nevertheless, historically a
substantial percentage of its net sales have been to multiple locations of a
small number of customers. Significant reductions or delays in sales to any of
those major customers would have a material adverse effect on its results of
operations. In the past, certain customers have terminated their manufacturing
relationship with Techdyne, or otherwise significantly reduced their product
orders. There can be no assurance that any major customer may not terminate or
otherwise significantly reduce or delay manufacturing orders, any of which such
terminations or changes in manufacturing orders could have a material adverse
effect on Techdyne's results of operations. Techdyne is dependent upon the
continued growth, viability and financial stability of its customers, which are
in turn substantially dependent on the growth of the personal computer, computer
peripherals, the communications, instrumentation, data processing and food
preparation equipment industries. Most of these industries have been
characterized by rapid technological change, short product life cycles, pricing
and margin pressures. In addition, many of its customers in these industries are
affected by general economic conditions. The factors affecting these industries
in general, and/or Techdyne's customers in particular, could have a material
adverse effect on results of its operations. In addition, Techdyne generates
significant accounts receivable in connection with providing manufacturing
services. If one or more of Techdyne's customers were to become insolvent or
otherwise were unable to pay us for provided manufacturing services, its
operating results and financial condition would be adversely affected. In 2000,
43% of Techdyne's sales were made to numerous locations of three major
customers. See Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations."


                                       6
<PAGE>

         The table below sets forth the respective portion of sales for the
applicable period attributable to customers and related suppliers who accounted
for more than 10% of sales in any respective period.

                                 Percentage of Sales

                                                2000        1999          1998
                                                ----        ----          ----
Illinois Tool Works (formerly
PMI Food Equipment Group)                        19%         16%           18%
Trilithic                                        12%          *             *
Alcatel                                          12%          *             *
Motorola, Inc.                                    *          13%           10%

---------------

*        less than 10% for that year

         Techdyne sells to approximately 100 additional other companies, which
comprise the remaining 57% of sales for 2000. Lytton focuses primarily on PCB
production, and had approximately 38% of its sales for fiscal 2000 to Illinois
Tool Works (formerly PMI Food Group).

         Marketing and Sales

         Techdyne is pursuing expansion and diversification of its customer base
and development of long-term relationships by working closely with customers
starting the initial product design and development stage, and continuing
throughout the manufacturing and distribution process. Techdyne's principal
sources of new business are the expansion in the volume and scope of services
provided to existing customers, referrals from customers and suppliers, direct
sales through its sales managers and executive staff, and through independent
sales representatives. Domestic operations generate sales through four regional
sales managers covering the Northeast, Southeast, West and Southwest regions of
the United States. There are 14 in-house sales/marketing personnel in the United
States and 2 internationally. In addition to sales through sales representatives
and in-house sales personnel, sales are also generated through website
http://www.tcdn.com, catalogues, brochures and trade shows.

         Techdyne (Europe) has two in-house sales personnel who market its
products, primarily ribbon, harness and cable assemblies, electro-mechanical
products, and molded cable assemblies, as well as its reworked and refurbished
products (see "Business - Products - Reworking and Refurbishing" above) to
customers in Scotland, England, Ireland, Germany and the Middle East.

         Substantially all of Techdyne's sales and reorders are effected through
competitive bidding. Most sales are accomplished through purchase orders with
specific quantity, price and delivery terms. Some productions, such as its
supplier partnerships, are accomplished under open purchase orders with
components released against customer request.

         Backlog

         At December 31, 2000, Techdyne's backlog of orders amounted to
approximately $18,676,000, of which approximately 66% or $12,310,000, was
represented by the orders from Lytton operations and approximately 9%, or
$1,711,000, was represented by orders from Techdyne (Europe) operations. Last
year the backlog of orders amounted to approximately $14,643,000, of which
approximately $8,179,000 (56%) was represented by the orders from its Lytton
operations and approximately $959,000 (7%) was represented by orders for
Techdyne (Europe) operations. Based on past experience, relationships with its

                                       7
<PAGE>

customers and manufacturing capabilities, most of Techdyne's backlog orders are
firm and should be filled within six months. Most of the purchase orders within
which Techdyne performs do not provide for cancellation. Over the last several
years cancellations have been minimal and management does not believe that any
significant amount of the backlog orders will be canceled. However, based upon
relationships with its customers, Techdyne occasionally allows cancellations and
frequent rescheduling of deliveries. The variations in the size and delivery
schedules of purchase orders received by Techdyne may result in substantial
fluctuations in backlog from period to period. Since orders and commitments may
be rescheduled or cancelled, and customers' lead times may vary, backlog does
not necessarily reflect the timing or amount of future sales.

         DIALYSIS OPERATIONS

         Dialysis Corporation of America currently operates eight outpatient
dialysis facilities, four facilities in Pennsylvania, two dialysis facilities in
New Jersey, and two dialysis facilities in Georgia. We have a 40% interest in a
dialysis center in Ohio, which we manage. Its ninth dialysis center is under
construction and scheduled to open within next several months. These dialysis
facilities are operated through subsidiaries, with Dialysis Corporation of
America `s ownership ranging from 51% to 100%. Dialysis Corporation of America
manages the facilities under Management Services Agreements. It also provides
acute dialysis services through contractual relationships with nine hospitals
and medical centers. In addition, it provides homecare services through its
wholly owned subsidiary, DCA Medical Services, Inc. New dialysis facilities are
anticipated, currently through construction and development as opposed to
acquisition. Management believes the company distinguishes itself on the basis
of quality patient care, and a patient-focused, courteous, highly trained
professional staff.

         Dialysis Industry

         Kidneys act as a filter removing harmful substances and excess water
from the blood, enabling the body to maintain proper and healthy balances of
chemicals and water. Chronic kidney failure, or End Stage Renal Disease which
results from chemical imbalance and buildup of toxic chemicals, is a state of
kidney disease characterized by advanced irreversible renal impairment. ESRD is
a likely consequence of complications resulting from diabetes, hypertension,
advanced age, and specific hereditary, cystic and urological diseases. ESRD
patients, in order to survive, must obtain a kidney transplant, which procedure
is limited due to lack of suitable kidney donors and the incidence of rejection
of transplanted organs, or obtain regular dialysis treatment for the rest of
their lives.

                  ESRD Treatment Options

         Treatment options for ESRD patients include (1) hemodialysis, performed
either at (i) an outpatient facility, or (ii) inpatient hospital facility, or
(iii) the patient's home; (2) peritoneal dialysis, either continuous ambulatory
peritoneal dialysis or continuous cycling peritoneal dialysis; and/or (3) kidney
transplant. The significant portion of ESRD patients receive treatments at
non-hospital owned outpatient dialysis facilities (according to HCFA,
approximately 86%) with the remaining patients treated at home through
hemodialysis or peritoneal dialysis. Patients treated at home are monitored by a
designated outpatient facility.

         The most prevalent form of treatment for ESRD patients is hemodialysis,
which involves the use of an artificial kidney, known as a dialyzer, to perform
the function of removing toxins and excess fluids from the bloodstream. This is
accomplished with a dialysis machine, a complex blood filtering device which
takes the place of certain functions of the kidney and which machine also
controls external blood flow and monitors the toxic and fluid removal process.
On the average, patients usually receive three treatments per week with each

                                       8
<PAGE>

treatment taking three to five hours. Dialysis treatments are performed by teams
of licensed nurses and trained technicians pursuant to the staff physician's
instructions.

         Home hemodialysis treatment requires the patient to be medically
suitable and trained and have qualified trained assistant. Dialysis Corporation
of America does not currently provide home hemodialysis (non-peritoneal)
services. A second home treatment for ESRD patients is peritoneal dialysis.
There are several variations of peritoneal dialysis, the most common being
continuous ambulatory peritoneal dialysis and continuous cycling peritoneal
dialysis. All forms of peritoneal dialysis use the patient's peritoneal
(abdominal) cavity to eliminate fluid and toxins from the patient. Continuous
ambulatory peritoneal dialysis utilizes dialysis solution infused manually into
the patient's peritoneal cavity through a surgically-placed catheter. The
solution is allowed to remain in the abdominal cavity for

a three to five hour period and is then drained. The cycle is then repeated.
Continuous cycling peritoneal dialysis is performed in a manner similar to
continuous ambulatory peritoneal dialysis, but utilizes a mechanical device to
cycle dialysis solution while the patient is sleeping. Peritoneal dialysis is
the third most common form of ESRD therapy following center hemodialysis and
renal transplant.

         The third modality for patients with ESRD is kidney transplantation.
While this is the most desirable form of therapeutic intervention, the scarcity
of suitable donors and possibility of donor rejection limits the availability of
this surgical procedure as a treatment option.

         Dialysis Corporation of America's Business Strategy

         Dialysis Corporation of America has 24 years' experience in developing
and operating dialysis treatment facilities. Its first priority is top quality
patient care. Dialysis Corporation of America intends to continue to establish
alliances with physicians and hospitals and to attempt to initiate dialysis
service arrangements with nursing homes and managed care organizations, and to
continue to emphasize high quality patient care. Dialysis Corporation of
America's smaller size allows it to focus on each patient's individual needs
while remaining sensitive to the physicians' professional concerns.

         Dialysis Corporation of America continues to actively seek and
negotiate with physicians and others to establish new outpatient dialysis
facilities. In 2000 it opened two new dialysis centers in Georgia. An Ohio
facility in which we have a 40% interest opened in February, 2001. We have
another dialysis facility under construction in Georgia. Dialysis Corporation of
America currently provides outpatient dialysis services through its eight modern
outpatient facilities to patients in Pennsylvania, New Jersey and Georgia . For
the year ended December 31, 2000, approximately 38,350 dialysis treatments were
performed, of which approximately 32,400 were outpatient treatments,
approximately 2,600 were homecare patients, and approximately 3,350 represented
inpatient dialysis treatments. Dialysis Corporation of America facilities are
designed for a maximum of 108 stations to render outpatient dialysis treatment
and training of home dialysis patients. The Ohio facility in which we have a 40%
interest has 12 dialysis stations.

         Acquisition and Development of Facilities

         One of the primary elements in acquiring or developing facilities is
locating an area with an existing patient base under the current treatment of a
local nephrologist, since the facility is primarily going to serve such
patients. Other considerations in evaluating a proposed acquisition or
development of a dialysis facility are the availability and cost of qualified
and skilled personnel, particularly nursing and technical staff, the size and
condition of the facility and its equipment, the atmosphere for the patients,
the area's demographics and population growth estimates, state regulation of
dialysis and healthcare services, and the existence of competitive factors such
as hospital or proprietary non-hospital owned and existing outpatient dialysis
facilities within reasonable proximity to the proposed center.

                                       9
<PAGE>

         Expansion of Dialysis Corporation of America's operations is being
approached presently through the development of its own dialysis facilities. To
construct and develop a new facility ready for operations may take an average of
four to six months, and approximately 12 months or longer to generate income,
all of which are subject to location, size and competitive elements. Four
centers, two of which were recently established, one in Homerville, Georgia, a
second being our 40% owned affiliate in Toledo, Ohio, and two having been
operational for a while, including Carlisle, Pennsylvania and Manahawkin, New
Jersey, are in the developmental stages since they have not reached the point
where the patient base is sufficient to generate and sustain earnings.
Construction of a 15 station facility may cost in a range of $600,000 to
$750,000 depending on location, size and related services to be provided by the
proposed facility. Acquisition of existing facilities is substantially more
expensive, and is usually based primarily

upon the number of patients, and to a lesser extent, location, competition,
nature of facility and negotiation. Any significant expansion, whether through
acquisition or development of new facilities, is dependent upon existing funds
or financing from other sources.

         Inpatient Services

         Management is also seeking to increase acute dialysis care contracts
with hospitals for inpatient dialysis services. These contracts are sought with
hospitals in areas serviced by Dialysis Corporation of America's facilities.
Hospitals are willing to enter into such inpatient care arrangements to
eliminate the administrative burdens of providing dialysis services to their
patients as well as the expense involved in maintaining dialysis equipment,
supplies and personnel. We believe that these arrangements are beneficial to our
operations, since the contract rates are individually negotiated with each
hospital and are not fixed by government regulation as is the case with Medicare
reimbursement fees for ESRD patient treatment. In 2000, Dialysis Corporation of
America entered into two new acute inpatient dialysis services agreements, and
one additional acute inpatient agreements in 2001, with hospitals in New Jersey
and Georgia. The Ohio center in which we have a 40% interest entered into an
acute inpatient service agreement in 2001.

         There is no certainty as to when any new centers or service contracts
will be implemented, or the number of stations, or patient treatments such may
involve, or if such will ultimately be profitable. There is no assurance that we
will be able to continue to enter into favorable relationships with physicians
who would become medical directors of such proposed dialysis facilities, or that
we will be able to acquire or develop any new dialysis centers within a
favorable geographic area. Newly established dialysis centers, although
contributing to increased revenues, also adversely affect results of operations
due to start-up costs and expenses and due to their having a smaller and slower
developing patient base. See "Business Strategy," "Operations" and "Competition"
of this Item 1, "Business".

         Operations

                    Location, Capacity and Use of Facilities

         Since inception in 1977, we have established and sold approximately ten
dialysis centers.

         The table below indicates our current dialysis centers operated through
our subsidiaries, when each subsidiary commenced operations and the approximate
number of patient treatments for the periods indicated.

                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                                    Dialysis Treatments
                                                                        Year Ended
                                                 Commencement          December 31,
Subsidiary and Location                         of Operations      2000    1999    1998
---------------------------------------------   ---------------   -----   -----   -----
<S>                                                   <C>         <C>     <C>     <C>
Dialysis Services of PA., Inc. - Lemoyne        June, 1995        8,300   7,600   7,500
Dialysis Services of PA., Inc. - Wellsboro      September, 1995   5,200   3,000   3,600
Dialysis Services of PA., Inc. - Carlisle       September, 1997   2,400   3,000   3,500
Dialysis Services of NJ, Inc. - Manahawkin      July, 1998        3,300   1,300     250
Dialysis Services of PA., Inc. - Chambersburg   January, 1999     4,900   2,900      --
DCA of Vineland, LLC                            February, 2000    6,800      --      --
DCA of So. Ga., LLC                             November , 2000   1,200      --      --
DCA of Homerville, LLC                          November, 2000      127      --      --
</TABLE>

         The Ohio dialysis center in which we hold a 40% interest commenced
operations in February, 2001.

         We estimate that on average our centers were operating at approximately
60% of capacity as of December 31, 2000, based on the assumption that a dialysis
center is able to provide up to three treatments a day per station, six days a
week. Management of Dialysis Corporation of America believes it is able to
increase the number of dialysis treatments at its centers without making
additional capital expenditures.

         Dialysis Corporation of America's facilities offer high-efficiency and
conventional hemodialysis, which, provides the most viable treatment for most
patients. The management of Dialysis Corporation of America considers its
dialysis equipment to be both modern and efficient, providing state of the art
treatment in a safe and comfortable environment. In 2000, Dialysis Corporation
of America acquired an additional 53 dialysis machines for our recently opened
dialysis centers which are more advanced and include better safety features and
updated technology. The addition of the improved equipment enhances its ability
to provide more efficient treatment.

         Dialysis Corporation of America's facilities also offer home dialysis
(other than hemodialysis), primarily continuous ambulatory peritoneal dialysis
and continuous cycling peritoneal dialysis and method 2. Training programs for
continuous ambulatory peritoneal dialysis or continuous cycling peritoneal
dialysis generally encompass two to three weeks at each facility, and such
training is conducted by the facility's home training nurse. After the patient
completes training, they are able to perform treatment at home with equipment
and supplies provided by the company.

         Inpatient Dialysis Services

         Dialysis Corporation of America presently provides inpatient dialysis
services to nine hospitals in New Jersey, Pennsylvania and Georgia. Our Ohio
affiliate in which we have a 40% interest also provides acute inpatient services
to a hospital. The agreements are for terms ranging from one to five years, with
automatic renewal terms, subject to termination by notice of either party.
Inpatient services are typically necessary for patients with acute kidney
failure resulting from trauma or similar causes, patients in the early stages of
ESRD, and ESRD patients who require hospitalization for other reasons.

         Ancillary Services

         Dialysis Corporation of America's dialysis facilities provide certain
ancillary services to ESRD patients, including the administration of EPO upon a
physician's prescription. EPO is a bio-engineered protein which stimulates the
production of red blood cells and is used in connection with dialysis to treat
anemia, a medical complication frequently experienced by ESRD patients. EPO
decreases the necessity for blood transfusions in ESRD patients. Other ancillary
services that Dialysis Corporation of America provides to its patients include
electrocardiograms and blood transfusions, all of which are separately
reimbursed by Medicare. See "Medicare Reimbursement" below.

                                       11

<PAGE>
         Physician Relationships

         An integral element to the success of a facility is its association
with nephrologists in the area, because a dialysis patient generally seeks
treatment at a facility near the patient's home and where such patient's
nephrologist has established its practice.

         The conditions of a facility's participation in the Medicare ESRD
program mandate that treatment at a dialysis facility be under the general
supervision of a medical director who is a physician. Dialysis Corporation of
America retains by written agreement qualified physicians or groups of qualified
physicians to serve as medical directors for each of its facilities. Generally,
the medical directors are board eligible or board certified in internal medicine
by a professional board specializing in nephrology and have had at least 12
months of experience or training in the care of dialysis patients at ESRD
facilities. The medical directors are typically a source of patients treated
at the particular center served. The medical directors of five of our eight
centers have acquired an ownership interest in the center they service
ranging from 20% to 49%. Our Ohio affiliate is 60% owned by the physician.
We make every effort to comply with federal and state regulations concerning
our relationships with the physicians and our medical directors treating
patients at our facilities. See "Government Regulation"
below.

         Agreements with medical directors range from a term of five years to
ten years, with renewal provisions, usually two renewal options each for five
years. Each agreement specifies the duties, responsibilities and compensation of
the medical director. Under each agreement, the medical director or professional
association maintains his, her or its own medical malpractice insurance. The
agreements also provide for non-competition in a limited geographic area
surrounding that particular dialysis center during the term of the agreement and
upon termination for a limited period. However, the agreements do not prohibit
physicians providing services at our facilities from providing direct patient
care services at other locations; and consistent with the federal and state law,
such agreements do not require a physician to refer patients to our dialysis
centers. Usually, physician's professional fees for services are billed to the
government payment authority on a direct basis by the treating physician and
paid directly to the physician or the professional corporation.

         Our ability to establish a dialysis facility in a particular area is
significantly geared to the availability of a qualified physician or
nephrologist to serve as the medical director. The loss of a medical director
who could not be readily replaced would have a material adverse effect on the
operations of that facility and the company. Compensation of medical directors
is separately negotiated for each facility and generally depends on competitive
factors such as the local market, the physician's qualifications and the size of
the facility.

         Quality Assurance

         Dialysis Corporation of America implements a quality assurance program
to maintain and improve the quality of dialysis treatment and care provided in
every facility. Quality assurance activities involve the ongoing examination of
care provided, the identification of deficiencies in that care and any necessary
improvements of the quality of care, through regular review of quality assurance
data, related to dialysis treatment services, equipment, technical and
environmental improvements, and staff-patient and personnel relationships. These
evaluations are in addition to assuring regulatory compliance with HCFA and the
Occupational Safety and Health Administration. Dialysis Corporation of America's
manager of compliance, who is a registered nurse, oversees this program in
addition to ensuring that the company meets federal and state compliance
requirements for dialysis centers. See "Government Regulation" below.

                                       12

<PAGE>

         Patient Revenues

         A substantial amount of the fees for outpatient dialysis treatments are
funded under the ESRD Program established by the federal government under the
Social Security Act, and administered in accordance with rates set by HCFA. It
has been reported by HCFA that 92% of all dialysis patients were covered by
Medicare. The balance of the outpatient charges are paid by private payors
including the patient's medical insurance, private funds or state Medicaid
plans. Pennsylvania, New Jersey, Georgia and Ohio, presently the states in which
we operate, provide Medicaid or comparable benefits to qualified recipients to
supplement their Medicare coverage.

         Under the ESRD Program, payments for dialysis services are determined
pursuant to Part B of the Medicare Act which presently pays 80% of the allowable
charges for each dialysis treatment furnished to patients. The maximum payments
vary based on the geographic location of the center. The remaining 20% may be
paid by Medicaid if the patient is eligible, from private insurance funds or
the patient's personal funds. Medicare and Medicaid programs are subject to
regulatory changes, statutory limitations and government funding restrictions,
which may adversely affect our revenues and dialysis services payments. See
"Medicare Reimbursement" below.

         The inpatient dialysis services are paid for by the hospital pursuant
to contractual pre-determined fees for the different dialysis treatments.
Inpatient treatments accounted for approximately 10%, 10% and 11% of our
revenues for the years ended December 31, 2000, 1999 and 1998, respectively.

         Medicare Reimbursement

         We are reimbursed primarily from third party payors including Medicaid,
commercial insurance companies, but substantially by Medicare under a
prospective reimbursement system for chronic dialysis services. Each of our
dialysis facilities is certified to participate in the Medicare program. Under
that Medicare system, the reimbursement rates are fixed in advance and limit the
allowable charge per treatment, but provides us with predictable and recurring
per treatment revenues and allows us to retain any profit earned. An established
composite rate set by HCFA governs the Medicare reimbursement available for a
designated group of dialysis services, including dialysis treatments, supplies
used for such treatments, certain laboratory tests and medications. HCFA
eliminated routine Medicare coverage for such tests as nerve conduction studies,
electrocardiograms, chest x-rays and bone density measurements, and will only
pay for such tests when there is documentation of medical necessity. The
Medicare composite rate is subject to regional differences in wage earnings.

         Dialysis Corporation of America receives reimbursement for outpatient
dialysis services provided to Medicare-eligible patients at rates that are
currently between $120 and $126 per treatment, depending upon regional wage
variations. The Medicare reimbursement rate is subject to change by legislation.
An average ESRD reimbursement rate is $122 per treatment for outpatient dialysis
services. The current maximum composite reimbursement rate is $142 per
treatment. The Benefits Improvement and Production Act of 2000, provided for a
2.7% increase in the amount paid to dialysis facilities for performance of
services in 2001.

         Other ancillary services and items are eligible for separate
reimbursement under Medicare and are not part of the composite rate, including
certain drugs such as EPO, the allowable rate of which is currently $10 per 1000
units for amounts in excess of three units per patient per year, and certain
physician-ordered tests provided to dialysis patients. Other than for the
administration of EPO, these ancillary services are not significant sources of
income to us compared to reimbursement for actual treatment.

         Management is unable to predict what, if any, future changes may occur
in the rate of reimbursement. Any reduction in the Medicare composite
reimbursement rate could have a material adverse effect on our and Dialysis
Corporation of America's business, revenues and net earnings.

         Medicaid Reimbursement

         Medicaid programs are state-administered programs partially funded by
the federal government. These programs are intended to provide coverage for
patients whose income and assets fall below state defined levels, and who are
otherwise uninsured. The programs also serve as supplemental insurance programs
for the Medicare co-insurance portion and provide certain additional coverages.
State regulations generally follow Medicare reimbursement levels and coverages
without any co-insurance amounts. Certain states, however, require beneficiaries
to pay a monthly share of the cost based upon

                                       13

<PAGE>

levels of income or assets. Pennsylvania has a Medical Assistance Program
comparable to Medicaid, as well as New Jersey, with primary and secondary
insurance coverage to those who qualify. Dialysis Corporation of America is a
licensed ESRD Medicaid provider in New Jersey, Pennsylvania and Georgia.

         Management Services

         Dialysis Corporation of America has a management services agreement
with each subsidiary and with DCA of Toledo, LLC, in which it holds a minority
position, providing them with administrative and management services, including
but not limited to providing capital equipment, preparing budgets, bookkeeping,
accounting, data processing, and other corporate based information services,
materials and human resource management, billing and collection, and accounts
receivable and payable processing. These services are provided for a percentage
of net revenues of that particular facility.

         LINUX DIVISION

         In January, 2000, we established a new division with the purpose of
investing in and incubating new technology companies, primarily involved with
Internet technology. Our first investment was in Linux Global Partners, a
private holding company which invests in Linux-related software companies. We
hold an approximately 10% interest in Linux Global Partners, to which company we
have loaned $2,200,000 at an annual rate of interest of 10%, and which funds we
borrowed from our subsidiary, Dialysis Corporation of America. Mr. Langbein, our
Chairman of the Board, Chief Executive Officer and President, also holding such
executive positions, other than President, with Techdyne and Dialysis
Corporation of America, was appointed as a director of Linux Global Partners in
January, 2000. See Item 13, "Certain Relationships and Related Transactions."
Linux is a free operating system written by a Finnish programmer in 1991, with
its source code openly published, developed and improved over the years by a
worldwide community of programmers. Linux has become an increasingly popular
operating system posing a potential challenge to the current major operating
systems, such as Microsoft's Windows NT and Sun Microsystems' Solaris, two of
the leading operating systems used on server computers, the data-serving
machines that are the engines of corporate networks and the Internet.

         Linux Global Partners has a portfolio currently consisting of several
companies that focus on the software capabilities of the Linux operating system.
Linux Global Partners has identified five primary Linux software areas: (i)
applications; (ii) utilities; (iii) embedded systems; (iv) developer's tools;
and (v) games. It holds ownership interests ranging from 30% to 80% or has
options for investment opportunities in entities in each of these areas. Some of
its investments include Ximian (formerly Helix Code), which company recently
obtained $15,000,000 in private financing for its operations, involved in
creating an applications suite, and maintains the GNOME graphical interface that
ships with Red Hat, a Linux distribution; Code Weavers, a software development
service and porting company; Gnu-Money, which has formulated open source
personal financial applications; Heimdall Linux, a company in the process of
formulating an operating system with C2 government certification; Linux
Utilities, a utilities software application company; and Metro Link, involved
in Linux graphics and the embedded sector. All of these companies are in the
developmental stages, several with limited revenues, and their success remains
extremely speculative.

         We believe Linux may become a competitive force as the operating system
of the future for the Internet. We are optimistic about our investment in this
new Linux technology, and hopefully it will supplement our operating business.
We will continue to evaluate new technologies to determine whether future
investment is warranted. This is a newly developing area, and there is no
assurance this new division will be successful. Our security for our loans is
all the ownership interest in the companies in which Linux Global Partners
invested, which are speculative, developing companies with great risk.

                                       14

<PAGE>

REGULATION

         Techdyne

         Techdyne's operations are subject to certain federal, state and local
regulatory requirements relating to environmental waste management and health
and safety matters. These regulations provide for civil and criminal fines,
injunctions and other sanctions and, in certain instances, allow third parties
to sue to enforce compliance. Management believes that Techdyne complies with
applicable regulations pertaining to health and safety in the workplace,
including those promulgated by OSHA, and the use, storage, discharge and
disposal of chemicals used in its manufacturing processes. Techdyne periodically
generates and temporarily handles limited amounts of materials that are
considered hazardous waste. The current costs of compliance are not material to
Techdyne or the company. Nevertheless, no assurances can be given that
additional or modified requirements will not be imposed in the future, and if so
imposed, will not involve substantial additional expenditures.

         Dialysis Corporation of America

         Dialysis Corporation of America's record of compliance with federal,
state and local governmental laws and regulations remains excellent. Regulation
of healthcare facilities, including dialysis centers, is extensive with
legislation continually proposed relating to safety, reimbursement rates,
licensing and other areas of operations. Each of the dialysis facilities must be
certified by HCFA, and Dialysis Corporation of America must comply with certain
rules and regulations established by HCFA regarding charges, procedures and
policies. Each dialysis center is also subject to periodic inspections by
federal and state agencies to determine if their operations meet the appropriate
regulatory standards. These requirements have been satisfied by each of Dialysis
Corporation of America's dialysis facilities. We are unable to predict the scope
and effect of any changes in government regulations, particularly any
modifications in the reimbursement rate for medical services or requirements to
obtain certification from HCFA. Enforcement may also become more stringent
adding to compliance costs as well as potential sanctions. To date, none of
Dialysis Corporation of America's business arrangements with physicians,
patients or others have been the subject of investigation by any governmental
authority. No assurance can be given, however, that Dialysis Corporation of
America's business arrangements will not be the subject of a future
investigation or prosecution by a federal or state governmental authority which
could result in civil and/or criminal sanctions.

         Although management believes that Dialysis Corporation of America
substantially complies with currently applicable state and federal laws and
regulations and has never had any difficulty in maintaining its licenses or its
Medicare and Medicaid authorizations, the healthcare service industry is and
will continue to be subject to substantial and continually changing regulation
at the federal and state levels, and the scope and effect of such and its impact
on Dialysis Corporation of America's operations cannot be predicted. Any loss by
of Dialysis Corporation of America's various certifications and approvals as a
certified provider under the Medicare or Medicaid programs, or its licenses
under the laws of any state or other governmental authority, a reduction of
dialysis reimbursement or a reduction or complete elimination of coverage for
dialysis services would have a material adverse effect on Dialysis Corporation
of America's business.

         Fraud and Abuse

         Each year OIG publishes a Fraud and Abuse Civil Plan. For the year
2000, OIG indicated it planned to concentrate, among other things, on ESRD
reimbursement issues, including oversight of

                                       15

<PAGE>

dialysis facilities, separately billable maintenance dialysis services, and
medical appropriateness of tests and other dialysis-related services. Dialysis
Corporation of America has reviewed the OIG 2000 Work Plan, and management
believes to be in compliance with applicable regulations to be addressed by OIG.
Nevertheless, the continuous review of risk areas inherent to dialysis treatment
and service, and development and implementation of compliance programs is
necessary. These programs focus on employee education concerning applicable
billing rules, regulations and insurance carrier interpretations, as well as
auditing medical records to ensure the medical necessity of services provided
and billed.

         The Social Security Act provides Medicare coverage to most persons
regardless of age or financial condition for dialysis treatments as well as
kidney transplants. The Social Security Act further prohibits, as do many state
laws, the payment of patient referral fees for treatments that are otherwise
paid for by Medicare, Medicaid or similar state programs under the Medicare and
Medicaid Patient and Program Protection Act of 1987, or the "Anti-kickback
Statute." The Anti-kickback Statute and similar state laws impose criminal and
civil sanctions on persons who knowingly and willfully solicit, offer, receive
or pay any remuneration, directly or indirectly, in return for, or to include,
the referral of a patient for treatment, among other things. Included in the
civil penalties is exclusion of the provider from participation in the Medicare
and Medicaid programs. The language of the Anti-kickback Statute has been
construed broadly by the courts. The federal government in 1991, 1992 and late
1999 published regulations that established exceptions, "safe harbors," to the
Anti-kickback Statute for certain business arrangements that would not be deemed
to violate the illegal remuneration provisions of the federal statute. All
conditions of the safe harbor must be satisfied to meet the exception and
immunize the arrangement from prosecution, but failure to satisfy all elements
does not mean the business arrangement violates the illegal remuneration
provision of the statute.

         As required by Medicare regulations, a medical director who is a
licensed nephrologist or otherwise qualified physician supervises each of
Dialysis Corporation of America's dialysis centers. The compensation of medical
directors is fixed by a medical director agreement and reflects competitive
factors in their respective location, and the size of the center, and the
physician's professional qualifications. The medical director's fee is fixed in
advance for periods of one to five years and does not take into account the
volume of patient treatments or amounts of referrals to the dialysis center.
Four of Dialysis Corporation of America's outpatient dialysis centers are owned
jointly between the company and a group of physicians, who hold a minority
position (the Ohio center is majority-owned by a physician). These physicians
also act as the medical director for those facilities. We attempt to structure
arrangements with our physicians to comply with the Anti-Kickback Statute. Many
of these physicians' patients are treated at our dialysis facilities. We believe
that the value of the minority interest represented by subsidiaries' stock
issued to physicians has been consistent with the fair market value of assets
transferred to, or services performed by such physicians for the subsidiary, and
in certain cases, monetary compensation, and there is no intent to induce
referrals to our facilities. See "Business - Physician Relationships" above.
Certain states in which we operate have similar statutes to the federal
anti-kickback laws limiting physicians from holding financial interests in
various type of medical facilities. If these statutes are interpreted to apply
to relationships Dialysis Corporation of America has with its medical directors
who hold joint ownership in our dialysis facilities, we would restructure our
relationship with these physicians but could be subject to penalties. There are
safe harbors for certain arrangements. However, these relationships with medical
director ownership of a minority interest in a Dialysis Corporation of America
facility satisfies many but not all of the criteria for the safe harbor, and
there can be no assurance that these relationships will not be subject of
investigation or prosecution by enforcement agencies. In an effort to further
the position of adhering to the law, Dialysis Corporation of America has
initiated the development of a compliance plan and medical chart audits to
confirm medical necessity of referrals.

                                       16

<PAGE>

         We endeavor in good faith to comply with all governmental regulations.
We have never been challenged under these statutes and management believes
arrangements with its medical directors are in material compliance with
applicable law. However, there can be no assurance that we will not be required
to change our practices or experience a material adverse effect as a result of
any such potential challenge. Management cannot predict the outcome of the
rule-making process or whether changes in the safe harbor rules will affect
Dialysis Corporation of America's position with respect to the Anti-kickback
Statute, but believes that Dialysis Corporation of America will remain in
compliance.

         Stark II

         The Physician Ownership and Referral Act ("Stark II") was adopted and
incorporated into the Omnibus Budget Reconciliation Act of 1993 and became
effective January 1, 1995. Stark II bans physician referrals, with certain
exceptions, for certain "designated health services" as defined in the statute
to entities in which a physician or an immediate family member has a "financial
relationship" which includes an ownership or investment interest in, or a
compensation arrangement between the physician and the entity. The entity is
prohibited from claiming reimbursement for such services under the Medicare or
Medicaid programs. Stark II includes certain exceptions. Regulations
interpreting Stark II were issued in January 2001, anticipated to become
effective in the first quarter of 2002.

         If the provisions of Stark II were found to apply to Dialysis
Corporation of America's arrangements however, management believes that it would
be in compliance. We compensate our nephrologist-physicians as medical directors
of our dialysis centers pursuant to medical director agreements, which we
believe are in compliance with Stark II. Non-affiliated physicians who send or
treat their patients at any of Dialysis Corporation of America's facilities do
not receive any compensation from the company. Medical directors of Dialysis
Corporation of America's facilities, which hold a minority investment interest,
may refer patients to hospitals with which Dialysis Corporation of America has
an acute inpatient dialysis service arrangement. Stark II may be interpreted to
apply to these types of interests. We believe that the contractual arrangements
with hospitals for acute care inpatient dialysis services are in compliance with
this exception. We believe that the language and legislative history of Stark II
and phase I of final Stark II regulations indicate that Congress did not intend
to include as designated health services dialysis services and the services and
items provided incident to dialysis services.

         If HCFA or any other government entity takes a contrary position in
interpreting the Stark II final regulations or otherwise, Dialysis Corporation
of America may be required to restructure certain existing compensation or
investment agreements with its medical directors, or, in the alternative, to
refuse to accept referrals for designated health services from certain
physicians. If such were to be the case, it could adversely affect Dialysis
Corporation of America's and our operations and future financial results.

         Health Insurance Reform Act

         Congress has taken action in recent legislative sessions to modify the
Medicare program for the purpose of reducing the amounts otherwise payable from
the program to healthcare providers. Future legislation or regulations may be
enacted that could significantly modify the ESRD program or substantially reduce
the amount paid to Dialysis Corporation of America for its services or impose
further regulation or restrictions on healthcare providers. Any new legislation
or regulations may adversely affect Dialysis Corporation of America's and our
business and operations, as well as our competitors.

         The Health Insurance Portability and Accountability Act of 1996
(HIPAA), provided for health insurance reforms which included a variety of
provisions important to healthcare providers, such as significant changes to the
Medicare and Medicaid fraud and abuse laws. HIPAA established two

                                       17

<PAGE>

programs that will coordinate federal, state and local healthcare fraud and
abuse activities, to be known as the "Fraud and Abuse Control Program" and the
"Medicare Integrity Program." The Fraud and Abuse Control Program will be
conducted jointly by HHS and the Attorney General while the Medicare Integrity
Program, which is funded by the Medicare Hospital Insurance Trust Fund, will
enable HHS, the Department of Justice and the FBI to monitor and review
specifically Medicare fraud. HIPAA also regulates privacy of medical
information. Compliance with HIPAA privacy regulation requires implementation of
policies, procedures and administrative safeguards with respect to private
health information. Under HIPAA compliance with privacy regulations is required
by April 2003. Compliance may require substantial effort and expense by Dialysis
Corporation of America.

         Environmental and Health Regulations

         Our dialysis centers are subject to hazardous waste laws and
non-hazardous medical waste regulation. Most of our waste is non-hazardous. HCFA
requires that all dialysis facilities have a contract with a licensed medical
waste handler for any hazardous waste. We also follow OSHA's Hazardous Waste
Communications Policy, which requires all employees to be knowledgeable of the
presence of and familiar with the use and disposal of hazardous chemicals in the
facility. Medical waste of each facility is handled by licensed local medical
waste sanitation agencies primarily responsible for compliance with such laws.

         There are a variety of regulations promulgated under OSHA relating to
employees exposed to blood and other potentially infectious materials requiring
employers, including dialysis centers, to provide protection. We adhere to
OSHA's protective guidelines, including regularly testing employees and patients
for exposure to hepatitis B and providing employees subject to such exposure
with hepatitis B vaccinations on an as-needed basis, protective equipment, a
written exposure control plan and training in infection control and waste
disposal.

PATENTS AND TRADE NAMES


         We sell certain of our medical supplies and products under the
trademark Medicore(TM). Certain of our lancets are marketed under the trademarks
Medicore(TM) , Producers of Quality Medical Disposables(TM) and Lady Lite(TM).
The company holds three patents related to our lancet line, (i) one design
patent, which expires September 26, 2009, consisting of the ornamental design
for a combined lancet and flowered cap, (ii) a utility patent, which expires
December 14, 2007, for an automatic lancet device; and (iii) one patent for a
cannular feeding apparatus, manufacturing equipment for feeding hypodermic
needles into a mold, which expires September 18, 2005.


         We do not rely on patents or trademarks in our electro-manufacturing
operations and manufacturing of medical products. Rather, we place importance
upon design, engineering, manufacturing cost containment, quality and marketing
skills to establish or maintain market position.

COMPETITION

         The medical supply operations are extremely competitive and we are not
a significant competitive factor in this area.

         The electronic manufacturing services industry is highly competitive.
Techdyne faces competition from divisions of large electronics and
high-technology firms, as well as numerous smaller specialized companies. We
believe that we are favorably positioned with regard to primary competitive
factors - price, quality of production, manufacturing capability, prompt
customer service, timely delivery, engineering expertise, and technical support.
We also believe that Techdyne (Europe), our European manufacturing and marketing
operation, internationally enhances our competitive position. However,
consolidation trends in the electronic manufacturing services industry are
resulting in changes in the competitive landscape. Increased competition could
result in lower priced components and lower profit

                                       18

<PAGE>

margins, or loss of customers, which could have a material adverse effect on our
business, financial condition and result of operations. Compared to
manufacturers who have greater direct buying power with component suppliers or
who have lower cost structure, we may be operating at a cost disadvantage.
Certain competitors have broader geographic coverage and competitive price
advantage based on their less expensive offshore operations, particularly in the
Far East. Many of the competitors are larger and more geographically diverse and
have greater financial, manufacturing and marketability resources. Techdyne's
main competitors in the PCB area include ACT Manufacturing, Inc., Vickers
Electronics Systems, Diversified Systems, Inc., Epic Technologies, Inc, and
others. Techdyne has numerous competitors in the cable and harness assembly
market, including Volex Interconnect Systems, Inc., Foxconn, ACT Manufacturing,
Inc., and Escod Industries.

         The dialysis industry is very competitive. There are numerous providers
who have dialysis facilities in the same areas as the company. Many are owned by
physicians or major corporations which operate dialysis facilities regionally,
nationally and internationally. Our dialysis operations are small in comparison
with those corporations. Some of Dialysis Corporation of America's major
competitors are public companies, including Fresenius Medical Care, Gambro
Healthcare, Inc., Renal Care Group, Inc., and Davita, Inc. Most of these
companies have substantially greater financial resources, many more centers,
patients and services than we do, and by virtue of such have a significant
advantage in competing for nephrologists and acquisitions of dialysis facilities
in areas and markets we target. Competition for acquisitions has increased the
cost of acquiring existing dialysis facilities. Dialysis Corporation of America
also faces competition from hospitals that provide dialysis treatments and from
admitting physicians of its centers who have opened their own dialysis
facilities. We are not very competitive based on our ownership of limited number
of centers and the size of each of our facilities. However, upon completion of
the sale of controlling stock of Techdyne, we plan to focus on expansion of our
dialysis facilities, and improvement of our dialysis operation's competitive
position.

EMPLOYEES

         The company and its subsidiaries employ approximately 580 full time
employees of which 10 are administrative, 118 are with the dialysis operations,
two are engaged in the medical supply operations, and 480 are with Techdyne's
electronic manufacturing operations (domestic and Europe). In addition, Dialysis
Corporation of America employs approximately 50 part-time and nine independent
part-time contract employees.

                                       19
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

         The Summary Compensation Table below sets forth compensation paid by
the company and its subsidiaries for the last three fiscal years ended
December 31, 2000 for services in all capacities for its Chief Executive
Officer and each of its principal executive officers whose total annual
salary, bonus or other compensation exceeded $100,000.

                          Summary Compensation Table
<TABLE>
<CAPTION>

                           Annual Compensation              Long Term Compensation
                      -----------------------------    --------------------------------
                                                                     Awards

(a)                   (b)       (c)         (e)                        (g)                      (i)
                                           Other
                                           Annual                   Securities               All Other
Name and                                   Compen-                  Underlying              Compensation
Principal Position    Year    Salary($)    sation($)              Options/SARs(#)                ($)
------------------    ----    --------     --------    --------------------------------     ------------
                                                       Medicore       Techdyne      DCA
                                                       --------       --------      ---
<S>                   <C>     <C>          <C>          <C>           <C>         <C>         <C>
CEO
Thomas K. Langbein    2000    278,000(1)   28,500(2)    550,000         ---         ---
                      1999    268,000(1)   32,400(2)      ---           ---       260,000        ---
                      1998    258,000(1)   32,300(2)      ---           ---         ---       25,000(1)

Barry Pardon(3)       2000    146,000(4)    6,311(5)    105,000
                      1999    149,600(4)    6,700(5)      ---           ---         ---          ---
                      1998    150,800(4)    7,300(5)      ---           ---         ---          ---

Joseph Verga(6)       2000    113,000(4)    1,907(5)     35,000        5,000
                      1999    100,700(4)    1,600(5)      ---           ---         ---          ---
                      1998     80,700(4)    1,600(5)      ---           ---         ---          ---

Stephen W. Everett(7) 2000    114,000(8)      470        25,000         ---         ---          ---
                      1999      ---           ---         ---           ---        35,000        ---
                      1998(9)   ---           ---         ---           ---         ---          ---
</TABLE>

                                       37
<PAGE>

-------------

(1) Bonus paid ($25,000) by Dialysis Corporation of America in 1998 not included
    in "Salary."

(2) Includes automobile allowance and related expenses, life and disability
    insurance premiums.

(3) President and director of Techdyne, and an officer and/or director of its
    subsidiaries.

(4) All compensation paid by Techdyne.

(5) Automobile lease and related expenses and term life insurance premiums
    ($300 for each year).

(6) Senior Vice President, Treasurer and director of Techdyne.

(7) President and director of Dialysis Corporation of America.

(8) All compensation paid by Dialysis Corporation of America.

(9) Joined Dialysis Corporation of America in November, 1998.

Employment Contracts and Termination of Employment and Change-In-Control
Arrangements

         Mr. Langbein has an employment agreement with the company through
August 31, 2003 at an annual salary, presently of $278,000 with yearly
increases in increments of no less than $10,000.  The agreement provides for
Mr. Langbein to serve as the Chairman, Chief Executive Officer and President.

         Main provisions of the employment agreement

         *  monthly automobile allowance
         *  benefit plans and other fringe benefits available to the company
            employees and executives
         *  reimbursement for business expenses
         *  payment of universal and term life insurance owned by Mr. Langbein
         *  indemnification for acting as an officer and/or director of the
            company and subsidiaries
         *  non-competition for two years from termination within 20 miles of
            the company's primary operations; company has option to request
            non-competition within the United States at $4,000 per month for
            each 12 month period, with escalation thereafter
         *  full compensation first 90 days of disability with company option
            to continue employment with full compensation less disability
            payments or terminate

         The Medicore employment agreement also contains different termination
provisions as follows:


         *  upon death, wrongful termination (defined below), disability
            termination or change in control (defined below), lump sum payment
            equal to Mr. Langbein's salary, including expenses and benefits, for
            three years from termination; the proposed sale of Techdyne to
            Simclar (see Item 1, "Business - General") triggers the change in
            control provision and lump sum payment, which Mr. Langbein has
            waived

         *  Mr. Langbein has option to take 400,000 shares of company common
            stock instead of the lump sum payment; two year right to demand
            registration of the shares, and three years may include the shares
            in any registration statement filed by the company; registration
            at the cost of the company

                                       38
<PAGE>

         *  full vesting of any warrants, options or similar rights; Mr.
            Langbein has choice to keep those options, otherwise the company
            has to repurchase them at a certain repurchase formula
         *  for cause by Medicore - no benefits or salary
         *  for good reason (defined below) by Mr. Langbein - the company
            continues to pay salary, benefits and expenses, and all options
            and other securities shall be fully vested and exercisable; or
            provide Mr. Langbein with the lump sum payment, at Mr. Langbein's
            option, the company to acquire the shares
         *  at expiration, if the company does not renew or enter into new
            employment agreement, severance allowance which is the lump sum
            payment or Mr. Langbein's option to take the company shares.


Definitions

         *  "cause" - willful failure to perform duties under the employment
            agreement, and illegal or gross misconduct which damages the
            business or reputation of Medicore
         *  "good reason" - assigning Mr. Langbein duties inconsistent with
            his position or any action that results in reducing Mr.
            Langbein's authority, duty or responsibilities; reduction of salary,
            expenses or benefits; or other substantial breach of the agreement
         *  "change in control" includes (a) the announcement for and/or
            acquisition by any person not affiliated with Mr. Langbein of 25%
            or more of the outstanding common stock, or (b) a sale of
            substantially all of the assets, or a merger or acquisition of
            the company (exclusive of a proposed sale of control of Techdyne
            to Simclar, see Item 1, "Business - General."), or (c) certain
            changes in the board other than through shareholder elections of
            members nominated by the existing board.

         Barry Pardon had a five year employment agreement with Techdyne through
December 31, 2000, which provided him with a base annual salary of $120,000,
plus an override commission of 1/2% of net sales of Techdyne in excess of
$20,000,000 the first year of the agreement, increasing $1,000,000 each
subsequent year of the term.   For acquired companies such as Lytton, the sales
for the preceding fiscal year were added to the base plus $1,000,000 yearly
increase before the override applied.  Mr. Pardon executed a new employment
agreement on September 27, 2000, effective for a period of five years
commencing January 1, 2001. Mr. Pardon's employment agreement provides for the
following:

         *  base annual salary of $130,000
         *  over-ride commission of .5% of net sales in excess of $45,000,000
            (increased by net sales of acquired companies) increasing $1,000,000
            each of the next two years
         *  automobile, travel and entertainment expenses
         *  termination may occur by (i) expiration of the term; (ii) death of
            Mr. Pardon; (iii) Mr. Pardon's disability; (iv) conviction of a
            crime, failure to carry out policies of Techdyne, dishonest
            practice, conduct prejudicing Techdyne or breach of the employment
            agreement; severance, which is nine months' salary, only paid upon
            death or termination without cause
         *  non-competition for one year from termination; restrictions on Mr.
            Pardon calling upon customers or suppliers of Techdyne, diverting
            customers, services, or products of Techdyne, or disclosing any
            trade secrets

         Stephen W. Everett, President and director of Dialysis Corporation of
America, has a five-year employment contract effective January 1, 2001,
providing him with a first year salary of $120,000, increasing a minimum of

                                       39
<PAGE>

$10,000 per annum the second and third years, and for each of the two remaining
years, the prior year's adjusted compensation increased by an amount equal to
the lesser of 3% of pre-tax profits or $10,000.  Mr. Everett's employment
agreement also provides:

         *  employee and fringe benefits to the extent available to other
            similarly situated executive employees
         *  reimbursement for reasonable out-of-pocket expenses incurred in
            connection with his duties
         *  vacations normally taken by senior management; compensated for
            annual vacation
         *  termination
            -  death; three months' severance pay
            -  for cause; salary and expenses to date of termination ("cause"
               includes conviction for fraud or criminal conduct, habitual
               drunkenness or drug addition, embezzlement, regulatory agency
               sanctions against Mr. Everett or the company due to his
               wrongful acts, material breach of the agreement, dishonesty, or
               resignation, except if due to breach by the company)
            -  by the company after 13 weeks of disability; three months'
               severance pay
            -  by Mr. Everett upon breach by the company; severance pay equal
               to the greater of six months of his then compensation or his
               remaining compensation under the agreement
         *  confidentiality restrictions two years from termination
         *  non-competition for one year from termination within the United
            States; provided, non-competition eliminated if the company
            terminates Mr. Everett without cause or due to the company's
            material breach of the agreement
         *  Mr. Everett to assign any patents, property rights, discovery or
            idea to the company

         Certain executive and accounting personnel and administrative
facilities of the company and its subsidiaries, including Techdyne and Dialysis
Corporation of America, were common for fiscal 2000.  The costs of executive
and accounting salaries and other shared corporate overhead are allocated
pursuant to a Service Agreement between the company and Techdyne, and otherwise
charged on the basis of direct usage when identifiable with any balance
allocated on the basis of time spent with respect to Dialysis Corporation of
America.  Mr. Langbein, as an officer and director of the company, Medicore
and Dialysis Corporation of America, and Mr. Daniel Ouzts, as an officer of
the company, Medicore and Dialysis Corporation of America, divide their time
and efforts among each company.  See Item 13, "Certain Relationships and
Related Transactions."


Options, Warrants or Rights

1989 Medicore Stock Option Plan

         *  expires May 18, 2009
         *  grants available to employees, officers, directors, consultants,
            advisors and similar persons
         *  non-qualified; five year term; exercise price fair market value
            on date of grant
         *  may be exercised with cash or company common stock or both; if
            exercised with stock, optionee receives additional option for
            amount of shares used for exercise at exercise price of the then
            current market price exercisable for remainder of original option
         *  termination of optionee's affiliation with the company

                                       40
<PAGE>

            -  death, disability or retirement after age 65; exercisable for
               two years from such event but not beyond expiration date of
               option
            -  any other termination; right to exercise terminates immediately

         *  forced redemption at formulated prices upon change in control of the
            company which includes (i) sale of substantially all assets of the
            company or its merger or consolidation, which would be triggered by
            the sale of Techdyne to Simclar (see Item 1, "Business - General"),
            (ii) majority of board changes other than by election of
            shareholders pursuant to board solicitation or vacancies filled by
            board caused by death or resignation, or (iii) any person acquires
            or makes a tender offer for at least 25% of the company's common
            stock; optionee may waive redemption

         *  options are non-transferable
         *  1989 Medicore Plan history last five years to March 21, 2001
            -  1,000,000 shares reserved for issuance
            -    809,000 granted in 1995
            -    803,000 expired
            -      3,000 exercised (in 2000)
            -      3,000 cancelled (in 1996 and 1997)
            -     35,000 granted in 1997 (exercisable at $2.38 per share to
                  6/10/02)
            -    820,000 granted in July, 2000 (exercisable at $1.38 per share
                 to 7/26/05)
            -    855,000 outstanding (18 persons including 11 officers and
                 directors of the company, Techdyne and Dialysis Corporation
                 of America)

2000 Medicore Stock Option Plan

        *  adopted February 17, 2000
        *  authorized 500,000 (incentive and non-qualified)
        *  expires February 16, 2005
        *  exercise price determined by board (or committee); must be at least
           fair market volume on date of grant
        *  exercise by cash, or discretion of board, (i) through delivery of
           shares with fair market value equal to exercise price, (ii)
           optionee's personal recourse or (discretion of board) non-recourse
           note, (iii) assignment to company of proceeds form sale of stock
           acquired on exercise with authorization to broker to pay proceeds
           to the company for the exercise price, or (iv) any combination of
           the above
        *  options and underlying shares non-transferable except by will or
           laws of descent
        *  termination of optionee's affiliation with the company
           -  for cause: exercise terminates immediately
           -  retirement, permanent disability or death: exercisable for nine
              months from such event

           -  change in control; triggered by sale of Techdyne (see 1989 Plan
              above)

        *  2000 Medicore Plan history to March 21, 2001
           -  475,000 outstanding (granted February 17, 2000)
              +  175,000 non-qualified options
              +  300,000 incentive options
              +  exercisable at $3.25 per share to 2/16/03
              +  none cancelled or exercised

1995 Techdyne Options

         *  non-qualified

                                       41
<PAGE>

         *  152,500 granted to eight directors of Techdyne and its subsidiaries
            and counsel; 7,500 expired
         *  145,000 exercised at $1.75 per share on February 25, 2000, cash for
            par value, the balance with three-year non-recourse promissory
            notes at 6.19% interest secured by the common stock held in escrow
         *  voting rights held by share owner provided no default exists under
            the note
         *  restriction on transfer of these shares until the exercise price
            has been paid  in full

1997 Techdyne Stock Option Plan

         *  expires June 22, 2002
         *  terms substantially similar to our company's 2000 Stock Option Plan
            (see above)
         *  1997 Techdyne Plan history to March 21, 2001
            -  500,000 reserved for issuance
            -  555,000 granted
            -  none exercised
            -  106,000 cancelled
            -  449,000 outstanding:
               +  325,000 exercisable at $3.25 per share through June 22, 2002
                  (155,000 non-qualified, 170,000 incentive)
               +  31,000 exercisable at $4.00 per share; expiration dates range
                  from June 29, 2002 to December 14, 2002; all incentive options
               +  3,000 exercisable at $4.00 per share; expiration date May 23,
                  2003;
               +  90,000 exercisable at $2.00 per share, exercisable for three
                  years, with one third vested, one third vesting on October 16,
                  2001 and one third vesting on October 16, 2002;

1995 Dialysis Corporation of America Stock Option Plan

         *  expired November 9, 2000
         *  terms substantially similar to our company's 2000 Stock Option Plan
            (see above)
         *  5,000 outstanding to a director of Dialysis Corporation of America
            exercisable at $2.25 per share through June 9, 2003

1999 Dialysis Corporation of America Stock Option Plan

         *  expires April 20, 2009
         *  terms substantially similar to our company's 2000 Stock Option Plan
            (see above)
         *  1999 Dialysis Corporation of America Plan history to March 21, 2001
            -  800,000 shares reserved for issuance
            -  800,000 shares granted in 1999
               +  435,000 non-qualified options (all one year except for 95,000
                  (5 years) to April 20, 2004)
               +  365,000 incentive options expiring April 20, 2004
            -  exercisable at $1.25 per share
            -  60,000 options cancelled due to termination of affiliation with
               the company
            -  340,000 options exercised; payment of par value and 3 year non-

                                       42
<PAGE>

               recourse promissory notes for the balance; stock held by Dialysis
               Corporation of America as collateral to secure notes
            -  165,000 granted January 2, 2001 (33,000 vested immediately;
               33,000 vest every January 1)
            -  433,000 options outstanding (all incentive options except for
               35,000 options)

         The exercise price of options is no less than 100% of the fair market
value of the common stock on the date of grant.

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
                                  Individual Grants                         Potential Realizable
-----------------------------------------------------------------------       Value at Assumed
                    Number of       % of Total                              Annual Rates at Stock
                    Securities      Options/SARs                             Price Appreciation
                    Underlying      Granted to     Exercise                    For Option Term
                   Options/SARs     Employees in    Price    Expiration     ---------------------
Name                Granted (#)     Fiscal Year     ($/Sh)      Date         5%($)        10%($)
(a)                    (b)              (c)          (d)        (e)           (f)           (g)
----                -----------     -----------     ------     ------        -----        ------
<S>                   <C>               <C>          <C>       <C>          <C>          <C>
Thomas K. Langbein    300,000           36.6         1.38      7/26/05      $114,000     $252,000
                      250,000           52.6         3.25      2/16/03            --(1)   102,000
Barry Pardon           80,000           25.0         1.38      7/26/01        30,400       67,200
                       25,000            5.3         3.25      2/16/03            --(1)    10,250
Joseph Verga           35,000            4.3         1.38      7/26/05        13,300       29,400
Stephen W. Everett     25,000            3.0         1.38      7/26/05         9,500       21,000
</TABLE>
----------------
(1)  Based upon 5% and 10% appreciation rates applied to market price at grant
date, the options would reflect a market valuation of $3.18 and $3.66,
respectively. Since the exercise price is $3.25, the options have no potential
realizable value at the end of the three year option term using a 5%
appreciation rate.

                                       43
<PAGE>

<TABLE>
<CAPTION>
     Aggregated Option/SAR Exercises In Last Fiscal Year and FY-End Option/SAR Values


   (a)                        (b)                  (c)              (d)                 (e)
                                                                Number of
                                                                Securities           Value of
                                                                Underlying          Unexercised
                                                                Unexercised         In-the-Money
                                                                Options/SARs       Options/SARs at
                                                                at FY-End (#)     Fiscal Year End($)
                        Shares Acquired      Value Realized     Exercisable/         Exercisable/
Name                    on  Exercise (#)           ($)          Unexercisable      Unexercisable($)
----                    ---------------      --------------     -------------      ---------------
<S>                        <C>                  <C>             <C>                     <C>
CEO
Thomas K. Langbein
    Medicore Options       -0-                  -0-             550,000 (exer.)         ---(1)
    Techdyne Options       40,000(2)            60,000          100,000 (exer.)         ---(3)
    Dialysis Options       -0-                  -0-             260,000 (exer.)         ---(4)

Barry Pardon (5)
    Medicore Options       -0-                  -0-             105,000 (exer.)         ---(6)
    Techdyne Options       40,000(2)            60,000          100,000 (exer.)         ---(3)
    Dialysis Options       -0-                  -0-              -0-                    ---

Joseph Verga (7)
    Medicore Options       -0-                  -0-              35,000 (exer.)         ---(8)
    Techdyne Options       25,000(2)            37,500           55,000 (exer.)         ---(3)
    Dialysis Options       -0-                  -0-              -0-                    ---

Stephen W. Everett(9)
    Medicore Options       25,000               -0-              25,000 (exer.)         ---(10)
    Techdyne Options       -0-                  -0-              -0-                    ---
    Dialysis Options
</TABLE>
--------------

(1)  The options are exercisable for 250,000 shares through February 16, 2003
     at $3.25 per share, and for 300,000 shares through July 26, 2005 at $1.38
     per share.  The company's options were all out-of-the-money, since the
     closing price of the company's common stock as reported by Nasdaq as of
     December 29, 2000 was $.88.

(2)  Exercised on February 25, 2000 with cash for par value ($.01 per share)
     and the balance with a non-recourse three year promissory note.

(3)  The options are exercisable at $3.25 per share through June 22, 2002.  The
     Techdyne options were out-of-the-money, since the closing price of the
     Techdyne common stock as reported by Nasdaq as of December 29, 2000 was
     $1.31.

(4)  The options are exercisable at $1.25 per share through April 20, 2004.
     The Dialysis options were out-of-the-money, since the closing price of
     the company's common stock as reported by Nasdaq at December 29, 2000 was
     $.63.

                                       44
<PAGE>

(5)  President and director of Techdyne.

(6)  The options are exercisable for 80,000 shares through July 26, 2005, at
     $1.38 per share, and for 25,000 shares through February 17, 2003, at $3.25
     per share.  The company's options were all out-of-the-money, since the
     closing price of the company's common stock as reported by Nasdaq as of
     December 29, 2000 was $.88.

(7)  Senior Vice President, Treasurer and director of Techdyne.

(8)  The options are exercisable for 35,000 shares through July 26, 2005, at
     $1.38 per share.  The company's options were all out-of-the-money, since
     the closing price of the company's common stock as reported by Nasdaq as
     of December 29, 2000 was $.88.

(9)  President and director of Dialysis Corporation of America.

(10) The options are exercisable for 25,000 shares through July 27, 2005, at
     $1.38 per share.  The company's options were all out-of-the-money, since
     the closing price of the company's common stock as reported by Nasdaq as
     of December 29, 2000 was $.88.

                                       45
<PAGE>
                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      The following is a list of documents filed as part of this report.

         1.        All financial statements - See Index to Consolidated
                   Financial Statements.

         2.        Financial statement schedules - See Index to Consolidated
                   Financial Statements.

         3.        Refer to subparagraph (c) below.

(b)      Current Reports on Form 8-K filed during fourth quarter.

         1.        We filed a Current Report on Form 8-K dated October 12, 1999,
                   Item 5, "Other Events" re: conversion of Techdyne, Inc. note
                   into Techdyne common stock.

(c)      Exhibits*


         (3)(i)    Restated Certificate of Incorporation, Articles of
                   Incorporation, as amended (incorporated by reference to the
                   Company's Annual Report on Form 10-K for the year ended
                   December 31, 1997 ("1997 Form 10-K"), Part IV, Item
                   14(c)(3)(i)).

         (ii)      Articles of Amendment to the Restated Articles of
                   Incorporation of Medicore, Inc., dated September, 1995.

         (iii)     By-laws, as amended (incorporated by reference to the
                   Company's 1997 Form 10-K, Part IV, Item 14(c)(3)(ii)).

         (4)       Instruments defining the rights of security holders,
                   including indentures.

         (i)       1989 Stock Option Plan (incorporated by reference to the
                   Company's 1997 Form 10-K, Part IV, Item 4(i)).

         (ii)      Form of Stock Option Agreement issued pursuant to the 1989
                   Stock Option Plan (incorporated by reference to the Company's
                   1997 Form 10-K, Part IV, Item 4(ii)).

         (iii)     Form of Additional Non-Qualified Stock Option Agreement
                   issuable under the Stock Option Agreement (incorporated by
                   reference to the Company's 1997 Form 10-K, Part IV, Item
                   14(iii)).

         (iv)      Form of 2000 Option granted to MainStreet IPO.com Inc. and
                   Affiliates (incorporated by reference to the Company's Annual
                   Report on Form 10-K for the year ended December 31, 1999
                   ("1999 Form 10-K"), Part IV, Item 14(iv)).

         (v)       2000 Stock Option Plan (incorporated by reference to the
                   Company's 1999 Form 10-K, Par iv, Item 4(v)).

                                       54
<PAGE>

         (vi)      Form of Stock Option Certificate issued under the 2000 Stock
                   Option Plan (incorporated by reference to the Company's 1999
                   Form 10-K, Part IV, Item 14(vi)).

         (10)      Material contracts.

         (i)       Employment Agreement between the Company and Thomas K.
                   Langbein dated August, 1998 (incorporated by reference to the
                   Company's Annual Report on Form 10-K for year ended December
                   31, 1998 ("1998 Form 10-K"), Part IV, Item 14(c)(10)(i)).

         (ii)      Lease between the Company and Heights Plaza Associates, dated
                   April 30, 1981 (incorporated by reference to the Company's
                   1997 Form 10-K, Part IV, Item 14(c)(10)(ii)).

         (iii)     Amendment to lease between the Company and Heights Plaza
                   Associates, dated March 31, 1996 (incorporated by reference
                   to the Company's 1997 Form 10-K, Part IV, Item
                   14(c)(10)(iii)).

         (iv)      Promissory Note of Techdyne, Inc. (1) to the Company dated
                   April 10, 1995 (incorporated by reference to Techdyne's
                   Registration Statement on Form SB-2, Registration No.
                   33-94998-A ("Techdyne's Form SB-2"), Part II, Item 27,
                   (a)(a)).

         (v)       Lease between the Company and Viragen, Inc.(2) dated December
                   8, 1992 (incorporated by reference to the Company's 1997 Form
                   10-K, Part IV, Item 14(c)(10)(xi)).

         (vi)      Addendum to Lease between the Company and Viragen, Inc.(2)
                   dated January 15, 1993 (incorporated by reference to the
                   Company's 1997 Form 10-K, Part IV, Item 14(c)(10)(xii)).

         (vii)     Lease Renewal Letter by the Company to Viragen, Inc.(2) lease
                   dated August 12, 1997 (incorporated by reference to the
                   Company's 1997 Form 10-K, Part IV, Item 14(c)(10)(xiii)).

         (viii)    Loan Agreement between Dialysis Corporation of America(3) and
                   Mercantile-Safe Deposit and Trust Company dated November 30,
                   1988(4) (incorporated by reference to Dialysis Corporation of
                   America's Form 10-Q for the quarter ended March 31, 1998
                   ("DCA's March, 1998 Form 10-Q"), Part II, Item 6(a), Part II,
                   Item 10(iii)).

         (ix)      First Amendment to Loan Agreement between Dialysis
                   Corporation of America(3) and Mercantile-Safe Deposit and
                   Trust Company dated December 1, 1997(4) (incorporated by
                   reference to Dialysis Corporation of America's Annual Report
                   on Form 10-K for the year ended December 31, 1997 ("DCA's
                   1997 Form 10-K"), Part IV, Item 14(c)(xxviii)).

         (x)       Promissory Note to Mercantile-Safe Deposit and Trust Company
                   by Dialysis Corporation of America(3) dated November 30,
                   1988(4) (incorporated by reference to DCA's March, 1998 Form
                   10-Q, Part II, Item 6(a), Part II, Item 10(ii)).


         (xi)      First Amendment and Modification to Promissory Note to
                   Mercantile-Safe Deposit and Trust Company by Dialysis
                   Corporation of America(3)(4) (incorporated by reference to
                   DCA's 1997 Form 10-K, Part IV, Item 14(c)(xxix)).

                                       55
<PAGE>

         (xii)     Lease Agreement between Dialysis Services of PA., Inc. -
                   Wellsboro(5) and James and Roger Stager dated January 15,
                   1995 (incorporated by reference to the Company's 1994 Form
                   10-K, Part IV, Item 14(a) 3 (10)(lxii)).

         (xiii)    Lease between Dialysis Corporation of America(3) and Dialysis
                   Services of PA., Inc. - Lemoyne(5) dated December 23, 1998
                   (incorporated by reference to Dialysis Corporation of
                   America's Annual Report on Form 10-K for the year ended
                   December 31, 1998 ("DCA's 1998 Form 10-K"), Part IV, Item
                   14(c)(ii)).

         (xiv)     Medical Director Agreement between Dialysis Services of PA.,
                   Inc. - Wellsboro(5) and George Dy, M.D. dated September 29,
                   1994 [*] (incorporated by reference to the Company's
                   Quarterly Report on Form 10-Q for the quarter ended September
                   30, 1994 as amended January, 1995 ("September, 1994 Form
                   10-Q"), Part II, Item 6(a)(10)(i)).

         (xv)      Agreement for In-Hospital Dialysis Services between Dialysis
                   Services of PA., Inc. - Wellsboro(5) and Soldiers & Sailors
                   Memorial Hospital dated September 28, 1994 [*] (incorporated
                   by reference to the Company's September, 1994 Form 10-Q, Part
                   II, Item 6(a)(10)(ii)).

         (xvi)     Medical Director Agreement between Dialysis Services of PA.,
                   Inc. - Lemoyne(5) and Herbert I. Soller, M.D. dated January
                   30, 1995 [*] (incorporated by reference to the Company's 1994
                   Form 10-K, Part IV, Item 14(a) 3 (10)(lx)).

         (xvii)    Agreement for In-Hospital Dialysis Services between Dialysis
                   Services of PA., Inc. - Lemoyne(5) and Pinnacle Health
                   Hospitals dated June 1, 1997 [*] (incorporated by reference
                   to Dialysis Corporation of America's Current Report on Form
                   8-K dated June 19, 1997, Part II, Item 7(c)(10)(i)).

         (xviii)   Form of Exclusive Sales Representative Agreement between
                   Techdyne, Inc.(1) and sales representative ** (incorporated
                   by reference to the Company's 1994 Form 10-K, Part IV, Item
                   14(a) 3 (10)(lxiv)).

         (xix)     Mortgage between Techdyne (Europe) Limited(6) and The Royal
                   Bank of Scotland dated August 8, 1994 (incorporated by
                   reference to the Company's June, 1994 Form 10-Q, Part II,
                   Item 6(a)(28)(vi)).


         (xx)      Employment Agreement between Techdyne, Inc.(1) and Barry
                   Pardon dated September 27, 2000 (incorporated by reference to
                   Techdyne, Inc.'s Annual Report on Form 10-K for the year
                   ended December 31, 2000, Part IV, Item 14(c)(10)(iii)).



         (xxi)     Service Agreement between the Company and Techdyne Inc.(1),
                   dated October 25, 1996 (incorporated by reference to
                   Techdyne's Registration Statement on Form S-3, Registration
                   No. 333-15371, Part II, Item 16, Exhibit 10(a)).

         [*]       Confidential portions omitted have been filed separately with
                   the Securities and Exchange Commission.

                                       56
<PAGE>

         (xxii)    Service Agreement renewal letter from the Company to
                   Techdyne, Inc.(1), dated September 30, 2000 (incorporated by
                   reference to Techdyne's Annual Report on Form 10-K for the
                   year ended December 31, 2000 ("Techdyne's 2000 Form 10-K"),
                   Part IV, Item 14(10)(viii)).

         (xxiii)   Lease Agreement between Techdyne, Inc.(1) and Route 495
                   Commerce Park Limited Partnership dated March 25, 1997
                   (incorporated by reference to Techdyne's Quarterly Report on
                   Form 10-Q for the quarter ended March 30, 1997, Item 6(a),
                   Part II, Item 10(i)).

         (xxiv)    Lease Agreement between Techdyne, Inc.(1) and PruCrow
                   Industrial Properties, L.P. dated April 30, 1997
                   (incorporated by reference to Techdyne's Current Report on
                   Form 8-K dated June 4, 1997 ("Techdyne's June 4, 1997 Form
                   8-K"), Item 7(c)(10)(i)).

         (xxv)     Lease Agreement between Techdyne, Inc.(1) and EGP Houston
                   Partners Ltd. dated April 29, 1997 (incorporated by reference
                   to Techdyne's June 4, 1997 Form 8-K, Item 7(c)(10)(ii)).

         (xxvi)    Asset Based Loan and Security Agreement between Techdyne,
                   Inc.(1) and The Provident Bank dated February 9, 2000
                   (incorporated by reference to Techdyne, Inc.'s Current Report
                   on Form 8-K dated March 1, 2000 ("Techdyne's March, 2000 Form
                   8-K"), Item 7(c)(10)(i)).*

         (xxvii)   Line of Credit Promissory Note for $4,500,000 from Techdyne,
                   Inc.(1) to The Provident Bank dated February 9, 2000
                   (incorporated by reference to Techdyne's March, 2000 Form
                   8-K, Item 7(c)(10)(ii)).*

         (xxviii)  Term Loan Promissory Note for $1,000,000 from Techdyne,
                   Inc.(1) to The Provident Bank dated February 9, 2000
                   (incorporated by reference to Techdyne's March, 2000 Form
                   8-K, Item 7(c)(10)(iii)).*

         (xxix)    Guaranty of the Company for the Lytton Incorporated(6)
                   financing with The Provident Bank dated February 9, 2000
                   (incorporated by reference to Techdyne's March, 2000 Form
                   8-K, Item 7(c)(10)(iv)).*

         (xxx)     Security Agreement of Techdyne, Inc.(1) for its Guaranty of
                   the Lytton Incorporated(6) financing with The Provident Bank
                   dated February 9, 2000 (incorporated by reference to
                   Techdyne's March, 2000 Form 8-K, Item 7(c)(10)(v)).*

         (xxxi)    Amendment to Asset Based Loan and Security Agreement between
                   Lytton Incorporated(6) and The Provident Bank dated February
                   9, 2000 (incorporated by reference to Techdyne's March, 2000
                   Form 8-K, Item 7(c)(10)(vi)).*

         (xxxii)   Amended and Restated Revolving Credit Promissory Note for
                   $3,000,000 from Lytton Incorporated(6) to The Provident Bank
                   dated February 9, 2000 (incorporated by reference to
                   Techdyne's March, 2000 Form 8-K, Item 7(c)(10)(vii)).*

         (xxxiii)  Amended and Restated Term Loan Promissory Note for $1,400,000
                   from Lytton Incorporated(6) to The Provident Bank dated
                   February 9, 2000 (incorporated by reference to Techdyne's
                   March, 2000 Form 8-K, Item 7(c)(10)(viii)).*

                                       57
<PAGE>

         (xxxiv)   Amended and Restated Equipment Acquisition Loan Promissory
                   Note for $500,000 from Lytton Incorporated(6) to The
                   Provident Bank dated February 9, 2000 (incorporated by
                   reference to Techdyne's March, 2000 Form 8-K, Item
                   7(c)(10)(ix)).*

         (xxxv)    Guaranty of Lytton Incorporated(6) for Techdyne, Inc.'s(1)
                   financing with The Provident Bank dated February 9, 2000
                   (incorporated by reference to Techdyne's March, 2000 Form
                   8-K, Item 7(c)(10)(x)).*

         (xxxvi)   Security Agreement for Lytton Incorporated(6) with respect to
                   its Guaranty of Techdyne, Inc.(1)'s financing with The
                   Provident Bank dated February 9, 2000 (incorporated by
                   reference to Techdyne's March, 2000 Form 8-K, Item
                   7(c)(10)(xi)).*

         (xxxvii)  Conditional Assignment of Lease by Lytton Incorporated(6) to
                   The Provident Bank dated February 9, 2000 (incorporated by
                   reference to Techdyne's March, 2000 Form 8-K, Item
                   7(c)(10)(xii)).*(4)

         (xxxviii) 1995 Stock Option Plan of Dialysis Corporation of America(3)
                   (November 10, 1995) (incorporated by reference to DCA Form
                   SB-2, Part II, Item 27, 10(5)).

         (xxix)    Form of Dialysis Corporation of America(3) Stock Option
                   Certificate under 1995 Stock Option Plan (November 10, 1995)
                   (incorporated by reference to DCA Form SB-2, Part II, Item
                   27, 10(4)).

         (xl)      Lease between Dialysis Services of PA., Inc. - Carlisle(7)
                   and Lester P. Burkholder, Jr. and Kirby K. Burkholder dated
                   November 1, 1996 (incorporated by reference to Dialysis
                   Corporation of America's Annual Report on Form 10-K for the
                   year ended December 31, 1996 ("DCA's 1996 Form 10-K"), Part
                   IV, Item 14(a) 3 (10)(xxiii)).

         (xli)     Lease between Dialysis Services of NJ., Inc. - Manahawkin(7)
                   and William P. Thomas dated January 30, 1997 (incorporated by
                   reference to DCA's 1996 Form 10-K, Part IV, Item 14(a) 3
                   (10)(xxiv)).

         (xlii)    Addendum to Lease Agreement between William P. Thomas and
                   Dialysis Services of NJ., Inc. - Manahawkin(7) dated June 4,
                   1997 (incorporated by reference to DCA's 1997 Form 10-K, Part
                   IV, Item 14(c)(10)(xviii)).

         (xliii)   Medical Director Agreement between Dialysis Services of NJ,
                   Inc. - Manahawkin(7) and Atlantic Nephrology Group, Inc.
                   dated January 21, 1998(8)(9) [*] (incorporated by reference
                   to DCA's 1998 Form 10-K, Part IV, Item 14(c)(xxv)).

         (xliv)    Agreement for In-Hospital Dialysis Services between Dialysis
                   Services of PA., Inc. - Carlisle(7) and Carlisle Hospital
                   dated August 15, 1997 [*] (incorporated by reference to
                   Dialysis Corporation of America's Current Report on Form 8-K
                   dated August 29, 1997, Item 7(c)(10(i)).

[*] Confidential portions omitted have been filed separately with the
    Securities and Exchange Commission.

                                       58
<PAGE>

         (xlv)     Equipment Master Lease Agreement BC-105 between Dialysis
                   Corporation of America(3) and B. Braun Medical, Inc. dated
                   November 22, 1996 (incorporated by reference to DCA's 1996
                   Form 10-K, Part IV, Item 14(a) 3 (10)(xxvii)).

         (xlvi)    Schedule of Leased Equipment 0597 commencing June 1, 1997 to
                   Master Lease BC-105 (incorporated by reference to Dialysis
                   Corporation of America's Quarterly Report on Form 10-Q for
                   the quarter ended June 30, 1997 ("DCA's June, 1997 10-Q"),
                   Part II, Item 6(a), Part II, Exhibit 10(i)).(10)

         (xlvii)   Form of Techdyne, Inc.(1) 1997 Stock Option Plan
                   (incorporated by reference to Techdyne's Current Report on
                   Form 8-K dated June 24, 1997 ("Techdyne's June 24, 1997 Form
                   8-K"), Item 7(c)(4)(i)).

         (xlviii)  Form of Techdyne, Inc.(1) 1997 Incentive Stock Option
                   (incorporated by reference to Techdyne's June 24, 1997 Form
                   8-K, Item 7(c)(4)(ii)).

         (xlix)    Form of Techdyne, Inc.(1) 1997 Non-Qualified Stock Option
                   (incorporated by reference to Techdyne's June 24, 1997 Form
                   8-K, Item 7(c)(4)(iii)).

         (l)       Form of Stock Option to The Investor Relations Group, Inc.
                   (incorporated by reference to Techdyne's Current Report on
                   Form 8-K dated May 28, 1998, Item 7(c)(10)(i)).

         (li)      Lease between Dialysis Services of PA., Inc. -
                   Chambersburg(7) and BPS Development Group dated April 13,
                   1998 (incorporated by reference to DCA's March, 1998 Form
                   10-Q, Part II, Item 6(a), Part II, Item 10(i)).

         (lii)     Stock Purchase Agreement between Dialysis Corporation of
                   America(3) and Atlantic Nephrology Group, Inc. (incorporated
                   by reference to Dialysis Corporation of America's Quarterly
                   Report on Form 10-Q for the quarter ended June 30, 1998, Part
                   II, Item 6(a), Part II, Item 10(i)).

         (liii)    Lease between Dialysis Corporation of America(3) and Wirehead
                   Networking Solutions, Inc. dated December 1, 1998
                   (incorporated by reference to DCA's 1998 Form 10-K, part IV,
                   Item 14(c)(10)(xxvi)).

         (liv)     1999 Stock Option Plan of the Dialysis Corporation of
                   America(3) (May 21, 1999) (incorporated by reference to
                   Dialysis Corporation of America's Annual Report on Form 10-K
                   for the year ended December 31, 1999 ("DCA 1999 Form 10-K"),
                   Part IV, Item 14(c)(10)(xxiii)).

         (lv)      Form of Stock Option Certificate under the 1999 Stock Option
                   Plan (May 21, 1999) (incorporated by reference to the DCA
                   1999 Form 10-K, Part IV, Item 14(c)(10)(xxiv)).

         (lvi)     Lease between DCA of Vineland, LLC(14) and Maintree Office
                   Center, L.L.C. dated May 10, 1999 (incorporated by reference
                   to the DCA 1999 Form 10-K, Part IV, Item 14(c)(10)(xxv)).

                                       59
<PAGE>

         (lvii)    Medical Director Agreement between DCA of Vineland, LLC(14)
                   and Vineland Dialysis Professionals dated April 30, 1999
                   (incorporated by reference to the DCA 1999 Form 10-K, Part
                   IV, Item 14(c)(10)(xxvi)).

         (lviii)   Medical Director Agreement between Dialysis Services of PA.,
                   Inc. - Carlisle(7) and Cumberland Valley Nephrology
                   Associates, P.C. dated April 30, 1999(11) (incorporated by
                   reference to the DCA 1999 Form 10-K, Part IV, Item
                   14(c)(10)(xxvii)).

         (lix)     Management Services Agreement between Dialysis Corporation of
                   America(3) and DCA of Vineland, LLC(14) dated April 30,
                   1999(12) (incorporated by reference to the DCA 1999 Form
                   10-K, Part IV, Item 14(c)(10)(xxviii)).

         (lx)      Amendment No. 1 to Management Services Agreement between
                   Dialysis Corporation of America(3) and DCA of Vineland,
                   LLC(7) dated October 27, 1999 (incorporated by reference to
                   the DCA 1999 Form 10-K, Part IV, Item 14(c)(10)(xxix)).

         (lxi)     Indemnity Deed of Trust from Dialysis Corporation of
                   America(3) to Trustees for the benefit of St. Michaels Bank
                   dated December 3, 1999 (incorporated by reference to Dialysis
                   Corporation of America's Current Report on Form 8-K dated
                   December 13, 1999 ("DCA's December Form 8-K"), Item
                   7(c)(99)(i)).

         (lxii)    Guaranty Agreement from Dialysis Corporation of America(3) to
                   St. Michaels Bank dated December 3, 1999 (incorporated by
                   reference to DCA's December Form 8-K, Item 7(c)(99)(ii)).

         (lxiii)   Promissory Note from the Company to Dialysis Corporation of
                   America(3) dated January 27, 2000 (incorporated by reference
                   to DCA's Current Report on Form 8-K dated February 10, 2000,
                   Item 7(c)10.1)

         (lxiv)    Management Services Agreement between DCA of Vineland, LLC
                   (4) and DCA Medical Services, Inc. (5) dated January 1,
                   2000(13) (incorporated by reference to the DCA 1999 Form
                   10-K, Part IV, Item 14(c)(10)(xxxiii)).


         (lxv)     Service Agreement renewal letter between Medicore, Inc. and
                   Techdyne, Inc. dated September 30, 2000 (incorporated by
                   reference to the Techdyne 2000 Form 10-K, Part IV, Item
                   14(c)(10(vii)).

         (lxvi)    Amended Secured Promissory Note from Medicore, Inc. to
                   Dialysis Corporation of America dated March 27, 2000
                   (incorporated by reference to Dialysis Corporation of
                   America's Annual Report on Form 10-K for the year ended
                   December 31, 2000 ("DCA 2000 Form 10-K"), Item
                   14(c)(10)(xxxiv)).


         (lxvii)   Promissory Note from Medicore, Inc. to Dialysis Corporation
                   of America dated August 9, 2000 (incorporated by reference to
                   Dialysis Corporation of America's Current Report on Form 8-K
                   dated August 21, 2000 , Item 7(c)(99)(i)).

         (lxviii)  Lease between Dialysis Corporation of America and DCA of So.
                   Ga., LLC dated November 8, 2000 (incorporated by reference to
                   Dialysis Corporation of America's Current Report on Form 8-K
                   dated January 3, 2001 ("DCA January, 2001 8-K"), Item
                   7(c)(10)(i)).

                                       60
<PAGE>

         (lxix)    Lease between Dialysis Corporation of America and South
                   Georgia Nephrology, P.C. dated November 27, 2000
                   (incorporated by reference to the DCA January, 2001 8-K, Item
                   7(c)(10)(ii)).

         (lxx)     Lease between DCA of Fitzgerald(5) and Hospital Authority of
                   Ben Hill County, dba Dorminy Medical Center, dated February
                   8, 2001 (incorporated by reference to Dialysis Corporation of
                   America's Current Report on Form 8-K dated March 5, 2001
                   ("DCA March, 2001 8-K"), Item 7(c)(10)(i)).

         (lxxi)    Lease between Dialysis Corporation of America and Renal
                   Treatment Centers - Mid-Atlantic, Inc. dated July 1, 1999
                   (incorporated by reference to the DCA March, 2001 8-K, Item
                   14(10)(xlii)).


         (lxxii)   Waiver of Thomas K. Langbein dated May 17, 2001.

         (lxxiii)  Employment Agreement between Dialysis Corporation of
                   America(3) and Stephen W. Everett dated December 29, 2000
                   (incorporated by reference to DCA 2000 Form 10-K, Item
                   14(c)(10)(xli)).


         (16)      (i) Letter re change in certifying accountant dated August
                   13, 1999 (incorporated by reference to the Company's Current
                   Report on Form 8-K dated August 13, 1999, Item 7(c)(16)).

         (ii)      Letter re change in certifying accountant dated August 27,
                   1999 (incorporated by reference to the Company's Current
                   Report on Form 8-K/A#1 dated August 27, 1999, Item 7(c)(16)).

         (21)      Subsidiaries of the Company.

         (23)      Consent of experts and counsel.

         (i)       Consent of Ernst & Young LLP, Independent Certified Public
                   Accountants.

         (ii)      Consent of Wiss & Company, LLP, Independent Certified Public
                   Accountants.



------------

(1)      71% owned subsidiary.
(2)      Former public subsidiary of the Company; spun-off in 1986.
(3)      61% owned subsidiary.
(4)      Dialysis Corporation of America has two loans with Mercantile Safe
         Deposit and Trust Company and such loan documents and promissory notes
         conform to the exhibit filed but for the amount of each loan.

(5)      100% owned subsidiary of Dialysis Corporation of America.
(6)      100% owned subsidiary of Techdyne, Inc.
(7)      80% owned subsidiary of Dialysis Corporation of America.
(8)      Previously filed with the same Medical Director under the name
         Oceanview Medical Group, P.A.
(9)      There are two Medical Director Agreements with Atlantic Nephrology
         Group, Inc. and such Medical Director Agreements conform to the exhibit
         filed but for the compensation and facility.
(10)     Dialysis equipment is leased from time to time and a new Schedule is
         added to the Master Lease; other than the nature of the equipment and
         length of the lease, the Schedules conform to the exhibit filed and the
         terms of the Master Lease remain the same.

                                       61
<PAGE>

(11)     There are two Medical Director Agreements with Cumberland Valley
         Nephrology Associates, P.C. and such agreements conform to the exhibit
         filed but for the facility, the other being located in Chambersburg,
         Pennsylvania. (12) There are several substantially similar Management
         Service Agreements which conform to the exhibit filed but for the name
         of the particular subsidiary which entered into the Agreement.
(13)     Each subsidiary has the identical Management Services Agreement with
         DCA Medical Services, Inc.
(14)     51% owned subsidiary of Dialysis Corporation of America.



*        Documents incorporated by reference not included in Exhibit Volume.

**       There are four such Agreements, all the same but for the territory
         assigned.

***      Options to directors are the same except as to amounts of underlying
         shares purchasable.

                                       62
<PAGE>
Schedule II - Valuation and Qualifying Accounts
Medicore, Inc. and Subsidiaries
December 31, 2000
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------
                  COL. A                            COL. B                           COL. C
---------------------------------------------------------------------------------------------------------
                                                                                             Additions
                                                   Balance at     Additions (Deductions)     Charged to
                                                   Beginning      Charged (Credited) to    Other Accounts
              Classification                       of Period        Cost and Expenses         Describe
---------------------------------------------------------------------------------------------------------
<S>                                               <C>                 <C>                    <C>

YEAR ENDED DECEMBER 31, 2000:
   Reserves and allowances deducted
      from asset accounts:
     Allowance for uncollectable accounts         $   431,000         $   220,000
     Reserve for inventory obsolescence               724,000             422,000
     Valuation allowance for deferred tax asset       500,000             320,000
                                                  -----------         -----------            -----------
                                                  $ 1,655,000         $   962,000            $         0
                                                  ===========         ===========            ===========

YEAR ENDED DECEMBER 31, 1999:
   Reserves and allowances deducted
      from asset accounts:
     Allowance for uncollectable accounts         $   317,000         $   103,000
     Reserve for inventory obsolescence               559,000             405,000
     Valuation allowance for deferred tax asset       528,000             (28,000)
                                                  -----------         -----------            -----------
                                                  $ 1,404,000         $   480,000            $         0
                                                  ===========         ===========            ===========
YEAR ENDED DECEMBER 31, 1998:
   Reserves and allowances deducted
      from asset accounts:
     Allowance for uncollectable accounts         $   231,000         $   106,000
     Reserve for inventory obsolescence               238,000             437,000
     Valuation allowance for deferred tax asset       850,465            (322,465)
                                                  -----------         -----------            -----------
                                                  $ 1,319,465         $   220,535)           $         0
                                                  ===========         ===========            ===========

--------------------------------------------------------------------------------
                  COL. A                             COL. D             COL. E
--------------------------------------------------------------------------------
                                                  Other Changes        Balance
                                                   Add (Deduct)       at End of
              Classification                        Describe           Period
--------------------------------------------------------------------------------

YEAR ENDED DECEMBER 31, 2000
   Reserves and allowances deducted
      from asset accounts:
     Allowance for uncollectable accounts         $  (199,000)(1)   $   452,000
     Reserve for inventory obsolescence              (348,000)(2)       798,000
     Valuation allowance for deferred tax asset            --           820,000
                                                  -----------       -----------
                                                  $  (547,000)      $ 2,070,000
                                                  ===========       ===========

YEAR ENDED DECEMBER 31, 1999:
   Reserves and allowances deducted
      from asset accounts:
     Allowance for uncollectable accounts         $    11,000)(1)   $   431,000
     Reserve for inventory obsolescence              (240,000)(2)       724,000
     Valuation allowance for deferred tax asset            --           500,000
                                                  -----------       -----------
                                                  $  (229,000)      $ 1,655,000
                                                  ===========       ===========
YEAR ENDED DECEMBER 31, 1998:
   Reserves and allowances deducted
      from asset accounts:
     Allowance for uncollectable accounts         $   (20,000)(1)   $   317,000
     Reserve for inventory obsolescence              (116,000)(2)       559,000
     Valuation allowance for deferred tax asset            --           528,000
                                                  -----------       -----------
                                                  $  (136,000)      $ 1,404,000
                                                  ===========       ===========

(1)      Net (write-offs) recoveries against receivables allowance.
(2)      Net write-offs against inventory reserves.
</TABLE>
<PAGE>

                                   SIGNATURES


         Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report, Form 10-K/A#2,
to be signed on its behalf by the undersigned, thereunto duly authorized.


                                          MEDICORE, INC.



                                          By /s/ THOMAS K. LANGBEIN
                                             -----------------------------------
                                             THOMAS K. LANGBEIN, Chairman
                                             of the Board of Directors, Chief
                                             Executive Officer and President
May 25, 2001

<PAGE>

         LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
                   FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
                                CERTAIN EXHIBITS
                          FINANCIAL STATEMENT SCHEDULES
                          YEAR ENDED DECEMBER 31, 2000
                                 MEDICORE, INC.
                                HIALEAH, FLORIDA

<PAGE>

                        FORM 10-K--ITEM 14(A)(1) AND (2)

                         MEDICORE, INC. AND SUBSIDIARIES

                          LIST OF FINANCIAL STATEMENTS

The following consolidated financial statements of Medicore, Inc. and
subsidiaries are included in Item 8:


                                                                           PAGE

Consolidated Balance Sheets--December 31, 2000 and 1999.................    F-4

Consolidated Statements of Operations--Years ended December 31, 2000,
   1999, and 1998.......................................................    F-5

Consolidated Statements of Stockholders' Equity--Years ended
December 31, 2000, 1999 and 1998........................................    F-6

Consolidated Statements of Cash Flows--Years ended December 31, 2000,
1999, and 1998..........................................................    F-7

Notes to Consolidated Financial Statements--December 31, 2000...........    F-8

The following financial statement schedule of Medicore, Inc. and subsidiaries is
included in Item 14(d):

           Schedule II-Valuation and qualifying accounts.

           All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable, and therefore have been
omitted.

                                      F-1
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Shareholders and Board of Directors
Medicore, Inc.

We have audited the accompanying consolidated balance sheets of Medicore, Inc.
and subsidiaries as of December 31, 2000 and 1999, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
two years in the period ended December 31, 2000. Our auditsalso included the
Financial Statement Schedule listed in the Index at Item 14(a). These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Medicore, Inc. and subsidiaries at December 31, 2000 and 1999, and the
consolidated results of their operations and their cash flows each of the two
years in the period ended December 31, 2000, in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

                                           /s/ WISS & COMPANY LLP

May 11, 2001
Livingston, New Jersey

                                      F-2
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Shareholders and Board of Directors
Medicore, Inc.

We have audited the accompanying consolidated statements of income,
stockholders' equity, and cash flows of Medicore, Inc. and subsidiaries for the
year ended December 31, 1998. Our audit included the information related to the
year ended December 31, 1998 on the financial statement schedule listed in
the Index at Item 14(a). These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated results of operations and
cash flows of Medicore, Inc. and subsidiaries for the year ended December 31,
1998, in conformity with accounting principles generally accepted in the United
States. Also, in our opinion, the related financial statement schedule for the
year ended December 31, 1998, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

                                                /s/ ERNST & YOUNG LLP

March 22, 1999
Miami, Florida

                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                         MEDICORE, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                                                             DECEMBER 31,   DECEMBER 31,
                                                                                2000            1999
                                                                            ------------    ------------
                                               ASSETS
CURRENT ASSETS

<S>                                                                         <C>             <C>
  Cash and cash equivalents                                                 $  1,464,543    $  4,151,150
  Marketable securities                                                               --           9,520
  Accounts receivable, less allowances of
    $452,000 in 2000 and $431,000 in 1999                                      9,612,264       8,958,837
  Note receivable                                                              2,200,000              --
  Inventories, less allowance for obsolescence
    of $798,000 in 2000 and $724,000 in 1999                                  11,165,131      10,097,974
  Prepaid expenses and other current assets                                    1,199,846         810,806
  Deferred tax asset                                                             673,463         614,308
                                                                            ------------    ------------
                     Total current assets                                     26,315,247      24,642,595

PROPERTY AND EQUIPMENT
  Land and improvements                                                        1,205,908       1,012,455
  Building and building improvements                                           3,797,877       3,071,948
  Equipment and furniture                                                     11,729,212      11,455,449
  Leasehold improvements                                                       2,367,835       2,243,658
                                                                            ------------    ------------
                                                                              19,100,832      17,783,510
  Less accumulated depreciation and amortization                               7,760,067       7,309,250
                                                                            ------------    ------------
                                                                              11,340,765      10,474,260
DEFERRED EXPENSES AND OTHER ASSETS                                               177,327         111,392

COSTS IN EXCESS OF NET TANGIBLE ASSETS ACQUIRED,
   less accumulated amortization of $932,000 in 2000 and $749,000 in 1999      3,595,020       3,381,718
                                                                            ------------    ------------
                                                                            $ 41,428,359    $ 38,609,965
                                                                            ============    ============

                                LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Short-term bank borrowings                                                $         --    $     30,024
  Accounts payable                                                             4,914,570       5,568,972
  Accrued expenses and other current liabilities                               2,697,523       2,210,345
  Current portion of long-term debt                                            1,150,079         732,677
  Income taxes payable                                                           180,884         260,481
                                                                            ------------    ------------
                     Total current liabilities                                 8,943,056       8,802,499

LONG-TERM DEBT                                                                10,354,734       8,363,497

DEFERRED INCOME TAXES                                                          2,251,388       1,814,743

MINORITY INTEREST IN SUBSIDIARIES                                              6,345,310       5,346,779

COMMITMENTS

STOCKHOLDERS' EQUITY
  Common stock, $.01 par value; authorized 12,000,000 shares;
     5,710,540 shares issued and outstanding in 2000;
     5,705,740 shares issued and outstanding in 1999                              57,105          57,075
  Capital in excess of par value                                              11,705,837      11,961,030
  Retained earnings                                                            1,929,447       2,335,881
  Accumulated other comprehensive loss:
     Foreign currency translation adjustment                                    (158,518)        (74,505)
     Unrealized gain on marketable securities for sale                                --           2,966
                                                                            ------------    ------------
          Total accumulated other comprehensive loss                           (158,518)        (71,539)
                                                                            ------------    ------------
                     Total Stockholders' Equity                               13,533,871      14,282,447
                                                                            ------------    ------------
                                                                            $ 41,428,359    $ 38,609,965
                                                                            ============    ============
</TABLE>

                 See notes to consolidated financial statements.

                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                         MEDICORE, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                            Year Ended December 31,
                                                                  --------------------------------------------
                                                                      2000            1999             1998
                                                                  ------------    ------------    ------------
REVENUES
  Sales:
<S>                                                               <C>             <C>             <C>
    Product sales                                                 $ 53,825,185    $ 49,415,808    $ 45,829,486
    Medical service revenues                                         8,769,470       5,498,541       3,552,279
                                                                  ------------    ------------    ------------
       Total sales                                                  62,594,655      54,914,349      49,381,765
  Gain on subsidiary warrants exercise                                 276,178              --              --
  Realized gain on sale of marketable securities                            --         263,144          12,780
  Other income                                                         532,730         466,925         753,984
                                                                  ------------    ------------    ------------
                                                                    63,403,563      55,644,418      50,148,529
COST AND EXPENSES Cost of sales:
    Cost of product sales                                           47,339,365      43,318,325      39,944,521
    Cost of medical services                                         5,833,081       3,964,258       2,516,239
                                                                  ------------    ------------    ------------
       Total cost of sales                                          53,172,446      47,282,583      42,460,760
  Selling, general and administrative expense                        9,347,998       8,225,600       7,017,524
  Provision for doubtful accounts                                      220,244         103,113         106,364
  Interest expense                                                     906,604         674,500         592,414
                                                                  ------------    ------------    ------------
                                                                    63,647,292      56,285,796      50,177,062
                                                                  ------------    ------------    ------------
    LOSS BEFORE INCOME TAXES
        MINORITY INTEREST AND EQUITY IN
        AFFILIATE LOSS                                                (243,729)       (641,378)        (28,533)


Income tax provision (benefit)                                         113,604          57,186        (352,369)
                                                                  ------------    ------------    ------------

    (LOSS) INCOME BEFORE MINORITY INTEREST
        AND EQUITY IN AFFILIATE LOSS                                  (357,333)       (698,564)        323,836

Minority interest in income (loss) of consolidated subsidiaries         28,205         (85,507)        225,415

Equity in affiliate loss                                               (20,896)             --              --
                                                                  ------------    ------------    ------------

       NET (LOSS) INCOME                                          $   (406,434)   $   (613,057)   $     98,421
                                                                  ============    ============    ============

(Loss) earnings per share:
   Basic                                                               $(.07)         $(.11)           $.02
                                                                       ======         ======           ====
   Diluted                                                             $(.07)         $(.11)           $.01
                                                                       ======         ======           ====
</TABLE>

                 See notes to consolidated financial statements.

                                      F-5
<PAGE>
<TABLE>
<CAPTION>


                                                   MEDICORE, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY



                                                                                CAPITAL IN
                                                                  COMMON         EXCESS OF      COMPREHENSIVE       RETAINED
                                                                  STOCK          PAR VALUE      INCOME (LOSS)       EARNINGS
                                                                ----------       ---------      -------------       --------
<S>                                                            <C>             <C>                <C>              <C>
   Balance December 31, 1997                                    $  58,569      $13,040,877                         $2,850,517
   Comprehensive income:
      Net income                                                                                   $   98,421          98,421
      Foreign currency translation adjustments                                                         11,671
      Unrealized loss on marketable securities:
      Unrealized holding loss arising during period, net of                                           (45,009)
                                                                                                   ----------
   tax
   Comprehensive income                                                                            $   65,083
                                                                                                   ==========
   Exercise of subsidiary stock options                                           (150,756)
   Repurchase of stock by subsidiary                                                78,696
   Subsidiary advance toward acquisition price guarantee                          (785,792)
   Subsidiary acquisition price adjustment                                         251,600
   Subsidiary acquisition of minority interest                                      23,386
   Consultant stock options                                                         12,806
   Repurchase of 133,200 common shares
                                                                ---------       ----------                       ------------     -
   Balance December 31, 1998                                       58,569       12,470,817                          2,948,938
   Comprehensive (loss) income:
      Net loss                                                                                      $(613,057)       (613,057)
      Foreign currency translation adjustments                                                        (55,048)
      Unrealized loss on marketable securities:
      Unrealized holding gain arising during period, net of tax                                         2,966
      Less reclassification adjustments, net of tax,
         for gain included in net (loss) income                                                      (130,204)
                                                                                                   ----------
      Unrealized holding loss, net of reclassification                                               (127,238)
                                                                                                   ----------
   Comprehensive loss                                                                               $(795,343)
                                                                                                   -=========
   Consultant stock options                                                         24,360
   Exercise of subsidiary stock options                                            (53,205)
   Subsidiary stock option issuances                                               104,040
   Conversion of Techdyne note                                                       7,363
   Sale of subsidiary minority interest                                              2,693
   Settlement subsidiary acquisition price guarantee                              (366,987)
   Repurchase of 8,000 common shares
   Cancellation of treasury shares                                 (1,494)        (228,051)
                                                                ---------      -----------                       ------------     -

   Balance December 31, 1999                                       57,075       11,961,030                          2,335,881
   Comprehensive loss
   Net loss                                                                                        $ (406,434)       (406,434)
   Foreign currency translation adjustments                                                           (84,013)
   Unrealized loss on marketable securities:
   Unrealized holding loss arising during period, net of tax                                              ---
   Less reclassification adjustments, net of tax,
   for shares written off                                                                              (2,966)
                                                                                                   ----------
   Comprehensive loss                                                                              $ (493,413)
                                                                                                   ==========
   Finders fee stock option expense                                                 69,000
   Stock option expense                                                             70,500
   Adjustment for subsidiary minority capital contribution                         123,817
   Exercise of subsidiary stock options                                           (602,055)
   Repurchase of stock by subsidiary                                                76,435
   Stock option exercises                                              30            7,110
                                                              ------=====      -----------                       ============
   Balance December 31, 2000                                      $57,105      $11,705,837                       $  1,929,447
                                                              ------=====      ===========
</TABLE>


<TABLE>
<CAPTION>

                                                                 ACCUMULATED
                                                                    OTHER
                                                                COMPREHENSIVE       TREASURY
                                                                INCOME (LOSS)         STOCK          TOTAL
                                                                -------------         -----          -----
<S>                                                              <C>            <C>                <C>
   Balance January 1, 1997                                       $   144,085    $   (16,790)       $16,077,258
   Comprehensive income:
      Net income
      Foreign currency translation adjustments                        11,671
      Unrealized loss on marketable securities:
      Unrealized holding loss arising during period, net of          (45,009)

   tax
   Comprehensive income                                                                                 65,083

   Exercise of subsidiary stock options                                                               (150,756)
   Repurchase of stock by subsidiary                                                                    78,696
   Subsidiary advance toward acquisition price guarantee                                              (785,792)
   Subsidiary acquisition price adjustment                                                             251,600
   Subsidiary acquisition of minority interest                                                          23,386
   Consultant stock options                                                                             12,806
   Repurchase of 133,200 common shares                                             (204,589)          (204,589)
                                                              --------------       --------      --------------
   Balance December 31, 1998                                         110,747       (221,379)        15,367,692
   Comprehensive (loss) income:
      Net loss
      Foreign currency translation adjustments                       (55,048)
      Unrealized loss on marketable securities:
      Unrealized holding gain arising during period, net of
   tax

      Less reclassification adjustments, net of tax,
         for gain included in net (loss) income

      Unrealized holding loss, net of reclassification              (127,238)

   Comprehensive loss                                                                                 (795,343)

   Consultant stock options                                                                             24,360
   Exercise of subsidiary stock options                                                                (53,205)
   Subsidiary stock option issuances                                                                   104,040
   Conversion of Techdyne note                                                                           7,363
   Sale of subsidiary minority interest                                                                  2,693
   Settlement subsidiary acquisition price guarantee                                                  (366,987)
   Repurchase of 8,000 common shares                                                 (8,166)            (8,166)
   Cancellation of treasury shares                                                  229,545
                                                              --------------        -------
                                                                                                           ---
   Balance December 31, 1999                                         (71,539)           ---         14,282,447
   Comprehensive loss
   Net loss
   Foreign currency translation adjustments                          (84,013)
   Unrealized loss on marketable securities:
   Unrealized holding loss arising during period, net of tax
   Less reclassification adjustments, net of tax,
   for shares written off                                             (2,966)

   Comprehensive loss                                                                                 (493,413)

   Finders fee stock option expense                                                                     69,000
   Stock option expense                                                                                 70,500
   Adjustment for subsidiary minority capital contribution                                             123,817
   Exercise of subsidiary stock options                                                               (602,055)
   Repurchase of stock by subsidiary                                                                    76,435
   Stock option exercises                                                                                7,140
                                                                   ==========   ============       ===========
   Balance December 31, 2000                                       $(158,518)   $        ---       $13,533,871
                                                                   ==========   ============       ===========

</TABLE>

    See notes to consolidated financial statements.


                                      F-6
<PAGE>


                         MEDICORE, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                               YEAR ENDED DECEMBER 31,

                                                                          2000           1999            1998
                                                                    ------------     -----------     -----------
OPERATING ACTIVITIES
<S>                                                                 <C>             <C>             <C>
  Net (loss) income                                                 $   (406,434)   $   (613,057)   $     98,421
  Adjustments to reconcile net (loss) income
     to net cash used in operating activities:
     Depreciation                                                      1,943,524       1,732,487       1,434,638
     Amortization                                                        220,647         181,594         161,542
     Bad debt expense                                                    220,244         103,113         106,364
     Provision for inventory obsolescence                                421,888         404,762         437,095
     Stock option related compensation expense                            70,500         153,000              --
     Gain on sale of securities                                               --        (263,144)        (12,780)
     Minority interest                                                    28,205         (85,507)        225,415
     Equity in affiliate losses                                           20,896              --              --
     Loss on writeoff of marketable securities                            42,317              --              --
     Deferred income taxes                                               162,348          40,100         (29,295)
     Consultant stock option expense                                      23,448          16,552          17,651
     Finders' fee stock options expense                                   69,000              --              --
     Gain on subsidiary stock offering and warrants exercise            (276,178)             --              --
     Increase (decrease) relating to operating activities from:
       Accounts receivable                                              (939,556)     (2,819,365)        (59,740)
       Inventories                                                    (1,531,788)     (2,122,458)       (138,866)
       Prepaid expenses and other current assets                        (178,725)       (142,453)        181,018
       Accounts payable                                                 (636,582)      1,966,247        (783,100)
       Accrued expenses and other current liabilities                    523,597         194,881        (307,010)
       Income taxes payable                                               31,871        (141,852)     (1,359,496)
                                                                    ------------    ------------    ------------
              Net cash used in operating activities                     (190,778)     (1,395,100)        (28,143)
INVESTING ACTIVITIES
  Redemption of minority interest in subsidiaries                             --              --        (385,375)
  Notes receivable from Linux Global Partners                         (2,200,000)             --              --
  Subsidiary acquisition payments                                       (395,806)     (1,389,530)       (153,818)
  Advance on subsidiary acquisition price guarantee                           --              --      (1,277,711)
  Additions to property and equipment, net of minor disposals         (2,362,673)     (2,406,650)     (1,776,381)
  Proceeds from sale of securities                                            --         292,354         252,780
  Deferred expenses and other assets                                     (13,517)         55,025         (56,414)
  Purchase of marketable securities                                      (37,580)        (33,947)             --
  Sale of minority interest in subsidiaries                              206,000           6,040              --
  Loan to MainStreet                                                    (140,000)             --              --
  Investment in affiliate                                                (28,589)             --              --
  Loan to medical director practice                                      (83,521)             --              --
                                                                    ------------    ------------    ------------
              Net cash used in investing activities                   (5,055,686)     (3,476,708)     (3,396,919)
FINANCING ACTIVITIES
  Borrowings to finance subsidiary acquisition                                --              --         600,000
  Line of credit borrowings                                            1,779,375       1,867,590         413,709
  Other short-term bank borrowings                                            --         405,024              --
  Payments on short-term bank borrowings                                 (30,024)       (375,000)             --
  Proceeds from long-term borrowings                                     850,000         783,333              --
  Payments on long-term borrowings                                      (741,999)       (922,145)     (1,081,928)
  Proceeds from exercise of stock options and warrants                   777,440             500           1,150
  Subsidiary repurchase of stock                                         (96,031)             --        (108,690)
  Repurchase of stock                                                         --          (8,166)       (204,589)
  Deferred financing costs                                                  (505)             --              --
                                                                    ------------    ------------    ------------
              Net cash provided by (used in) financing activities      2,538,256       1,751,136        (380,348)
Effect of exchange rate fluctuations on cash                              21,601         (22,885)            699
                                                                    ------------    ------------    ------------
(Decrease) increase in cash and cash equivalents                      (2,686,607)     (3,143,557)     (3,804,711)
Cash and cash equivalents at beginning of year                         4,151,150       7,294,707      11,099,418
                                                                    ------------    ------------    ------------
Cash and cash equivalents at end of year                            $  1,464,543    $  4,151,150    $  7,294,707
                                                                    ============    ============    ============

</TABLE>

                 See notes to consolidated financial statements.

                                      F-7
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Business: The Company has four reported business segments. The
electro-mechanical segment, Techdyne, is an international contract manufacturer
of electronic and electro-mechanical products primarily manufactured to customer
specifications in the data processing, telecommunication, instrumentation and
food preparation equipment industries. The medical services segment, DCA, owns
and operates eight kidney dialysis centers located in Pennsylvania, New Jersey
and Georgia and has agreements to provide inpatient dialysis treatments to
various hospitals and provides supplies and equipment for dialysis home
patients. The medical products segment is engaged in the manufacture and
distribution of medical supplies. A fourth segment, investment in technology
companies, was initiated in January, 2000 with an investment in and financing to
Linux software companies.

         Consolidation: The Consolidated Financial Statements include the
accounts of Medicore, Inc., Medicore's 60.6% owned subsidiary, Dialysis
Corporation of America ("DCA") and Medicore's 71.3% owned subsidiary, Techdyne,
Inc. ("Techdyne") and its subsidiaries Lytton Incorporated ("Lytton"), Techdyne
(Europe) Limited ("Techdyne (Europe)"), and Techdyne (Livingston) Limited which
is a subsidiary of Techdyne (Europe), collectively known as the Company. All
material intercompany accounts and transactions have been eliminated in
consolidation.  DCA has a 40% interest in an Ohio dialysis center it manages,
which is accounted for by the equity method and not consolidated for financial
reporting purposes.

         Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

         Sale of Stock By Subsidiaries: The Company follows an accounting policy
of recognizing income on sales of stock by its subsidiaries, which includes
exercise of warrants issued in subsidiary stock offerings.

         Marketable Securities: The Company follows Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities". Under this Statement, the Company is required to classify
its marketable equity securities as either trading or available-for-sale. The
Company does not purchase equity securities for the purpose of short-term sales;
accordingly, its securities are classified as available-for-sale. Marketable
securities are recorded at fair value. Unrealized gains and losses relating to
available-for-sale securities are included separately as a component of
accumulated other comprehensive income (loss) included in shareholders' equity,
net of income tax effect, until realized. Realized gains and losses are computed
based on the cost of securities sold using the specific identification method.
Marketable securities are comprised of the following:

                                                       DECEMBER 31,
                                                           1999

                Cost                                      $4,737
                Unrealized holding gains                   4,783
                                                          ------
                Fair value                                $9,520
                                                          ======



                                       F-8
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--CONTINUED


         Business: The Company has four reported business segments. The
electro-mechanical segment, Techdyne, is an international contract manufacturer
of electronic and electro-mechanical products primarily manufactured to customer
specifications in the data processing, telecommunication, instrumentation and
food preparation equipment industries. The medical services segment, DCA, owns
and operates eight kidney dialysis centers located in Pennsylvania, New Jersey
and Georgia and has agreements to provide inpatient dialysis treatments to
various hospitals and provides supplies and equipment for dialysis home
patients. The medical products segment is engaged in the manufacture and
distribution of medical supplies. A fourth segment, investment in technology
companies, was initiated in January, 2000 with an investment in and financing to
Linux software companies.


         Inventories: Inventories are valued at the lower of cost (first-in,
first-out and/or weighted average cost method) or market value. The cost of
finished goods and work in process consists of direct materials, direct labor
and an appropriate portion of fixed and variable manufacturing overhead.
Inventories are comprised of the following:

                                             DECEMBER 31,         DECEMBER 31,
                                                2000                 1999
                                             ------------         -----------
Electronic and mechanical components, net:

   Finished goods                                658,966          $ 1,018,131
   Work in process                             2,586,900            2,463,191
   Raw materials and supplies                  6,937,268            6,010,987
                                             -----------          -----------
                                              10,183,134            9,492,309
   Medical supplies                              981,997              605,665
                                             -----------          -----------
                                             $11,165,131          $10,097,974
                                             ===========          ===========

         Property and Equipment: Property and equipment is stated at cost.
Depreciation is computed by the straight-line method over the estimated useful
lives of the assets, which range from 5 to 34 years for buildings and
improvements; 3 to 10 years for machinery, computer and office equipment, and
furniture; and 5 to 15 years for leasehold improvements based on the shorter of
the lease term or estimated useful life of the property. Replacements and
betterments that extend the lives of assets are capitalized. Maintenance and
repairs are expensed as incurred. Upon the sale or retirement of assets, the
related cost and accumulated depreciation are removed and any gain or loss is
recognized.

         Long-lived Asset Impairment: Pursuant to Financial Accounting Standards
Board Statement No. 121 "Accounting for the Impairment of Long-lived Assets and
Assets to be Disposed of," impairment of long-lived assets, including
intangibles related to such assets, is recognized whenever events or changes in
circumstances indicate that the carrying amount of the asset, or related groups
of assets, may not be fully recoverable from estimated future cash flows and the
fair value of the related assets is less than their carrying value. The Company,
based on current circumstances, does not believe any indicators of impairment
are present.

         Costs in Excess of Net Tangible Assets Acquired: The costs in excess of
net tangible assets acquired are being amortized on a straight-line basis over
25 years. If, in the opinion of management, an impairment in value occurs, based
on the undiscounted cash flow method, any writedowns will be charged to expense.

         Deferred Expenses: Deferred expenses, except for deferred loan costs,
are amortized on the straight-line method, over their estimated benefit period
ranging to 60 months. Deferred loan costs are amortized over the lives of the
respective loans.

         Income Taxes: Deferred income taxes at the end of each period are
determined by applying enacted tax rates applicable to future periods in which
the taxes are expected to be paid or recovered to differences between the
financial accounting and tax basis of assets and liabilities.

                                      F-9
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--CONTINUED

         The Company filed consolidated federal and state tax returns with
Techdyne until October 2, 1995, the date Techdyne's securities offering was
completed, after which Techdyne files separate income tax returns with its
income tax liability reflected on a separate return basis. DCA was likewise
included in the consolidated tax returns of the Company until the completion of
its public offering in April 1996, after which it files separate income tax
returns with its income tax liability reflected on a separate return basis.

         Stock Based Compensation: The Company follows Accounting Principles
Board Opinion No. 25 "Accounting for Stock Issued to Employees" (APB 25) and
related Interpretations in accounting for its employee stock options. Financial
Accounting Standards Board Statement No. 123, "Accounting for Stock-Based
Compensation"(FAS 123) permits a company to elect to follow the accounting
provisions of APB 25 rather than the alternative fair value accounting provided
under FAS 123 but requires pro forma net income and earnings per share
disclosures as well as various other disclosures not required under APB 25 for
companies following APB 25.

         Foreign Currency Translation: The financial statements of the foreign
subsidiary have been translated into U.S. dollars in accordance with Statement
of Financial Accounting Standards No. 52. All balance sheet accounts have been
translated using the current exchange rates at the balance sheet date. Income
statement amounts have been translated using the average exchange rate for the
year. The translation adjustments resulting from the change in exchange rates
from year to year have been reported separately as a component of accumulated
other comprehensive income (loss) included in stockholders' equity. Foreign
currency transaction gains and losses, which are not material, are included in
results of operations. These gains and losses result from exchange rate changes
between the time transactions are recorded and settled and, for unsettled
transactions, exchange rate changes between the time transactions are recorded
and the balance sheet date.

         Other Income: Other income is comprised as follows:

                                       YEAR ENDED DECEMBER 31,
                    ------------------------------------------------------------
                    2000                       1999                       1998
                    ----                       ----                       ----

Interest income   $328,553                   $257,077                   $417,339
Rental income      160,432                    142,561                    121,835
Other               43,745                     67,287                    214,810
                  --------                   --------                   --------
                  $532,730                   $466,925                   $753,984
                  ========                   ========                   ========

         Earnings Per Share: Diluted earnings per share gives effect to
potential common shares that were dilutive and outstanding during the period,
such as stock options and warrants, using the treasury stock method and average
market price.

                                      F-10
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--CONTINUED

<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31,
                                                               -----------------------------------------
                                                                  2000           1999           1998
                                                               -----------    -----------    -----------
<S>                                                            <C>            <C>            <C>
Net (loss) income, numerator-basic computation                 $  (406,434)   $  (613,057)   $    98,421
Adjustment due to subsidiaries' dilutive securities                 (1,476)        (7,624)       (52,219)
                                                               -----------    -----------    -----------
Net (loss) income as adjusted, numerator-diluted computation   $  (407,910)   $  (620,681)   $    46,202
                                                               ===========    ===========    ===========

Weighted average shares                                          5,710,007      5,710,696      5,804,506
                                                               ===========    ===========    ===========

(Loss) earnings per share:
Basic                                                          $      (.07)   $      (.11)   $       .02
                                                               ===========    ===========    ===========
Diluted                                                        $      (.07)   $      (.11)   $       .01
                                                               ===========    ===========    ===========
</TABLE>


         The Company has various stock options outstanding which have not been
included on the earnings (loss) per share computation since they were
anti-dilutive, including 820,000 July 2000 options, 475,000 February 2000
options, 150,000 January 2000 options, 5,000 May 1998 options, 35,000 June 1997
options, and 809,000 April 1995 options during such periods as these were
outstanding, until their expiration in April 2000.


         Cash and Cash Equivalents: The Company considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents. The carrying amounts, reported in the balance sheet for cash and
cash equivalents approximate their fair values. The credit risk associated with
cash and cash equivalents are considered low due to the high quality of the
financial institutions in which these assets are invested.

         Customer Payment Terms: The majority of the Company's sales are made at
payment terms of net amount due in 30-45 days, depending on the customer.

         Estimated Fair Value of Financial Instruments: The carrying value of
cash, accounts receivable and debt in the accompanying financial statements
approximate their fair value because of the short-term maturity of these
instruments, and in the case of debt because such instruments bear variable
interest rates which approximate market.

         Business Segments: The Company follows the provisions of Financial
Accounting Standards Board Statement No. 131, " Disclosures About Segments of an
Enterprise and Related Information" (FAS 131) which contains standards for
reporting information about operating segments in annual financial statements
with operating segments representing components of an enterprise evaluated by
the enterprise's chief operating decision maker for purposes of making decisions
regarding resource allocation and performance evaluation. The adoption of FAS
131 has not changed the Company's reported business segments, but has resulted
in changes in the Company's segment reporting disclosures.

         Comprehensive Income: The Company follows Financial Accounting
Standards Board Statement No. 130, "Reporting Comprehensive Income" (FAS 130)
which contains rules for the reporting of comprehensive income and its
components. Comprehensive income (loss) consists of net income (loss), foreign
currency translation adjustments and unrealized gains on marketable securities
and is presented in the Consolidated Statement of Shareholders' Equity.

                                      F-11
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--CONTINUED

         Revenue Recognition: The Company follows the guidelines of SEC Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB
101). Product sales are recorded upon delivery pursuant to agreed upon shipping
terms, and medical service sales revenues are recorded as services are rendered.

         New Pronouncements: In June, 1998, the Financial Accounting Standards
Board issued Financial Accounting Standards Board Statement No. 133, "Accounting
for Derivative Instruments and Hedging Activities" (FAS 133). FAS 133 is
effective for fiscal quarters of fiscal years beginning after June 15, 2000. FAS
133 establishes accounting and reporting standards for derivative instruments
and for hedging activities and requires, among other things, that all
derivatives be recognized as either assets or liabilities in the statement of
financial position and that these instruments be measured at fair value. The
Company is in the process of determining the impact that the adoption of FAS 133
will have on its consolidated financial statements. Due to the Company's limited
use of derivative financial instruments, the adoption of FAS 133 is not expected
to have a significant effect on its consolidated results of operations,
financial condition or cash flows.

         In December, 1999, the Securities and Exchange Commission issued SEC
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
(SAB 101). In March, 2000, the Financial Accounting Standards Board issued
Financial Accounting Standards Board Interpretation No. 44, "Accounting for
Certain Transactions Involving Stock Compensation" (FIN 44), effective July 1,
2000. The Company was previously in compliance with both SAB 101 and FIN 44;
accordingly, these pronouncements have no effect on its consolidated results of
operations, financial position, or cash flows.

NOTE 2--TRANSACTIONS WITH VIRAGEN, INC.


         During 1999, the Company sold its remaining approximately 259,000
shares, less than 1% of Viragen (formerly a majority owned subsidiary of the
Company) stock, representing approximately .4% of outstanding Viragen shares,
and recognized a gain of approximately $228,000.


         The Company has a royalty agreement with Viragen expiring November
2001, pursuant to which it is to receive a royalty on Viragen's net sales of
interferon and related products. The agreement provides for aggregate royalty
payments of $2.4 million to be paid based on the following percentages of
Viragen sales: 5% of the first $7 million, 4% of the next $10 million, and 3% of
the next $55 million. The effective date of the agreement was November 15, 1994,
with royalty payments due quarterly, commencing March 31, 1995. No royalty
income was earned under the agreement in 2000, 1999 or 1998. In addition, a
payment of approximately $108,000, earned under a previous royalty agreement, is
due as the final payment under the new agreement.

NOTE 3--LONG-TERM DEBT

         Techdyne had a five year $1,500,000 commercial term loan and $1,600,000
commercial revolving line of credit which became effective December 29, 1997.
The line of credit had an outstanding balance of $1,600,000 at December 31,
1999. This line had a scheduled maturity of May 1, 2000 with monthly payments of
interest at prime. The commercial term loan with an outstanding balance of
$900,000 at December 31, 1999 had a scheduled maturity of December 15, 2002 with
monthly principal payments of $25,000 plus interest. Both credit facilities are
collateralized by the corporate assets of Techdyne.

                                      F-12
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 3--LONG-TERM DEBT--CONTINUED

         Techdyne had two other commercial term loans with the same bank, one
for $712,500 for five years maturing on February 7, 2001 at an annual rate of
interest equal to 8.28% with a monthly payment of principal and interest of
$6,925 based on a 15-year amortization schedule with the unpaid principal and
accrued interest due on the maturity date. This term loan had an outstanding
balance of approximately $606,000 at December 31, 1999 and was secured by a
mortgage on properties in Hialeah, Florida owned by the Company, two of which
properties are leased to Techdyne and one parcel being vacant land used as a
parking lot. Under this term loan, Techdyne was obligated to adhere to a variety
of affirmative and negative covenants.

         The second commercial term loan was for the principal amount of
$200,000 for a period of five years bearing interest at a per annum rate of
1.25% over the bank's prime rate and requiring monthly principal payments with
accrued interest of $3,333 through maturity on February 7, 2001. This $200,000
term loan which had a balance of approximately $47,000 at December 31, 1999 was
secured by all of Techdyne's tangible personal property, goods and equipment,
and all cash or noncash proceeds of such collateral.

         The Company unconditionally guaranteed the payment and performance by
Techdyne of the revolving loan and the three commercial term loans and
subordinated Techdyne's intercompany indebtedness to the Company to the bank's
interest. There were cross defaults between the revolving and term loans
exclusive of the $200,000 term loan.

         In February 2000, Techdyne refinanced its line of credit and term loan
through the same bank which handles Lytton's financing. One credit facility is a
$4,500,000 three year committed line of credit facility maturing February, 2003
with interest at prime minus 1/4% and an option to fix the rate for up to 180
days at Libor plus 2.50%. This line of credit had an outstanding balance of
approximately $3,883,000 at December 31, 2000. The bank also extended a
$1,000,000 five year term loan maturing February 8, 2005 with the same interest
rate as for the line of credit. This loan had an outstanding balance of
approximately $833,000 at December 31, 2000. The interest rate on both loans was
9.25% as of December 31, 2000. The loans are secured by the business assets of
Techdyne and are cross collateralized with the debt of Lytton.

         Lytton had a $1,500,000 revolving bank line of credit requiring monthly
interest payments at prime plus 1/2% maturing June 30, 1999 which was increased
to $3,000,000 and extended to June 30, 2000. In conjunction with Techdyne's
refinancing, the bank amended this line of credit to coincide with the Company's
loan agreements. Accordingly, the maturity was extended to February 2003 and the
interest rate was reduced to prime minus 1/4% with an option to fix the rate for
180 days at Libor plus 2.50%. There was an outstanding balance on this loan of
approximately $2,786,000 at December 31, 2000 and $2,830,000 at December 31,
1999. Lytton had a $1,000,000 installment loan with the same bank maturing
August 1, 2002 at an annual interest rate of 9% until July 1999, with monthly
payments of $16,667 plus interest. Lytton replaced this loan at June 30, 1999
with a $1,400,000 installment loan with interest at prime plus 1/2% and monthly
payments of $20,833 plus interest payable in 60 monthly installments commencing
August 1, 1999 with the final installment due June 30, 2004. The balance


                                      F-13
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 3--LONG-TERM DEBT--CONTINUED

outstanding on this loan was approximately $1,028,000 at December 31, 2000 and
$1,283,000 as of December 31, 1999. Lytton also has a $500,000 equipment loan
agreement with the same bank maturing February 2003 with monthly interest
payments until January 2001 and monthly principal payments of $6,000 plus
interest commencing January 2001, with interest originally at prime plus 1/2%.
This loan had an outstanding balance of $150,000 at December 31, 2000 with no
outstanding balance as of December 31, 1999. In conjunction with Techdyne
refinancing, the bank amended the interest rate on these term loans to prime
minus 1/4% with an option to fix the rate for 180 days at Libor plus 2.50%. The
interest rate on all of the Lytton loans was 9.25% as of December 31, 2000. All
of these bank loans are secured by the business assets of Lytton, and are cross
collateralized with the debt of Techdyne.

         DCA through its subsidiary DCA of Vineland, LLC, obtained a $700,000
development and equipment line of credit with interest at 8.75% which is secured
by the acquired assets of DCA of Vineland and a second mortgage on DCA's real
property in Easton, Maryland on which an affiliated bank holds the first
mortgage. Outstanding borrowings are subject to monthly payments of interest
only through December 2001 with monthly payments thereafter of principal and
interest totaling $6,186 with any remaining balance due September 2, 2003. This
loan had an outstanding principal balance of $700,000 at December 31, 2000 with
no outstanding borrowings under this line of credit as of December 31, 1999.

         The DCA equipment financing agreement provides financing for kidney
dialysis machines for DCA's facilities in Pennsylvania, New Jersey and Georgia.
Additional financing totaled approximately $245,000 in 1998, $387,000 in 1999
and $525,000 in 2000. Payments under the agreement are pursuant to various
schedules extending through August 2005. Payments under some schedules begin one
year after commencement of the financing which would increase monthly payments
from $17,494 as of December 31, 2000 to $32,124 if all payments had commenced as
of that date. Financing under the equipment financing agreement is a noncash
financing activity which is a supplemental disclosure required by FAS 95.

         The Company's medical products division has a revolving secured
$350,000 line of credit with a Florida bank with a maturity of April 22, 2001
with interest payable monthly at prime plus 1%. This line of credit is secured
by the accounts receivable and inventory of the medical products division.

  Long-term debt is as follows:
<TABLE>
<CAPTION>
                                                                                                       DECEMBER 31,
                                                                                                   -------------------
                                                                                                   2000           1999
                                                                                                   ----           ----
<S>                                                                                            <C>              <C>
Line of credit agreement secured by business assets of Techdyne and cross
   collateralized by the business assets of Lytton

X   Monthly payments of interest as described above                                             $3,883,058      $    --

Installment loan secured by business assets of Techdyne and
   cross collateralized by the business assets of Lytton.  Monthly
   payments of principal and interest as described above                                        $  833,330           --

Term loan secured by real property.  Monthly payments of
   principal and interest as described above                                                            --      605,584

Term loan secured by tangible personal property, goods and
   equipment of Techdyne. Monthly payments of principal
   and interest as described above                                                                      --       46,764
</TABLE>

                                      F-14
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 3--LONG-TERM DEBT--CONTINUED
<TABLE>
                                                                                              DECEMBER 31,
                                                                                            ----------------
                                                                                            2000        1999
                                                                                            ----        ----
                                                                                                --
<S>                                                                                       <C>         <C>
Commercial term loan secured by corporate assets of Techdyne
   Monthly payments of principal and interest as described above                                --     900,000

Three-year revolving line of credit agreement maturing May 1, 2000
   Secured by corporate assets of Techdyne.  Monthly payment
   of interest as described above                                                               --   1,600,000

Mortgage note secured by land and building with a net book value of
   $699,000 at December 31, 2000. Quarterly payments of approximately
   $18,000 based on exchange rates at December 31, 2000 for 15 years
   commencing October, 1997 including interest
   at 2% above bank base rate                                                              413,608     489,308

Promissory note with a single principal payment due on
   April 21, 2000 with interest payable monthly at prime                                        --     145,000

Mortgage note secured by land and building with a net book value of
   of $369,000 at December 31, 2000.  Monthly principal payments of
   $3,333 plus interest at 1% over the prime rate through November 2003                    116,715     156,711

Mortgage note secured by land and building with a net book value of
   $667,000 at December 31, 2000.  Monthly principal payments of
   $2,667 plus interest at 1% over the prime rate through November 2003                     93,284     125,289

Equipment financing agreement secured by DCA equipment with a net book
   value of $1,115,000 at December 31, 2000. Monthly payments totaling
   $17,494 as of December 31, 2000, including principal and interest, as
   described below, pursuant to various schedules extending through
   August 2005 with interest at rates ranging from 4.14% to 10.48%                       1,140,260     731,423

Mortgage note secured by land with a net book value of $107,000 at
   December 31, 2000. Monthly principal payments of $1,083 plus interest
   at 1.5% over the prime
   rate.  The entire unpaid principal balance and accrued interest is due May 1, 2003       30,285      43,281

Line of credit agreement refinanced in February 2000 described above
   Secured by business assets of Lytton and cross collateralized by the
   business assets of Techdyne.  Monthly payments of interest as described above         2,786,442   2,829,997

Installment loan secured by business assets of Lytton and cross collateralized
   by the business assets of Techdyne.  Monthly payments of principal and
   interest as described above                                                           1,028,337   1,283,333

Equipment loan secured by business assets of Lytton and cross
   collateralized by business assets of Techdyne

   Monthly payments of principal and interest as described above                           150,000          --

Development and equipment loan secured by assets of DCA of Vineland and
   land and building with a total net book value of $348,000 at December
   31, 2000. Payments of principal and
   interest as described above                                                             700,000          --

Line of credit maturing April 22, 2001 secured by accounts receivable and
   inventory of medical supply division with a carrying value of
   approximately $716,000 at December 31, 2000. Monthly payments
   of interest as described above                                                          216,930          --
</TABLE>

                                      F-15
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 3--LONG-TERM DEBT--CONTINUED
<TABLE>
<CAPTION>
                                                                                   DECEMBER 31,
                                                                            -------------------------
                                                                                2000          1999
                                                                            -----------   -----------
<S>                                                                          <C>            <C>
Equipment loan requiring monthly payments of $4,298 including interest at
   5.5% and maturing in April 2002. The loan is secured by equipment of
   Lytton with a

   carrying value of approximately $277,000 at December 31, 2000                 66,157       112,693

Other                                                                            46,407        26,791
                                                                            -----------   -----------
                                                                             11,504,813     9,096,174
Less current portion                                                          1,150,079       732,677
                                                                            -----------   -----------
                                                                            $10,354,734   $ 8,363,497
                                                                            ===========   ===========
</TABLE>

           The prime rate was 9.50% as of December 31, 2000 and 8.50% as of
December 31, 1999.

           In July 1994, Techdyne (Europe) purchased the facility housing its
operations obtaining a 15 year mortgage which had a U.S. dollar equivalency of
approximately $414,000 at December 31, 2000 and $489,000 at December 31, 1999,
based on exchange rates in effect at each of these dates.

           Scheduled maturities of long-term debt outstanding at December 31,
2000 are: 2001 - $1,150,000; 2002 - $995,000; 2003 - $8,526,000; 2004- $476,000;
2005- $188,000; thereafter - $170,000. Interest payments on all of the above
debt amounted to $883,000, $649,000 and $583,000 in 2000, 1999 and 1998,
respectively.

           The Company's various debt agreements contain certain restrictive
covenants that, among other things, restrict the payment of dividends, restrict
rent commitments, restrict additional indebtedness, prohibit issuance or
redemption of capital stock and require maintenance of certain financial ratios.

NOTE 4--INCOME TAXES

           The Company has net operating loss carryforwards of approximately
$950,000 at December 31, 2000 and $1,333,000 at December 31, 1999 that expire
through the year through 2020. Techdyne has net operating loss carryforwards
which amounted to approximately $170,000 and $1,000,000 at December 31, 2000 and
1999. DCA has federal net operating loss carryforwards $170,000 at December 31,
2000 that expire in 2020. Both Techdyne and DCA file separate federal and state
income tax returns with their respective income tax liabilities reflected on a
separate basis.

           Deferred income taxes reflect the net tax effect of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant
components of the Company's deferred tax liabilities and assets are as follows:

                                                    DECEMBER 31,
                                             -----------------------
                                                 2000         1999
                                             ----------   ----------
Deferred tax liabilities:
  Tax over book depreciation                 $   81,200   $  253,525
  Gain on sale of Techdyne and DCA stock      2,067,000    2,067,000
  Unrealized gain on marketable securities           --        1,817
  Other                                              --      159,239
                                             ----------   ----------
      Total deferred tax liability            2,148,200    2,481,581

Deferred tax assets:
  Obsolescence and other reserves               435,480      502,666
  Tax credits                                        --      303,000
  Inventory capitalization                      111,328       91,074
  Accrued expenses and other                    118,195       92,000
                                             ----------   ----------
Sub-total                                       665,003      988,740

                                      F-16
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 4--INCOME TAXES--CONTINUED

                                          DECEMBER 31,
                                  --------------------------
                                         2000           1999
                                  -----------    -----------
Net operating loss carryforward       725,272        792,406
Valuation allowance                  (820,000)      (500,000)
                                  -----------    -----------
Net deferred tax asset            $   570,275      1,281,146
                                  -----------    -----------
Net deferred tax liability        $ 1,577,925    $ 1,200,435
                                  ===========    ===========


Due to the uncertainty as to the realizability of deferred tax assets, a
valuation allowance of $820,000 and $500,000 was recorded as of
December 31, 2000 and December 31, 1999, respectively.

Deferred taxes in the accompanying balance sheets consist of the following
components:

                                                      DECEMBER 31,
                                             --------------------------
                                                 2000           1999
                                             -----------    -----------
Current deferred tax asset                   $    73,178    $   685,740
Current deferred tax liabilities                (252,600)       (71,432)
                                             -----------    -----------
Net current deferred tax asset (liability)      (179,422)       614,308

Long-term deferred tax asset                     671,097        505,808
Long-term deferred tax liability              (2,069,600)    (2,320,551)
                                             -----------    -----------
Net long-term deferred tax liability          (1,398,503)    (1,814,743)
                                             -----------    -----------
Net deferred tax liability                   $(1,577,925)   $(1,200,435)
                                             ===========    ===========

         A deferred tax liability of $2,067,000 at December 31, 2000 and 1999,
resulted from income tax expense recorded on gains recognized for financial
reporting purposes, but not for income tax purposes, resulting in a difference
between book and tax basis of the Company's investment in Techdyne and DCA. This
temporary difference would reverse upon the occurrence of certain events
relating to the divestiture of Techdyne and DCA. This deferred tax liability has
been classified as noncurrent.

         For financial reporting purposes, (loss) income before income taxes
includes the following components:

                                      YEAR ENDED DECEMBER 31,
                              -----------------------------------
                                 2000         1999         1998
                              ---------    ---------    ---------
United States income (loss)   $  84,549    $ (64,744)   $ 508,933
Foreign loss                   (328,278)    (576,634)    (537,466)
                              ---------    ---------    ---------
                              $(243,729)   $(641,378)   $ (28,533)
                              =========    =========    =========

Significant components of the provision (benefit) for income taxes are as
follows:

                                      F-17

<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 4--INCOME TAXES--CONTINUED

                                                YEAR ENDED DECEMBER 31,
                                -----------------------------------------------
                                   2000               1999              1998
                                ---------          ---------          ---------
Current:
  Federal                       $(160,309)         $ (82,739)         $(415,468)
  State                           116,022             99,825             92,394
                                ---------          ---------          ---------
                                  (44,287)            17,086           (323,074)
Deferred:
 Federal                          104,875             40,100             66,602
 State                             53,016                 --                 --
 Foreign                               --                 --            (95,897)
                                ---------          ---------          ---------
                                  157,891             40,100            (29,295)
                                ---------          ---------          ---------
                                $ 113,604          $  57,186          $(352,369)
                                =========          =========          =========

         The reconciliation of income tax attributable to income before income
taxes and minority interests computed at the U.S. federal statutory rate (34%)
to income tax expense is as follows:
<TABLE>
<CAPTION>

                                                                 YEAR ENDED DECEMBER 31,
                                                        -----------------------------------
                                                           2000         1999        1998
                                                        ---------    ---------    ---------
<S>                                                     <C>          <C>          <C>
Tax at statutory rate                                   $ (89,973)   $(208,439)   $  (9,526)
Adjustments resulting from:
  State income taxes-net of federal income tax effect      89,774       65,311      105,215
  Lower effective income taxes of other countries         111,615      196,056       86,841
  Non deductible items                                     67,598       27,052       62,235
  Prior year tax return to provision adjustment          (268,433)      (3,641)    (287,623)
  Change in valuation allowance                           320,000      (28,000)    (322,465)
  Other                                                  (116,977)       8,847       12,954
                                                        ---------    ---------    ---------
                                                        $ 113,604    $  57,186    $(352,369)
                                                        =========    =========    =========
</TABLE>


         Undistributed earnings of the Company's foreign subsidiary amounted to
approximately $1,390,000 at December 31, 2000 and $1,718,000 at December 31,
1999. Those earnings are considered to be indefinitely reinvested and,
accordingly, no provision for U.S. federal and state income taxes has been
provided thereon. Upon distribution of those earnings in the form of dividends
or otherwise, the Company would be subject to both U.S. income taxes (subject to
an adjustment for foreign tax credits) and withholding taxes payable.
Determination of the amount of unrecognized deferred U.S. income tax liability
is not practicable because of the complexities associated with its hypothetical
calculation; however, foreign tax credits may be available to reduce some
portion of the U.S. liability. Withholding taxes of approximately $69,000 and
$86,000 would be payable upon remittance of all previously unremitted earnings
at December 31, 2000 and December 31, 1999, respectively.

         Income tax (refunds) payments were approximately $(72,000) in 2000,
$101,000 in 1999 and $1,203,000 in 1998.

                                      F-18
<PAGE>


                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 5--STOCK OPTIONS AND STOCK COMPENSATION

         The Company has elected to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related
Interpretations in accounting for its employee stock options because, as is
discussed below, Financial Accounting Standards Board Statement No. 123,
"Accounting for Stock Based Compensation" (FAS123), requires use of option
valuation models that were not developed for use in valuing employee stock
options. Under APB 25, because the exercise price of the Company's stock options
equals the market price of the underlying stock on the date of grant, no
compensation expense was recognized.


         The Company has 1,000,000 shares of common stock reserved for future
issuance pursuant to its 1989 Stock Option Plan. On April 18, 1995, the Company
granted 809,000 options under its 1989 plan, of which 3,000 were exercised at
$2.38 in March 2000 for a total of $7,140 proceeds, with 3,000 cancelled and
803,000 options having expired on April 17, 2000. On June 11, 1997, the
Company's board of directors granted a five-year non-qualified stock option
under the 1989 Plan for 35,000 shares immediately exercisable with an exercise
price of $3.75 to a new board member, which exercise price was reduced to $2.38
per share on September 10, 1997, the fair market value on that date. These
options remain outstanding at December 31, 2000. On July 27, 2000, the board
granted 820,000 five-year non-qualified stock options under the 1989 Plan to 17
officers, directors and employees of the Company and its subsidiaries under the
1989 Plan. The options are exercisable at $1.38, the market price on the date of
grant. These options remain outstanding at December 31, 2000.


         On February 17, 2000, the Company adopted a new 2000 Stock Option Plan
for up to 500,000 shares and granted 175,000 non-qualified and 300,000 incentive
stock options which was subject to shareholder approval obtained May 24, 2000,
prior to which the options were restricted from exercise. The options are
exercisable for 3 years at $3.25. The Company recorded an expense of
approximately $71,000 on 75,000 of these options in May 2000.

         On May 6, 1996, the Company adopted a Key Employee Stock Plan reserving
100,000 shares of its common stock for issuance from time to time to officers,
directors, key employees, advisors and consultants as bonus or compensation for
performances and or services rendered to the Company or otherwise providing
substantial benefit for the Company. 2,000 shares under this plan were issued to
the managing director of Techdyne's European operations.

         In May 1994, Techdyne adopted a stock option plan for up to 250,000
options. Pursuant to this plan, in May 1994, the board of directors granted
227,500 options to certain of its officers, directors, and employees. These
options were exercisable for a period of five years at $1 per share. On June 30,
1998, 115,000 of these options were exercised, and on May 10, 1999, 50,000 of
the remaining options were exercised. The Company received cash payment of the
par value, which amounted to $1,150 for the 1998 exercises and $500 for the 1999
exercises, and the balance in three year promissory notes with interest at 5.16%
for the June 1998 exercises and 4.49% for the May 1999 exercises.

         On February 27, 1995 Techdyne granted non-qualified stock options, not
part of the 1994 Plan, to directors of Techdyne and its subsidiary for 142,500
shares exercisable at $1.75 per share for five years. In April 1995, Techdyne
granted a non-qualified stock option for 10,000 shares, not part of the 1994
Plan, to its general counsel at the same price and terms as the directors'
options. On February 25, 2000, 145,000 of these options were exercised. The
Company received cash payment of the par value amounting to $1,450 and the
balance in three year promissory notes with interest at 6.19%.

                                      F-19
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 5--STOCK OPTIONS AND STOCK COMPENSATION--CONTINUED

         In June 1997, Techdyne's board of directors adopted a Stock Option Plan
for up to 500,000 options, and pursuant to the plan the board granted 375,000
options exercisable for five years through June 22, 2002 at $3.25 per share the
closing price of the common stock on the date of grant with 325,000 of these
options outstanding at December 31, 2000. On June 30, 1999, Techdyne granted
52,000 options exercisable for three years through June 29, 2002 at $4.00 per
share with 10,000 options outstanding at December 31, 2000. On August 25, 1999,
Techdyne granted 16,000 options exercisable for three years through August 24,
2002 at $4.00 per share with 13,000 options outstanding at December 31, 2000. On
December 15, 1999, Techdyne granted 19,000 options exercisable for three years
through December 14, 2002 at $4.00 per share with 13,000 options outstanding at
December 31, 2000. On May 24, 2000, Techdyne granted 3,000 options exercisable
for three years through May 23, 2000 at $4.00 per share, which remain
outstanding at December 31, 2000. On October 16, 2000, Techdyne granted 90,000
three year stock options exercisable at $2.00 per share through October 15,
2002, with one-third of the options vesting immediately, one-third vesting on
October 16, 2001 and one-third vesting on October 16, 2002.

         In November 1995, DCA adopted a stock option plan for up to 250,000
options. On June 10, 1998, DCA's board of directors granted an option under
the 1995 plan to a new board member for 5,000 shares exercisable at $2.25 per
share though June 9, 2003.

         In April 1999, DCA adopted a stock option plan pursuant to which its
board of directors granted 800,000 options exercisable at $1.25 per share to
certain of its officers, directors, employees and consultants with 340,000
options exercisable through April 20, 2000 and 460,000 options exercisable
through April 20, 2004. DCA recorded expense of $153,000 on 340,000 of these
options pursuant to FAS 123 and APB 25. In April 2000, the 340,000 one-year
options were exercised to which the Company received cash payment of the par
value amounting to $3,400 and the balance in three-year promissory notes with
interest at 6.2%.

         In May, 1998, as part of the consideration pursuant to an agreement for
investor relations and corporate communications services agreement, the Company
granted options for 20,000 shares of its common stock exercisable for three
years through May 14, 2001 at $2.25 per share and Techdyne granted options for
25,000 shares of its common stock exercisable for three years through May 14,
2001 at $4.25 per share. Options for 5,000 shares of the Company's common stock
and 6,250 shares of Techdyne's common stock vested during 1998 with no
additional options to vest due to cancellation of this agreement in August,
1998. Pursuant to FAS 123, the Company recorded approximately $18,000 expense
for options vesting under this agreement.

                                      F-20
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 5--STOCK OPTIONS AND STOCK COMPENSATION--CONTINUED

         Techdyne entered into a consulting agreement on July 1, 1999 for
financial advisory services, which ended on September 15, 2000. As compensation,
the consultant received non-qualified stock options to purchase 100,000 shares
of Techdyne's common stock exercisable at $3.50 per share that will expire on
September 15, 2000. These options were valued at $40,000 resulting in
approximately $23,000 expense during 2000 and $17,000 expense during 1999.

         Pro forma information regarding net income and earnings per share is
required by FAS 123, and has been determined as if the Company had accounted for
its employee stock options under the fair value method of that Statement. The
fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions for the option grants: risk-free interest rates of 6.43% for the
January 2000 options, 6.75% for the February 2000 and July 2000 options, 5.55%
for the 1999 options and 5.59% for the 1998 options; no dividend yield;
volatility factor of the expected market price of the Company's common stock of
 .78 for the January 2000 and February 2000 options, .81 for the July 2000
options, .72 for the 1998 options and .97 for the 1999 options; and an expected
life of 3 years for the January 2000 options, 2.75 years for the February 2000
options, 2.5 years for the July 2000 options, 3 years for the 1998 options and
2.5 years for the 1999 options.

         The Black-Scholes options valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective input assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different than those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

         For purposes of pro forma disclosures, the estimated fair value of
options is amortized to expense over the options' vesting period. The Company's
pro forma information which includes the pro forma effect of its own options, as
well as the pro forma effects related to the Company's interest in Techdyne and
DCA pro forma adjustments follows:

                                                2000          1999          1998
                                        ------------    ----------    ----------
Pro forma net (loss) income             $ (1,401,506)   $ (874,361)   $   87,212
                                        ============    ==========    ==========
Pro forma (loss) earnings per share
   Basic                                $       (.25)   $     (.15)   $    .02
                                        ============    ==========    ==========
   Diluted                              $       (.25)   $     (.15)   $    .01
                                        ============    ==========    ==========

                                      F-21
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 5--STOCK OPTIONS AND STOCK COMPENSATION--CONTINUED

           A summary of the Company's stock option activity, and related
information for the years ended December 31, follows, with modified options
being reflected as grants and the original grants being modified reflected as
cancellations:

<TABLE>
<CAPTION>
                                                 2000                                   1999                             1998

                                                    Weighted-                   Weighted-                    Weighted-average
                                                     Average                     Average
                                        Options   Exercise Price   Options    Exercise Price   Options        Exercise Price
                                        -------   --------------   -------    --------------   -------        --------------

<S>                                      <C>             <C>       <C>               <C>        <C>                    <C>
Outstanding-beginning of year            846,000                    846,000                     841,000
Granted                                1,445,000         $2.16          ---                       5,000                $2.25
Exercised                                 (3,000)         2.38          ---                         ---
Expired                                 (803,000)         2.38          ---                         ---
                                       ----------                   -------                     -------
Outstanding-end of year                1,485,000                    846,000                     846,000
                                       =========                    =======                     =======
Exercisable at end of year:
1995 and 1997 options                     35,000         $2.38      841,000           $2.38     841,000                 2.38
1998 options                               5,000          2.25        5,000            2.25       5,000                 2.25
January 2000 and February 2000 options   625,000          3.19          ---                         ---
July 2000 options                        820,000          1.38          ---                         ---
                                       ---------                    -------                     -------
                                       1,485,000                    846,000                     846,000
                                       =========                    =======                     =======
Weighted-average fair value of
   options granted, including
   modified options, during the year     $.77                       $ .--                       $.98
                                         ====                       =====                       ====
</TABLE>

         The weighted average remaining contractual life at December 31, 2000 of
the 1997 options is 1.4 years, .4 years for the 1998 options, 1.9 years for the
January 2000 and February 2000 options, and 4.4 years for the July 2000 options.

         The Company has 2,153,000 shares reserved for future issuance at
December 31, 2000, including: 1,000,000 shares for the 1989 plan; 500,000 shares
for the February 2000 plan, 98,000 shares for key employee stock plan; 5,000
shares for consultant stock options; 150,000 for the January 2000 options, and
400,000 shares for an employment agreement.

         The fair value of Techdyne options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted average
assumptions for the options issued during 1999, 1998 and 1997, respectively:
risk-free interest rate of 5.20%, 5.55% and 5.59%; no dividend yield; volatility
factor of the expected market price of Techdyne common stock of .67, .58 and
 .60; and an expected life of the options of 1.8 years, 3 years, and 2.5 years.

         A summary of Techdyne's stock option activity, and related information
for the years ended December 31, follows:

<TABLE>
<CAPTION>
                                           2000                            1999                        1998
                                           ----                            ----                        ----
                                            Weighted-                  Weighted-                     Weighted-
                                             Average                    Average                       Average
                                 Options  Exercise Price  Options    Exercise Price   Options      Exercise Price
                                 -------  --------------  -------    --------------   -------      --------------

<S>                               <C>            <C>      <C>               <C>       <C>                 <C>
Outstanding-beginning of year     688,250                  590,350                     699,100
Granted                            93,000        $2.06     187,000          $3.73        6,250            $4.25
Exercised                        (145,000)        1.75     (50,000)          1.00     (115,000)            1.00
Expired                          (176,000)        3.57     (39,100)          2.77           --
                                ---------                  -------                     -------
Outstanding-end of year           460,250                  688,250                     590,350
                                =========                  =======                     =======
Outstanding and exercisable
   at end of year:
May 1994 options                      ---                      ---                      56,600             1.00
February and April 1995 options       ---                  150,000           1.75      152,500             1.75

</TABLE>
                                      F-22
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 5--STOCK OPTIONS AND STOCK COMPENSATION--CONTINUED
<TABLE>
<CAPTION>

                                           2000                        1999                       1998
                                           ----                        ----                       ----
                                                Weighted-                   Weighted-                    Weighted-
                                                 Average                     Average                      Average
                                     Options   Exercise Price   Options    Exercise Price   Options     Exercise Price
                                     -------   --------------   -------    --------------   -------     --------------

<S>  <C>                             <C>             <C>        <C>               <C>       <C>                <C>
June 1997 options                    325,000         $3.25      345,000           3.25      375,000            3.25
May 1998 options                       6,250          4.25        6,250           4.25        6,250            4.25
June, August and December 1999
    options, and May 2000 options     39,000          4.00       87,000           4.00          ---
July 1999 options                        ---                    100,000           3.50          ---
October 2000 options                  90,000          2.00          ---                         ---
                                     -------                    -------                     -------
                                     460,250                    688,250                     590,350
                                     =======                    =======                     =======
Weighted-average fair value of
   options granted during the year     $.44                       $.59                       $2.04
                                       ====                       ====                       =====
</TABLE>

           The remaining average contractual life at December 31, 2000 is 2.8
years for the October 2000 options, 3.6 years for the June 1999, August 1999,
December 1999 and May 2000 options, .4 years, for the 1998 options and 1.5 years
for the June 1997 options. There are 90,000 October 2000 options with a $2.00
exercise price which are included in outstanding options at December 31, 2000 of
which 30,000 were vested and reflected as exercisable.

        The fair value of DCA options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted average
assumptions for options granted/modified during 1999 and 1998, respectively;
risk-free interest rate of 5.65% and 5.55%; no dividend yield; volatility factor
of DCA common stock of .95 and .93 and a weighted average expected life of 1.9
years and 2.0 years.

         A summary of DCA's stock option activity, and related information for
the years ended December 31, follows:
<TABLE>
<CAPTION>

                                                    2000                              1999                              1998
                                                    ----                              ----                              ----
                                                 WEIGHTED-AVERAGE               WEIGHTED-AVERAGE                  WEIGHTED-AVERAGE

                                      OPTIONS     EXERCISE PRICE   OPTIONS       EXERCISE PRICE   OPTIONS         EXERCISE PRICE

<S>                                    <C>            <C>           <C>             <C>           <C>                 <C>
Outstanding-beginning of year          809,500                      19,500                        29,000
Granted                                    ---                     800,000          $1.25         10,000              $2.25
Cancellations                              ---                         ---                        (5,000)              4.75
Exercised                             (340,000)       $1.25            ---           1.50            ---
Expired                                 (4,500)        1.50        (10,000)          3.50        (14,500)              1.50
                                      ---------                    --------                       ------
Outstanding-end of year                465,000                     809,500                        19,500
                                       =======                     =======                        ======
Outstanding and exercisable
   at end of year:
   April 1999 options                  460,000         1.25        800,000           1.25            ---
   November 1995 options                   ---                       4,500           1.50          4,500               1.50
   August 1996 and June 1998 options     5,000         2.25          5,000           2.25         10,000               2.25
   August 1996 options                      ---                         ---                        5,000               4.75
                                      ---------                  ----------                       ------
                                       465,000                     809,500                        19,500
                                       =======                     =======                        ======
Weighted-average fair value of
   options granted during the year     $.--                        $.59                            $.79
                                       ====                        ====                            ====


</TABLE>
                                      F-23
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 5--STOCK OPTIONS AND STOCK COMPENSATION--CONTINUED

         The remaining contractual life at December 31, 2000 is 3.3 years for
460,000 options issued in April 1999 and 2.4 years for the options issued in
June 1998.

NOTE 6--BUSINESS SEGMENT AND GEOGRAPHIC AREA DATA

         The following summarizes information about the Company's four reported
business segments. The medical products division has been shown separately even
though not required by FAS 131. Corporate activities include general corporate
revenues and expenses. Corporate assets included unallocated cash, deferred
income taxes, corporate fixed assets and goodwill not allocated to any of the
segments. Intersegment sales are generally intended to approximate market price.

BUSINESS SEGMENT REVENUES
<TABLE>
<CAPTION>

                                                                   2000            1999            1998
                                                               ------------    ------------    ------------
Electro-Mechanical

<S>                                                            <C>             <C>             <C>
     External                                                  $ 52,766,512    $ 48,359,292    $ 44,755,164
     Intersegment Sales                                                  --          23,468         171,567
Medical Products                                                  1,112,490       1,119,179       1,335,128
Medical Services                                                  9,247,101       5,865,571       4,003,935
New Technology                                                      185,836              --              --
Corporate                                                           457,839         539,066         310,713
Elimination of corporate rental charges
     to electro-mechanical manufacturing                           (128,630)        (93,907)        (93,444)
Elimination of corporate rental charges
     to medical products                                             (7,320)             --              --
Elimination of corporate interest charge
     to electro-mechanical                                          (30,979)       (143,086)       (156,197)
Elimination of medical services interest
    charge to new technology                                       (185,836)             --              --
Elimination of corporate interest charge
     to medical services                                                 --              --          (5,878)
Elimination of medical services
     interest charge to corporate                                   (13,450)         (1,697)           (892)
Elimination of electro-mechanical
     manufacturing sales to medical products                             --         (23,468)       (171,567)
                                                               ------------    ------------    ------------
                                                               $ 63,403,563    $ 55,644,418    $ 50,148,529
                                                               ============    ============    ============
BUSINESS SEGMENT (LOSS) PROFIT

Electro-Mechanical                                             $    655,570    $    653,139    $    924,924
Medical Products                                                   (284,380)       (192,644)        (87,818)
Medical Services                                                   (379,198)       (960,821)       (441,010)
New Technology                                                      (69,000)             --              --
Corporate                                                          (166,721)       (141,052)       (424,629)
                                                               ------------    ------------    ------------
                                                               $   (243,729)   $   (641,378)   $    (28,533)
                                                               ============    ============    ============
BUSINESS SEGMENT ASSETS

Electro-Mechanical                                             $ 27,875,785    $ 26,760,202    $ 23,767,144
Medical Products                                                    899,650         723,204         667,955
Medical Services                                                 11,177,382       9,035,947       9,348,924
New Technology                                                    2,385,836              --              --
Corporate                                                         1,889,881       2,202,517       2,699,982
Elimination of electro-mechanical trade receivable
     from medical products                                               --          (6,763)        (53,050)
Elimination of medical services advance receivable
     from corporate                                                (414,339)       (105,142)       (120,865)
Elimination of medical services notes receivable
     from new technology                                         (2,200,000)             --              --
Elimination of medical services accrued interest
     from new technology                                           (185,836)             --              --
                                                                                               ------------
                                                               $ 41,428,359    $ 38,609,965    $ 36,310,090
                                                               ============    ============    ============
</TABLE>

                                      F-24

<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 6--BUSINESS SEGMENT AND GEOGRAPHIC AREA DATA--CONTINUED
<TABLE>
<CAPTION>

                                                                   2000            1999            1998
                                                               ------------    ------------    ------------
OTHER BUSINESS SEGMENT INFORMATION

INTEREST INCOME:

<S>                                                            <C>             <C>             <C>
Electro-Mechanical                                             $     43,885    $     34,167    $     78,315
Medical Services                                                    289,350         195,344         296,943
New Technology                                                      185,836              --              --
Corporate                                                            39,747         172,349         205,048
Elimination of corporate intercompany
     interest charge to electro-mechanical                          (30,979)       (143,086)       (156,197)
Elimination of corporate intercompany
     interest charge to medical services                                 --              --          (5,878)
Elimination of medical services intercompany
     interest charge to corporate                                   (13,450)             --              --
Elimination of medical services intercompany
     interest charge to new technology                             (185,836)         (1,697)           (892)
                                                               ------------    ------------    ------------
                                                               $    328,553    $    257,077    $    417,339
                                                               ============    ============    ============
INTEREST EXPENSE:

Electro-Mechanical                                             $    839,660    $    738,794    $    662,856
Medical Products                                                     11,485           1,377              --
Medical Services                                                     82,456          72,605          81,531
New Technology                                                      185,836
Corporate                                                            17,432           6,507          10,994
Elimination of corporate intercompany
     interest charge to electro-mechanical                          (30,979)       (143,086)       (156,197)
Elimination of medical services
     interest charge to new technology                             (185,836)
Elimination of corporate intercompany
     interest charge to medical services                                 --              --          (5,878)
Elimination of medical services intercompany
     interest charge to corporate                                   (13,450)         (1,697)           (892)
                                                               ------------    ------------    ------------
                                                               $    906,604    $    674,500    $    592,414
                                                               ============    ============    ============
DEPRECIATION AND AMORTIZATION:

Electro-Mechanical                                             $  1,439,474    $  1,331,021    $  1,115,023
Medical Products                                                     39,307          36,702          35,617
Medical Services                                                    596,305         452,203         334,387
Corporate                                                            89,085          94,155         111,153
                                                               ------------    ------------    ------------
                                                               $  2,164,171    $  1,914,081    $  1,596,180
                                                               ============    ============    ============
OTHER SIGNIFICANT NON-CASH ITEMS:
Electro mechanical:
     Provision for inventory obsolescence                      $    421,888    $    404,762    $    437,095
Medical services:
     Stock option related compensation expense                           --         153,000              --
NEW TECHNOLOGY:

Finders' fee stock option expense                              $     69,000              --              --
CORPORATE:

     Gain on subsidiary warrant exercise                       $    276,178    $         --    $         --
     Gain on sale of marketable securities                               --         263,144          12,780
     Stock option related compensation expense                       70,500              --              --
CAPITAL EXPENDITURES:

Electro-Mechanical                                             $    893,269    $  1,475,823    $    832,410
Medical Products                                                      1,897          19,710          23,652
Medical Services                                                  1,912,049       1,202,819       1,149,373
Corporate                                                             2,802          20,681          24,438
                                                               ------------    ------------    ------------
                                                               $  2,810,017    $  2,719,033    $  2,029,873
                                                               ============    ============    ============
GEOGRAPHIC AREA SALES

United States                                                  $ 57,724,977    $ 51,096,063    $ 44,735,318
Europe(1)                                                         4,869,678       3,818,286       4,646,447
                                                               ------------    ------------    ------------
                                                               $ 62,594,655    $ 54,914,349    $ 49,381,765
                                                               ============    ============    ============
</TABLE>

(1)    Techdyne (Europe) sales are primarily to customers in the United Kingdom.

                                      F-25

<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 6--BUSINESS SEGMENT AND GEOGRAPHIC AREA DATA--CONTINUED

GEOGRAPHIC AREA PROPERTY, PLANT AND EQUIPMENT (NET)

United States                    $10,267,378       $ 9,189,406       $ 8,114,120
Europe                             1,073,387         1,284,854         1,386,142
                                 -----------       -----------       -----------
                                 $11,340,765       $10,474,260       $ 9,500,262
                                 ===========       ===========       ===========


MAJOR CUSTOMERS

         A majority of the Company's electro-mechanical sales are to certain
major customers. The loss of, or substantially reduced sales to, any of these
customers would have an adverse effect on the Company's operations, if such
sales were not replaced.

         Electro-mechanical sales to major customers comprising 10% or more of
the Company's sales are as follows:

                                     YEAR ENDED DECEMBER 31,

CUSTOMERS                                 2000          1999            1998
---------                                -----          ----            ----
Illinois Tool Works                  $10,196,000      $7,195,000      $8,183,000
Motorola(1)(3)                                --       6,338,000              --
Alcatel(2)(3)                          6,179,000              --              --
Trilithic(2)(3)                        6,177,000              --              --

---------------------
(1)        Less than 10% of sales for 2000.
(2)        Less than 10% of sales for 1999.
(3)        Less than 10% of sales for 1998.

         Sales to Illinois Tool Works (formerly PMI Food Equipment Group) by
Lytton, represented approximately 38%, 32% and 31% of Lytton's sales, 19%, 16%
and 18% of Techdyne's sales and 16%, 13% and 17% of the Company's sales for the
year ended December 31, 2000, 1999 and 1998, respectively.

         Sales to Compaq Computer Corp., which at one time was a major customer
of Techdyne (Europe) amounted to $139,000 in 2000, $209,000 in 1999 and
$1,192,000 in 1998 representing 3%, 5% and 26% of the sales of Techdyne (Europe)
for 2000, 1999 and 1998, respectively.

         Medical services revenues, which represent revenues of the Company's
dialysis division, are attributable to payments received under Medicare, which
is supplemented by Medicaid or comparable benefits in the states in which the
Company operates. Reimbursement rates under these programs are subject to
regulatory changes and governmental funding restrictions. Although the Company
is not aware of any future rate changes, significant changes in reimbursement
rates could have a material effect on the Company's operations.

         Medical product sales are highly dependent on government contracts
which have become increasingly difficult to secure due to changes in government
procurement procedures. Significant reductions in government contract revenues
would have had a material adverse effect on the operations of the Medical
Products Division.

                                      F-26
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 7--COMMITMENTS

Commitments

         The Company and its subsidiaries have leases on several facilities,
which expire at various dates. The aggregate lease commitments at December 31,
2000 are approximately: 2001 - $898,000; 2002 - $685,000; 2003 - $458,000, 2004
- $367,000; 2005 - $293,000. Total rent expense was approximately $1,033,000,
$1,045,000 and $916,000 in 2000, 1999 and 1998, respectively.

         Lytton leases its operating facilities from an entity which is owned by
Lytton's former owner and former President. The operating lease, which expires
July 31, 2002, required annual lease payments of approximately $218,000,
adjusted each year based on the change in the Consumer Price Index, with the
lease containing renewal options for a period of five to ten years at the then
fair market rental value.

         Effective January 1, 1997, DCA established a 401(k) savings plan
(salary deferral plan) with an eligibility requirement of one year of service
and 21 year old age requirement. DCA has made no contributions under this plan
as of December 31, 2000.

         Lytton sponsors a 401(k) Profit Sharing Plan covering substantially all
of its employees. The Company and Techdyne adopted this plan as participating
employers effective July 1, 1998. The discretionary profit sharing and matching
expense including that of the Company, Techdyne and Lytton amounted to
approximately $88,000 for the year ended December 31, 2000 and $92,000 for the
year ended December 31, 1999.

NOTE 8--RELATED PARTY TRANSACTIONS

         During 2000, 1999 and 1998, the Company paid premiums of approximately
$829,000, $761,000, and $589,000, respectively, for insurance through a director
and stockholder, and the relative of a director and stockholder.

         During 2000, 1999 and 1998, legal fees of approximately $267,000,
$263,000 and $277,000, respectively, were paid by the Company and its public
subsidiaries to an attorney who acts as general counsel and is Secretary of the
Company (of which he is a director), Techdyne and DCA.

         Subcontract manufacturing is performed for Techdyne by a company of
which a director of the Techdyne is President and one of the owners. Subcontract
manufacturing purchases from this company amounted to approximately $2,302,000,
$1,728,000 and $2,245,000 in 2000, 1999 and 1998, respectively.

                                      F-27
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 9--QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

           The following summarizes certain quarterly operating data:

<TABLE>
<CAPTION>
                                      YEAR ENDED DECEMBER 31, 2000             YEAR ENDED DECEMBER 31, 1999
                              MARCH 31    JUNE 30    SEPT. 30    DEC. 31    MARCH 31     JUNE 30    SEPT. 30    DEC. 31
                              --------    -------    --------    -------    --------     -------    --------    -------
                                                           (In thousands except per share data)
<S>                          <C>         <C>         <C>        <C>         <C>         <C>         <C>        <C>
Net Sales                    $ 14,730    $ 14,606    $ 16,113   $ 17,146    $ 11,259    $ 12,175    $ 15,993   $ 15,487
Gross profit                    1,816       2,226       2,592      2,789       1,438       1,752       2,680      1,762
Realized gain on sale of
   marketable securities           --          --          --         --          --         228          --         35
Gain on subsidiary

   warrant exercise               246           5          --         25          --          --          --         --
Net (loss) income                (370)       (316)         17        262        (287)       (126)        214       (414)
(Loss) earnings per share:
   Basic                     $   (.06)   $   (.06)      $.---   $    .05    $   (.05)   $   (.02)   $    .04   $   (.07)
   Diluted                   $   (.06)   $   (.06)      $.---   $    .05    $   (.05)   $   (.02)   $    .04   $   (.07)
</TABLE>

         Since the computation of earnings per share is made independently for
each quarter using the treasury stock method, the total of four quarters
earnings do not necessarily equal earnings per share for the year.

         The Company recorded an adjustment to the valuation allowance relating
to its deferred tax asset of approximately $320,000 during the fourth quarter
of 2000, $28,000 during the fourth quarter of 1999 and $300,000 during the
fourth quarter of 1998.

NOTE 10--ACQUISITION

         On July 31, 1997, Techdyne acquired Lytton, which manufactures and
assembles printed circuit boards and other electronic products, for $2,500,000
cash, paid at closing, and issuance of 300,000 shares of Techdyne's common
stock. Techdyne guaranteed that the seller would realize a minimum of $2,400,000
from the sale of these shares of common stock based on Lytton having achieved
certain earnings objectives. The purchase price in excess of the fair value of
net assets acquired is being amortized over 25 years. Additional contingent
consideration was due if Lytton achieved pre-defined sales levels. Additional
consideration of approximately $396,000, $290,000 and $154,000 was paid in April
2000, April 1999, and April 1998, respectively, based on sales levels. As the
contingencies have been resolved, additional consideration due, has been
recorded as goodwill, and is being amortized over the remainder of the initial
25 year life of the goodwill.

         In July 1998, Techdyne advanced the seller approximately $1,278,000
("Advance") toward the guarantee for the sale of Techdyne's common stock in
addition to the prior sales by the seller. Subsequently, Techdyne also
guaranteed the seller aggregate proceeds of no less than $1,100,000 from the
sale of the remaining common stock if sold on or prior to July 31, 1999. In July
1999, Techdyne forgave the Advance and issued payment of $1,100,000 to the
seller, which together with the proceeds realized by the seller from the sale of
stock in 1998 satisfied Techdyne's remaining obligation under the $2,400,000
guarantee. The 295,000 shares held by the seller were returned to Techdyne and
were cancelled.

                                      F-28
<PAGE>

                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 11--SUBSIDIARY STOCK OFFERINGS

         Pursuant to a 1996 public offering, DCA issued common stock and
2,300,000 redeemable common stock purchase warrants to purchase one DCA common
share each with an exercise price of $4.50, originally exercisable through April
16, 1999 and extended to June 30, 2000, at which time the remaining outstanding
warrants expired. The underwriters received options to purchase 100,000 shares
of DCA common stock and 200,000 common stock purchase warrants, with the options
exercisable at $4.50 per unit through April 16, 2001 with the underlying
warrants being substantially identical to the public warrants except that they
are exercisable at $5.40 per share.

         During 2000, approximately 170,000 DCA warrants were exercised with net
proceeds to DCA of approximately $765,000. In accordance with its accounting
policy, the Company recognized a gain of approximately $276,000 and deferred
income taxes of approximately $105,000 related to the DCA warrant exercises.

NOTE 12--PROPOSED MERGER AND ACQUISITION

         On October 20, 1999, DCA entered into an Agreement and Plan of Merger
with MainStreet IPO.com Inc. ("MainStreet"). In August 2000, DCA terminated the
proposed merger as a result of MainStreet's failure to satisfy conditions
contemplated by the merger agreement.

NOTE 13--LOAN TO MAINSTREET

         In July 2000, DCA loaned $140,000 to MainStreet pursuant to a one year
convertible promissory note secured by 300,000 shares of Linux Global Partners
("LGP") owned by MainStreet. The note bore interest at prime plus 1/2% payable
on the earlier of failure of DCA's shareholder to approve its proposed merger
with MainStreet before November 1, 2000 or at maturity on July 11, 2001. The
proposed merger was terminated in, and accordingly the note came due November 1,
2000. Upon MainStreet's failure to repay the loan, DCA has retained the 300,000
shares of LGP held as security in satisfaction of MainStreet's obligations under
the note. See Note 12.

NOTE 14--INVESTMENT

         On January 27, 2000, the Company acquired a 6% interest, with an option
to acquire an additional 2%, in Linux Global Partners ("LGP"), a holding company
investing in Linux software companies, and loaned LGP $1,500,000 with a 10%
annual interest rate. In March 2000, the Company exercised an option to acquire
an additional 2% interest in LGP in conjunction with which it loaned LGP an
additional $500,000. The Company's investment of $120 in LGP is accounted for at
cost. The loans were originally scheduled to mature January 26, 2001. On August
9, 2000, the Company loaned an additional $200,000 to LGP at an annual interest
rate of 10% in originally scheduled to mature in 30 days with the maturity
having been extended. The Company borrowed the funds for the loans from DCA with
an annual interest rate of 10%, with the loans having the same terms as the
Company's loans to Linux Global Partners. Interest on the notes amounted to
approximately $186,000 for the year ended December 31, 2000. Interest receivable
on the note from LGP amounted to approximately $186,000 and is included in
prepaid expense and other current assets. To assist LGP in achieving its
long-term investment objectives, the Company has agreed to extend the maturity
of its notes receivable from LGP to June 30, 2001 for additional consideration
consisting of 400,000 additional shares of LGP stock, representing a 2% interest
in LGP, and the right to convert all or part of the loans into convertible
Preferred A shares of LGP with the same terms and conditions as a private
placement of its securities in process by LGP. Additionally, LGP has agreed to
repay all monies owed to the Company prior to any other use of its private
placement proceeds if Medicore chooses no to convert the loans. See Notes 12 and
13.

                                      F-29
<PAGE>


                         MEDICORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 14--INVESTMENT--CONTINUED

         The Company issued options to purchase 150,000 shares of its common
stock to MainStreet and two of its officers as a finder's fee in conjunction
with the Company's investment in the LGP and recorded an expense of
approximately $69,000 on these options in January 2000. See Note 12 and 13.

                                      F-30
<PAGE>


                                 EXHIBIT INDEX

(c)      Exhibits

         (3)(ii)           Articles of Amendment to the Restated Articles of
                           Incorporation of Medicore, Inc., dated September,
                           1995.

         (10)(lxxii)       Waiver of Thomas K. Langbein dated May 17, 2001.

         (23)              Consents of experts and counsel.

                           (i)      Consent of Ernst & Young, LLP, Independent
                                    Certified Public Accountants

                           (ii)     Consent of Wiss & Company, LLP, Independent
                                    Certified Public Accountants