SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-----------------------
FORM 8-K/A
CURRENT REPORT
Pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 7, 1995
SPARTA SURGICAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-11047 22-2870438
(State or other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) ID. Number)
Bernal Corporate Park
7068 Koll Center Parkway, Pleasanton, CA 94566
(Address of principal executive offices)
Registrant's telephone number, including area code (510)417-8812
not applicable
(Former name or former address, if changed since last report)
<PAGE>
The Registrant hereby amends Item 7, Financial Statements and Exhibits of
its Current Report on Form 8-K dated December 7, 1995 as follows:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro forma financial information.
Proforma Condensed Financial Statements Summary of Presentation
Unaudited Proforma Condensed Balance Sheet as of November 30,
1995
Unaudited Proforma Condensed Statement of Operations for the
nine months ended November 30, 1995
Unaudited Proforma Condensed Statement of Operations for the
year ended February 28, 1995
Notes to Proforma Condensed Financial Statements
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SPARTA SURGICAL CORPORATION
(Registrant)
By: /s/ Thomas F. Reiner
Thomas F. Reiner, Chairman of
the Board, President & CEO
Dated: February 6, 1996
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
FINANCIAL STATEMENTS
TO
FORM 8-K/A
DATED DECEMBER 7, 1995
<PAGE>
SPARTA SURGICAL CORPORATION AND SUBSIDIARY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE
----
Proforma Condensed Financial Statements Summary
of Presentation ......................................................... F-2
Proforma Condensed Balance Sheet as of November
30, 1995 ............................................................... F-3
Proforma Condensed Statement of Operations for
the nine months ended November 30, 1995 ................................ F-5
Proforma Condensed Statement of Operations for
the year ended February 28, 1995 ....................................... F-6
Notes to Proforma Condensed Financial Statements ........................ F-7
F-1
<PAGE>
SPARTA SURGICAL CORPORATION AND SUBSIDIARY
PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited proforma condensed consolidated financial statements
gives effect to the sale of Sparta Surgical Corporation's (the "Company's")
wound care division to Tecnol New Jersey Wound Care, Inc. ("Tecnol"), a
subsidiary of Tecnol, Inc. The proforma condensed consolidated financial
statements are based on the Company's historical financial statements and
estimates and assumptions set forth below.
The proforma condensed consolidated balance sheet as of November 30, 1995 gives
effect to the sale of the Company's wound care division to Tecnol as if the sale
took place on November 30, 1995.
The proforma condensed consolidated statement of operations for the nine months
ended November 30, 1995 includes the sale of the Company's wound care division
as if the transaction was completed at the beginning of the year. The proforma
condensed consolidated statement of operations for the year ended February 28,
1995 includes the sale of the Company's wound care division as if the
transaction was completed at the beginning of the year.
Proforma adjustments are based upon preliminary estimates, available information
and certain assumptions that management deems appropriate. The unaudited
proforma financial information presented herein is not necessarily indicative of
the results of operations or financial position that the Company would have
obtained had such events occurred at the beginning of the period, as assumed, or
of the future results of the Company. The proforma financial statements should
be read in conjunction with the historical financial statements and notes
thereto included in the Company's Annual Report on Form 10-KSB for the year
ended February 28, 1995 and the Company's Quarterly Report on Form 10-QSB for
the nine months ended November 30, 1995.
F-2
<PAGE>
SPARTA SURGICAL CORPORATION AND SUBSIDIARY
PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
NOVEMBER 30, 1995
(UNAUDITED)
ASSETS
------
Proforma Proforma
SSC Adjustments Combined
--- ----------- --------
Current Assets:
Cash and cash equivalents ...... $ -- $ 5,000,000 1 $ 250,000
(4,750,000)2
Accounts receivable -
trade (net) ................... 1,065,342 -- 1,065,342
Inventories .................... 4,202,868 (1,144,000)1 3,058,868
Prepaid expenses and other ..... 122,295 -- 122,295
----------- ----------- -----------
Total Current Assets ........ 5,390,505 (894,000) 4,496,505
----------- ----------- -----------
Property and Equipment (net) ..... 1,087,513 (712,199)1 375,314
----------- ----------- -----------
Other Assets:
Intangible assets (net) ........ 887,805 (11,608)1 876,197
Deposits and other ............. 113,880 -- 113,880
Accounts receivable-related
entities ...................... 821,419 -- 821,419
Notes receivable-officers ...... 120,757 -- 120,757
----------- ----------- -----------
Total Other Assets .......... 1,943,861 (11,608) 1,932,253
----------- ----------- -----------
Total Assets ................ $ 8,421,879 $(1,617,807) $ 6,804,072
=========== =========== ===========
The accompanying notes are an integral part of these
unaudited proforma condensed consolidated financial statements.
F-3
<PAGE>
SPARTA SURGICAL CORPORATION AND SUBSIDIARY
PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
NOVEMBER 30, 1995
(UNAUDITED)
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Proforma Proforma
SSC Adjustments Combined
--- ----------- --------
Current Liabilities: 985,000 1
Accounts payable - trade .......... $ 807,621 $ (351,228)2 $ 1,441,393
Accrued expenses .................. 155,262 (69,710)2 85,552
Dividends payable ................. 5,839 -- 5,839
Notes payable ..................... 2,050,000 (1,600,000)2 450,000
Accrued royalty payments .......... 44,277 -- 44,277
Current portion of long-term
debt ............................. 842,841 (755,401)2 87,440
----------- ----------- -----------
Total Current Liabilities ...... 3,905,840 (1,791,339) 2,114,501
----------- ----------- -----------
Long-term debt, net of current
portion above ...................... 2,102,682 (1,973,661)2 129,021
----------- ----------- -----------
Commitments and contingencies ....... -- -- --
Total stockholders' equity .......... 2,413,357 2,147,193 1 4,560,550
----------- ----------- -----------
Total Liabilities and
Stockholders' Equity .......... $ 8,421,879 $(1,617,807) $ 6,804,072
=========== =========== ===========
The accompanying notes are an integral part of these
unaudited proforma condensed consolidated financial statements.
F-4
<PAGE>
SPARTA SURGICAL CORPORATION AND SUBSIDIARY
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED NOVEMBER 30, 1995
(UNAUDITED)
Proforma Proforma
SSC Adjustments Combined
--- ----------- --------
Net sales ......................... $ 5,250,269 $(3,151,930)3 $ 2,098,339
Cost of sales ..................... 2,495,461 (1,580,102)3 915,359
----------- ----------- -----------
Gross Profit ................. 2,754,808 (1,571,828) 1,182,980
Selling, general and
administrative expenses .......... 1,748,450 (325,000)3 1,423,450
Research and development
expense .......................... 52,415 (24,000)3 28,415
Depreciation and amortization ..... 452,321 (282,000)3 170,321
----------- ----------- -----------
Income (Loss) From
Operations .................. 501,622 (940,828) (439,206)
----------- ----------- -----------
Other Income (Expense):
Interest and other income ....... 9,827 -- 9,827
Interest expense ................ (469,090) (417,000)4 (52,090)
Gain on sale of wound care
division ....................... -- 2,147,193 5 2,147,193
----------- ----------- -----------
Total Other Income
(Expense) ................... (459,263) 2,564,193 2,104,930
----------- ----------- -----------
Income (Loss) Before Provision
For Income Taxes ................. 42,359 1,623,365 1,665,724
Provision for income taxes ........ -- -- --
----------- ----------- -----------
Net Income (Loss) ................. 42,359 1,623,365 1,665,724
Preferred stock dividends ......... (44,184) -- (44,184)
----------- ----------- -----------
Net Income (Loss) Applicable
To Common Shareholders ........... $ (1,825) $ 1,623,365 $ 1,621,540
=========== =========== ===========
Net Income (Loss) Per Share of
Common Stock:
Primary:
Weighted average number of
common shares outstanding ..... 3,592,508 3,592,508
=========== ===========
Net Income (Loss) .............. $ -- $ .45
=========== ===========
Fully diluted:
Weighted average number of
common shares outstanding ..... 3,934,631 3,934,631
=========== ===========
Net Income (Loss) .............. $ -- $ .41
=========== ===========
The accompanying notes are an integral part of these
unaudited proforma condensed consolidated financial statements.
F-5
<PAGE>
SPARTA SURGICAL CORPORATION AND SUBSIDIARY
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED FEBRUARY 28, 1995
(UNAUDITED)
Proforma Proforma
SSC Adjustments Combined
--- ----------- --------
Net sales ......................... $ 7,142,293 $(3,698,938)3 $ 3,443,355
Cost of sales ..................... 4,056,282 (2,181,569)3 1,874,713
----------- ----------- -----------
Gross Profit ................. 3,086,011 (1,517,369) 1,568,642
Selling, general and
administrative expenses .......... 3,624,950 (450,000)3 3,174,950
Research and development
expense .......................... 97,921 (18,000)3 79,921
Depreciation and amortization ..... 772,682 (520,000)3 252,682
----------- ----------- -----------
Income (Loss) From
Operations .................. (1,409,542) (529,369) (1,938,911)
----------- ----------- -----------
Other Income (Expense):
Interest and other income ....... 11,283 -- 11,283
Interest expense ................ (764,713) (485,000)4 (279,713)
Gain on sale of wound care
division ....................... -- 2,147,193 5 2,147,193
Offering costs absorbed ......... (587,039) -- (587,039)
----------- ----------- -----------
Total Other Income
(Expense) ................... (1,340,469) 2,632,193 1,291,724
----------- ----------- -----------
Income (Loss) Before Provision
For Income Taxes ................. (2,750,011) 2,102,824 (647,187)
Provision for income taxes ........ -- -- --
----------- ----------- -----------
Net Income (Loss) ................. (2,750,011) 2,102,824 (647,187)
Preferred stock dividends ......... (135,783) -- (135,783)
----------- ----------- -----------
Net Income (Loss) Applicable
To Common Shareholders ........... $(2,885,794) $ 2,102,824 $ (782,970)
=========== =========== ===========
Net Income (Loss) Per Share
of Common Stock:
Primary:
Weighted average number of
common shares outstanding ..... 2,494,456 2,494,456
=========== ===========
Net Income (Loss) .............. $ (1.16) $ (.31)
=========== ===========
Fully diluted:
Weighted average number of
common shares outstanding ..... 2,494,456 2,494,456
=========== ===========
Net Income (Loss) .............. $ (1.16) $ (.31)
=========== ===========
The accompanying notes are an integral part of these
unaudited proforma condensed consolidated financial statements.
F-6
<PAGE>
SPARTA SURGICAL CORPORATION AND SUBSIDIARY
NOTES TO PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
On December 7, 1995, Sparta Surgical Corporation (The "Company")
executed an Asset Purchase Agreement for the sale of the Company's
impregnated wound care gauze dressings product line to Tecnol New
Jersey Wound Care, Inc., ("Tecnol"), a subsidiary of Tecnol, Inc., a
medical products manufacturer headquartered in Fort Worth, Texas. The
sales price was $5,675,000 of which approximately $5,000,000 was paid
in cash, with the balance being paid in the form of a promissory note
with interest at the prime rate which is due in September 1997 upon
certain conditions being met. The assets sold consisted of wound care
inventory, equipment, and various other assets.
2. Proforma Net Income Per Share of Common Stock
The proforma net income per share of common stock is based on the
weighted average number of common shares outstanding during the
period.
3. Proforma Adjustments
Adjustments to present the proforma combined condensed consolidated
financial statements are as follows:
1. Adjustment to record the sales proceeds of the sale to Tecnol and
to remove the assets sold as of November 30, 1995.
2. Adjustment to record the use of cash to repay substantially all
of the Company's outstanding loans, including (i) $2,199,172 owed
to Congress Financial Corporation under a revolving credit
facility; (ii) $111,602 for the buyout of certain manufacturing
equipment which was subject to a lease; (iii) $469,710 owed to
Asset Factoring, Inc. consisting of principal and accrued
interest; (iv) $600,000 to repay a portion of the note payable to
Storz Instrument Company; (v) $18,288 to repay a note payable to
a related party; (vi) $1,000,000 to Arbora, A.G. to repay a note
payable. Also includes payment of $351,228 of accounts payable by
the Company.
3. Adjustment to remove the operations of the wound care division
for the period.
4. Adjustment to remove the interest expense incurred on the notes
payable in number two above. The notes are assumed to have been
repaid at the beginning of the period for purposes of the
statements of operations.
5. Adjustment to record the estimated gain on the sale of the wound
care division.
F-7
