Sparta Commercial Services, Inc. (SRCO) reported another loss-making quarter in its Form 10‑Q for the three months ended July 31, 2026, and continues to face severe financial strain. Revenue was $47,698, down 51% from $96,688 a year earlier, mainly from lower merchant financing fees, while operating expenses rose 35% to $496,870 driven by higher compensation and a $105,900 credit loss provision.
Loss from operations was $456,073 and net loss attributable to common stockholders was $499,518, similar to the prior year’s $482,329 loss. Cash used in operating activities improved to $233,393 from $346,671, but period‑end cash was only $54,738. Total assets were $93,572 against total liabilities of $12,685,452, leaving a stockholders’ deficit of $13,589,446 and a working capital deficit of $11,842,251.
The company carries $756,109 of derivative liabilities tied to deeply discounted convertible notes and has an accumulated deficit of $72,289,995. Management and the auditors highlight substantial doubt about Sparta’s ability to continue as a going concern. Sparta estimates it needs about $1,000,000 of additional capital over the next 12 months, continues to rely on equity issuances and convertible debt, and discloses multiple material weaknesses in internal control, including lack of an audit committee and poor segregation of duties.
Sparta Commercial Services, Inc. (SRCO) is a Nevada-based holding company with four main lines of business: FinTech trade finance (Agoge/EZBroker360 and iGoCards), municipal equipment leasing, e-commerce/mobile app and vehicle history report services, and nutritional supplements via New World Health Brands.
The company reports a long history of losses, with an accumulated deficit of $71,790,476, negative working capital of $11,553,887, and total liabilities of $12,459,845 as of April 30, 2026. Management states it must raise approximately $1 million over the next twelve months to support operations, and auditors express substantial doubt about its ability to continue as a going concern. As of August 13, 2026, there were 54,636,926 shares of common stock outstanding, with additional dilution risk from roughly 42 million potential shares tied to convertible instruments.
Sparta Commercial Services, Inc. reported another quarterly loss while modestly growing revenue. For the three months ended January 31, 2026, revenue rose to $92,162 from $78,998, driven mainly by higher merchant financing fees, but the net loss attributable to common stockholders was $414,058, or $0.01 per share.
For the nine months, revenue increased to $288,157 from $168,357, while the net loss narrowed to $1,423,052 from $1,791,717. The balance sheet remains highly leveraged, with total assets of $932,602 against total liabilities of $12,138,652, including $9,099,205 in notes payable and $967,564 in derivative liabilities. Stockholders’ deficit was $11,206,052 and the accumulated deficit reached $70,342,036.
Management discloses a working capital deficit of $10,467,055, a cash balance of only $70,116, and substantial doubt about the company’s ability to continue as a going concern without additional financing. During the nine months, Sparta raised $215,000 from equity sales and $492,000 from notes, and continued issuing shares for services, debt conversions and penalties, significantly increasing its share count. Internal controls over financial reporting are considered ineffective, with material weaknesses including lack of an audit committee and limited segregation of duties.
Sparta Commercial Services director reports open-market share purchase. Director Jeffrey Buchanan Bean bought 73,000 shares of Sparta Commercial Services common stock on January 16, 2026 at a price of $0.09 per share, in a transaction coded "P" for a purchase. Following this transaction, he directly beneficially owned 1,914,733 shares of the company’s common stock.
Sparta Commercial Services, Inc. reported granting a series of unregistered stock options as equity compensation to its leadership, directors, and employees. On January 16, 2026, the company granted its CEO and Vice President of Operations five-year options covering an aggregate of 3,600,000 shares of common stock at an exercise price of $0.14 per share, vesting in three equal annual tranches over three years.
On the same date, each of the two independent directors received five-year options for 350,000 shares at $0.14 per share, also vesting over three years, as compensation for past board service. Employees received additional five-year non-qualified options covering an aggregate of 260,000 shares on the same terms. The exercise price was set at 110% of the closing price of the common stock over the thirty consecutive trading days immediately before the grant date, subject to a minimum trading volume condition.
The company treated these grants as exempt from registration under Section 4(a)(2) of the Securities Act, with recipients representing investment intent and having access to company information through their relationships with Sparta.
Sparta Commercial Services director receives stock options grant. Director Jeffrey Buchanan Bean was awarded a non-qualified stock option for 350,000 shares of Sparta Commercial Services common stock at an exercise price of $0.14 per share on 01/16/2026. Following this grant, he holds 1,841,733 derivative securities related to the company on a direct ownership basis.
The option has a staged vesting schedule: 116,667 options vest immediately, another 116,667 options vest on 01/16/2027, and the remaining 116,666 options vest on 01/16/2028. The option becomes exercisable starting 01/16/2026 and expires on 01/16/2031, giving the director a long-dated incentive tied to the company’s equity performance.
Sparta Commercial Services, Inc. director granted stock options
Sparta Commercial Services, Inc. director Kristian Srb reported receiving a grant of non-qualified stock options on 01/16/2026. The grant covers 350,000 options with an exercise price of $0.14 per share, exercisable into common stock and expiring on 01/16/2031.
According to the vesting schedule, 116,667 options vest immediately, another 116,667 vest on 01/16/2027, and the remaining 116,666 vest on 01/16/2028. Following this award, Srb beneficially owns 2,190,932 derivative securities related to the issuer, held in direct ownership.