0001493152-26-012196
SEC filingSparta Commercial Services, Inc. (SRCO) recorded total revenue of $92K for the three months ended January 31, 2026, up 17% year-over-year from $79K, primarily driven by merchant financing ($52K, +37%) and information technology ($33K, +28%), offset by a decline in wellness products ($7K, -54%). Gross profit improved 21% to $87K with cost of goods sold at $5K. Operating expenses rose to $295K, led by compensation ($188K) and consulting fees ($42K), yielding an operating loss of $208K, 12% wider than prior year. High interest expense on notes ($345K) and changes in derivative fair value ($147K loss) contributed to a net loss of $405K, nearly unchanged from $406K YoY. For the nine months, revenue grew 71% to $288K, with net loss narrowing to $1.4M from $1.8M. Balance sheet shows total assets steady at $933K (cash $70K, loans receivable $844K), but liabilities climbed to $12.1M (current notes $9.0M, derivatives $968K), deepening stockholders' deficit to $11.2M. YTD operating cash use $725K was funded by $664K financing inflows. Substantial going concern doubts persist due to recurring losses, $70.3M accumulated deficit, and $10.5M working capital deficit; management seeks equity financing.
Sparta Commercial Services, Inc. reported total revenue of $92,162 for the three months ended January 31, 2026, up from $78,998 in the prior year period. Gross profit was $86,672 versus $71,550 YoY. Operating expenses totaled $294,889, compared to $257,270, resulting in loss from operations of $208,217 versus $185,720. Other income/expense included interest expense on notes $345,221 and loss in changes in fair value of derivative liability $147K (shown as positive adjustment in some contexts but net other expense $197K), leading to net loss $405,288 versus $406,141 YoY. Net loss attributed to common stockholders $414,058 versus $411,012. For nine months ended January 31, 2026, revenue $288,157 versus $168,357 prior year; net loss $1,399,213 versus $1,788,457. Balance sheet as of January 31, 2026: total assets $932,602 (up from $756,579 at April 30, 2025); total liabilities $12,138,652 (up from $11,349,644); total stockholders' deficit -$11,206,052 (worsened from -$10,593,065). Weighted average shares basic 45.3M versus 35.4M YoY.
Revenue for three months ended January 31, 2026, disaggregated as: Information technology $32,814 (prior year $25,599); Wellness products $6,966 ($15,172); Merchant financing $52,382 ($38,227). Merchant financing represented 57% of total, information technology 36%, wellness products 7%. Nine months: Information technology $100,496 ($87,638); Wellness products $28,956 ($26,354); Merchant financing $158,705 ($54,365). No geographic revenue mix disclosed. Revenue recognized under ASC 606. Operations span FinTech Services, Financial Services, E-Commerce & Mobile Technology, and Health and Wellness via subsidiaries and joint ventures.
Gross profit $86,672 for three months on $92,162 revenue, with cost of goods sold $5,490 (prior $7,448). Operating expenses breakdown: Compensation and related costs $187,807 ($128,027); Accounting and legal fees $7,535 ($11,300); Consulting fees $41,602 ($58,085); Rent and lease $18,000 ($18,000); General office expenses $39,945 ($41,858). Total op expenses $294,889 ($257,270). Loss from operations $208,217 ($185,720). Nine months op loss $761,725 ($858,410). High interest expense $345K drove net results. Preferred dividend none.
Nine months cash flows: Net cash used in operating activities $725,087 (prior $1,179,977), with net loss $1,399,213 adjusted for derivative fair value gain $40K, shares for services $157K, default shares $154K, changes in loans receivable -$237K, accounts payable +$615K. Financing provided $664K: stock proceeds $215K, notes payable net $492K, repayments -$43K notes and -$4K related party. Net decrease in cash $61K to $70K end (from $131K). Balance sheet: Current assets $924K (cash $70K, AR $8K, inventory $1K, loans rec $844K); Total liab $12.1M (current $11.4M incl AP $1.4M, notes current $9.0M, deriv $968K; LT $748K incl related party $647K). Common shares issued/outstanding 45,673,996; to be issued 35,899,343. Accumulated deficit -$70.3M.
The financial statements raise substantial doubt about going concern due to recurring losses, negative cash flows, accumulated deficit $70,342,036, and working capital deficit $10,467,055. Cash and revenues insufficient for next 12 months. Management pursuing equity financing via investment bankers, private equity, and investors. No assurance of success. No audit committee, material weaknesses in internal controls including lack of policies, segregation of duties, management override risk; disclosure controls ineffective as of January 31, 2026. Subsequent to period: issued shares for equity/notes, received additional $25K on note.