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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sparta Commercial Services Inc (PK) | USOTC:SRCO | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.0122 | 10.38% | 0.1297 | 0.0177 | 0.13 | 0.1297 | 0.0903 | 0.0903 | 5,000 | 21:03:35 |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
Nevada
|
30-0298178
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
Large accelerated filer ☐ | Accelerated filer ☐ |
Non-accelerated filer ☐ | Smaller reporting company ☒ |
|
|
Page
|
|
|
|
PART I.
|
FINANCIAL INFORMATION
|
|
|
|
|
Item 1.
|
3
|
|
|
|
|
|
3
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
7
|
|
|
|
|
Item 2.
|
17
|
|
|
|
|
Item 3.
|
21
|
|
|
|
|
Item 4.
|
22
|
|
|
|
|
PART II.
|
OTHER INFORMATION
|
|
|
|
|
Item 1.
|
23
|
|
|
|
|
Item 1A.
|
23
|
|
|
|
|
Item 2.
|
23
|
|
|
|
|
Item 3.
|
24
|
|
|
|
|
Item 4.
|
24
|
|
|
|
|
Item 5.
|
24
|
|
|
|
|
Item 6.
|
24
|
|
|
|
|
25
|
|
July 31, 2016
|
April 30, 2016
|
||||||
|
(Unaudited)
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
3,459
|
$
|
33,697
|
||||
Accounts receivable
|
7,319
|
7,649
|
||||||
Total Current Assets
|
10,778
|
41,346
|
||||||
Property and equipment, net of accumulated depreciation and amortization of $206,980 and $206,362, respectively
|
6,282
|
6,900
|
||||||
Other assets
|
9,628
|
9,628
|
||||||
Deposits
|
106,026
|
79,776
|
||||||
|
||||||||
Total assets
|
$
|
132,714
|
$
|
137,650
|
||||
|
||||||||
LIABILITIES AND DEFICIT
|
||||||||
|
||||||||
Liabilities:
|
||||||||
Current Liabilities
|
||||||||
Accounts payable and accrued expenses
|
$
|
2,377,769
|
$
|
2,132,093
|
||||
Current portion notes payable net of discount of $160,094 and $347,072, respectively
|
3,648,474
|
3,394,033
|
||||||
Deferred revenue
|
22,415
|
23,000
|
||||||
Derivative liabilities
|
2,603,747
|
2,170,976
|
||||||
Total Current Liabilities
|
8,652,405
|
7,720,102
|
||||||
Long term portion notes payable net of discount of $288,417 and $209,813, respectively
|
110,083
|
96,687
|
||||||
Loans payable-related parties
|
418,853
|
395,853
|
||||||
Total Long Term Liabilities
|
528,936
|
492,540
|
||||||
Total liabilities from continuing operations
|
9,181,341
|
8,212,642
|
||||||
LIABILITIES FROM DISCONTINUED OPERATIONS - Current
|
12,080
|
14,670
|
||||||
Total liabilities
|
9,193,421
|
8,227,312
|
||||||
Commitments and contingencies | - | - | ||||||
|
||||||||
Deficit:
|
||||||||
Sparta Commercial Services, Inc. Stockholders’ Deficit:
|
||||||||
Preferred stock, $0.001 par value; 10,000,000 shares authorized of which 35,850 shares have been designated as Series A convertible preferred stock, with a stated value of $100 per share, 125 and 125 shares issued and outstanding, respectively
|
12,500
|
12,500
|
||||||
Preferred stock B, 1,000 shares have been designated as Series B redeemable preferred stock, $0.001 par value, with a liquidation and redemption value of $10,000 per share, 0 and 0 shares issued and outstanding, respectively
|
-
|
-
|
||||||
Preferred stock C, 200,000 shares have been designated as Series C redeemable, convertible preferred stock, $0.001 par value, with a liquidation and redemption value of $10 per share, 0 and 0 shares issued and outstanding, respectively
|
-
|
-
|
||||||
Common stock, $0.001 par value; 750,000,000 shares authorized, 483,665,125 and 419,912,451 shares issued and outstanding, respectively
|
483,665
|
419,912
|
||||||
Common stock to be issued 9,605,000 and 9,605,000 shares, respectively
|
9,605
|
9,605
|
||||||
Additional paid-in-capital
|
45,575,886
|
45,473,029
|
||||||
Accumulated deficit
|
(55,952,313
|
)
|
(54,758,294
|
)
|
||||
Total Sparta Commercial Services, Inc. Stockholders' Deficit
|
(9,870,657
|
)
|
(8,843,248
|
)
|
||||
Non-controlling interest
|
809,950
|
753,586
|
||||||
Total Deficit
|
(9,060,707
|
)
|
(8,089,662
|
)
|
||||
Total Liabilities and Deficit
|
$
|
132,714
|
$
|
137,650
|
|
Three Months Ended
|
|||||||
|
July 31,
|
|||||||
|
2016
|
2015
|
||||||
Revenue
|
||||||||
Information technology
|
$
|
161,447
|
$
|
167,223
|
||||
Cost of revenue
|
14,486
|
44,146
|
||||||
Gross profit
|
146,961
|
123,077
|
||||||
|
||||||||
Operating expenses:
|
||||||||
General and administrative
|
507,615
|
763,050
|
||||||
Depreciation and amortization
|
618
|
1,057
|
||||||
Total operating expenses
|
508,233
|
764,107
|
||||||
|
||||||||
Loss from operations
|
(361,272
|
)
|
(641,030
|
)
|
||||
|
||||||||
Other (income) expense:
|
||||||||
Other income
|
-
|
(7,153
|
)
|
|||||
Financing cost
|
356,790
|
189,478
|
||||||
Amortization of debt discount
|
200,374
|
712,477
|
||||||
Loss from changes in fair value of derivative liability
|
258,064
|
75,465
|
||||||
Total other expense
|
815,228
|
970,267
|
||||||
|
||||||||
Loss from continuing operations
|
$
|
(1,176,500
|
)
|
$
|
(1,611,297
|
)
|
||
|
||||||||
Loss from discontinued operations
|
(10,964
|
)
|
(12,548
|
)
|
||||
|
||||||||
Net Loss
|
(1,187,464
|
)
|
(1,623,845
|
)
|
||||
|
||||||||
Net income attributed to non-controlling interest
|
(6,364
|
)
|
(4,264
|
)
|
||||
|
||||||||
Preferred dividend
|
(191
|
)
|
(191
|
)
|
||||
|
||||||||
Net loss attributed to common stockholders
|
$
|
(1,194,019
|
)
|
$
|
(1,628,300
|
)
|
||
|
||||||||
Basic and diluted loss per share:
|
||||||||
Loss from continuing operations attributable to Sparta Commercial Services, Inc. common stockholders
|
$
|
(0.00
|
)
|
$
|
(0.03
|
)
|
||
Loss from discontinued operations attributable to Sparta Commercial Services, Inc. common stockholders
|
(0.00
|
)
|
(0.00
|
)
|
||||
Net loss attributable to Sparta Commercial Services, Inc. common stockholders
|
$
|
(0.00
|
)
|
$
|
(0.03
|
)
|
||
|
||||||||
|
||||||||
Weighted average shares outstanding
|
458,404,528
|
57,229,920
|
|
Series A
|
Common Stock
|
Additional
|
Non-
|
||||||||||||||||||||||||||||||||||||
|
Preferred Stock
|
Common Stock
|
to be issued
|
Paid in
|
Accumulated
|
controlling
|
||||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Interest
|
Total
|
||||||||||||||||||||||||||||||
Balance April 30, 2016
|
125
|
$
|
12,500
|
419,912,451
|
$
|
419,912
|
9,605,000
|
$
|
9,605
|
$
|
45,473,029
|
$
|
(54,758,294
|
)
|
$
|
753,586
|
$
|
(8,089,662
|
)
|
|||||||||||||||||||||
Sale of subsidiary preferred stock
|
50,000
|
50,000
|
||||||||||||||||||||||||||||||||||||||
Shares issued for conversion of notes and interest
|
63,752,674
|
63,753
|
-
|
-
|
102,857
|
166,610
|
||||||||||||||||||||||||||||||||||
Preferred dividend
|
(191
|
)
|
(191
|
)
|
||||||||||||||||||||||||||||||||||||
Net loss
|
(1,193,828
|
)
|
6,364
|
(1,187,464
|
)
|
|||||||||||||||||||||||||||||||||||
Balance July 31, 2016
|
125
|
$
|
12,500
|
483,665,125
|
$
|
483,665
|
9,605,000
|
$
|
9,605
|
$
|
45,575,886
|
$
|
(55,952,313
|
)
|
$
|
809,950
|
$
|
(9,060,707
|
)
|
|
Three Months Ended
|
|||||||
|
July 31,
|
|||||||
|
2016
|
2015
|
||||||
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss
|
$
|
(1,187,464
|
)
|
$
|
(1,623,845
|
)
|
||
Adjustments to reconcile net loss to net cash used in
operating activities:
|
||||||||
Depreciation and amortization
|
618
|
1,057
|
||||||
Loss from change in fair value of derivative liabilities
|
258,064
|
75,465
|
||||||
Amortization of debt discount
|
200,374
|
712,477
|
||||||
Non-cash financing cost
|
248,591
|
-
|
||||||
Equity based compensation
|
-
|
82,115
|
||||||
Changes in operating assets and liabilities
|
||||||||
Accounts receivable
|
330
|
(24,574
|
)
|
|||||
Other assets
|
(26,250
|
)
|
(33,961
|
)
|
||||
Accounts payable and accrued expenses
|
245,674
|
125,486
|
||||||
Deferred revenue
|
(585
|
)
|
-
|
|||||
Net cash used in operating activities
|
(260,648
|
)
|
(685,780
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
- | - | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|||||||
Proceeds from sale of common stock
|
-
|
20,000
|
||||||
Proceeds from sale of subsidiary preferred stock
|
50,000
|
-
|
||||||
Proceeds from notes payable
|
182,000
|
946,400
|
||||||
Payments on notes payable
|
(22,000
|
)
|
(320,500
|
)
|
||||
Proceeds from related party notes
|
23,000
|
80,000
|
||||||
Net cash provided by financing activities
|
233,000
|
725,900
|
||||||
|
||||||||
Cash flows from discontinued operations:
|
||||||||
Cash used in operating activities of discontinued operations
|
(2,590
|
)
|
(1,832
|
)
|
||||
Net cash used in discontinued operation activities
|
(2,590
|
)
|
(1,832
|
)
|
||||
|
||||||||
Net (decrease) increase in cash and cash equivalents
|
$
|
(30,238
|
)
|
$
|
38,288
|
|||
|
||||||||
Cash and cash equivalents, beginning of period
|
$
|
33,697
|
$
|
14,034
|
||||
Cash and cash equivalents , end of period
|
$
|
3,459
|
$
|
52,322
|
||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$
|
6,741
|
$
|
600
|
||||
Income taxes
|
$
|
-
|
$
|
-
|
· | Level 1 — Quoted prices for identical instruments in active markets. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as certain securities that are highly liquid and are actively traded in over-the-counter markets. |
· | Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which all significant inputs and significant value drivers are observable in active markets. |
· | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value measurements. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques based on significant unobservable inputs, as well as management judgments or estimates that are significant to valuation. |
|
Three Months Ended
|
|
||||||
|
July 31,
|
|
July 31,
|
|
||||
|
2016
|
|
2015
|
|
||||
|
|
|
||||||
Revenues
|
|
$
|
7,209
|
|
|
$
|
18,416
|
|
Net loss
|
|
$
|
(10,964
|
)
|
|
$
|
(12,548
|
)
|
|
July 31,
|
April 30,
|
||||||
|
2016
|
2016
|
||||||
|
||||||||
Secured, subordinated individual lender
|
$
|
-
|
$
|
2,590
|
||||
Secured, subordinated individual lender
|
12,080
|
12,080
|
||||||
Total
|
$
|
12,080
|
$
|
14,670
|
Notes Payable
|
July 31,
2016
|
April 30,
2016
|
||||||
Notes convertible at holder's option
|
$
|
2,716,568
|
$
|
2,625,105
|
||||
Notes convertible at Company's option
|
225,000
|
225,000
|
||||||
Non-convertible notes payable
|
1,265,500
|
1,197,500
|
||||||
Subtotal
|
4,207,068
|
4,047,605
|
||||||
Less debt discount
|
(448,511
|
)
|
(556,885
|
)
|
||||
Total
|
3,758,557
|
3,490,720
|
||||||
Less: Current portion of notes payable
|
(3,648,474
|
)
|
(3,394,033
|
)
|
||||
Long-term portion of notes payable
|
$
|
110,083
|
$
|
96,687
|
Year ending April 30,
|
Amount
|
|||
2018
|
$
|
398,500
|
Significant Assumptions:
|
|
|
|
||
|
|
|
|
||
Risk free interest rate
|
Ranging from
|
0.101% to 0.752
|
%
|
||
Expected stock price volatility
|
|
|
|
248
|
%
|
Expected dividend payout
|
|
|
|
0
|
%
|
Expected life in years
|
Ranging from
|
0.34 years to 2.24
|
years
|
|
July 31,
|
|||||||
|
2016
|
2015
|
||||||
Balance, beginning of year
|
$
|
2,170,976
|
$
|
1,605,535
|
||||
Derivative liability extinguished
|
(100,593
|
)
|
(477,540
|
)
|
||||
Derivative financial liability arising on the issuance of convertible notes
|
275,300
|
823,201
|
||||||
Fair value adjustments
|
258,064
|
75,465
|
||||||
Balance, end of period
|
$
|
2,603,747
|
$
|
2,026,661
|
·
|
issued 2,043,180 shares of common stock which had been classified as to be issued at April 30, 2015,
|
·
|
sold 760,456 shares of restricted common stock to an accredited investor for $20,000,
|
·
|
is sued 24,395,940 shares of common stock upon the conversion of $420,052 principal amount of convertible notes,
|
·
|
accrued 1,962,220 shares as shares to be issued for the conversion of $29,806 of accrued interest, which shares were issued subsequent to July 31, 2015,
|
·
|
issued 391,059 shares of common stock valued at $11,078 pursuant to terms of various notes,
|
·
|
issued 2,846,000 shares of common stock valued at $82,080 pursuant to consulting agreements,
|
·
|
issued 35,056 shares of common stock to three employees pursuant to vesting provisions of prior stock awards.
|
|
Fair Value Measurement Using
|
|||||||||||||||
|
Fair Value at
July 31, 2016
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Derivative liabilities
|
$
|
2,603,747
|
-
|
-
|
$
|
2,603,747
|
|
Fair Value Measurement Using
|
|||||||||||||||
|
Fair Value at
April 30, 2016
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Derivative liabilities
|
$
|
2,170,976
|
-
|
-
|
$
|
2,170,976
|
·
|
Issued 391,059 shares of common stock valued at $11,078 pursuant to the terms of the notes
|
·
|
Issued 340,000 shares of common stock in settlement of $14,450 in accounts payable
|
·
|
Issued 24,055,940 shares of common stock upon conversion of $405,602 of interest and notes and accounts payable
|
·
|
Issued 35,056 shares of common stock to three employees pursuant to vesting schedules of prior stock awards
|
·
|
Issued 2,846,000 shares of common stock valued at $82,080 to two consultants.
|
|
Three Month Periods Ended
|
|||||||
|
July 31,
|
July 31,
|
||||||
|
2016
|
2015
|
||||||
|
||||||||
Revenues
|
$
|
7,209
|
$
|
18,416
|
||||
Net loss
|
$
|
(10,964
|
)
|
$
|
(12,548
|
)
|
● | lack of documented policies and procedures; |
● | we have no audit committee; |
● | there is a risk of management override given that our officers have a high degree of involvement in our day-to-day operations. |
● | there is no effective separation of duties, which includes monitoring controls, between the members of management. |
|
SPARTA COMMERCIAL SERVICES, INC.
|
|
|
Date: September 19, 2016
|
By: /s/ Anthony L. Havens
|
|
Anthony L. Havens, Chief Executive Officer,
|
|
Principal financial and accounting officer
|
|
|
1 Year Sparta Commercial Services (PK) Chart |
1 Month Sparta Commercial Services (PK) Chart |
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