U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB


           X               Quarterly Report under Section 13 or 15 (d) of the
     -----------           Securities Exchange Act of 1934.

                           For the quarterly period ended June 30, 1999.

     ___________           Transition Report under Section 13 or 15 (d) of the
                           Exchange Act.

For the transition period from     _____________ to __________________.

                        Commission File Number 000-19318

                               SPARTA FOODS, INC,
        (exact name of small business issuer as specified in its charter)

           Minnesota                             41-1618240
  (state or other jurisdiction of        (IRS Employer Identification No.)
      incorporation or organization)

                  1565 First Avenue NW, New Brighton, MN 55112
                    (Address of principal executive offices)

                                 (651) 697-5500
                           (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 _______

State the number of shares outstanding of each of the Issuer's classes of common
equity, as of the latest practicable date:

                     10,191,416 of Common Stock at July 30, 1999.

Transitional Small Business Disclosure Format:  Yes  _____        No     X


<PAGE>


                               SPARTA FOODS, INC.

                                   FORM 10-QSB

                           QUARTER ENDED JUNE 30, 1999

                                TABLE OF CONTENTS
                                                                       PAGE

PART I.  FINANCIAL INFORMATION

         Item 1.    Financial Statements                                3

                    Condensed Consolidated Balance Sheets
                    At June 30, 1999 and September 30, 1998             3

                    Condensed Consolidated Statements of
                    Operations for the three-month periods
                    and the nine-month periods ended
                    June 30, 1999 and 1998                              4

                    Condensed Consolidated Statements of
                    Cash Flows for the nine-month periods
                    ended June 30, 1999 and 1998                        5

                    Notes to Condensed Consolidated Financial
                    Statements - June 30, 1999                          6

         Item 2.    Management's Discussion and Analysis or             8
                    Plan of Operation



PART II. OTHER INFORMATION

         Item 2.    Changes in Securities and Use of Proceeds          12

         Item 4.    Submission of Matters to a Vote of
                    Security Holders                                   12

         Item 6.    Exhibits and Reports on Form 8-K                   12


SIGNATURES                                                             14

EXHIBIT INDEX                                                          15


<PAGE>


                           PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
                               SPARTA FOODS, INC.
                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>

                                                                                 June 30              September 30
                                                                                   1999                    1998
                                                                          ----------------------- ----------------------
                                                                               (unaudited)
<S>                                                                                 <C>                    <C>
ASSETS
Current Assets
   Cash and cash equivalents                                                        $  2,173,784           $  1,131,255
   Accounts receivable, less allowances of $30,000                                       986,832                877,752
   Deposits receivable                                                                   262,152                    -
   Inventories:
      Finished goods                                                                     466,479                436,784
      Raw materials and packaging                                                      1,008,476                396,396
  Prepaid expenses                                                                       227,330                198,752
  Income tax receivable                                                                    2,746                  4,746
  Deferred tax asset                                                                      43,000                 43,000
------------------------------------------------------------------------------------------------  ----------------------
Total current assets                                                                   5,170,799              3,088,685
------------------------------------------------------------------------------------------------- ----------------------
Property and Equipment                                                                 9,424,536              9,045,342
  Less accumulated depreciation                                                        3,397,917              2,788,399
------------------------------------------------------------------------------------------------- ----------------------
                                                                                       6,026,619              6,256,943
------------------------------------------------------------------------------------------------- ----------------------
Other Assets
  Restricted cash                                                                        206,239                242,059
  Covenants not-to-compete, less accumulated amortization of
      $44,419 and $39,424, respectively                                                   55,581                 60,576
  Goodwill, less accumulated amortization of $95,033 and $85,404,
      respectively                                                                       418,339                427,968
  Deferred financing costs, less accumulated amortization of
      $81,907 and $64,778, respectively                                                  116,127                133,256
  Deferred tax asset                                                                     227,000                227,000
  Other                                                                                  189,865                284,698
------------------------------------------------------------------------------------------------- ----------------------
                                                                                       1,213,151              1,375,557
================================================================================================= ======================
                                                                                   $  12,410,569           $ 10,721,185
================================================================================================= ======================
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
  Current maturities of long-term debt                                                  $391,779            $   367,377
  Accounts payable                                                                       517,109                506,874
  Accrued expenses                                                                       368,455                469,448
------------------------------------------------------------------------------------------------- ----------------------
            Total current liabilities                                                  1,277,343              1,343,699
------------------------------------------------------------------------------------------------- ----------------------
Long-term Debt, less current maturities                                                2,368,677              2,667,623
------------------------------------------------------------------------------------------------- ----------------------
Stockholders Equity
  Preferred Stock, authorized 1,000,000 shares, $1,000 par value;
      issued and outstanding 2,500 shares                                              2,500,000              2,500,000
  Common Stock, authorized 15,000,000 shares, $0.01 par value; issued and
      outstanding 10,191,416 and 7,037,172 shares, respectively                          101,914                 70,371
  Additional paid-in capital                                                           7,100,150              4,977,092
  Accumulated deficit                                                                   (937,515)              (837,600)
------------------------------------------------------------------------------------------------- ----------------------
                                                                                       8,764,549              6,709,863
================================================================================================= ======================
                                                                                   $  12,410,569           $ 10,721,185
================================================================================================= ======================
See Notes to Condensed Consolidated Financial Statements.

</TABLE>

<PAGE>


                               SPARTA FOODS, INC.
                 Condensed Consolidated Statements of Operations
                                   (unaudited)

<TABLE>
<CAPTION>


                                                          For the three months                       For the nine months
                                                                  Ended                                      Ended
                                                                 June 30                                   June 30
------------------------------------------------ ---------------------- ----------------- --- ---------------- -------------------
                                                         1999                 1998                 1999               1998
------------------------------------------------ ---------------------- ----------------- --- ---------------- -------------------
<S>                                                  <C>                       <C>          <C>                      <C>
Net sales                                            $       4,092,284         $ 3,969,986  $      11,198,174        $ 11,047,646

Cost of sales                                                2,779,567           2,703,381          7,918,440           7,920,510
------------------------------------------------ ---------------------- ------------------- ------------------ -------------------

   Gross profit                                              1,312,717           1,266,605          3,279,734           3,127,136

Selling, general, and administrative expenses                1,199,293             892,002          3,338,253           2,703,439
------------------------------------------------ ---------------------- ------------------- ------------------ -------------------

    Operating income (loss)                                    113,424             374,603            (58,519)             423,697

Other income, net                                               40,163              41,582            109,224             117,574

Interest expense                                               (47,579)            (77,957)          (146,620)           (280,219)
------------------------------------------------ ---------------------- ------------------- ------------------ -------------------

    Income (loss) before income tax                            106,008             338,228            (95,915)            261,052

Provision for income tax                                         1,000               2,500              4,000               3,500
------------------------------------------------ ---------------------- ------------------- ------------------ -------------------

   Net income (loss)                                           105,008             335,728            (99,915)            257,552

   Preferred dividends                                         (31,250)            (31,250)           (93,750)            (43,750)
------------------------------------------------ ---------------------- ------------------- ------------------ -------------------

   Net income (loss) available to common
     shareholders
                                                                73,758             304,478           (193,665)            213,802
================================================ ====================== =================== ================== ===================

Earnings (loss) per share:
    Basic                                            $             .01         $       .04  $            (.02)       $        .03
    Diluted                                          $             .01         $       .03  $            (.02)       $        .02
================================================ ====================== =================== ================== ===================

Weighted average shares:
     Basic                                                  10,191,416           6,908,152          9,066,085           6,830,341
     Diluted                                                10,429,758          10,650,892          9,066,085           9,215,017
================================================ ====================== =================== ================== ===================

See Notes to Condensed Consolidated Financial Statements.

</TABLE>

<PAGE>

                               SPARTA FOODS, INC.
                 Condensed Consolidated Statements of Cash Flows
                                   (unaudited)
<TABLE>
<CAPTION>


                                                                                                  For the nine months
                                                                                                     ended June 30
                                                                                                  -------------------
                                                                                                1999               1998
                                                                                                ----               ----
<S>                                                                                            <C>                <C>
Cash Flows from Operating Activities
   Net income (loss)                                                                           $  (99,915)        $ 257,552
   Adjustments to reconcile net income (loss) to net cash
      used in operating activities:
         Depreciation and Amortization                                                            641,795           527,080
         (Gain) Loss on the sale of equipment and rental property                                   1,420            (6,625)
         Changes in assets and liabilities:
            Accounts receivable                                                                  (109,080)         (120,310)
            Deposits receivable                                                                  (262,152)             -
            Inventories                                                                          (641,775)          128,014
            Prepaid expenses                                                                      (28,578)          (73,749)
            Income tax receivable                                                                   2,000              -
            Accounts payable and accrued expenses                                                 (90,758)         (810,535)
-------------------------------------------------------------------------------- ----- ------------------- -----------------
                 Net cash used in operating activities                                           (587,043)          (98,573)
-------------------------------------------------------------------------------- ----- ------------------- -----------------
Cash Flows from Investing Activities
   Decrease in restricted cash                                                                     35,820         1,602,705
   Purchases of equipment                                                                        (381,138)       (1,880,972)
   Proceeds from the sale of equipment and rental property                                           -              997,095
   Change in deposits and other assets                                                             94,833           (42,667)
-------------------------------------------------------------------------------- ----- ------------------- -----------------
                 Net cash provided by (used in) investing activities                             (250,485)          676,161
-------------------------------------------------------------------------------- ----- ------------------- -----------------
Cash Flows from Financing Activities
   Net payments on the line of credit                                                                -             (834,209)
   Net payments on Long-term Debt                                                                (274,544)       (1,593,392)
   Issuance of Common Stock, net of costs                                                       2,154,601           174,484
   Issuance of Preferred Stock, net of costs                                                         -            2,356,441
   Deferred financing costs                                                                          -               (4,812)
-------------------------------------------------------------------------------- ----- ------------------- -----------------
                 Net cash provided by financing activities                                      1,880,057            98,512
-------------------------------------------------------------------------------- ----- ------------------- -----------------
                 Net increase in cash                                                           1,042,529           676,100
Cash and cash equivalents
   Beginning of period                                                                          1,131,255               600
-------------------------------------------------------------------------------- ----- ------------------- -----------------
   End of period                                                                              $ 2,173,784        $  676,700
================================================================================ ===== =================== =================

Supplemental Disclosures of Cash Flow Information
   Cash payments for:
      Interest                                                                                   $138,020         $ 306,395
      Income taxes                                                                                  2,000             5,750
================================================================================ ===== =================== =================

See Notes to Condensed Consolidated Financial Statements.

</TABLE>

<PAGE>


                               Sparta Foods, Inc.
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 1999
                                   (Unaudited)

NOTE 1.  GENERAL

     The unaudited condensed consolidated balance sheet at June 30, 1999, the
     condensed consolidated statements of operations for the three-month and
     nine-month periods ended June 30, 1999 and 1998, and the condensed
     consolidated statements of cash flows for the nine-month periods ended June
     30, 1999 and 1998, include all adjustments which in the opinion of
     management are necessary in order to make the financial statements not
     misleading and are not necessarily indicative of results of operations to
     be expected for the entire fiscal year ending September 30, 1999.

     The unaudited financial statements should be read in conjunction with the
     audited financial statements for the years ended September 30, 1998 and
     1997, contained in Form 10-KSB and Management's Discussion and Analysis or
     Plan of Operation contained herein.


NOTE 2.  FINANCING AGREEMENTS

     The Company has a line of credit (the "Line of Credit") and term loan (the
     "Term Loan") with a bank, secured by certain assets. Maximum borrowings
     under the Line of Credit are determined by a borrowing base calculation or
     $1,200,000, whichever is less. Borrowings bear interest at prime (7.75
     percent at June 30, 1999). At June 30, 1999 and September 30, 1998, $0 is
     outstanding on the Line of Credit and $1,073,789 and $1,243,333,
     respectively, is outstanding on the Term Loan. The Company is to maintain
     certain minimum net worth and debt service coverage levels.

     The Company has a loan acquired through the State of Minnesota related to a
     revenue bond issuance. The loan is due in monthly installments that vary in
     accordance with the maturity dates of the related revenue bonds, plus
     interest at rates varying from 4.5 to 6.0 percent. At June 30, 1999,
     $1,686,667 is outstanding. The Company is to maintain certain net worth and
     debt service coverage levels. In addition certain dividend restrictions are
     stipulated and a debt service reserve fund has been established. The debt
     service reserve fund will remain until all loan obligations have been
     satisfied and is reflected on the consolidated balance sheet as restricted
     cash.

     In 1999, the Company entered into an operating lease agreement for certain
     new factory equipment. As of June 30, 1999, deposits totaling $262,152 on
     equipment subject to the lease agreement are scheduled to be refunded to
     the Company in August 1999. These deposits are reflected on the June 30,
     1999 consolidated balance sheet as deposits receivable.


<PAGE>


NOTE 3.  INCOME TAX

     Deferred taxes are provided on an asset and liability method whereby
     deferred tax assets are recognized for deductible temporary differences and
     operating loss and tax credit carryforwards, net of deferred tax
     liabilities for temporary differences. Due to losses and the availability
     of tax benefits to offset any regular tax, the provisions for income taxes
     are based upon a state minimum income tax.


NOTE 4.  PREFERRED STOCK

     In February of 1998, the Company issued 2,500 shares of Preferred Stock,
     Series 1998. The shares are convertible at any time at the rate of 606.06
     shares of Common Stock for each share of Preferred Stock. The holders of
     the preferred stock have the right to require the Company to repurchase the
     stock in the event of a change in control authorized by the Board of
     Directors or if the Company is in default with certain covenants as defined
     in the agreement. The holders of the Preferred Stock are entitled to
     receive, when, as and if declared by the Company's Board of Directors, cash
     dividends at the rate of 5% annually or, at the option of the Company,
     dividends of shares of additional Preferred Stock at the rate of 7.5%
     annually. Dividends are fully cumulative, accumulate without interest from
     the date the Preferred Stock was originally issued, and, if declared by the
     Board of Directors, are payable, semi-annually on January 1st and July 1st.
     At June 30, 1999, cumulative and undeclared cash dividends totaled $168,250
     or $67.30 per share of preferred stock.


NOTE 5.  NET INCOME (LOSS) PER COMMON SHARE

     The Company is complying with "Statement of Financial Accounting Standards
     No. 128, Earnings per Share" (FAS 128). FAS 128 requires the presentation
     of basic earnings or losses per share (EPS) and diluted earnings or losses
     per share amounts. Basic EPS is the net income or loss related to the
     weighted-average number of common shares outstanding for the period.
     Diluted EPS reflects potential dilution assuming the issuance of common
     stock for stock options and warrants exercisable under the treasury stock
     method and also considers the potential conversion of convertible preferred
     stock.

     Diluted EPS for the three-month periods ended June 30, 1999 and 1998
     includes 238,342 and 2,227,589, respectively, weighted-average shares
     assumed issued upon exercise of outstanding options and warrants. In
     addition, for the three-month period ended June 30, 1998, 1,515,151 shares
     assumed issued for convertible preferred stock. For the three-month period
     ended June 30, 1999, the conversion of preferred stock has not been assumed
     due to an antidilutive impact.

     Diluted EPS for the nine-month period ended June 30, 1998 includes
     2,384,676 weighted-average shares assumed issued for options and warrants.
     For the nine-month period ended June 30, 1999, the issuance of shares for
     options and warrants has not been assumed due to an antidilutive impact. In
     addition, for the nine-month periods ended June 30, 1999 and 1998, the
     conversion of preferred stock has not been assumed due to an antidilutive
     impact.


<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR
         PLAN OF OPERATION

Overview

     La Canasta of Minnesota, Inc. ("La Canasta"), the predecessor of Sparta
     Foods, Inc. (the "Company"), and now a wholly-owned subsidiary of the
     Company, began producing limited volumes of hand stretched tortillas, corn
     tortillas and corn tortilla chips shortly following its organization in
     1981, primarily for sale to restaurants. The Company was organized under
     the laws of the State of Minnesota in 1988, originally under the name of
     "Sparta Corp." for the purposes of raising capital for the acquisition of,
     or investment in, a business. In January 1991, the Company acquired all of
     the outstanding capital stock of La Canasta. Since 1991, the Company has
     completed acquisitions and secured new broker and distributor relationships
     which has expanded its trademark retail brands to include Cruz, Chapala,
     Mexitos and La Campana Paradiso, its retail distribution network to include
     Crystal Farms Refrigerated Distribution Company and Marigold Foods, Inc.
     and its food service customers to include McDonald's, Perkins, Friendly's
     and Carlos O'Kelly restaurants.

Results of Operations

     The Company's net sales of $11,198,174 increased $150,528 (1.4%) for the
     nine months ended June 30, 1999, as compared to the nine months ended June
     30, 1998. Net sales of $4,092,284 increased $122,298 (3.1%) for the three
     months ended June 30, 1999, as compared to the three months ended June 30,
     1998. These increases are caused by a growth in sales to established and
     new customers. This growth is offset by the loss of a significant private
     label barbecue sauce customer. Net sales to the lost customer totaled
     approximately $0 and $370,000 (3.3%) for the nine-month periods ended June
     30, 1999 and 1998, respectively. [Trend in Growth - Not meet 20%]

     Gross profit, as a percentage of net sales, for the nine months ended June
     30, 1999, was 29.3% compared to 28.3% for the nine months ended June 30,
     1998. Gross profit, as a percentage of net sales, for the three months
     ended June 30, 1999, was 32.1% compared to 31.9% for the three months ended
     June 30, 1998. These increases are primarily due to more favorable
     operating efficiencies.

     Selling, general and administrative expenses increased by $634,814 or 23.5%
     during the nine months ended June 30, 1999, as compared to the nine months
     ended June 30, 1998. These expenses increased by $307,291 or 34.4% during
     the three months ended June 30, 1999, as compared to the three months ended
     June 30, 1998. These increases are due mainly to the hiring of additional
     sales personnel and consultants to implement the Company's long-term sales
     growth objectives. In addition, increased advertising and promotional
     expenses have been incurred on new and existing products in an effort to
     penetrate new markets and increase market share in existing markets.

     Interest expense decreased by $133,599 (47.7%) for the nine months ended
     June 30, 1999 compared to the nine months ended June 30, 1998. Interest
     expense decreased by $30,378 (39.0%) for the three months ended June 30,
     1999 compared to the three months ended June 30, 1998. These decreases are
     due to significant debt reductions as a result of the use of proceeds from
     the issuance of preferred stock and the sale of rental property in fiscal
     1998.

<PAGE>

     Due to a net loss for the nine-month period ended June 30, 1999 and the
     availability of tax benefits to offset any regular tax for the nine-month
     period ended June 30, 1998, the Company has recorded provisions for income
     taxes equal to a state minimum income tax.

     For the reasons discussed above, the net loss for the nine months ended
     June 30, 1999 was $99,915 compared to a net income of $257,552 for the same
     period in 1998. The net income for the three months ended June 30, 1999 was
     $105,008 compared to a net income of $335,728 for the same period in 1998.


Liquidity and Capital Resources

     The Company financed its current activities primarily through cash
     generated from the issuance of common stock resulting from the exercise of
     warrants.

     Cash used in operating activities during the nine months ended June 30,
     1999 was $587,043 consisting principally of a net loss of $99,915, an
     increase in accounts receivable and prepaid expenses of $137,658, an
     increase in deposits receivable of $262,152 and an increase in inventories
     of $641,775, primarily caused by advance purchases of raw materials and
     packaging for anticipated production of a new retail product, offset by
     depreciation and amortization of $641,795. Cash used in investing
     activities was $250,485 consisting principally of the purchase of equipment
     of $381,138 offset by the utilization of restricted cash of $35,820 and a
     decrease in deposits and other assets of $94,833. Cash provided by
     financing activities was $1,880,057 consisting of $2,154,601 in net
     proceeds from the issuance of common stock upon exercise of outstanding
     warrants offset by a $274,544 reduction in long-term debt.

     At June 30, 1999, the Company had cash and cash equivalents of $2,173,784
     and working capital of $3,893,456. The Company believes that its available
     cash, cash equivalents, cash flow from operations and existing bank credit
     facilities will be sufficient to meet its operating requirements through
     fiscal 1999.


Seasonality

     The Company has historically had higher sales in its third and fourth
     fiscal quarters which end June 30, and September 30, respectively, than in
     its first and second quarters. Management believes that this is a result of
     seasonal consumption patterns with respect to the Company's food products,
     such as consumption of higher volumes of tortilla chips and salsa during
     the summer months. This seasonality may cause quarterly results of
     operations to fluctuate.


Raw Material Cost Fluctuations

     The Company does not enter into futures contracts as defined by SFAS 80. It
     does, however, enter into purchase orders for delayed delivery of raw
     materials, generally 30 days for raw materials other than flour and corn.
     The Company enters into purchase orders for delayed delivery of flour and
     corn for a period of 2-18 months, depending on current pricing, to ensure
     the availability of the type of flour and corn best suited for the
     Company's products. These purchase orders are placed directly with the
     suppliers.

<PAGE>

Outlook

     The Company's plan in fiscal 1999 is to grow the business by increasing
     sales and expanding its presence in new geographic territories. The Company
     plans to grow the business internally as well as through joint ventures
     and/or acquisitions and through the development of new distribution
     relationships.

     The Company anticipates that net sales for the fiscal year 1999 will exceed
     sales for fiscal year 1998, but will fall far short of the Company's
     previously announced 20% sales growth target.  The Company attributes
     its failure to meet its growth target on the inability of its sales
     personnel to reach their sales targets for fiscal year 1999 and the
     slower than expected market introduction of the Company's Banditos snack
     product.  Net sales of the Banditos snack product will fall short of the
     Company's projected sales of $3 to $4 million in fiscal year 1999.
     However, the Company believes that a 20% growth in net sales can be
     achieved in fiscal year 2000.

     The Company relies on computer software and hardware systems to manage its
     information and portions of its manufacturing. The Company is aware of the
     computer software and hardware issues associated with the programming code
     in existing computer software programs and non-information technology such
     as micro-controllers found in computer hardware. The issue is whether
     systems will properly recognize date sensitive information. Much of the
     computer software and hardware in use today are unable to recognize a year
     that begins with "20" instead of "19." Many computers will be unable to
     recognize the Year 2000 and, as a result, could generate erroneous data or
     cause a computer to fail. Some computer systems may begin to operate
     improperly sooner for failure to read other dates.

     The Company has completed an assessment of its exposure to the Year 2000
     issue by evaluating its software and hardware systems. The Company's
     assessment revealed that its exposure to the Year 2000 issue is nominal,
     and it has upgraded its software and hardware systems to make such systems
     Year 2000 compliant. Costs associated with the upgrade were immaterial. In
     addition to evaluating its own systems, the Company has inquired of its
     major customers and suppliers as to their exposure to the Year 2000 issue
     to determine the extent to which the Company is indirectly vulnerable to
     the Year 2000 issues from such customers and suppliers. Many of the
     Company's customers and suppliers have responded that they believe they are
     or will be Year 2000 compliant. The Company plans to continue to assess its
     exposure to the Year 2000 issue and develop plans to address any
     developments associated with the Year 2000 issue that could have an adverse
     effect on the Company and its operations.

     The foregoing statements contained in this Outlook section of Management's
     Discussion and Analysis or Plan of Operation and those relating to the
     Company's operating requirements through fiscal 1999 contained in
     Management's Discussion and Analysis or Plan of Operation are forward
     looking statements that involve a number of risks and uncertainties. Some
     additional factors that could cause actual results to differ materially
     include but are not limited to (i) seasonality of its sales and raw
     materials cost fluctuations, which are discussed above; (ii) a decline
     in international sales growth of tortillas; (iii) a loss of any of its
     significant customers and distributors; (iv) the failure of the Company's
     sales force to achieve its sales targets; (v) the lack of consumer demand
     for the Banditos snack product; and (vi) the inability of the Company
     to grow its tortilla business due to competitive forces, including the
     following:

<PAGE>

     Reliance on Principal Customers. During 1998, sales to Crystal Farms
     Refrigerated Distribution Company ("Crystal Farms") and Catalina Specialty
     Foods, Inc. accounted for approximately 25% and 12%, respectively, of the
     Company's sales. For the nine-month period ended June 30, 1999, Crystal
     Farms and Catalina Specialty Foods, Inc. accounted for approximately 25%
     and 13%, respectively, of the Company's sales. Crystal Farms is the
     Company's largest single distributor of its retail products and has a
     significant impact on the Company's growth in the retail market. Although
     the Company and Crystal Farms operate under a distribution agreement, the
     loss of Crystal Farms as a customer would have a material and adverse
     effect on the Company's sales and profitability and future growth.

     Competition. The Mexican-style food manufacturing and distribution industry
     is highly competitive. The Company is in competition with a number of
     manufacturers and distributors of Mexican-style food products and, to a
     limited extent, manufacturers of "snack foods," many of which are better
     capitalized than the Company. The Company will also be subject to future
     competition from other manufacturers, distributors and retailers who enter
     into the Mexican-style food and distribution industry. In the retail
     market, many of these competitors engage in extensive local and national
     advertising and marketing, and the brand names for products distributed by
     those competitors are significantly more recognizable to the consumer than
     the Company's brand names. In addition, competition for shelf space in
     retail grocery stores is intense. In the food service market, the Company
     is competing with a number of regional and national producers of
     Mexican-style food products. Many of these competitors are better
     capitalized than the Company and have established sales organizations. No
     assurance can be given that the Company will be able to compete as it
     expands its markets.





<PAGE>



                           PART II. OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES

During the quarter ended June 30, 1999, the Company sold no unregistered
securities.





ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On July 9, 1999, Sparta Foods, Inc. (the "Registrant") held a special meeting of
its shareholders at which shareholders approved a 500,000 shares increase in the
number of shares reserved for issuance under its stock option plan. The number
of votes cast for, against or withheld, as well as abstentions and non-votes are
set forth below:

     Votes casted for                                6,024,239
     Votes cast against or withheld                  2,412,173
     Number of abstentions                              47,883
     Number of broker non-votes                              0



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

10.1     First Amendment dated March 5, 1999 to the Term Loan and Credit
         Agreement dated June 1998 between the Company and Norwest Bank
         Minnesota, National Association.

10.2     Second Amendment dated May 28, 1999 to the Term Loan and Credit
         Agreement dated June 1998 between the Company and Norwest Bank
         Minnesota, National Association.

10.3     Second Amendment dated June 3, 1999 to the Industrial Building Lease
         Agreement dated September 1, 1997 between the Company and First
         Industrial, LP

10.4     Supply Agreement dated January 14, 1999 between the Company and Rupari
         Food Services, Inc.

10.5     Change of Control Executive Severance Pay Agreement dated April 1,
         1999 between the Company and Craig S. Cram.

10.6     First Amendment dated April 1, 1999 to the Salary Continuation
         Agreement dated August 1995 between the Company and Joel P. Bachul.


<PAGE>

10.7     First Amendment dated April 1, 1999 to the Salary Continuation
         Agreement dated August 1995 between the Company and A. Merrill Ayers.

10.8     Revised License Agreement dated January 1, 1999 between the Company and
         Atlas International Food and Equipment Corporation.

11       Computation of Earnings (Loss) Per Common Share.

27       Financial Data Schedule (filed only in electronic format).



(b)      Reports on Form 8-K


     A report on Form 8-K was not filed during the quarter ended June 30, 1999.





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                                   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, thereunto duly authorized.


                                        SPARTA FOODS, INC.
                                        (Registrant)

Dated:   July 30, 1999                  By: /s/ Joel P. Bachul
                                           Joel P. Bachul,
                                           President and Chief Executive Officer


Dated:   July 30, 1999                  By: /s/ A. Merrill Ayers
                                            A. Merrill Ayers
                                            Treasurer, Secretary and
                                            Chief Financial Officer