SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB

(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934

                       For the quarter ended May 31, 1998

                                       OR

[ ] TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
    OF 1934 

                 For the transition period from         to

                         Commission File Number 1-11047

                           SPARTA SURGICAL CORPORATION
        (Exact name of small business issuer as specified in its charter)

               Delaware                                   22-2870438
    (State or other jurisdiction                       (I.R.S. Employer
   of incorporation or organization)                 Identification Number)


                              Bernal Corporate Park
                 7068 Koll Center Parkway, Pleasanton, CA 94566
                    (Address of principal executive offices)

                                 (510) 417-8812
                           (Issuer's telephone number)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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

As of July 9,  1998,  1,851,235  shares  of  Common  Stock,  121,783  shares  of
Redeemable Convertible Preferred Stock and 28,068 shares of Series A Convertible
Redeemable Preferred Stock were outstanding.


<PAGE>


                           SPARTA SURGICAL CORPORATION

                                   Form 10-QSB


                                      INDEX


                                                                           Page
                                                                          Number

Part I.    Financial Information

           Item 1.    Financial Statements

                      Consolidated Balance
                      Sheet as of May 31, 1998                                 1

                      Consolidated Statements of
                      Operations for the three months
                      ended May 31, 1998 and 1997                              2

                      Consolidated Statements of
                      Cash Flows for the three months
                      ended May 31, 1998 and 1997                              3

                      Notes to Financial Statements                            4

           Item 2.    Management's Discussion and
                      Analysis of Financial Condition
                      and Results of Operations                            5 - 7

Part II.   Other Information and Signatures                                8 - 9


<PAGE>




                           SPARTA SURGICAL CORPORATION
                           CONSOLIDATED BALANCE SHEET
                                  May 31, 1998
                                   (Unaudited)

                                     ASSETS
Current assets:
 Cash and cash equivalents .....................................    $     1,000
 Accounts receivable - net of allowance
   for doubtful accounts of $34,000 ............................        407,000
 Inventories ...................................................      2,111,000
 Other .........................................................         32,000
                                                                    -----------

    Total current assets .......................................      2,551,000
                                                                    -----------
Property and equipment, at cost:
 Equipment .....................................................        490,000
 Other .........................................................         16,000
                                                                    -----------
                                                                        506,000
Less accumulated depreciation ..................................       (330,000)
                                                                    -----------
    Net property and equipment .................................        176,000
                                                                    -----------
Other assets:
 Intangible assets .............................................        607,000
 Other .........................................................         68,000
                                                                    -----------
     Total other assets ........................................        675,000
                                                                    -----------
     Total assets ..............................................    $ 3,402,000
                                                                    ===========

                     LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
 Curren portion of long term obligations .......................    $   437,000
 Accounts payable - trade ......................................        720,000
 Accrued expenses ..............................................        232,000
                                                                    -----------
     Total current liabilities .................................      1,389,000
                                                                    -----------
Revolving credit facility and long term obligations ............      2,374,000
Stockholders' deficit:
 Preferred stock: $4.00 par value, 750,000 shares authorized;
   Non-cumulative convertible redeemable preferred stock:
    165,000 shares  authorized,  121,783 shares issued
     and outstanding ...........................................        487,000
   Series A cumulative convertible preferred stock:
    30,000 shares authorized, 28,068 shares issued
     and outstanding ...........................................        112,000
Common stock: $0.002 par value, 8,000,000 shares
    authorized, 1,851,235 shares issued and outstanding ........          4,000
 Additional paid in capital ....................................      8,258,000
 Accumulated deficit ...........................................     (9,222,000)
                                                                    -----------
      Total stockholders' deficit ..............................       (361,000)
                                                                    -----------
      Total liabilities and stockholders' deficit ..............    $ 3,402,000
                                                                    ===========


The accompanying notes are an integral part of these statements


                                      -1-


<PAGE>


                          SPARTA SURGICAL CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)


                                                     Three Months Ended May 31,
                                                    ---------------------------
                                                        1998            1997
                                                    -----------     -----------
Net sales ......................................    $   719,000     $   650,000
Cost of sales ..................................        385,000         322,000
                                                    -----------     -----------
     Gross profit ..............................        334,000         328,000

Selling, general and administrative
 expenses ......................................        259,000         491,000
Research and development expense ...............             --           2,000
                                                    -----------     -----------
     Income (Loss) from operations .............         75,000        (165,000)

Other income (expense):
 Interest and other income .....................        206,000          85,000
 Interest expense ..............................        (93,000)        (65,000)
                                                    -----------     -----------

     Total other income (expense) ..............        113,000          20,000
                                                    -----------     -----------
     Income (Loss) before provision
      for income taxes .........................        188,000        (145,000)

Provision for income taxes .....................             --              --
                                                    -----------     -----------
Net income (loss) ..............................        188,000        (145,000)

Preferred stock dividends ......................         (4,000)         (4,000)
                                                    -----------     -----------
Net income (loss) applicable to common
 shareholders ..................................    $   184,000     $  (149,000)
                                                    ===========     ===========
Shares used to calculate basic net income
 (loss) per common share .......................        861,499         817,500
                                                    ===========     ===========
Basic net income (loss) per common share .......    $      0.21     $      (.18)
                                                    ===========     ===========
Shares used to calculate diluted net income
        (loss) per common share ................      1,098,523         817,500
                                                    ===========     ===========
Diluted net income (loss) per common share .....    $      0.17     $      (.18)
                                                    ===========     ===========


        The accompanying notes are an integral part of these statements


                                      -2-


<PAGE>


                          SPARTA SURGICAL CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)


                                                           Three Months Ended
                                                                May 31,
                                                        -----------------------
                                                           1998         1997
                                                        ---------   -----------
Cash flows from operating activities:
  Net income (loss) ..................................  $ 188,000   $  (145,000)
  Adjustments to reconcile net income (loss) to
   net cash used by operating activities:
    Depreciation and amortization ....................     67,000        67,000
    Settlement related to disposal of product line ...   (206,000)      (85,000)
    Changes in operating assets and liabilities:
     Accounts receivable .............................   (192,000)      (14,000)
     Inventories .....................................     54,000        12,000
     Other assets ....................................    (13,000)      (56,000)
     Accounts payable and accrued expenses ...........     26,000      (232,000)
                                                        ---------   -----------
      Net cash used by operating activities ..........    (76,000)     (453,000)
                                                        ---------   -----------
Cash flows from investing activities:
  Capital expenditures ...............................     (5,000)       (6,000)
  Increase in intangible assets ......................    (11,000)           --
  Principal payments received on notes receivable ....         --       578,000
                                                        ---------   -----------
      Net cash provided (used) by investing
       activities ....................................    (16,000)      572,000
                                                        ---------   -----------

Cash flows from financing activities:
  Proceeds from  borrowing ...........................    676,000     1,259,000
  Principal payments on long term obligations ........   (584,000)   (1,378,000)
                                                        ---------   -----------
      Net cash provided (used) by financing
       activities ....................................     92,000      (119,000)
                                                        ---------   -----------
      Net change in cash and cash equivalents ........         --            --

      Cash and cash equivalents at beginning of
       the period ....................................      1,000            --
                                                        ---------   -----------
      Cash and cash equivalents at end of
       the period ....................................  $   1,000   $        --
                                                        =========   ===========
Supplemental disclosure of cash flow information:

Cash paid during the period for:
    Interest .........................................  $  66,000   $    45,000
    Income taxes .....................................         --            --

Supplemental disclosure of noncash investing and
 financing activities:
  Conversion of preferred stock into common stock ....  $      --   $   101,000
  Dividends payable on Series A convertible
   redeemable preferred stock ........................      4,000         4,000
  Issuance of common stock and warrants in payment
   of loan costs .....................................         --       127,000


        The accompanying notes are an integral part of these statements


                                      -3-


<PAGE>


                           SPARTA SURGICAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   The accompanying  condensed  financial  statements of the Company as of May
     31,  1998 and for the three  months  ended May 31,  1998 and 1997 have been
     prepared  on the same basis as the  audited  financial  statements.  In the
     opinion of management,  such unaudited information includes all adjustments
     (consisting  only  of  normal  recurring  accruals)  necessary  for a  fair
     presentation of this interim information.  Operating results and cash flows
     for  interim  periods  are not  necessarily  indicative  of results for the
     entire  year.  The  information  included in this report  should be read in
     conjunction  with the  Company's  audited  financial  statements  and notes
     thereto included in the Company's Annual Report on Form 10-KSB for the year
     ended February 28, 1999  previously  filed with the Securities and Exchange
     Commission.

2.   Effective  January 1, 1998, the Company adopted the provisions of Statement
     No.  130,  Reporting  Comprehensive  Income  that  modifies  the  financial
     statement presentation of comprehensive income and its components. Adoption
     of this  Statement  had no effect on the  Company's  financial  position or
     operating results.

     Comprehensive  income  (loss) for the three  months  ended May 31, 1998 and
     1997,  representing all changes in Stockholders'  deficit during the period
     other than changes  resulting  from the Company's  stock,  was $188,000 and
     $(144,000), respectively.

3.   Basic  income  per  share is based  upon  weighted  average  common  shares
     outstanding.  Diluted  income  per share is  computed  using  the  weighted
     average common shares outstanding plus any potential  dilutive  securities.
     Dilutive  securities  include  stock  options,  warrants,  and  convertible
     preferred  stock.  The following  table sets forth the computation of basic
     and diluted net income per common share:

                                                   Three Months Ended May 31,
                                                   --------------------------
                                                        1998         1997
                                                    -----------  ----------
   Numerator
     Net income (loss) ...........................  $   188,000   $(145,000)
     Preferred stock dividends ...................       (4,000)     (4,000)
                                                    -----------   ---------
     Net income (loss) available to shareholders .  $   184,000   $(149,000)
                                                    ===========   =========
   Denominator
     Weighted average common shares outstanding
       during the period .........................      861,499     817,500
                                                    -----------   ---------
     Shares used in computing basic income (loss)
       per common share ..........................      861,499     817,500
     Conversion of preferred stock ...............       63,984          --
     Dilutive effect of options and warrants using
       the treasury stock method .................      173,040          --
                                                    -----------   ---------
     Shares used in computing dilutive income
       (loss) per common share ...................    1,098,523     817,500
                                                    -----------   ---------


                                       -4-


<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Three months ended May 31, 1998
as Compared to Three months ended May 31, 1997

     Net sales for the three months ended May 31, 1998  ("First  Quarter  Fiscal
1999") were $719,000,  a 10.8% increase from net sales of $650,000 for the three
months ended May 31, 1997 ("First Quarter Fiscal 1998").  The net sales increase
during the First  Quarter  Fiscal 1998 as compared to the First  Quarter  Fiscal
1997 is the result of an increase of $51,000 or 14.0% in electrotherapy  product
sales from  $367,000 to $418,000  coupled with an increase of $18,000 or 6.5% in
surgical product sales from $283,000 to $301,000.  The increase in sales for the
electrotherapy  product line can be primarily attributed to an increase in sales
to one of its OEM accounts. During the First Quarter Fiscal 1998 the Company had
approximately  $265,000  in sales to this OEM  account as  compared  to $135,000
during the same period last year.  The loss of any of the Company's OEM accounts
could  have a  material  adverse  effect on the  Company's  business,  operating
results and financial condition.

     The Company  intends to continue to  concentrate  its efforts on increasing
its level of sales to achieve profitable  operations.  In addition,  the Company
intends  to  consider  growth  through  selective   strategic   acquisitions  in
complementary  lines of business.  In that  regard,  on May 29, 1998 the Company
entered into a non-binding  letter of intent for the  acquisition  of all of the
outstanding common stock of Med-E-Quip  Locators,  Inc.  ("Med-E-Quip") based in
St.  Louis,  Missouri.  The  purchase  price  will be  approximately  $4,000,000
consisting  of  $2,750,000  in cash,  $500,000 in notes  payable  over three (3)
years,  $100,000 in  royalties  up to 4.5% of net sales,  and $650,000 in Common
Stock.  The letter of intent also calls for the Company to issue earn-out common
shares to Med-E-Quip's principals which is subject to Med-E-Quip meeting certain
minimum net sales and net income goals beginning the fiscal year ending February
28,  1999.  The  closing of the  acquisition  is subject to several  conditions,
including  approval by Sparta's Board of Directors;  satisfactory  completion of
due diligence on Med-E-Quip's business and assets; and completing financing.

     Gross  profit  was  $334,000  or 46.4% of net sales  for the First  Quarter
Fiscal 1999 as compared to $328,000 or 50.4% of net sales for the First  Quarter
Fiscal 1998.  The decrease in gross profit  percentage  is primarily  due to the
increase in electrotherapy product sales. In general, the electrotherapy product
line generates lower gross profits than the surgical product line.

     Selling, general and administrative ("SG&A") expenses for the First Quarter
Fiscal 1999 were  $259,000,  a 52.7% decrease from SG&A expenses of $491,000 for
the First  Quarter  Fiscal  1998.  The  decrease in SG&A  expenses for the First
Quarter  Fiscal 1999 as compared to the First  Quarter  Fiscal 1998 is primarily
due to the continuing reduction of personnel,  salaries,  and the containment of
operating costs.  Depreciation  and amortization  expenses for the First Quarter
Fiscal 1999 and 1998 remained constant at $67,000.

     Total  other  income for the First  Quarter  Fiscal 1999 was  $113,000,  an
increase  of $93,000  from total other  income of $20,000 for the First  Quarter
Fiscal 1998.  The increase in total net income is primarily due to the reduction
of  $206,000  in accrued  liabilities  during the First  Quarter  Fiscal 1999 as
compared to the  reduction  of $85,000 in accrued  liabilities  during the First
Quarter  Fiscal 1998.  The increase of $121,000  resulting from the reduction of
accrued  liabilities is offset by an increase of $28,000 in net interest expense
resulting   primarily  from  higher  loan  balances  and  banking   expenses  to
NationsCredit,  the Company's  primary  lender.  During the First Quarter Fiscal
1998,  the  Company  reduced  its accrued  liabilities  by  $206,000  which were
originally  accrued in connection with the lease  termination  costs relating to
the sale of the wound care  product line in December  1995.  See "Item 1 - Legal
Proceedings."


                                       -5-


<PAGE>


     As a result of the  foregoing,  the net income for the First Quarter Fiscal
1999 was  $188,000,  an increase of $333,000 from a net loss of $145,000 for the
First  Quarter  Fiscal 1998.  The  increase in net income for the First  Quarter
Fiscal 1999 as compared to the First Quarter Fiscal 1998 is primarily due to the
decrease in SG&A  expenses  coupled  with an  increase in total other  income as
discussed above.

LIQUIDITY AND CAPITAL RESOURCES

     Since inception, the Company's primary sources of working capital have been
revenues  from  operations,  bank and private  party loans and proceeds from the
sale of securities.

     As of February 28, 1998,  the Company had net operating loss carry forwards
of  approximately  $9,450,000.  Availability of the Company's net operating loss
carry forwards,  if not utilized,  will expire at various dates through the year
2013.

     The Company's working capital at May 31, 1998 was $1,162,000 as compared to
$1,122,000  at  February  28,  1998.  The  Company's  working  capital  position
increased by $40,000.

     Mr. Reiner,  provided the Company with a Working Capital Credit Facility of
up to  $500,000,  bearing 12% interest  per annum.  The advances  made under the
Working  Capital Credit Facility and any accrued and unpaid interest are due the
earlier of (i) June  1999;  (ii) upon the  closing  of a minimum  of  $1,000,000
equity or debt  financing by the Company;  or (iii) at the option of Mr. Reiner,
with five (5) day notice to the Company. In addition,  Mr. Reiner has the option
to convert  all amounts  under the  Working  Capital  Credit  Facility  into the
Company's  Common Stock at 75% of the average  closing bid prices as reported on
Nasdaq for the five (5) trading days preceding the  conversion  date. As of July
9, 1998, the amount due to Mr. Reiner under the Working  Capital Credit Facility
was approximately $280,000.

     On  July  25,   1997,   NationsCredit   Commercial   Funding   Division  of
NationsCredit  Commercial Corporation,  A NationsBank Company  ("NationsCredit")
provided  the  Company  with  a  48-month  Revolving  Line  of  Credit  of up to
$2,500,000 (the "Loan"). The Company agreed to pay NationsCredit interest on the
average  outstanding  principal  amount of the Loan at a per annum rate of prime
plus 3%. The Loan is advanced to the Company  based on a percentage  of eligible
assets and is secured by a first position security interest on all of the assets
of the Company.  In addition,  $250,000 of the Loan is personally  guaranteed by
Thomas F. Reiner, the Company's Chairman, President and Chief Executive Officer.
As of July 9,  1998,  the  outstanding  balance on the Loan was  $1,530,000  and
approximately $3,000 in credit was available.  The Loan is being used to provide
working capital for current operations.

     On February 23, 1998,  the Nasdaq Stock  Market  materially  increased  the
financial and other criteria  necessary to qualify for continued  listing on the
Nasdaq  National  and SmallCap  Markets.  As of that date the Company was not in
compliance with any of the new net tangible, market capitalization or net income
requirements for continued  listing on the Nasdaq SmallCap  Market.  On February
25, 1998, the Nasdaq Stock Market, Inc. notified the Company that its securities
would be delisted from the Nasdaq  SmallCap  Market  effective with the close of
business on March 4, 1998. The Company appealed  Nasdaq's decision and a hearing
was scheduled for April 9, 1998. On May 1, 1998,  Nasdaq  delisted the Company's
securities from the Nasdaq SmallCap Market.  Trading in the Company's securities
is  currently  being  conducted  in the Nasdaq OTC  Bulletin  Board  which could
substantially reduce the markets for the Company's securities.

     On April 17, 1998, the Company entered into an agreement with Nova Bancorp,
USA  ("Nova")  to act as its  exclusive  financial  advisor.  In its  role  as a
financial  advisor,  Nova Bancorp will advise Sparta on the targeting,  planning
and  execution  as to  provide on a best  efforts  basis  $3.5  million  private
placement.  The proposed private placement  financing is to be issued to finance
potential acquisitions, and to provide financing for repayment of debts, working


                                       -6-


<PAGE>


capital,  sales  and  marketing  expenses  and  research  and  development.   In
consideration for providing these services,  the Company agreed to issue to Nova
an option to purchase  150,000 shares of the Company's Common Stock at $1.00 per
share at any time until  January 16, 2000. In addition,  upon  completion of the
$3.5  million  financing,  the  Company  agreed  to issue to Nova an  option  to
purchase up to 10% of the outstanding  shares of the Common Stock of the Company
on a  fully-diluted  basis at an exercise price equal to 110% of the fair market
value price of the Common Stock at the time of the Closing of the financing.

     The Company may make  additional  acquisitions  of companies,  divisions of
companies  or  products  in the  future.  Acquisitions  entail  numerous  risks,
including  difficulties  or an inability  to  successfully  assimilate  acquired
operations  and products,  diversion of  management's  attention and loss of key
employees of acquired businesses,  all of which the Company has encountered with
previous  acquisitions.  Future acquisitions by the Company may require dilutive
issuances of equity  securities and the  incurrence of additional  debt, and the
creation  of  goodwill  or  other   intangible   assets  that  could  result  in
amortization expense.  These factors could have a material adverse effect on the
Company's business, operating results and financial condition.

     The Company's current operations continue to be cash flow negative, further
straining the Company's working capital resources.  The Company's future capital
requirements will depend on numerous  factors,  including the acquisition of new
product lines and/or other business operations and the continued  development of
existing  product sales,  distribution and marketing  capabilities.  In order to
continue its current level of  operations,  it will be necessary for the Company
to obtain additional working capital, from either debt or equity sources. If the
Company is unable to obtain such additional working capital, it may be necessary
for  the  Company  to   restructure   its   operations  to  reduce  its  ongoing
expenditures.

     The Company is currently  evaluating the potential  impact of the year 2000
on the processing of  date-sensitive  information by the Company's  computerized
information  system.  The year 2000  problem is the result of computer  programs
being written using two digits (rather than four) to define the applicable year.
Any of the  Company's  computer  programs that have  time-sensitve  software may
recognize a date using "00" as the year 1900  rather  than the year 2000,  which
could  result  in  miscalculations  or  system  failures.  Based on  preliminary
information,  the costs of addressing  the potential  problems are not currently
expected to have a material adverse effect on the Company's  financial position,
liquidity or results of operations in future periods.  However,  if the Company,
or its customers or vendors,  are unable to resolve such processing  issues in a
timely manner, it could pose a material financial risk. Accordingly, the Company
plans to devote the  necessary  resources to resolve all  significant  year 2000
issues in a timely manner.

     Except for the historical  information  contained  herein,  the matters set
forth in this report are  forward-looking  statements  within the meaning of the
"safe harbor"  provisions  of the Private  Securities  Litigation  Reform Act of
1995. These  forward-looking  statements are subject to risks and  uncertainties
that may cause  actual  results to differ  materially.  These risks are detailed
from time to time in the Company's  periodic  reports filed with the  Securities
and Exchange  Commission,  including the Company's Annual Report on Form 10-KSB,
Quarterly   Reports  on  Form   10-QSB  and  other   periodic   filings.   These
forward-looking  statements  speak  only  as of the  date  hereof.  The  Company
disclaims any intent or obligation to update these forward-looking statements.


                                       -7-


<PAGE>


Part II. Other Information

Item 1.  Legal Proceedings

         On June 15,  1998,  the  Superior  Court of New Jersey,  Law  Division,
         Atlantic County (the "Court"),  Docket No. ATL-L-430-98  entered into a
         final  judgement in the amount of $385,000 in favor of the Company.  On
         February 2, 1998,  the Company had filed suit in the Court  against the
         Company's  former  landlord,  River Road  Associated,  L.P. ("RRA") and
         RRA's general partner Jerome Raifman.  In this suit the Company claimed
         that RRA had  breached the lease  agreement  between it and the Company
         respecting  property  located  in  Hammonton,  New  Jersey due to RRA's
         failure to  maintain  and make  repairs to the  demised  premises.  The
         Company  alleged that because of RRA's  failure to maintain the demised
         premised  that the Company  could not sublet such premises and suffered
         damages  as a  result.  The  Company  also  alleged  that  it has  been
         constructively  evicted  from the demised  premises  and that the lease
         with RRA was therefore  terminated.  On March 2, 1998,  RRA  instituted
         proceedings to enforce a confession of judgement against the Company in
         the  approximate  amount of $361,000 for unpaid rent and other  charges
         allegedly due under the lease through the end of the lease term in May,
         2000.  On April 6, 1998,  the Court set asside the  enforcement  of the
         confession   of  judgement   seeked  by  RRA  and   consolidated   both
         proceedings.  In the event the  Company  does not  prevail  in the suit
         brought on by RRA the Company  will seek to offset any amounts due with
         the judgement it received.

Item 2.  Changes in Securities
                None
Item 3.  Defaults Upon Senior Securities
                None
Item 4.  Submission of Matters to a Vote of Security Holders
                None
Item 5.  Other Information
                None
Item 6.  Exhibits and Reports on Form 8-K

         A.     Exhibit No.

                27         Financial Data Schedule.

         B.     Reports on Form 8-K

         The  Registrant  filed a Form 8-K dated March 24,  1998 which  reported
         that it had  filed  suit  in the  Superior  Court  of New  Jersey,  Law
         Division,  Atlantic County on February 2, 1998, Docket No. ATL-L-430-98
         against  Registrant's  former  landlord,  River Road  Associates,  L.P.
         ("RRA"). In addition the Registrant reported that on March 2, 1998, RRA
         instituted  proceedings to enforce a confession of judgment against the
         Registrant  in the  approximate  amount of $361,400 for unpaid rent and
         other  charges  allegedly  due under the lease  through  the end of the
         lease term in May, 2000.

         The  Registrant  filed a Form 8-K dated  April 1, 1998  which  reported
         Nasdaq's  notification  to the Registrant that it was not in compliance
         with the new SmallCap Market  continued  listing  requirements and that
         its securities would be delisted on April 9, 1998.

         The  Registrant  filed a Form 8-K  dated  May 1,  1998  which  reported
         Nasdaq's  notification to the Registrant  that its securities  would be
         delisted from the Nasdaq  SmallCap  Market  effective with the close of
         business on May 1, 1998.


                                      -8-


<PAGE>


                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

Sparta Surgical Corporation



     Thomas F. Reiner
---------------------------
Thomas F. Reiner
Chairman of the Board
President and CEO


     H. Dale Biggs
---------------------------
H. Dale Biggs
Controller and Chief Financial Officer
(Principal Accounting Officer)


July 15, 1998


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