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, 1997

                                       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 May 31, 1996, 833,089 shares of Common Stock, 135,483 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

                      Condensed Consolidated Balance
                      Sheet as of May 31, 1997                             1 - 2

                      Condensed Consolidated Statements
                      of Operations for the three months
                      ended May 31, 1997 and 1996                              3

                      Condensed Consolidated Statements
                      of Cash Flows for the three months
                      ended May 31, 1997 and 1996                              4

                      Notes to Financial Statements                            5

           Item 2.    Management's Discussion and
                      Analysis of Financial Condition
                      and Results of Operations                            6 - 8

Part II.   Other Information and Signatures                               9 - 12


<PAGE>


                           SPARTA SURGICAL CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  May 31, 1997
                                   (Unaudited)

                                     ASSETS


Current Assets:
 Cash and cash equivalents ..................................       $        --
 Accounts receivable - trade, net of allowance
   for doubtful accounts of $30,381 .........................           335,247
 Inventories ................................................         2,248,942
 Prepaid expenses ...........................................            67,107
                                                                    -----------
    Total Current Assets ....................................         2,651,296
                                                                    -----------
Property and Equipment, at cost:
 Machinery and equipment ....................................           491,923
 Leasehold improvements .....................................            15,733
                                                                    -----------
                                                                        507,656
Less accumulated depreciation ...............................          (264,705)
                                                                    ----------- 
    Net Property and Equipment ..............................           242,951
                                                                    -----------
Other Assets:
 Intangible assets, net of
  accumulated amortization ..................................           831,545
 Deposits and other .........................................           130,152
 Receivables from officer ...................................           529,362
                                                                    -----------
     Total Other Assets .....................................         1,491,059
                                                                    -----------
     Total Assets ...........................................       $ 4,385,306
                                                                    ===========


                     The accompanying notes are an integral
           part of these condensed consolidated financial statements

                                      -1-


<PAGE>


                          SPARTA SURGICAL CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  May 31, 1997
                                  (Unaudited)
                                  (Continued)

                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current Liabilities:
 Accounts payable - trade .......................................   $   736,748
 Accrued expenses:
  Payroll taxes and wages .......................................        52,240
  Interest and other ............................................         1,070
  Other liabilities .............................................       147,380
 Dividends payable ..............................................         3,509
 Notes payable ..................................................       165,000
 Accrued royalty payments .......................................        46,715
 Current portion of long-term debt ..............................       324,352
                                                                    -----------
     Total Current Liabilities ..................................     1,477,014
                                                                    -----------
Long-Term Debt:
 Obligations under capital leases ...............................       105,736
 Financial institutions and other ...............................     1,909,290
 Less current portion above .....................................      (489,352)
                                                                    -----------
       Total Long-Term Debt .....................................     1,525,674
                                                                    -----------
Other liabilities ...............................................       209,650
                                                                    -----------
Commitments and contingencies ...................................            --

Stockholders' Equity:
 Preferred Stock: $4.00 par value, 750,000 shares authorized;
   Non-cumulative Redeemable Convertible Preferred Stock:
    165,000 shares  authorized,  135,483 shares issued
     and outstanding ............................................       541,932
   Series A Cumulative Convertible Redeemable Preferred Stock:
    30,000 shares authorized, 28,068 shares issued
     and outstanding ............................................       112,272
 Common Stock: $.002 par value, 8,000,000 shares authorized,
    833,089 shares issued and outstanding .......................         1,667
 Additional paid in capital .....................................     8,172,146
 Accumulated deficit ............................................    (7,655,049)
                                                                    -----------
      Total Stockholders' Equity ................................     1,172,968
                                                                    -----------
      Total Liabilities and Stockholders'  Equity ...............   $ 4,385,306
                                                                    ===========


                     The accompanying notes are an integral
           part of these condensed consolidated financial statements

                                      -2-


<PAGE>


                          SPARTA SURGICAL CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)


                                                          Three Months Ended
                                                                May 31,
                                                       ------------------------
                                                          1997           1996
                                                          ----           ----
Net sales ........................................     $ 649,540      $ 584,953
Cost of sales ....................................       321,899        242,651
                                                       ---------      ---------
     Gross Profit ................................       327,641        342,302

Selling, general and administrative expenses .....       424,167        512,241
Research and development .........................         1,913         17,975
Depreciation and amortization ....................        66,904         57,589
                                                       ---------      ---------
     Income (Loss) From  Operations ..............      (165,343)      (245,503)
                                                       ---------      ---------
Other Income (Expense):
 Interest and other income .......................        85,000          4,185
 Interest expense ................................       (64,943)       (31,779)
                                                       ---------      ---------
     Total Other Income (Expense) ................        20,057        (27,594)
                                                       ---------      ---------
     Income (Loss) Before Provision
      For Income Taxes ...........................      (145,286)      (273,097)

Provision for income taxes .......................            --             --
                                                       ---------      ---------
Net Income (Loss) ................................      (145,286)      (273,097)

Preferred stock dividends ........................        (3,509)        (4,134)
                                                       ---------      ---------
Net Income (Loss) Applicable To
 Common Shareholders .............................     $(148,795)     $(277,231)
                                                       =========      =========
Net Income (Loss) Per Share of Common Stock:
 Primary:
  Weighted average number of common
   shares outstanding ............................       817,500        690,381
                                                       =========      =========
   Net Income (Loss) Per Common Share ............     $    (.18)     $    (.40)
                                                       =========      =========
 Fully diluted:
  Weighted average number of common
   shares outstanding ............................       817,500        690,381
                                                       =========      =========
   Net Income (Loss) Per Common Share ............     $    (.18)     $    (.40)
                                                       =========      =========


                     The accompanying notes are an integral
           part of these condensed consolidated financial statements

                                      -3-


<PAGE>


                          SPARTA SURGICAL CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)


                                                         Three Months Ended
                                                                May 31,
                                                     --------------------------
                                                         1997             1996
                                                         ----             ----
Cash Flows From Operating Activities:
  Net income (loss) ..............................   $  (145,286)   $  (273,097)
  Adjustments to reconcile net income (loss) to
   net cash used by operating activities:
    Depreciation and amortization ................        66,904         57,589
    Reduction of accrued liabilities .............       (85,000)            --
    Changes in assets and liabilities:
     (Increase) in accounts receivable ...........       (13,570)       (39,173)
     Decrease in inventories .....................        11,517         49,326
     (Increase) in prepaid expenses and other ....       (24,837)       (41,076)
     (Increase) Decrease in deposits and other ...       (31,222)         2,341
     (Decrease) in accounts payable
      and accrued expenses .......................      (232,173)      (258,435)
                                                     -----------    -----------
      Net Cash (Used) By Operating Activities ....      (453,667)      (502,525)
                                                     -----------    -----------
Cash Flows From Investing Activities:
  Capital expenditures ...........................        (5,967)          (905)
  Increase in intangible assets ..................          (250)       (31,665)
  Increase in receivables from related entities ..            --         (4,662)
  Principal payments received on notes receivable.       578,399             --
                                                     -----------    -----------
      Net Cash Provided (Used) By Investing
       Activities ................................       572,182        (37,232)
                                                     -----------    -----------
Cash Flows From Financing Activities:
  Proceeds from  borrowing .......................     1,259,177      1,055,898
  Principal payments on notes payable ............    (1,377,692)      (602,535)
  Principal payments on accrued royalties ........            --        (31,106)
  Issuance of common stock upon exercise
   of warrants ...................................            --        117,500
                                                     -----------    -----------
      Net Cash Provided (Used) By Financing
       Activities ................................      (118,515)       539,757
                                                     -----------    -----------
      Net Increase (Decrease) in Cash and
       Cash Equivalents ..........................            --             --

      Cash and Cash Equivalents at Beginning
       of Period .................................            --             --
                                                     -----------    -----------
      Cash and Cash Equivalents at End of Period .   $        --    $        --
                                                     ===========    ===========
Supplemental Disclosure of Cash Flow Information:
  Cash paid during the period for:
    Interest .....................................   $    44,967    $    19,004
    Income taxes .................................            --             --

Supplemental Disclosure of Noncash Investing
 and Financing Activities:
  Conversion of Preferred Stock into Common Stock.   $   100,780    $   436,708
  Dividends payable on Series A Convertible
   Redeemable Preferred Stock ....................         3,509          4,134
  Issuance of common stock and warrants in
   payment of loan costs .........................       127,500             --


                     The accompanying notes are an integral
           part of these consolidated condensed financial statements

                                      -4-


<PAGE>


                           SPARTA SURGICAL CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   The  accompanying  financial  information  of the  Company is  prepared  in
     accordance with the rules prescribed for filing condensed interim financial
     statements and,  accordingly,  does not include all disclosures that may be
     necessary for complete  financial  statements  prepared in accordance  with
     generally accepted  accounting  principles.  The disclosures  presented are
     sufficient,  in  management's  opinion,  to make  the  interim  information
     presented not misleading.  All adjustments,  consisting of normal recurring
     adjustments,  which are necessary so as to make the interim information not
     misleading,  have been made.  Results of  operations  for the three  months
     ended May 31, 1997 are not necessarily  indicative of results of operations
     that  may be  expected  for  the  year  ending  February  28,  1998.  It is
     recommended  that this  financial  information  be read  with the  complete
     financial statements included in the Company's Annual Report on Form 10-KSB
     for the year ended February 28, 1997  previously  filed with the Securities
     and Exchange Commission.


                                       -5-


<PAGE>


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

RESULTS OF OPERATIONS

Three months ended May 31, 1997
as Compared to Three months ended May 31, 1996

     Net sales for the three months ended May 31, 1997  ("First  Quarter  Fiscal
1998") were $649,540,  a 11.1% increase from net sales of $584,953 for the three
months ended May 31, 1996 ("First Quarter Fiscal 1997").  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 $97,327 or 36.1% in electrotherapy  product
sales from  $269,814 to $367,14  coupled  with a decrease of $32,740 or 10.4% in
surgical product sales from $315,139 to $282,399.  The increase in sales for the
electrotherapy  product line can be primarily  attributed  to the receipt of two
non-cancelable   purchase  orders  from  Henley  Healthcare  ("Henley")  in  the
approximate  aggregate amount of $300,000.  During the First Quarter Fiscal 1997
the  Company  had  approximately  $135,000  in  sales  to  Henley.  The  Company
anticipates that it will receive additional  purchase orders from Henley for the
fiscal year ending February 28, 1998 ("Fiscal 1998").

     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 November 1, 1996 the Company
entered into a non-binding letter of intent for the acquisition of substantially
all of the  operating  assets of Orion Life  Systems,  Inc. and its wholly owned
subsidiary, Orion Medical Products, Inc. ("Orion"). Based in Wheeling, Illinois,
Orion  specializes in contract  manufacturing,  packaging,  and sterilization of
medical  devices and single-use  procedure  trays as well as  manufacturing  and
marketing its own line of urological,  respiratory,  and I.V. therapy disposable
products.  The  closing of the  acquisition  is  subject to several  conditions,
including the determination by the Company that the results of its due diligence
investigation of Orion's business and assets are  satisfactory;  approval of the
Board of Directors of both  companies;  the  execution of a mutually  acceptable
definitive purchase agreement; and completing the Company's financing.

     Gross  profit  was  $327,641  or 50.4% of net sales  for the First  Quarter
Fiscal 1998 as compared to $342,302 or 58.5% of net sales for the First  Quarter
Fiscal 1997.  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 1998 were  $424,167,  a 17.2% decrease from SG&A expenses of $512,241 for
the First  Quarter  Fiscal  1997.  The  decrease in SG&A  expenses for the First
Quarter  Fiscal 1998 as compared to the First  Quarter  Fiscal 1997 is primarily
due to legal expenses  incurred  during the First Quarter Fiscal 1997 which were
not repeated  during the First Quarter  Fiscal 1998. In an effort to continue to
decrease SG&A expenses for Fiscal 1998, in June 1997, the Company  implemented a
restructuring plan involving a reduction of personnel,  a Company wide reduction
in salaries, and the implementation of an overall cost containment program.

     Research and development ("R&D") expenses for the First Quarter Fiscal 1998
were $1,913, a 89.4% decrease from R&D expenses of $17,975 for the First Quarter
Fiscal 1997.  During the First  Quarter  Fiscal 1998 the Company  completed  its
redesign of the TENS units resulting in increased quality and lower product cost
for the electrotherapy product line.

     Depreciation and amortization ("D&A") expenses for the First Quarter Fiscal
1998 were $66,904,  a 16.2%  increase from D&A expenses of $57,589 for the First
Quarter  Fiscal  1997.  During  the First  Quarter  Fiscal  1998,  D&A  expenses
increased due to the amortization of $127,500, over a two year period, resulting
from the issuance of common stock and warrants in payment of loan costs. See " -
Liquidity and Capital Resources".

     Total  other  income for the First  Quarter  Fiscal  1998 was  $20,057,  an
increase of $47,594  from total other  expense of $27,594 for the First  Quarter
Fiscal 1997.  The increase in total net income is primarily due to the reduction
of  $85,000  in  accrued  liabilities  offset by an  increase  of $37,349 in net
interest  expense  resulting  primarily  from higher loan  balances  and banking
expenses to FINOVA, the Company's primary lender.


                                       -6-


<PAGE>


     As a result of the  foregoing,  the net loss for the First  Quarter  Fiscal
1998 was  $145,286,  a decrease of $127,811  from a net loss of $273,097 for the
First Quarter Fiscal 1997. The decrease in net loss for the First Quarter Fiscal
1998 as  compared  to the First  Quarter  Fiscal  1997 is  primarily  due to the
decrease in SG&A  expenses  coupled  with an  increase in total other  income as
discussed above.

     Primary  loss per  share  was $.18 for the  First  Quarter  Fiscal  1998 as
compared to a primary loss per share of $.40 for the First Quarter  Fiscal 1997.
Fully  diluted  loss per share,  which  assumes  all  dilutive  preferred  share
conversions  and the exercise of all dilutive  stock options and  warrants,  was
$.18 for the First Quarter Fiscal 1998 as compared to fully diluted loss of $.40
per share for the First  Quarter  Fiscal  1997.  The primary  and fully  diluted
income per share  computation  for the First Quarter Fiscal 1998 reflect accrued
dividends on the Series A Convertible Preferred Stock which will be paid in June
1997.

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 May 31, 1997,  the Company had net operating  loss carry  forwards of
approximately $6,500,000. Availability of the Company's net operating loss carry
forwards, if not utilized, will expire at various dates through the year 2011.

     The Company's working capital at May 31, 1997 was $1,174,282 as compared to
$1,066,176  at  February  28,  1997.  The  Company's  working  capital  position
increased by $108,106.

     On March 11,  1996,  FINOVA  Capital  Corporation  ("FINOVA")  provided the
Company  with a  36-month  Revolving  Line of  Credit of up to  $1,500,000  (the
"Loan").  The Company agreed to pay FINOVA  interest on the average  outstanding
principal  amount of the Loan at a per annum  rate of prime plus 4%. The Loan is
advanced to the Company based on a percentage of eligible  assets and is secured
by a first lien on all of the assets of the Company.  Accordingly, the amount of
available funds under the Loan may be  substantially  less than  $1,500,000.  In
addition, $450,000 of the Loan is personally guaranteed by Thomas F. Reiner, the
Company's  Chairman,  President and Chief Executive Officer. As of May 31, 1997,
the  outstanding  balance on the Loan was $947,485 and  approximately  $3,000 in
credit was  available.  The Loan is being used to provide  working  capital  for
current operations.

     On March 19,  1997,  the  Company  repaid  $575,000  against  the amount of
$740,000 in principal  and accrued  interest  owing under a $600,000  promissory
note issued to Halstead LLC ("Halstead"). This amount was required to be paid by
the Company upon the Company's negotiated  settlement with Tecnol which resulted
in Tecnol paying the Company  $575,000.  On that same date,  the Company  issued
Halstead a  promissory  note in the  principal  amount of  $165,000  bearing 12%
interest per annum due December 1997. The $165,000  promissory  note  represents
the  remaining  principal  amount owed of $25,000  plus the  $140,000 in accrued
interest under the $600,000 note. The promissory note is subordinated to FINOVA,
the Company's primary lender, and is personally guaranteed by Mr. Reiner.

     On March 20, 1997, the Company borrowed  $375,000 from J&C Resources,  Inc.
("J&C  Resources"),  a  company  controlled  by  Mr.  Johnston  evidenced  by  a
promissory note bearing 15% interest per annum due in March 1999. The promissory
note is subordinated to FINOVA,  and is personally  guaranteed by Mr. Reiner. In
connection with the financing, the Company issued J&C Resources 50,000 shares of
Common  Stock and a warrant to purchase up to 16,667  shares of its Common Stock
exercisable at $.60 per share at any time until March 17, 2001. The Company also
entered into a two year  consulting  agreement  with J&C  Resources in which the
Company  is  required  to pay J&C  Resources  $50,000  per year  for  consulting
services.

     On  September  27, 1996,  the Company was served with a complaint  filed by
Storz Instrument  Company  ("Storz") seeking to collect the remaining balance of
$450,000  relating to a $1,050,000 note payable in connection with the Company's
acquisition  of certain  assets of Storz' Oral  Maxillofacial  product  line. On
November 27, 1996, the Company paid Storz $100,000 and entered into an agreement
pursuant  to which  Storz  would  take no  further  action on its  complaint  in
exchange for payment of $350,000, on or before April 15, 1997, together with all
accrued interest thereon through the date of payment, plus $5,000 as a fixed sum
for attorneys'  fees. On March 27, 1997,  the Company  repaid  $120,000 to Storz
against the $350,000 note payable,  $5,000 as a fixed sum for  attorneys'  fees,
and amended its  November  27, 1996  agreement  pursuant to which the Company is
required  to make  monthly  payments  of $10,000 to be applied to  interest  and


                                       -7-


<PAGE>


principal,  plus quarterly $10,000  forbearance  payments,  not to be applied to
principal  or  interest.  If these  payments  are not  made,  a  judgement  will
automatically  be  executed  against  the  Company  for the  balance of the note
payable.

     On or about  November 20, 1996,  Tecnol  initiated  an  arbitration  action
against the Company before the American Arbitration Association. Tecnol asserted
claims  allegedly  arising out of Tecnol's  purchase  of the  Company's  medical
product  line in December  1995.  On March 12,  1997,  the  Company  settled the
arbitration  action initiated by Tecnol.  Under the settlement  agreement Tecnol
paid the Company $575,000 in  consideration  for the cancellation by the Company
of a $665,000  note due from  Tecnol and the  dismissal  with  prejudice  of the
arbitration action by both parties.

     In April 1997, the Company entered into a debt repayment agreement with Mr.
Reiner. The amounts owed by Mr. Reiner will be repaid at varying amounts through
April 2004.  In addition,  all amounts owed by Mr.  Reiner are extended to April
2004 and no  interest  will be charged  on the notes owed by Mr.  Reiner and the
Company will reimburse Mr. Reiner for certain income tax related considerations.
In June 1997, the Company  amended its debt repayment  agreement with Mr. Reiner
increasing  the repayment  amount for the next twelve months from  approximately
$24,000 to  $50,000.  Due to the  increase in  payments  from Mr.  Reiner to the
Company,  the notes and accounts  receivable from Mr. Reiner are being presented
as a long term asset  rather than a  reduction  of  stockholders'  equity in the
financial  statements as presented on the Company's Annual Report on Form 10-KSB
for the year ended  February 28, 1997  previously  filed with the Securities and
Exchange Commission.

     In May 1997, the Company  entered into a Working  Capital  Credit  Facility
agreement  with Mr.  Reiner in which Mr. Reiner is providing the Company with up
to $200,000 in working capital on an as needed basis.  Working capital  advances
are evidenced by demand  promissory notes bearing 12% interest per annum due the
earlier of (i) thirty (30) calendar days from the advance; (ii) the closing of a
minimum of  $1,000,000  equity or debt  financing by the  Company;  or (iii) Mr.
Reiner's demand with a five day notice to the Company.  The promissory notes are
subordinated  to FINOVA  with a junior  lien on all  assets of the  Company.  In
connection  with  the  financing,  the  Company  gave  Mr.  Reiner,  at his sole
discretion, the right to convert any portion of the outstanding amount owed into
the  Company's  common stock at 75% of the average  closing bid price during the
five (5)  business  days prior to the  conversion  as  reported  by  Nasdaq.  In
addition,  the  Company  issued Mr.  Reiner a warrant to  purchase  up to 97,000
shares of its common stock  exercisable at $1.35 per share at any time until May
22, 2004.  As of May 31,  1997,  the  outstanding  balance on the loans from Mr.
Reiner was $40,000.

     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.

     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.


                                       -8-


<PAGE>


Part II.     Other Information

Item 1.      Legal Proceedings
                    None

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.

                    10.90     Restated Debt  Repayment  Agreement  dated May 15,
                              1997 by and between the Registrant and Mr. Reiner.
                    10.91     Working Capital Credit Facility dated May 23, 1997
                              by and between the Registrant and Mr. Reiner.
                    11        Computation  of Primary  Earnings  per Share (page
                              10).
                    11.1      Computation  of Fully  Diluted  Earnings per Share
                              (page 11).
                    27        Financial Data Schedule.

             B.     Reports on Form 8-K

             The  Company  filed a Form 8-K dated  March 19,  1997 to report the
             following events: (i) on March 19, 1997 the Company repaid $575,000
             in against the amount of $740,000 in principal and accrued interest
             owing under a promissory note issued to Halstead LLC; (ii) on March
             20, 1997 the Company  borrowed  $375,000 from J&C Resources,  Inc.;
             and (iii) on March 27,  1997 the Company  repaid  $120,000 to Storz
             Instrument  Company against a $350,000 note payable and amended its
             November 27, 1996 agreement.


                                       -9-


<PAGE>


                           SPARTA SURGICAL CORPORATION
                    COMPUTATION OF PRIMARY EARNINGS PER SHARE


                                                          Three Months Ended
                                                                May 31,
                                                      -------------------------
                                                          1997          1996
                                                          ----          ----
Shares outstanding at beginning of period ..........      764,249       641,138

Shares issued during the period (weighted average) .       53,251        49,243

Dilutive shares contingently issuable upon
exercise of options and warrants (weighted average)            --            --

Less shares assumed to have been purchased for
treasury with assumed proceeds of stock warrants
and options (weighted average) .....................           --            --
                                                      -----------   -----------
Total Primary Shares ...............................      817,500       690,381
                                                      ===========   ===========
Net Income (Loss) Applicable To Common Shareholders   $  (148,795)  $  (277,231)
                                                      ===========   ===========
Net Income (Loss) Per Primary Share ................  $      (.18)  $      (.40)
                                                      ===========   ===========


                                      -10-


<PAGE>


                           SPARTA SURGICAL CORPORATION
                 COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE


                                                          Three Months Ended
                                                                May 31,
                                                      -------------------------
                                                          1997          1996
                                                          ----          ----
Shares outstanding at beginning of period ..........      764,249       641,138

Shares issued during the period (weighted average) .       53,251        49,243

Dilutive shares contingently issuable upon
exercise of options and warrants (weighted average)            --            --

Less shares assumed to have been purchased for
treasury with assumed proceeds of stock warrants
and options (weighted average) .....................           --            --
                                                      -----------   -----------
Total Fully Diluted Shares .........................      817,500       690,381
                                                      ===========   ===========
Net Income (Loss) Applicable To Common Shareholders   $  (148,795)  $  (277,231)
                                                      ===========   ===========
Net Income (Loss) Per Fully Diluted Share ..........  $      (.18)  $      (.40)
                                                      ===========   ===========


                                      -11-


<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 & CEO


     Wm. Samuel Veazey
---------------------------
Wm. Samuel Veazey
Vice President of Finance
and Administration


June 23, 1997


                                     - 12 -


<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION

                                    EXHIBITS
                                       TO
                                  FORM 10-QSB

                       FOR THE QUARTER ENDED MAY 31, 1997