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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 3, 1999
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SPARTA SURGICAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-11047 22-2870438
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
Olsen Centre
2100 Meridian Park Blvd., Concord, CA 94520
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(Address of principal executive offices)
Registrant's telephone number, including area code (925) 825-8151
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS
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On September 2, 1999, the Registrant borrowed $485,000 from Spags
Investment Group, N.V. and its affiliate Coridal, N.V. ("Spags/Coridal"). Under
the terms of the Note, the principal sum of $485,000 is due on March 2, 2000
together with interest on the unpaid principal balance outstanding until paid
in full at the rate of seven percent (7%) per annum. Interest is computed
monthly, and is payable in arrears in full. At the same time, the Registrant
paid in full its $200,000 Note dated July 7, 1999 to Spags. In consideration of
Spags making a $485,000 loan to Registrant, Sparta agreed to issue to Spags/
Coridal 342,000 shares of the Company's Common Stock, par value $0.002. In
connection with this transaction, 28,500 shares of the Company's Common Stock,
par value $0.002, was issued to Royce Walker & Co., Ltd. for finder's fee. In
addition, upon certain terms and conditions, Spags/Coridal has an irrevocable
option to purchase an additional 965,000 shares of the Registrant's Common
Stock, par value
On September 3, 1999, the Registrant issued 550,000 shares of the Company's
Common Stock, par value $0.002, to Thomas F. Reiner, the Company's Chairman,
President and CEO. The shares issued are for providing a guarantee for certain
of the Company's obligations by Mr. Reiner. The shares issued are subject to
escrow conditions. The guarantee of the obligations are all related to the
Company's capital leases including computers and telephone equipment/voicemail
system and a line of credit with Wells Fargo Bank. These obligations relate to
the Registrant's recent acquisition of Olsen Electrosurgical, Inc. In connection
with Mr. Reiner's personally guaranteeing the Company's obligations (even
though Mr. Reiner is not required to do so), with such shares to be held in
escrow until the Company's obligation are fully paid in which case such shares
will be returned back to the Registrant. However, in the event that the
Company's obligations are not paid within one (1) year from the issuance of
shares into escrow, at the sole option of Mr. Reiner, the shares will be
released to Mr. Reiner or continued to be held in escrow in the event Mr. Reiner
extends such time period. In addition, in connection with working capital
requirements for Olsen Electrosurgical, Inc., Mr. Reiner further agreed to
increase the Working Capital Line of Credit facility from $500,000 to $750,000,
and to extend the term of such facility through June 2000.
On August 26, 1999, the Registrant issued 100,000 restricted shares of the
Company's Common Stock, par value $0.002, at $1.25 per share to an individual
investor. The proceeds will be used for working capital. Under the terms, the
issuance of the shares are subject to an irrevocable voting trust, appointing
Thomas F. Reiner, as Trustee, with full voting rights over such shares. A
finder's fee of ten percent was paid in connection with this transaction.
On August 13, 1999, the Registant terminated its non-binding letter of
intent issued on March 22, 1999 to purchase all or substantially all of the
assets of Western Medical Services, Inc.
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
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Thomas F. Reiner, Chairman of
the Board, President & CEO
Dated: September 3, 1999
