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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):
February 21, 2002
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 ID
diction of incorporation) File Number) Number)
Olsen Centre
849 E Stanley Blvd, Livermore, CA. 94550
(Address of principal executive offices)
Registrant's telephone number, including area code (925) 373-0374
not applicable
(Former name or former address, if changed since last report)
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Sparta Surgical Corporation
Form 8-K
ITEM 5 - OTHER EVENTS
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On February 10, 2002, the Company's wholly-owned subsidiary, Neslo Medical,
Inc., (hereinafter "Neslo") disclosed that it received a Three-Day Notice To Pay
Rent or Quit. On February 15, 2002, Neslo received a complaint for unlawful
detainer from Delta Properties, its landlord, (hereinafter, "Delta"), under the
title of action, Delta, et al vs. Neslo, Case #N 020185 filed in the Superior
Court of California, County of Contra Costa. Under the complaint, Delta is
seeking judgment, (i) for past due rent and associated charges relating to the
facility leases and (ii) for forfeiture of leases, and (iii) for reasonable
attorney's fees and, (iv) for costs of suit and other costs and damages. Neslo
has few, if any assets, no employees and has essentially ceased doing business
since October 2001. Therefore, with lack of working capital Neslo will be unable
to defend the complaint made by Delta. In addition, on February 7, 2002, Thomas
F. Reiner, Sr., (hereinafter, "Reiner"), resigned from the position of
President, Treasurer, Secretary, and is no longer acting in any capacity as an
officer, director and or agent of Neslo.
With respect to the Company, on February 15, 2002, the Company received a five
(5) days advance notice of demand of payment from Thomas F. Reiner, Sr., the
Company's Chairman and CEO, under certain Security Agreements and Promissory
Notes (hereinafter, "Notes") issued to Reiner, demanding payment, including all
accrued and unpaid interest pursuant to the May 23, 1997, and as amended August
20, 2001 Working Capital Credit Facility (hereinafter "Reiner Facility"), in the
approximate amount of $640,000. Under the Reiner Facility, Reiner as a senior
lender, is secured by a first position security interest in all of the Company's
assets. The secured Notes are due and payable the earlier of, (i) February 27,
2002, or (ii) upon demand by Reiner with a five day (5) notice to the Company,
or (iii) if an order is entered for relief against the Company or declaring the
Company insolvent, or if the Company voluntarily files for bankruptcy. As
disclosed previously, the Company's operations are cash flow negative and
therefore, it will have a very difficult time to satisfy these obligations on a
timely basis to Reiner, if at all, as required under the terms of the Notes and
Security Agreements pursuant to the Reiner Facility Agreement. The failure to
finalize additional financing will cause the Company to lose all of its assets
to Reiner and cease operations.
SIGNATURE
Pursuant to the requirements of the Securities and 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
Date: February 21, 2002
By /s/ Thomas F. Reiner
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Thomas F. Reiner,
Chairman of the Board,
President and Chief Executive Officer