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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549





                                    FORM 8-K
                                 CURRENT REPORT


                     Pursuant to section 13 or 15(d) of the
                         Securities Exchange Act of 1934


                Date of Report (Date of earliest event reported):
                                October 16, 2001



                           SPARTA SURGICAL CORPORATION
             (Exact name of registrant as specified in its charter)


         Delaware                    1-11047                    22-2870438
  (State or other juris-           (Commission             (I.R.S. Employer ID
 diction of incorporation)         File Number)                   Number)



                                  Olsen Centre
                   2100 Meridian Park Blvd., Concord, CA 94520
                    (Address of principal executive offices)



        Registrant's telephone number, including area code (925) 417-8812



                                 not applicable
          (Former name or former address, if changed since last report)


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SPARTA SURGICAL CORPORATION

Form 8-K


ITEM 5 - OTHER EVENTS
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On October 10, 2001, Sparta Surgical Corporation  (Sparta") and its wholly-owned
subsidiary Sparta Olsen  Electrosurgical,  Inc. ("Olsen")  completed the sale of
substantially  all  of the  assets  of  Olsen's  electrosurgical  business  (the
"Sale"), including inventory,  machinery and equipment and all intangible assets
(excluding cash and accounts receivable) for the amount of $1,815,528 in cash to
Kentucky Packaging Service,  LP DBA Q2 Medical. At the same time we entered into
a  Transition  Agreement  whereby  Q2  Medical  agreed to pay  Sparta  and Olsen
approximately $70,830 to assist in the transfer of the electrosurgical business.

In  connection  with the Sale,  Sparta and Sparta  Olsen paid to Bank of America
("B/A") all amounts required pursuant to a Settlement  Agreement between Sparta,
Sparta Olsen, Thomas and Denise Reiner and B/A (the "Parties"). B/A released all
security  interest  in all of the assets of Sparta and  Sparta  Olsen,  and also
released the personal guarantee of Thomas F. Reiner, our Chairman, President and
CEO. The  Settlement  Agreement also  contained  customary  releases and forever
discharges  each  other  from any and all  claims  and  demands  of any kind and
nature. In addition,  the Parties dismissed  lawsuits they had initiated against
one and another.






                                    SIGNATURE

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                         SPARTA SURGICAL CORPORATION
Date: October 16, 2001
                                         By  /s/     Thomas F. Reiner
                                         ---------------------------------------
                                         Thomas F. Reiner,
                                         Chairman of the Board,
                                         President and Chief Executive Officer