UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A

            [X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934

                    For the fiscal year ended April 30, 2005

            |_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934

            For the transition period from __________ to __________.

                         Commission file number: 0-9483

                        SPARTA COMMERCIAL SERVICES, INC.
             (Exact name of registrant as specified in its charter)

             NEVADA                                         30-0298178
  (State or other jurisdiction                            (IRS Employer
of incorporation or organization)                       Identification No.)

                 462 Seventh Ave, 20th Floor, New York, NY 10018
               (Address of principal executive offices) (Zip Code)

      Issuer's telephone number: (212) 239-2666

      Securities registered under Section 12(b) of the Exchange Act: None

      Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, par value $0.001
                                (Title of class)

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. |_|

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 |_|

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. |_|

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes | | No |X|

The issuer's revenues for its most recent fiscal year: $65,833.

The aggregate market value of voting and non-voting stock of the issuer held by
non-affiliates on July 11, 2005 was $8,055758.

As of July 11, 2005, we had 86,293,879 shares of common stock issued and
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

None.

Transitional Small Business Disclosure Format (check one): YES |_| NO |X|

<PAGE>

                                INTRODUCTORY NOTE

This Amendment No. 1 (the "Amendment") to our Annual Report on Form 10-KSB for
the year ended April 30, 2005 filed on July 25, 2005 (the "Annual Report")
amends the following items set forth in our Annual Report:

      Part II - Item 6. Management's Discussion and Analysis and Plan of
                Operation
      Part II - Item 7.  Financial Statements
      Part II - Item 8A.  Controls and Procedures
      Part III - Item 13. Exhibits

The staff of the Division of Corporation Finance of the Securities and Exchange
Commission (the "Commission") issued comments on September 28, 2005 to the
Company in connection with its review of the Company's Annual Report.

Based on these comments and discussions with the Commission, and after
consultation with the Company's independent registered public accounting firm,
the Company is filing this Amendment to present the payment for an option to
acquire certain assets as a separate line item on our Consolidated Statement of
Losses. In this regard, the Company has also expanded the comparison of the year
ended April 30, 2005 to the year ended April 30, 2004 in the Management's
Discussion and Analysis and Plan of Operation.

                        SPARTA COMMERCIAL SERVICES, INC.

                                TABLE OF CONTENTS

                                                                            Page

PART I

Item 1.   Description of Business                                             3
Item 2.   Description of Property                                            12
Item 3.   Legal Proceedings                                                  12
Item 4.   Submission of Matters to a Vote of Security Holders                12

PART II

Item 5.   Market for Common Equity and Related Stockholder Matters           13
Item 6.   Management's Discussion and Analysis and Plan of Operation         16
Item 7.   Financial Statements                                               24
Item 8.   Changes In and Disagreements With Accountants on Accounting and
            Financial Disclosure                                             48
Item 8A.  Controls and Procedures.                                           49
Item 8B.  Other Information                                                  50

PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance With Section 16(a) of the Exchange Act                  51
Item 10.  Executive Compensation                                             54
Item 11.  Security Ownership of Certain Beneficial Owners and Management     57
Item 12.  Certain Relationships and Related Transactions                     59
Item 13.  Exhibits                                                           60
Item 14.  Principal Accountant Fees and Services                             61


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<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL OVERVIEW

Sparta Commercial Services, Inc. ("Sparta" "we," "us," or the "Company") is a
Nevada corporation.

We only recently began our current business operations. Prior to February 27,
2004, we did not conduct any substantive operations. On February 27, 2004, we
acquired the business of Sparta Commercial Services, LLC.

Sparta Commercial Services, LLC is a Delaware limited liability company formed
on October 1, 2001. Sparta's business plan is to provide dealers of powersports
vehicles with an alternative source of financing for new and used motorcycles.
Since inception, Sparta developed proprietary web-based solutions for back-end
processing, financing and leasing of new and used powersports vehicles.
Currently, Sparta offers a private label program, lease and retail installment
sales finance contracts to numerous dealerships in powersports industry.
Sparta's business model focuses on select motorcycles (i.e., 600cc and higher),
4-stroke all-terrain vehicles (ATVs), and select scooters. Sparta's management
believes that the emphasis on these products eliminates a number of vehicles
that often under-perform due to the demographics of the purchaser and/or
excessive depreciation in the market value of certain vehicle models.

Our offices are located at 462 Seventh Avenue, 20th Floor, New York, NY 10018,
telephone number: (212) 239-2666. We maintain a website at:
www.spartacommercial.com.

OUR ORGANIZATION HISTORY

Our company was incorporated under the laws of the State of Nevada on May 13,
1980 under the name Tomahawk Oil and Minerals, Inc. and engaged in oil and gas
exploration activities.

On November 6, 1983, the company changed its corporate name to Tomahawk
Industries, Inc.

In 1984, Tomahawk entered the business of installing energy recovery and energy
saving devices.

In July 1987, Tomahawk filed for protection under Chapter 11 of the U. S.
Bankruptcy Code and operated as a debtor-in-possession. The petition for
bankruptcy protection was denied. Tomahawk ceased all business operations,
liquidated its former subsidiary and abandoned all net assets remaining by April
30, 1988. Tomahawk effectively had no operations, assets or liabilities since
its fiscal year ended April 30, 1988 through February 27, 2004.

On February 27, 2004, pursuant to an Agreement and Plan of Reorganization, we
acquired Sparta Commercial Services, LLC, in a transaction viewed as a reverse
acquisition. Under the terms of the agreement, we acquired all of the
outstanding membership interests in Sparta Commercial Services, LLC in exchange
for the agreement to issue such number of shares of our common stock as would
represent approximately 91.75% percent of our outstanding shares. Sparta
Commercial Services, LLC also entered into a consulting agreement for business
and financial services with Glenn A. Little, the former principal of Tomahawk.
The agreement is for a term of one year. Mr. Little received a fee of $100,000
pursuant to the consulting agreement.

As a result of the acquisition, a change in control occurred in the ownership
and management of Tomahawk. In connection with the acquisition, the managing
member of Sparta, Anthony Havens, was appointed President and Chairman of
Tomahawk. The former directors and officers of Tomahawk resigned as of the
acquisition date.

On August 25, 2004, we changed our corporate name from "Tomahawk Industries,
Inc." to "Sparta Commercial Services, Inc."

On September 13, 2004, we filed a Certificate of Amendment to the Articles of
Incorporation with the Secretary of State of the State of Nevada increasing the
authorized capital from 200,000,000 to 700,000,000 shares, of which 690,000,000
shares are common stock, par value $0.001 and 10,000,000 shares are preferred
stock, par value $0.001.


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<PAGE>

Effective December 27, 2004, pursuant to a Certificate of Amendment to the
Articles of Incorporation with the Secretary of State of the State of Nevada,
the Company's authorized capital was reduced from 700,000,000 shares, of which
690,000,000 shares were common stock and 10,000,000 shares are preferred stock,
to 350,000,000 shares, of which 340,000,000 shares are common stock and
10,000,000 shares are preferred stock. In connection with the decrease in
authorized capital, the Company effected a 1:200 reverse stock split, with
fractional shares paid in cash, followed immediately by a 25:1 forward stock
split.

On December 28, 2004, we filed a Certificate of Designation with the Secretary
of State of the State of Nevada in connection with its 10,000,000 shares are
preferred stock, designating 35,850 shares as Series A Redeemable Preferred
Stock.

OUR BUSINESS

We seek to become a specialized consumer finance company engaged primarily in
the origination of lease and retail installment sales contracts of new and used
motorcycles, scooters, and ATVs. We believe that the market for consumer finance
programs for motorcycles and ATVs is underserved by traditional lenders.

We seek to provide both indirect loans and lease financing for motorcycles and
ATVs. We intend to be an originator and indirect lender for retail installment
loan and lease financing for the purchase or lease of new and used motorcycles,
scooters, and ATVs.

Our principal business is to provide financing programs, primarily to purchasers
of new and used motorcycles, scooters, and ATVs who meet our credit criteria.

We are developing relationships with vehicle dealers and manufacturers to
provide our financing programs to their customers. We also seek to provide
motorcycle, scooter, and all-terrain vehicle manufacturers a private label
version of our financing programs for their customers.

BUSINESS OVERVIEW

Sparta's business model has been designed to generate revenue from several
sources:

      o     Retail installment sales contracts and leases;
      o     Private label programs for manufacturers and distributors;
      o     Ancillary products and services, such as private label gap coverage
            and private label service contracts; and
      o     Remarketing of off-lease and repossessed vehicles.

Sparta's management believes that by offering dealers (and their customers) the
option of either financing or leasing, Sparta will be able to capture a greater
share of the dealer's business. Additionally, by offering both alternatives,
once profitability is achieved, Sparta believes that it will be in a position to
achieve greater cash-flow than it could by offering only one of these
alternatives because depreciation generated by Sparta's leasing activities will
reduce income tax due on income resulting from Sparta's retail installment sales
contracts.

      RETAIL INSTALLMENT SALES CONTRACTS AND LEASES

Retail Installment Sales - Sparta intends to purchase retail installment sales
contracts from both franchised and independent powersports dealers who qualify
as Sparta Authorized Dealers and/or as Private Label Authorized Dealers under
Sparta's Private Label Programs. Sparta has developed policies and procedures
for credit evaluation, collections, insurance follow up, and asset recovery.
Sparta imposes strict credit criteria to determine which retail installment
sales contract applications to approve. This credit criterion has been developed
to be in compliance with the credit criterion required by our lenders. The
dealers understand that if they consummate a credit transaction with a buyer on
whose application we have given them a conditional approval that Sparta will
purchase that contract if it is in full compliance with all terms and conditions
of that approval and contained in our dealer agreement.


                                       4
<PAGE>

To insure that Sparta's Credit Evaluation Process and Collateral Guidelines are
consistently applied and that the credit/underwriting decision process provides
rapid decisioning to Sparta Authorized Dealers and the Private Label Dealers,
Sparta has developed a point of sale credit application and contract decisioning
system. This system is named "iPLUS" and is structured as an Application Service
Provider ("ASP") and has the capability of providing the dealer with conditional
approvals without human involvement seven days a week, twenty-four hours a day.
This technology provides quick, consistent credit decisions for our dealer
network and reduces the number of credit analysts required, thereby, reducing
Sparta's personnel expense. Depending on Sparta's arrangement with its lending
sources, in the case of consumer finance contracts, Sparta may finance its
purchase of the contracts by borrowing from a lending source and pledging the
retail finance contracts as collateral for the loan.

All of the installment sale contracts will be secured by qualified, titled
motorcycles with 600+cc and higher engines, 4-stroke all-terrain vehicles
(ATVs), or select scooters. Customer financing needs are projected to range from
approximately $2,000 to $35,000. Contract terms of 24 to 60 months will be
offered.

Leases - Sparta intends to purchase qualified vehicles for lease to customers of
its Sparta Authorized Dealers and/or Private Label Dealers. While the steps in
the leasing process are almost identical to those in the installment sales
contract process, the major difference is that when a lease "approval" is
transmitted to a dealer, the "approval" describes the terms and conditions under
which Sparta will purchase a specific vehicle from the dealer and lease it to
the applicant. Unlike an installment service contract which finances a
customer's purchase of a vehicle owned by the customer, the lease contract
contains the payment terms and conditions under which Sparta will allow the
customer to use (lease) the vehicle, which is owned by Sparta, and also contains
a vehicle purchase price option which provides the customer with the right to
purchase the vehicle at the lease-end. Depending on Sparta's arrangement with
its lending sources, in the case of leases, Sparta may finance its purchase of
leased vehicles by borrowing from a lending source and assigning or pledging the
lease and leased vehicle as collateral for the loan. Lease terms range from 24
to 60 months, although most lease terms are either 36 or 60 months. Leases
generally have lower monthly payments than retail installment sales contracts
because they finance only part of the vehicle with the balance being financed by
the lessor.

            PRIVATE LABEL PROGRAMS FOR MANUFACTURERS AND DISTRIBUTORS

Under "private label" financing agreements with the U.S. distributors of major
manufacturers of scooters and ATVs, Sparta allows the manufacturer to put its
name on Sparta's finance and lease products, and offer such financing
arrangements to its customers. Sparta owns the finance business under these
"private label" programs, and derives revenues from sales of the distributor's
product line pursuant to individual finance arrangements with the dealer's
customers. The private label program also expands Sparta's dealer base by the
number of dealerships in the distributor's chain, thereby generating additional
opportunities to sell Sparta's own financial services to these dealers for their
customers interested in non-"private label" covered vehicles.

      REVENUE FROM ANCILLARY PRODUCTS AND SERVICES

Sparta expects to receive additional revenue related to servicing its portfolio,
such as lease acquisition fees, late payment fees, vehicle disposition fees at
lease-end, early termination fees, charges for excess wear-and-tear on leased
vehicles, and from ancillary products and services.

Sparta is being positioned as a full service organization providing products and
services to its dealers that are costly to obtain on an individual dealer basis.
Sparta plans to offer the following ancillary products and services:

GAP COVERAGE - Sparta markets its private label gap coverage on a fee basis to
customers through dealers. This coverage protects the customer should the
vehicle be stolen or wrecked and the holder's primary insurance is not adequate
to cover their payoff to the creditor that holds the lien on the vehicle.

SERVICE CONTRACTS - Sparta offers dealers private label service contract plans
for purchased and leased vehicles on a fee basis. Service contracts will be
offered to anyone who finances a vehicle, whether financed through Sparta or
another source. For a one time, up front fee to the owner or lessee of the
vehicle, the service contracts, administered by Interstate National Dealer
Services, Inc. ("Interstate"), provide extended service coverage (repair or
replacement from 12 to 60 months depending on the contract) for specified
engine, drive train and electrical components of the vehicle. The actual service
is performed by the originating dealer, which must be pre-approved by Interstate
as an "authorized dealer."


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<PAGE>

Sparta intends to continue to evaluate additional ancillary products and
services and believes that it can create products and services to meet dealers'
needs, creating company brand loyalty in the dealer community and generating
other revenue streams.

      REVENUE FROM REMARKETING OFF-LEASE AND REPOSSESSED VEHICLES

RE-LEASING TO ORIGINAL LESSEES - Management intends to commence its re-leasing
efforts as early as eleven months prior to the end of the scheduled lease term.
Lessees' options are expected to include: extending the lease, returning the
vehicle to Sparta or buying the vehicle at the buy-out option price established
at the beginning of the lease. Sparta's policy requires lessees who wish to
return their vehicles, return the vehicle to the originating dealer. If the
lessee has moved, then the vehicle should be returned to the Sparta Authorized
Dealer closest to the lessee. If this is impracticable, then Sparta will arrange
to have the vehicle transported at the lessee's expense. Sparta plans to offer a
64-month Purchase Plus lease program--a 60-month lease with a low residual value
(usually 11% of original price) that the lessee can typically pay off in four or
five additional monthly payments at the end of the 60-month lease term.

RETURNED LEASED VEHICLES - When a vehicle is returned to a Sparta Authorized
Dealer at the end of the scheduled lease term, the dealer will inspect it for
excessive wear and mileage over maximum levels specified under the lease
agreement and prepare it for resale/lease. All Sparta Authorized Dealers and all
Sparta Private Label Dealers are contractually bound to charge no more than cost
plus ten-percent for repairs and to provide free storage for all consignment
vehicles. Thereafter, Sparta plans to consign the vehicle to the originating
dealer for sale or re-lease to a new party. Should the dealer decline to take
the vehicle on consignment, it will be electronically marketed on the Classified
Pages of the Sparta web site. Sparta believes the market for used vehicles is
significant, and the opportunity to remarket the same vehicle numerous times is
a key selling point with prospective dealerships. Sparta believes that using its
dealer network in such a manner will result in a better overall economic return
on its portfolio as well as strengthen dealer relationships.

REPOSSESSED VEHICLES - All repossessed vehicles are similarly returned to the
originating Sparta Authorized Dealer to be reconditioned (if needed) for
consignment sale or re-lease in the same manner and conditions as returned
vehicles.

SECOND CHANCE EXPRESS - Sparta allows its Authorized Dealers to offer its
inventory of returned or repossessed vehicles not only to customers with
approved credit applications but, also to customers with less than prime credit.
Applicants with low credit scores are evaluated under Sparta's Second Chance
Express Program. This unique finance/lease product is designed to offer a
financing program tailored to this non-prime customer. The program allows Sparta
to serve those customers who can offset their credit risk with higher down
payments. A key benefit of this program to Sparta is that the minimum
down-payment requirement is 20% in order to bring the amount financed in line
with the current wholesale value of the vehicle. Under the Second Chance Express
Program, Sparta pays its dealers a commission on any Sparta inventory vehicle,
held on consignment on their "floor" or offered on the Sparta Classified Web
Page, for which they arrange a sale or finance.

CREDIT AND COLLECTIONS

      POLICIES AND PROCEDURES

Sparta has developed policies and procedures for credit evaluation, collections,
insurance follow up, and asset recovery. Sparta imposes strict credit criteria
to determine which retail installment sales contracts and lease applications are
approved.

      CREDIT EVALUATION PROCESS AND COLLATERAL GUIDELINES

To insure that Sparta's Credit Evaluation Process and Collateral Guidelines are
consistently applied and that the credit/underwriting decision process provides
rapid decisioning to Sparta Authorized Dealers and the Private Label Dealers,
Sparta has worked closely with Teledata Communications, Inc. ("TCI"), a leading
provider of interactive credit accessing and decisioning solutions, to develop
the iPLUS point of sale credit application and contract decisioning system.


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<PAGE>

            IPLUS (INTERNETPURCHASING LEASING UNDERWRITING SERVICING)

Sparta's retail installment sales contract and leasing programs are delivered
through a proprietary, web-based, credit application processing system. This
system is named iPLUS" and is structured as an Application Service Provider
("ASP") and has the capability of providing the dealer with conditional
approvals without human involvement seven days a week, twenty-four hours a day.
This system also provides the powersports dealer with system capabilities
comparable to those of new car franchises. Sparta believes iPLUS will provide
the Sparta Authorized Dealers and Private Label Dealers with a competitive
advantage and will increase Sparta's ability to garner a larger share of the
dealer's business. Although we intend to add additional features, iPLUS is
currently being utilized by us.

      Major features of iPLUS include:

      o     100% WEB Browser Based (www.spartacommercial.com)
      o     User friendly system
      o     No costly software required by the users
      o     Operates on any dial-up connection as slow as 28.8
      o     Requires Internet Explorer 5.5 or above, Adobe Acrobat Reader 5.0 or
            above, both available at no charge on the Internet
      o     Integrated scorecard and decision engine
      o     Integrated credit bureau retrieval and review (can access any of the
            3 major bureaus)
      o     Once application is submitted; decisions in seconds/7 Days a Week
            /24 Hours a Day
      o     Easy to complete customer application
      o     Dealer application management
      o     Dealer Desking Tool - Profit Manager (Assists dealer in structuring
            any approved application.)
      o     Prints approved customer contract and contract package
      o     Captures information in electronic format
      o     Complete underwriting documentation and control system
      o     Dealer communication
      o     Allows the dealer to track the entire decisioning, underwriting, and
            funding process in real time.

Additionally, this technology provides quick, consistent credit decisions for
our dealer network and reduces the number of credit analysts required, thereby,
reducing Sparta's personnel expense.

Sparta has established program guidelines that are an integral function of the
iPLUS decision process. These program guidelines establish and clarify credit
criteria such as credit tiers, maximum amount financed, term and rate, dealer
rate participation, deal structure, buyer profile, credit bureau parameters,
budget parameters, and eligible collateral, including maximum loan-to-value
ratios for each of its retail installment sales contracts and lease contracts,
depending on the applicant's credit rating and stability. Sparta has developed
its own credit rating system by using an empirical score card and then assigning
its own rating based on Sparta's experience. This rating is used as the basis to
determine the terms and conditions under which an applicant is approved or
declined.

Sparta plans to conduct both applicant credit risk and asset evaluation before
approving financing. Sparta's policy is that it will not finance more than 100%
of a vehicle's retail value, but Sparta may lend an additional 10% above retail
value to cover add-ons, extended warranty and other costs. Should the customer
seek financing above this threshold, Sparta intends to ask for a down payment
from the borrower or lessee to close the gap between selling price and retail
value. The size of the down payment will be a function of the applicant's credit
rating, stability, budget, and the value of the underlying asset.

      COLLECTION PROCEDURES

Approving retail installment sales contracts and leases that comply with the
policies and procedures established by Sparta is just the first step. A
principal factor in the success of Sparta's business model is its ability to
track contract and lease performance.


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<PAGE>

Advanced Lease Systems, Inc. (ALS) provides the software Sparta uses to manage
its assets, customer base, collections, insurance, and accounting systems. Using
a variety of basic and customized reports generated by ALS, Sparta monitors its
customers' compliance with their obligations under retail installment sales
contracts or lease contracts. These reports are accessed on a real-time basis by
employees of Sparta and are distributed to management personnel for review. The
reports include delinquency reports, collection tickler (promises) reports,
insurance status reports, termination reports, inventory reports, maturing
contract reports, etc.

Sparta requires continuous physical damage insurance on all financed vehicles
and continuous liability and physical damage insurance coverage on all leased
vehicles. In addition, Sparta is required to be listed as Additional Named
Insured and Loss Payee. Continuous insurance is critical, and Sparta intends to
quickly repossess a vehicle if coverage lapses. Lapsed or cancelled policies
will be covered by a "blanket" VSI insurance policy, which Sparta intends to
purchase. Any lapse in insurance coverage for any reason will lead to automatic
repossession of leased vehicles.

      USING DIVERSIFICATION TO REDUCE PORTFOLIO RISK

Management will reduce portfolio risk not only by carefully screening applicants
and monitoring covenant compliance, but also by diversifying its financing
activities across credit tiers and Sparta's list of motorcycle, ATV and scooter
models that it will finance or lease.

CREDIT TIERS - Sparta expects that it will maintain a portfolio dominated by A/B
credit applicants over C applicants in the ratio of at least 70/30. Management
anticipates that it will be able to rebalance its portfolio by training its
sales force to work closely with dealerships in their territories to help Sparta
maintain its conservative 70/30 target.

Sparta will also be able to manage this ratio by revising the variables in its
various programs (terms and conditions under which Sparta will lease vehicles or
purchase retail installment contracts), such as minimum income, debt ratios,
payment to income ratios, minimum down payment required, acquisition fees (paid
by dealer), discounts (paid by dealer), etc.

SPARTA APPROVED VEHICLE MODELS - Advance rates and other credit restrictions
will be in effect for certain models and years based on the relevant facts and
circumstances.

CERTAIN AGREEMENTS WITH  RELATED THIRD PARTIES

We entered into a license agreement, dated as of June 1, 2002, and as amended on
December 3, 2003, with American Motorcycle Leasing Corp. Under the agreement, we
have a non-exclusive, perpetual right to use American Motorcycle Leasing Corp.'s
proprietary operating systems related to consumer credit underwriting
procedures, vehicle and vehicle lease value evaluation methods, rental stream
collection and insurance tracking policies and procedures. The license fee
consisted of $300,000 and 330,433 membership interests of Sparta Commercial
Services, LLC, which were subsequently exchanged in connection with the reverse
acquisition of Sparta Commercial Services, LLC for 34,256,941 shares of common
stock of our company..

We entered into a services agreement, dated as of March 1, 2004, with American
Motorcycle Leasing Corp. For a period of three years, American Motorcycle
Leasing Corp. is to provide personnel, computer equipment and software, and
facilities, in connection with our credit and underwriting activities and our
use of the operating systems that we had licensed from American Motorcycle
Leasing Corp. In return for such services, we agreed to pay $100,000 by March 1,
2005, and for the time of the personnel utilized at their salary rate at
American Motorcycle Leasing Corp.

We entered into a purchase option agreement with American Motorcycle Leasing
Corp., an entity controlled by the Company's president and a significant
shareholder, on November 2, 2004 at a cost to Sparta Commercial Services of
$250,000. This agreement granted Sparta Commercial Services the right, for a two
year period, to purchase portions of a certain portfolio of equipment leases
that American Motorcycle Leasing Corp. owns. The portfolio is secured by a first
priority security interest in favor of Citibank, N.A. or its assigns. The cost
of $250,000 has been charged to operations in fiscal 2005. As of April 30, 2005,
payments against this obligation of $81,000 were made. In June, 2005, an
additional $20,000 was paid.


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<PAGE>

MARKET INFORMATION

As reported in the 2003 Annual Statistical Report of the Motorcycle Industry
Council, retail sales of new motorcycles have grown steadily from 1991 through
2003. North American registrations of new 600cc and higher motorcycles reached
495,400 in 2004. This represents a 7.1% increase over 2003. Registrations have
increased for 13 consecutive years. Retail sales of new and used motorcycles
reached $8.8 billion in 2002.

U.S. sales of new ATVs were estimated to be 900,000 units in 2004 with a market
value of $1.8 billion and scooter sales approached 60,000 in 2003 and are
growing at a 20% annual rate, as reported in All Terrain Vehicle Magazine in the
October 11, 2004 edition.

SALES AND MARKETING

Normally, vehicle finance programs are sold primarily at the dealer level,
rather than the consumer level. Sparta's strategy is to develop an in-house
direct sales force that will promote Sparta's products and services to qualified
dealers, train them, and provide them with point-of-sale marketing materials.
Sparta's vehicle financing programs are already gaining market acceptance as
evidenced by the four Private Label Contracts. This in-house direct sales force
will be comprised of a Marketing Group and a Dealer Support Group.

The Marketing Group will continue to work directly with the manufactures and
distributors to obtain additional Private Label affiliations and to monitor our
competition. The Private Label partners will assist us directly in training the
Private Label Dealers. This will be done at the manufacturers/distributors place
of business, at industry shows, or with a group of dealers in a common
geographic area.

As required we will add additional marketing representatives to our staff. These
marketing representatives will be assigned geographic territories. We currently
have two marketing representatives and expect to expand the number of marketing
representatives.

The Dealer Support Group will accept application packages from dealers that want
to be either or both Sparta Authorized Dealers or Private Label Dealers. They
will then notify the approved dealers by email that they have been approved and
provide them with the required information to process applications and print
contracts through iPlus, including a Dealer Sign Up packet. The Dealer Support
Group will be available to directly assist dealers by telephone, follow up with
dealers on conditional approvals to assist dealers in forwarding the funding
packages to us for purchase. This group will also accept all incoming calls from
dealers, answering their inquiry or directing them, if necessary, to the
appropriate department. We currently have two Dealer Support representatives and
expect to expand the number of Dealer Support representatives.

Sparta has built an interactive website (www.spartacommercial.com) for our
authorized dealers. iPLUS is accessed through this website by our dealers and
allows them to submit credit applications and receive on-line approvals or
declines based on current Sparta credit criteria. The Customer Management
section of iPLUS enables authorized dealers to track the status of all
applicants submitted by their dealership. The dealer is able to review pending,
approved, declined and active (funded) applications and contracts they have
submitted. This enables the dealer to easily review their business with Sparta
and gives Sparta the ability to easily monitor dealer activity at any point in
time. The Sparta Loan/Lease Calculator configures both retail installment sales
contract and lease payments, simultaneously and instantaneously, allowing
dealers to provide their customers with highly accurate payment schedules. In
addition, the website provides authorized dealers with access to a PowerPoint
presentation that will fully acquaint their staff with the various Sparta
financing products and how to sell them.

Authorized dealers are able to advertise both new and used vehicles in the
Classified Section of our website, at no cost to the dealer. Sparta plans to use
this feature of the website to remarket its own inventory (both repossessed and
returned end-of-term vehicles) throughout the country. Sparta's exclusive
"Second-Chance Express" program for customers with a poor or limited credit
history was created to help re-market the company's inventory. Incentives are in
place for authorized dealers who sell or lease either a Sparta inventory vehicle
at their dealership or one that is at another dealership in our network.


                                       9
<PAGE>

While Sparta does not market or sell directly to consumers, Sparta expects
consumers to visit the Sparta website. Sparta has provided a consumer oriented
PowerPoint presentation for their review. Additionally, visiting consumers will
be able to view Sparta advertising, news and find general information about
vehicle makes and models, road rallies, and other areas of vehicle interest.
They will also be able to utilize our Dealer Locator to find the nearest
authorized Sparta dealer in their neighborhood. Consumers will be able to view
the Classified Section of the website and any consumer inquiring about the
program will be directed to our nearest authorized dealer.

COMPETITION

The consumer finance industry is highly fragmented and highly competitive.
Broadly speaking, Sparta competes with commercial banks, savings & loans,
industrial thrift and credit unions, and a variety of local, regional and
national consumer finance companies. While there are numerous financial service
companies that provide consumer credit in the automobile markets, including
banks, other consumer finance companies, and finance companies owned by
automobile manufacturers and retailers, most financial service companies are
reluctant to lend to motorcyclists. Customers who approach these lending sources
to take out installment loans are often encouraged to pursue personal loans
instead.

There are few companies that provide nationwide dealer-based leasing options in
the motorcycle industry segment, and these tend to be private label factory
programs supporting their own brands. Because of their narrow focus (such as
requiring that the equipment be covered by the brand's warranty), these
companies have met with limited success.

Independent consumer financial services companies and large commercial banks
that participated in this market have withdrawn substantially from the
motorcycle loan niche over the past two years or have toughened their
underwriting criteria. Sparta believes that those companies may have suffered as
a result of compromising their underwriting criteria for the sake of volume. In
addition, management believes that our competitors' practice of financing all
makes and models of a particular manufacturer results in lower overall portfolio
performance because of the poor demographics associated with some of those
product lines. The marketplace also includes small competitors such as local
credit unions, local banks and a few regional players.

Sparta will compete for customers with commercial banks, savings and loans,
credit unions, consumer financing companies, and manufacturers' finance
subsidiaries. Additionally, some powersports manufacturers such as
Harley-Davidson and BMW have subsidiaries that provide financing.

The more significant competitors of Sparta include: GE Retail Services, Capital
One, HSBC/Household Bank, Sheffield Financial/BB&T, Lending Tree, CIT Bank, AIG,
and Transamerica. To management's knowledge, none of these firms offer leases
for powersports vehicles.

The largest of these firms, GE Retail Services, markets both directly to dealers
in Powersports market and through co-branded private label programs. GE recently
has co-brranded with Yamaha, Moto Guzzi, Aprillia Brands and other national
manufacturers and distributors of Powersports and recreational products such as
Coachmen Industries. GE also offers dealer and distributor floor plan financing
and private label credit cards.

Capital One markets a product for Capital One Bank, offering consumer direct and
dealer indirect consumer contracts to the powersports industry. They offer
smaller dealers the ability to have customers apply via the web site affiliate
program and larger dealers can go direct to Capital One finance. Capital One
recently announced the purchase of Onyx Finance and truly entered the vehicle
financing arena with the purchase of Peoples First Finance. Typical terms range
from 30 to 60 months with a minimum of individuals approved for a product named
"The Blank Check". Capital One Auto Finance, America's largest online vehicle
lender, provides vehicle loans to customers directly via the Internet, as well
as through a nationwide dealership network.

While some of Sparta's larger competitors have vast sources of capital and may
be able to offer lower interest rates due to lower borrowing costs, Sparta
believes that the combination of management's experience, expedient service,
availability of the lease option and iPLUS give Sparta an advantage over its
competitors.


                                       10
<PAGE>

REGULATION

Our planned financing operations are subject to regulation, supervision and
licensing under various federal, state and local statutes and ordinances.
Additionally, the procedures that we must follow in connection with the
repossession of vehicles securing contracts are regulated by each of the states
in which we plan to do business. Accordingly, the laws of such states, as well
as applicable federal law, govern our operations. Compliance with existing laws
and regulations has not had a material adverse affect on our operations to date.
Our management believes that we maintain all requisite licenses and permits and
are in material compliance with all applicable local, state and federal laws and
regulations. We will periodically review our office practices in an effort to
ensure such compliance.

The following constitute certain of the federal, state and local statutes and
ordinances with which we must comply:

      o     Fair Debt Collection Act. The Fair Debt Collection Act and
            applicable state law counterparts prohibit us from contacting
            customers during certain times and at certain places, from using
            certain threatening practices and from making false implications
            when attempting to collect a debt.

      o     Truth in Lending Act. The Truth in Lending Act requires us and the
            dealers we do business with to make certain disclosures to
            customers, including the terms of repayment, the total finance
            charge and the annual percentage rate charged on each Contract or
            direct loan.

      o     Consumer Leasing Act. The Consumer Leasing Act applies to any lease
            of consumer goods for more than four months. The law requires the
            seller to disclose information such as the amount of initial
            payment, number of monthly payments, total amount for fees,
            penalties for default, and other information before a lease is
            signed.

      o     The Consumer Credit Protection Act of 1968. The Act required
            creditors to state the cost of borrowing in a common language so
            that the consumer could figure out what the charges are, compare
            costs, and shop for the best credit deal.

      o     Equal Credit Opportunity Act. The Equal Credit Opportunity Act
            prohibits creditors from discriminating against loan applicants on
            the basis of race, color, sex, age or marital status. Pursuant to
            Regulation B promulgated under the Equal Credit Opportunity Act,
            creditors are required to make certain disclosures regarding
            consumer rights and advise consumers whose credit applications are
            not approved of the reasons for the rejection.

      o     Fair Credit Reporting Act. The Fair Credit Reporting Act requires us
            to provide certain information to consumers whose credit
            applications are not approved on the basis of a report obtained from
            a consumer reporting agency.

      o     Gramm-Leach-Bliley Act. The Gramm-Leach-Bliley Act requires us to
            maintain privacy with respect to certain consumer data in our
            possession and to periodically communicate with consumers on privacy
            matters.

      o     Soldiers' and Sailors' Civil Relief Act. The Soldiers' and Sailor's
            Civil Relief Act requires us to reduce the interest rate charged on
            each loan to customers who have subsequently joined, enlisted, been
            inducted or called to active military duty.

      o     Electronic Funds Transfer Act. The Electronic Funds Transfer Act
            prohibits us from requiring our customers to repay a loan or other
            credit by electronic funds transfer ("EFT"), except in limited
            situations that do not apply to us. We are also required to provide
            certain documentation to our customers when an EFT is initiated and
            to provide certain notifications to our customers with regard to
            preauthorized payments.


                                       11
<PAGE>

      o     Telephone Consumer Protection Act. The Telephone Consumer Protection
            Act prohibits telephone solicitation calls to a customer's home
            before 8 a.m. or after 9 p.m. In addition, if we make a telephone
            solicitation call to a customer's home, the representative making
            the call must provide his or her name, our name, and a telephone
            number or address at which our representative may be contacted. The
            Telephone Consumer Protection Act also requires that we maintain a
            record of any requests by customers not to receive future telephone
            solicitations, which must be maintained for five years.

      o     Bankruptcy. Federal bankruptcy and related state laws may interfere
            with or affect our ability to recover collateral or enforce a
            deficiency judgment.

EMPLOYEES

We currently have nine employees.

ITEM 2. DESCRIPTION OF PROPERTY

We presently maintain our executive offices at 462 Seventh Avenue, 20th Floor,
New York, NY 10018, pursuant to a lease expiring on November 30, 2007. The
premises contain approximately 7,000 square feet. The annual rate is $163,200
for calendar year 2005, $167,280 (annualized) for the first six months of
calendar year 2006, $174,080 (annualized) for the second six months of calendar
year 2006, and $178,432 for the calendar year 2007. We believe that our present
facilities are suitable for our present needs. Our offices are adequately
covered by insurance for claims arising out of such occupancies.

ITEM 3. LEGAL PROCEEDINGS

As at April 30, 2005, we are not a party to any material pending legal
proceeding.

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

Not applicable.


                                       12
<PAGE>

                                     PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

Our common stock is currently quoted on the OTC Bulletin Board under the symbol
"SRCO". Prior to December 27, 2004, the stock symbol was SRTA. Prior to August
30, 2004, the stock symbol was TMHK.

In 2001, we filed a request for clearance of quotations on the OTC Bulletin
Board under SEC Rule 15c2-11, Subsection (a)(5) with NASD Regulation Inc. A
Clearance Letter was issued in April 2001. The first posted trade was conducted
on May 3, 2001, and, historically, there has been very low volume of trading of
our common stock.

The quoted high and low closing market prices of our common stock on the OTC
Bulletin Board, for the periods indicated, are presented in the table below.
Prices prior to February 27, 2004 reflects prices for our former business, which
was essentially a public shell vehicle. Our business changed on February 27,
2004 when we acquired Sparta Commercial Services, LLC.

<TABLE>
<CAPTION>
                                                              High                Low
                                                              ----                ---
<S>                                                           <C>      <C>        <C>       <C>
Fiscal Year 2004 (May 1, 2003 - April 30, 2004) *
      First quarter (May 1, 2003 - July 31, 2003)                      $0.01                $0.01
      Second quarter (August 1, 2003 - October 31, 2003)      $0.05               $0.01
      Third quarter (November 1, 2003 - January 31, 2004)     $0.03               $0.017
      Fourth quarter (February 1, 2004 - April 30, 2004)      $0.20               $0.03

Fiscal Year 2005 (May 1, 2004 - April 30, 2005) *
      First quarter (May 1, 2004 - July 31, 2004)                      $1.60                $0.80
      Second quarter (August 1, 2004 - October 31, 2004)      $0.96               $0.48
      Third quarter (November 1, 2004 - January 31, 2005)     $0.96               $0.48
      Fourth quarter (February 1, 2005 - April 30, 2005)      $1.05               $0.45
</TABLE>

*     On December 27, 2004, the Company effected a net effective 25:200 common
      stock split. Fiscal year 2004 stock prices have not been adjusted to give
      effect for a net effective 25:200 stock split effected

HOLDERS

The approximate number of holders of record of our common stock as of April 30,
2005 was 2,978, excluding stockholders holding common stock under nominee
security position listings.

DIVIDENDS

We have never declared any cash dividends on our common stock. Future cash
dividends on the common stock, if any, will be at the discretion of our Board of
Directors and will depend on our future operations and earnings, capital
requirements and surplus, general financial condition, contractual restrictions,
and other factors that the Board of Directors may consider important. The Board
of Directors does not intend to declare or pay cash dividends in the foreseeable
future. It is the current policy to retain all earnings, if any, to support
future growth and expansion.

TRANSFER AGENT

The transfer agent for our common stock is Executive Registrar & Transfer Inc.


                                       13
<PAGE>

RECENT SALES OF UNREGISTERED SECURITIES

In December 2004, we commenced a private placement to raise up to $3,000,000
through the sale of up to 30 units of our securities at $100,000 per unit. Each
unit consists of (i) 1,000 shares of series A convertible, redeemable preferred
stock and (ii) warrants to purchase 320,513 shares of common stock, exercisable
for three years at $0.195 per share. The preferred stock has a stated value of
$100 per share, carries a 6% annual cumulative dividend, payable semi-annually
in arrears, and is convertible into shares of common stock at the rate of one
preferred share into 641 shares of common stock. The private placement is being
conducted by a placement agent on a best efforts basis. The units are being
offered solely to accredited investors. The units offered have not been
registered under the Securities Act and may not be offered or sold in the United
States absent registration or an applicable exemption from registration
requirements. We agreed to file a registration statement, at our expense, for
the resale of common stock underlying the units within 90 days of the final
closing of the private placement. The placement agent is entitled to 10% of the
cash proceeds from the private placement and reimbursement for expenses, and
warrants to purchase such number of shares of common stock, exercisable for five
years at $0.172 per share from the date of issuance, as equals 10% of the number
of shares of common stock underlying the preferred stock sold. In transactions
with accredited investors deemed exempt from registration pursuant to Section
4(2) of the Securities Act, from December 2004 through April 30, 2005, we sold
12.25 units for proceeds of $1,225,000, and issued 785,257 warrants to the
placement agent. A subscription for 0.05 units was subsequently rescinded.
Through July, 2005, we sold an aggregate of 29.95 units for proceeds of
$2,995,000. We used the proceeds for working capital purposes.

Between May and July 2004, we sold certain rights to seven accredited investors
for aggregate gross proceeds of $585,000 in transactions deemed exempt from
registration pursuant to Section 4(2) of the Securities Act. Pursuant to the
terms of the rights, in the event that we conduct a private placement
transaction in 2004 utilizing a designated registered broker-dealer as a
placement agent, the rights automatically convert into the securities sold in
such private placement at the private placement sale price. On January 1, 2005,
these rights were automatically converted into 5.85 units. Each unit consists of
(i) 1,000 shares of series A convertible, redeemable preferred stock and (ii)
warrants to purchase 320,513 shares of common stock, exercisable for three years
at $0.195 per share.

In October and November 2004, pursuant to loan agreements, we issued promissory
notes for the aggregate principal amount of $375,000. Pursuant to the loan
agreements, the notes carried interest at the rate of 10% per year, and we
agreed to grant 128,206 restricted shares of common stock to the note holders
for each $100,000 loaned. The notes were to mature in April 2005. In the event
of default on repayment of the promissory notes, as penalty, (i) the interest
rate on the unpaid principal shall be increased to a rate of 20% per annum
commencing from the date of default, (ii) the equity kicker shall be increases
to a rate of 192,308 restricted shares of common stock for each $100,000 loaned,
and (iii) the repayment after default of the promissory notes shall be
collateralized by a subordinated security interest in the Company's assets. The
security interest shall be subordinate to the rights of any lending institution,
any asset-based lending agreement, and any rights and preferences of any
subscribers in the private placement of units that commenced in December 2004.
Through April 29, 2005, we repaid notes with an aggregate principal amount of
$150,000 and accrued interest thereon, and issued 192,309 shares of common stock
to the note holders. In April 2005, the four note holders of the remaining
principal amount of $225,000 agreed to extend the maturity date of the loans
from April 30, 2005 to May 31, 2005. In consideration of the extension, the
interest rate on three notes were increased to the rate of 20% per year and the
shares of common stock issuable to certain of those note holders will be based
on 192,308 restricted shares of common stock for each $100,000 loaned. On or
about May 25, 2005 and May 27, 2005, the four note holders further agreed to
extend the maturity date of the loans, so that one note in the principal amount
of $50,000 was due June 15, 2005, and the three other notes in the aggregate
principal amount of $175,000 were due June 30, 2005. In June 2005, we repaid two
notes with the principal amount of $75,000 and issued 96,155 shares of common
stock to the note holders with 48076 shares yet to be issued. In June 2005, a
holder of a $50,000 note due June 30, 2005 agreed to extend the maturity date to
August 15, 2005, and another holder of a $100,000 note due June 30, 2005 agreed
to extend the maturity date to September 1, 2005.

In April 2005, in a transaction deemed exempt from registration pursuant to
Section 4(2) of the Securities Act, we issued warrants to purchase 200,000
shares of our common stock to Jaffoni & Collins Incorporated pursuant to a
consulting agreement for public relations services. The warrants are exercisable
for three years at $0.195 per share.


                                       14
<PAGE>

On August 2, 2004, pursuant to an employment agreement with Daniel J. Lanjewar,
our former Chief Financial Officer, we agreed to issue 568,175 shares of our
common stock in a transaction deemed exempt from registration pursuant to
Section 4(2) of the Securities Act. The grant of shares was subject to vesting
and subject to continued employment. On January 1, 2005, 113,635 shares vested,
and the reminder of the shares were to vest in equal portions on July 1, 2005,
July 1, 2006, July 1, 2007, and July 1, 2008, subject to proportionate
adjustment in the event of employment termination for any incomplete vesting
period. In April 2005, Mr. Lanjewar resigned as our Chief Financial Officer, and
was vested with an additional 113,637 shares of common stock, which is yet to be
issued

On April 29, 2005, pursuant to an option agreement with Richard Trotter, our
Chief Operating Officer, we agreed to issue options to purchase up to 875,000
shares of our common stock in a transaction deemed exempt from registration
pursuant to Section 4(2) of the Securities Act. Subject to vesting, the stock
options are exercisable for five years from the vesting date at $0.605 per
share. Twenty percent of the options vested on April 29, 2005, and the remaining
options are to vest in equal installments over the next four anniversary dates
of the agreement.

In July, 2005, we sold one accredited investor in a transaction deemed exempt
from registration pursuant to Section 4(2) of the Securities Act, for the sum of
$5,000, 50 shares of Series A convertible, redeemable preferred stock and
warrants to purchase 6,026 shares of common stock, exercisable for three years
at $.0195 per share. The preferred stock has a stated value of $100 per share,
carries a 6% annual cumulative dividend, payable semi annually in arrears, and
is convertible into shares of common stock at a rate of one preferred share into
641 shares of common stock. We used the proceeds for working capital purchases.


                                       15
<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

"FORWARD-LOOKING" INFORMATION

This report on Form 10-KSB contains certain "forward-looking statements" within
the meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
which represent our expectations and beliefs, including, but not limited to
statements concerning the Company's expected growth. The words "believe,"
"expect," "anticipate," "estimate," "project," and similar expressions identify
forward-looking statements, which speak only as of the date such statement was
made. These statements by their nature involve substantial risks and
uncertainties, certain of which are beyond our control, and actual results may
differ materially depending on a variety of important factors.

INTRODUCTORY STATEMENT

The following discussion and analysis should be read in conjunction with the
information set forth in the audited consolidated financial statements for the
years ended April 30, 2005 and April 30, 2004 and footnotes found in the
Company's Annual Report on Form 10-KSB.

Unless otherwise stated, the discussion and analysis refers to the business of
Sparta Commercial Services, Inc. and does not refer to the operations for our
former business which was essentially a non-operating shell company.

The year ended April 30, 2005 was a period of development, as we continue to
develop our products and market them to dealers and manufacturers.

MERGER AND CORPORATE RESTRUCTURE

Prior to February 27, 2004, we did not conduct any substantive operations. On
February 27, 2004, pursuant to an Agreement and Plan of Reorganization, we
acquired Sparta Commercial Services, LLC, in a transaction viewed as a reverse
acquisition. The purpose of the transaction was to try to create some value for
our shareholders. As an inactive publicly registered shell corporation with no
significant assets or operations, our business plan was to seek an acquisition
candidate. Sparta sought access to financing, as a publicly-held company. As a
result of the reverse acquisition, there was a change in control of our company.
In accordance with SFAS No. 141, Sparta Commercial Services LLC was the
acquiring entity. While the transaction is accounted for using the purchase
method of accounting, in substance the Agreement is a recapitalization of the
Company's capital structure and is recorded as a capital transaction rather than
a business combination under SFAS 141.

For accounting purposes, the Company has accounted for the transaction as a
reverse acquisition and Sparta Commercial Services LLC shall be the surviving
entity. The Company did not recognize goodwill or any intangible assets in
connection with the transaction and there were no adjustments to the Company's
historic carrying values of the assets and liabilities.

The accompanying financial statements present the historical financial
condition, results of operations and cash flows of Sparta Commercial Services
LLC prior to the acquisition.

Till January 31, 2005, Sparta was a development stage company. Efforts had been
principally devoted to developing business as an originator and indirect lender
for retail installment loan and lease financing for the purchase or lease of new
and used motorcycles (specifically 500cc and higher) and utility-oriented
4-stroke all terrain vehicles (ATVs).

To date, we have generated limited sales revenues, have incurred expenses and
have sustained losses. Consequently, our operations are subject to all the risks
inherent in the establishment of a new business enterprise. For the period from
October 1, 2001 (date of Sparta's inception) through April 30, 2005, we have
accumulated losses of $6,277,658.


                                       16
<PAGE>

The period from inception till January 31, 2005 was a developmental stage period
for us, setting up credit procedures, setting our arrangements with vehicle
distributors, obtaining personnel, seeking financing to support our
developmental efforts, and seeking credit facilities. In fiscal year 2005, we
have begun to obtain regulatory approval in several states, where required,
prior to commencing active operations. We are actively signing up dealers to
participate in our financing programs, including our private label financing
programs. We have signed up three manufacturers to our private label programs,
and are in negotiations with several other manufacturers who have indicated an
interest in a private label program. Presently, we do not have sufficient
operating capital to fulfill our planned business plans. We estimate that we
will need approximately $1,800,000 to conduct limited operations during the next
twelve months. The lack of capital has made it difficult to obtain a credit line
with a lending institution which we will need before commencing full active
operations. We are presently in discussions with several institutions about
obtaining a credit line, which would permit us to more quickly implement our
business plan

RESULTS OF OPERATIONS
COMPARISON OF THE YEAR ENDED APRIL 30, 2005 TO THE YEAR ENDED APRIL 30, 2004

For the year ended April 30, 2005, we have generated limited sales revenues,
have incurred significant expenses, and have sustained significant losses. We
believe we will begin to earn increasing revenues from operations in fiscal 2006
as we complete our transition to an operating company.

Revenues
--------

Revenues totaled $65,833 in fiscal 2005 compared to $0 revenues in fiscal 2004.
Fiscal 2005 revenue was comprised of $22,800 in dealer fees, $9,900 in private
label fees, $17,575 in lease payments and $15,558 in other fees and income.

Costs and Expenses
------------------

The Company incurred licensing fees of $150,633 for the year ended April 30,
2005, and $730,433 for the year ended April 30, 2004, respectively. The costs
incurred were for the licensing of certain proprietary software, operating
systems and processes for use in connection with the extension of credit and
underwriting techniques for the purchase and lease of motor vehicles. The
decrease from fiscal 2004 to fiscal 2005 reflects the fact that this process is
nearing completion.

The Company incurred organization costs of $294,408 for the year ended April 30,
2005, and $670,486 for the year ended April 30, 2004, respectively.
Organizational costs consist of establishing business procedures, filing to do
business web site development and related activities. The year to year decrease
in organization costs is primarily attributed to the wind down of initial
organizational activity.

The Company incurred compensation costs of $828,298 for the year ended April 30,
2005 compared with $223,968 in fiscal 2004. The increase is related to the costs
of the Company increasing its employment base during 2005 including the addition
of a Chief Operating Officer and a Chief Financial Officer as well as several
administrative personnel. At April 30, 2005, the headcount was 8. As the Company
continues to expand, the Company will incur additional costs for personnel. In
order for the Company to attract and retain quality personnel, management
anticipates it will continue to offer competitive salaries and issue common
stock to consultants and employees.

The Company paid $233,333 and $135,140 to its managing member, who is Chairman
and Chief Executive Officer, in fiscal 2005 and 2004, respectively. These
payments were charged to operations, and are included in the compensation costs
shown above.

In connection with the private placement transaction, the Company has expensed
non cash costs of $383,284 to issue warrants to the private placement agent for
the year ended April 30, 2005 and $0 in fiscal 2004. The Company has expensed
non cash costs $1,810,000 which equals the intrinsic value of the imbedded
beneficial conversion feature for the Preferred Stock holders for the year ended
April 30, 2005 and $0 in fiscal 2004. At April 30, 2005, accrued preferred
dividends of $28,906 were charged to operations. There was no accrual made in
fiscal 2004.

The Company incurred legal and accounting fees of $197,384 for the year ended
April 30, 2005, as compared to $85,962 for the year ended April 30, 2004,
respectively. The increase in costs is related to legal and accounting expenses
associated with finalizing the private placement and complying with various
federal and state securities statutes, rules and regulations.


                                       17
<PAGE>

The Company incurred other operating expenses of $791,647 for the year ended
April 30, 2005. Notable expenses in this category are the cost of a purchase
option for a portfolio of equipment leases of $250,000, rent of $125,214,
consulting expenses of $84,365, travel of $79,547, advertising of $28,107,
telecommunications of $21,476 and depreciation of $22,626. The remainder is
comprised of expenses for postage, shipping, storage, repairs and other normal
operating costs. In fiscal 2004, other operating costs totaled $70,119,
comprised of rent of $19,772, travel of $18,430, advertising of $4,057 and all
other expenses of $27,860.

Net Loss
--------

Our net loss for the year ended April 30, 2005 was $4,418,727 in contrast to a
loss of $1,772,257 for the year ended April 30, 2004, respectively. The increase
in net loss was due primarily to the fact that the Company incurred expenses
related to the private placement transaction, consisting of non cash expense of
a beneficial conversion discount of $1,810,000, and a non cash expense of
$383,284 for warrants issued to the placement agent in 2005 and to the fact that
the Company has increased its resources and spending in 2005 as it transitioned
from a development stage to an operating entity. The payment of $250,000 for a
purchase option for equipment leases from American Motorcycle Leasing Corp.
("AML") also contributed to the loss. While AML is not a shareholder of the
Company, our President and Chief Executive Officer is an officer and a minority
shareholder of AML.

As a result of significant restrictions on transfers of the equipment leases
owned by AML including, but not limited to, obtaining approvals from AML's
secured lender, and the agreement's non-exclusivity, the Company has accounted
for the fee as an expense and has charged the $250,000 to operations in the
current year.

While the Company has charged the fee to operations during the current year, the
Company believes that the purchase option, subject to the terms and conditions
described, may provide us with the opportunity to expand its equipment leasing
portfolio, which would benefit the Company. However, there is no guaranty that
we will acquire any of the assets held by AML at terms and conditions acceptable
to us.

Our net loss per common share (basic and diluted) was $0.05 for the year ended
April 30, 2005 and $0.25 for the year ended April 30, 2004.

LIQUIDITY AND CAPITAL RESOURCES

As of April 30, 2005, the Company had a working capital deficit of $728,207. The
Company generated a deficit in cash flow from operations of $1,688,745 for the
year ended April 30, 2005. This deficit is primarily attributable to the
Company's net loss from operations of $2,579,821, adjusted for depreciation and
amortization of $28,740, the cost of warrants issued of $473,264, the cost of
shares issued to employees of $82,500, the cost of accrued preferred dividends
of $28,906 and to changes in the balances of current assets and liabilities.
Accounts payable and accrued expenses increased by $428,215 primarily due to the
remaining accrual of a portfolio purchase option of $169,000, payroll taxes of
$85,341, accrued interest on notes payable of $13,476, accrued preferred
dividends of $28,906 and other normal operating expenses recorded but not yet
paid.

Cash flows used in investing activities for the year ended April 30, 2005 was
$220,863, primarily due to the purchase of property and equipment of $120,964
and payments for motorcycles of $113,278.

The Company met its cash requirements during the period through net proceeds
from the issuance of equity of $1,681,000 and obtaining net bridge loans of
$300,000 and a loan from officer for $25,000. Subsequent to this period, the
Company has received additional proceeds from equity of $1,775,000.
Additionally, the Company has received limited revenues from leasing and
financing motorcycles and other vehicles, its recently launched private label
programs and from dealer sign-up fees.

While we have raised capital to meet our working capital and financing needs in
the past, additional financing is required in order to meet our current and
projected cash flow deficits from operations and development. We are seeking
financing in the form of equity in order to provide the necessary working
capital. We currently have no commitments for financing. There is no guarantee
that we will be successful in raising the funds required.


                                       18
<PAGE>

We estimate that we will need approximately $1,800,000 to conduct limited
operations during the next twelve months. Based on capital received from equity
financing to date, and certain indications of interest to purchase our equity,
we believe that we have a reasonable chance to raise sufficient capital
resources to meet projected cash flow deficits through the next twelve months.
There can be no assurance that additional private or public financing, including
debt or equity financing, will be available as needed, or, if available, on
terms favorable to the Company. Any additional equity financing may be dilutive
to shareholders and such additional equity securities may have rights,
preferences or privileges that are senior to those of the Company's existing
common or preferred stock. Furthermore, debt financing, if available, will
require payment of interest and may involve restrictive covenants that could
impose limitations on the operating flexibility of the Company. However, if we
are not successful in generating sufficient liquidity from operations or in
raising sufficient capital resources, on terms acceptable to us, this could have
a material adverse effect on our business, results of operations, liquidity and
financial condition, and we will have to adjust our planned operations and
development on a more limited scale.

The effect of inflation on the Company's revenue and operating results was not
significant. The Company's operations are located in North America and there are
no seasonal aspects that would have a material effect on the Company's financial
condition or results of operations.

AUDITOR'S OPINION EXPRESSES DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE AS A
"GOING CONCERN"

The independent auditors report on our April 30, 2005 and 2004 financial
statements included in the Company's Annual Report states that the Company's
historical losses and the lack of revenues raise substantial doubts about the
Company's ability to continue as a going concern, due to the losses incurred and
its lack of significant operations. If we are unable to develop our business, we
have to discontinue operations or cease to exist, which would be detrimental to
the value of the Company's common stock. We can make no assurances that our
business operations will develop and provide us with significant cash to
continue operations.

PLAN OF OPERATIONS

Addressing the Going Concern Issues
-----------------------------------

In order to improve the Company's liquidity, the Company's management is
actively pursing additional equity financing through discussions with investment
bankers and private investors. There can be no assurance the Company will be
successful in its effort to secure additional equity financing.

We continue to experience net operating losses. Our ability to continue as a
going concern is subject to our ability to develop profitable operations. We are
devoting substantially all of our efforts to developing our business and raising
capital. Our net operating losses increases the difficulty in meeting such goals
and there can be no assurances that such methods will prove successful.

The primary issues management will focus on in the immediate future to address
this matter include:

      o     seeking a credit line from institutional lenders;
      o     seeking institutional investors for equity investments in our
            company; and
      o     initiating negotiations to secure short term financing through
            promissory notes or other debt instruments on an as needed basis.

To address these issues, we are negotiating the potential sale of securities
with investment banking companies to assist us in raising capital.

Product Research and Development
--------------------------------

We do not anticipate incurring significant research and development expenditures
during the next twelve months.

Acquisition or Disposition of Plant and Equipment
-------------------------------------------------

We do not anticipate the sale of any significant property, plant or equipment
during the next twelve months. We do not anticipate the acquisition of any
significant property, plant or equipment during the next twelve months.


                                       19
<PAGE>

Number of Employees
-------------------

From our inception through the period ended April 30, 2005, we have relied on
the services of outside consultants for services and currently have nine
employees. In order for us to attract and retain quality personnel, we
anticipate we will have to offer competitive salaries to future employees. We do
not anticipate our employment base will significantly change during the next
twelve months. As we continue to expand, we will incur additional cost for
personnel. This projected increase in personnel is dependent upon our generating
revenues and obtaining sources of financing. There is no guarantee that we will
be successful in raising the funds required or generating revenues sufficient to
fund the projected increase in the number of employees.

INFLATION

The impact of inflation on the costs of the Company, and the ability to pass on
cost increases to its customers over time is dependent upon market conditions.
The Company is not aware of any inflationary pressures that have had any
significant impact on the Company's operations over the past quarter, and the
Company does not anticipate that inflationary factors will have a significant
impact on future operations.

CRITICAL ACCOUNTING POLICIES

The preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make estimates and judgments that affect our reported assets, liabilities,
revenues, and expenses, and the disclosure of contingent assets and liabilities.
We base our estimates and judgments on historical experience and on various
other assumptions we believe to be reasonable under the circumstances. Future
events, however, may differ markedly from our current expectations and
assumptions. While there are a number of significant accounting policies
affecting our consolidated financial statements; we believe the following
critical accounting policy involves the most complex, difficult and subjective
estimates and judgments:

Stock-Based Compensation
------------------------

In December 2003, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123." This statement
amends SFAS No. 123, "Accounting for Stock-Based Compensation," to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation.

In addition, this statement amends the disclosure requirements of SFAS No. 123
to require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The Company has chosen to
continue to account for stock-based compensation using the intrinsic value
method prescribed in APB Opinion No. 25 and related interpretations.
Accordingly, compensation expense for stock Warrants is measured as the excess,
if any, of the fair market value of the Company's stock at the date of the grant
over the exercise price of the related option. The Company has adopted the
annual disclosure provisions of SFAS No. 148 in its financial reports for the
period from January 1, 2003 through April 30, 2003 and will adopt the interim
disclosure provisions for its financial reports for the subsequent periods. The
Company has stock based awards of compensation to employees of $82,500 granted
and outstanding during the period from October 1, 2001 (date of inception)
through April 30, 2005.

Website Development Costs
-------------------------

The has incurred costs to develop a proprietary web-based private label
financing program for processing including web access, processing credit
applications, consumer contracts and other related documents and processes. The
Company has elected to recognize the costs of developing its website and related
intellectual property the website development costs in accordance with Emerging
Issue Task Force ("EITF") No. 00-02, "Accounting for Website Development
Costs."" As such, the Company expenses all costs incurred that relate to the
planning and post implementation phases of development of its website. Direct
costs incurred in the development phase are capitalized and recognized over the
estimated useful life. Costs associated with repair or maintenance for the
website are included in cost of net revenues in the current period expenses.


                                       20
<PAGE>

NEW ACCOUNTING PRONOUNCEMENTS

In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS
151, Inventory Costs-- an amendment of ARB No. 43, Chapter 4. This Statement
amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify
the accounting for abnormal amounts of idle facility expense, freight, handling
costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4,
previously stated that ". . . under some circumstances, items such as idle
facility expense, excessive spoilage, double freight, and rehandling costs may
be so abnormal as to require treatment as current period charges. . . ." This
Statement requires that those items be recognized as current-period charges
regardless of whether they meet the criterion of "so abnormal." In addition,
this Statement requires that allocation of fixed production overheads to the
costs of conversion be based on the normal capacity of the production
facilities. This Statement is effective for inventory costs incurred during
fiscal years beginning after June 15, 2005. Management does not believe the
adoption of this Statement will have any immediate material impact on the
Company.

In December 2004, the FASB issued SFAS No.152, "Accounting for Real Estate
Time-Sharing Transactions--an amendment of FASB Statements No. 66 and 67" ("SFAS
152) The amendments made by Statement 152 This Statement amends FASB Statement
No. 66, Accounting for Sales of Real Estate, to reference the financial
accounting and reporting guidance for real estate time-sharing transactions that
is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real
Estate Time-Sharing Transactions. This Statement also amends FASB Statement No.
67, Accounting for Costs and Initial Rental Operations of Real Estate Projects,
to state that the guidance for (a) incidental operations and (b) costs incurred
to sell real estate projects does not apply to real estate time-sharing
transactions. The accounting for those operations and costs is subject to the
guidance in SOP 04-2. This Statement is effective for financial statements for
fiscal years beginning after June 15, 2005. with earlier application encouraged.
The Company does not anticipate that the implementation of this standard will
have a material impact on its financial position, results of operations or cash
flows.

On December 16, 2004, the Financial Accounting Standards Board ("FASB")
published Statement of Financial Accounting Standards No. 123 (Revised 2004),
Share-Based Payment ("SFAS 123R"). SFAS 123R requires that compensation cost
related to share-based payment transactions be recognized in the financial
statements. Share-based payment transactions within the scope of SFAS 123R
include stock Warrants, restricted stock plans, performance-based awards, stock
appreciation rights, and employee share purchase plans. On April 14, 2005, the
SEC amended the effective date of the provisions of this statement. Accordingly,
the Company will implement the revised standard in the forth quarter of fiscal
year 2006. Currently, the Company accounts for its share-based payment
transactions under the provisions of APB 25, which does not necessarily require
the recognition of compensation cost in the financial statements. Management is
assessing the implications of this revised standard, which may materially impact
the Company's results of operations in the third quarter of fiscal year 2006 and
thereafter.

On December 16, 2004, FASB issued Statement of Financial Accounting Standards
No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29,
Accounting for Nonmonetary Transactions (" SFAS 153"). This statement amends APB
Opinion 29 to eliminate the exception for nonmonetary exchanges of similar
productive assets and replaces it with a general exception for exchanges of
nonmonetary assets that do not have commercial substance. Under SFAS 153, if a
nonmonetary exchange of similar productive assets meets a commercial-substance
criterion and fair value is determinable, the transaction must be accounted for
at fair value resulting in recognition of any gain or loss. SFAS 153 is
effective for nonmonetary transactions in fiscal periods that begin after June
15, 2005. The Company does not anticipate that the implementation of this
standard will have a material impact on its financial position, results of
operations or cash flows.

In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, "Accounting for
Conditional Asset Retirement Obligations, an interpretation of FASB Statement
No. 143," which requires an entity to recognize a liability for the fair value
of a conditional asset retirement obligation when incurred if the liability's
fair value can be reasonably estimated. The Company is required to adopt the
provisions of FIN 47 no later than the end of its fiscal 2006. The Company does
not expect the adoption of this Interpretation to have a material impact on its
consolidated financial position, results of operations or cash flows.


                                       21
<PAGE>

In May 2005 the FASB issued Statement of Financial Accounting Standards (SFAS)
No. 154, "Accounting Changes and Error Corrections, a replacement of APB Opinion
No. 20 and FASB Statement No. 3." SFAS 154 requires retrospective application to
prior periods' financial statements for changes in accounting principle, unless
it is impracticable to determine either the period-specific effects or the
cumulative effect of the change. SFAS 154 also requires that retrospective
application of a change in accounting principle be limited to the direct effects
of the change. Indirect effects of a change in accounting principle, such as a
change in non-discretionary profit-sharing payments resulting from an accounting
change, should be recognized in the period of the accounting change. SFAS 154
also requires that a change in depreciation, amortization, or depletion method
for long-lived, non-financial assets be accounted for as a change in accounting
estimate effected by a change in accounting principle. SFAS 154 is effective for
accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005. Early adoption is permitted for accounting changes and
corrections of errors made in fiscal years beginning after the date this
Statement is issued. The Company does not expect the adoption of this SFAS to
have a material impact on its consolidated financial position, results of
operations or cash flows.

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not maintain off-balance sheet arrangements nor does it
participate in non-exchange traded contracts requiring fair value accounting
treatment.

TRENDS, RISKS AND UNCERTAINTIES

We have sought to identify what we believe to be the most significant risks to
our business, but we cannot predict whether, or to what extent, any of such
risks may be realized nor can we guarantee that we have identified all possible
risks that might arise. Investors should carefully consider all of such risk
factors before making an investment decision with respect to our Common Stock.

CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS

We have sought to identify what we believe are significant risks to our
business, but we cannot predict whether, or to what extent, any of such risks
may be realized nor can we guarantee that we have identified all possible risks
that might arise.

Potential Fluctuations in Annual Operating Results

Our annual operating results may fluctuate significantly in the future as a
result of a variety of factors, most of which are outside our control,
including: the demand for our products and services; seasonal trends in
purchasing, the amount and timing of capital expenditures and other costs
relating to the commercial and consumer financing; price competition or pricing
changes in the market; technical difficulties or system downtime; general
economic conditions and economic conditions specific to the consumer financing
sector.

Our annual results may also be significantly impacted by the impact of the
accounting treatment of acquisitions, financing transactions or other matters.
Particularly at our early stage of development, such accounting treatment can
have a material impact on the results for any quarter. Due to the foregoing
factors, among others, it is likely that our operating results may fall below
our expectations or those of investors in some future quarter.

Dependence Upon Management

Our future performance and success is dependant upon the efforts and abilities
of our Management. To a very significant degree, we are dependent upon the
continued services of Anthony L. Havens, our President and Chief Executive
Officer and member of our Board of Directors. If we lost the services of either
Mr. Havens, or other key employees before we could get qualified replacements,
that loss could materially adversely affect our business. We do not maintain key
man life insurance on any of our Management.


                                       22
<PAGE>

Limitation of Liability and Indemnification of Officers and Directors

Our officers and directors are required to exercise good faith and high
integrity in our Management affairs. Our Articles of Incorporation provide,
however, that our officers and directors shall have no liability to our
shareholders for losses sustained or liabilities incurred which arise from any
transaction in their respective managerial capacities unless they violated their
duty of loyalty, did not act in good faith, engaged in intentional misconduct or
knowingly violated the law, approved an improper dividend or stock repurchase,
or derived an improper benefit from the transaction. Our Articles and By-Laws
also provide for the indemnification by us of the officers and directors against
any losses or liabilities they may incur as a result of the manner in which they
operate our business or conduct the internal affairs, provided that in
connection with these activities they act in good faith and in a manner that
they reasonably believe to be in, or not opposed to, the best interests of
Sparta, and their conduct does not constitute gross negligence, misconduct or
breach of fiduciary obligations. To further implement the permitted
indemnification, we have entered into Indemnity Agreements with our officers and
directors.

Continued Control of Current Officers and Directors

The present officers and directors own approximately 67% of the outstanding
shares of Common Stock, and therefore are in a position to elect all of our
Directors and oth6wise control the Company, including, without limitation,
authorizing the sale of equity or debt securities of Sparta, the appointment of
officers, and the determination of officers' salaries. Shareholders have no
cumulative voting rights. (See Security Ownership of Certain Beneficial Owners
and Management)

Management of Growth

We may experience growth, which will place a strain on our managerial,
operational and financial systems resources. To accommodate our current size and
manage growth if it occurs, we must devote management attention and resources to
improve our financial strength and our operational systems. Further, we will
need to expand, train and manage our sales and distribution base. There is no
guarantee that we will be able to effectively manage our existing operations or
the growth of our operations, or that our facilities, systems, procedures or
controls will be adequate to support any future growth. Our ability to manage
our operations and any future growth will have a material effect on our
stockholders.

If we fail to remain current on our reporting requirements, we could be removed
from the OTC Bulletin Board which would limit the ability of broker-dealers to
sell our securities and the ability of stockholders to sell their securities in
the secondary market.

Companies trading on the OTC Bulletin Board, such as us, must be reporting
issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and
must be current in their reports under Section 13, in order to maintain price
quotation privileges on the OTC Bulletin Board. If we fail to remain current on
our reporting requirements, we could be removed from the OTC Bulletin Board. As
a result, the market liquidity for our securities could be severely adversely
affected by limiting the ability of broker-dealers to sell our securities and
the ability of stockholders to sell their securities in the secondary market.


                                       23
<PAGE>

ITEM 7      FINANCIAL STATEMENTS

                                                                            Page
                                                                            ----

Report of Registered Independent Certified Public Accounting  Firm           F-1
Consolidated Balance Sheets as of April 30, 2005 and 2004                    F-2
Consolidated Statements of Losses for the years ended
  April 30, 2005 and 2004                                                    F-3
Consolidated Statement of Deficiency in Stockholders' Equity for the
  years ended April 30, 2005 and 2004                                        F-4
Consolidated Statements of Cash Flows for the years ended April 30,
  2005 and 2004                                                        F-5 ~ F-6
Notes to Consolidated Financial Statements                             F-7~ F-23

<PAGE>

                    RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                          CERTIFIED PUBLIC ACCOUNTANTS

--------------------------------------------------------------------------------

        REPORT OF REGISTERED INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM

Board of Directors
Sparta Commercial Services, Inc.
New York, New York

      We have audited the accompanying consolidated balance sheet of Sparta
Commercial Services, Inc., as of April 30, 2005 and 2004, and the related
consolidated statements of losses, deficiency in stockholders' equity and cash
flows for each of the two years in the period ended April 30, 2005. These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on the financial statements based upon
our audits.

      We have conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States of America). Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Sparta
Commercial Services, Inc. at April 30, 2005 and 2004, and the consolidated
results of its operations and its cash flows for each of the two years in the
period ended April 30, 2005, in conformity with accounting principles generally
accepted in the United States of America.

      The accompanying financial statements have been prepared assuming the
company will continue as a going concern. As discussed in the Note O to the
accompanying financial statements, the company has suffered recurring losses
from operations that raises substantial doubt about the company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note O. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

                                   /s/ RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                                   ---------------------------------------------
                                   Russell Bedford Stefanou Mirchandani LLP
                                   Certified Public Accountants

New York, New York
July 15, 2005


                                      F-1
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                           CONSOLIDATED BALANCE SHEETS
                             APRIL 30, 2005 and 2004

<TABLE>
<CAPTION>
                                                                                             2005           2004
                                                                                          -----------    -----------
<S>                                                                                       <C>            <C>
ASSETS
Current assets:
Cash and cash equivalents                                                                 $   108,365    $    11,973
Retail installment sale contract receivables-current (Note E)                                  14,764             --
Marketable securities                                                                              --         13,379
Other current assets, net                                                                       6,700             --
                                                                                          -----------    -----------
Total current assets                                                                          129,829         25,352

Motorcycles and other vehicles under operating leases, net of accumulated
  depreciation of $13,392 and $0, at April 30, 2005 and April 30, 2004,
  respectively (Note D)                                                                        99,886             --
Property and equipment, net of accumulated depreciation and amortization of $15,378 and
  $30, at April 30, 2005 and 2004, respectively (Note F)                                      106,809          1,193

  Other assets:
  Prepaid expenses and deposits (see Note C)                                                   48,967             --
  Retail installment sale contract receivables (Note E)                                        21,521             --
                                                                                          -----------    -----------
  Total other assets                                                                           70,488             --

Total assets                                                                              $   407,012    $    26,545
                                                                                          ===========    ===========

LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses                                                     $   509,936    $    81,721
Note payable (Note G)                                                                         300,000             --
Deferred revenue (Note A)                                                                      23,100             --
Due to related party (Note H)                                                                  25,000         23,885
                                                                                          -----------    -----------
       Total current liabilities                                                              858,036        105,606

Commitments and contingencies (Note M)

Deficiency in Stockholders' Equity: (Note I)
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. 18,100 and 0 shares of convertible preferred stock are
  issued and outstanding
  at April 30, 2005 and 2004, respectively                                                  1,810,000             --
Common Stock, $0.001 par value; 340,000,000 and 200,000,000 shares authorized at
  April 30, 2005 and 2004, respectively; 86,005,415 and 7,079,654 shares
  issued and outstanding at April 30, 2005 and 2004, respectively                              86,005          7,080
Common stock - subscription payable                                                                --         17,920
Additional paid-in-capital                                                                  3,930,629      1,754,870
Accumulated deficit                                                                        (6,277,658)    (1,858,931)
                                                                                          -----------    -----------
       Total deficiency in stockholders' equity                                              (451,024)       (79,061)
                                                                                          -----------    -----------

Liabilities and deficiency in stockholders' equity                                        $   407,012    $    26,545
                                                                                          ===========    ===========

           See accompanying notes to consolidated financial statements
</TABLE>


                                      F-2
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                        CONSOLIDATED STATEMENT OF LOSSES

<TABLE>
<CAPTION>
                                                                    For the Year Ended April 30,
                                                                    ----------------------------
                                                                       2005              2004
                                                                    ------------    ------------
<S>                                                                 <C>             <C>
Revenue                                                             $     65,833    $         --
                                                                    ------------    ------------

Operating Expenses:
General and administrative                                             2,366,914       1,780,968
Payment for option to purchase portfolio from a related party            250,000              --
Depreciation and amortization (Note F)                                    28,740              --
                                                                    ------------    ------------
   Total Operating Expenses                                            2,645,654       1,780,968

Loss from Operations                                                  (2,579,821)     (1,780,968)

Other Income (Expenses)                                                       --           8,711
Income Taxes (Note J)                                                         --              --

Net Loss                                                              (2,579,821)     (1,772,257)
                                                                    ------------    ------------
Preferred dividend payable                                                28,906              --
Preferred dividend-beneficial conversion discount on
  convertible  preferred                                               1,810,000              --
                                                                    ------------    ------------
Net Loss Available to Common Stockholders                           $ (4,418,727)   $ (1,772,257)
                                                                    ============    ============

Loss per common share (basic and assuming dilution) (Note K)        $      (0.05)   $      (0.25)
                                                                    ============    ============

Weighted average common shares outstanding (basic and diluted), as    85,812,006       7,079,654
  restated for splits
</TABLE>

           See accompanying notes to consolidated financial statements

                                       F-3

<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
          CONSOLIDATED STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                   FOR THE YEARS ENDED April 30, 2005 and 2004

<TABLE>
<CAPTION>
                                    Sparta
                                  Commercial                                 Subscription
                                 Services LLC                    Common        Payable-
                                  Membership       Common        Shares         Common      Subscription     Preferred
                                   Interest        Shares        Amount         Shares         Payable        Shares
                                 ------------   ------------  ------------   ------------   ------------   ------------
<S>                              <C>            <C>           <C>            <C>            <C>            <C>
Balance at April 30, 2003        $  5,265,000             --  $    165,250   $         --   $         --             --

Proceeds from capital
contributions                         775,000             --       775,000             --             --             --

Membership interests issued
to consultants in exchange for
services in June 2003 at $1 per
unit                                  448,000             --       448,000             --             --             --

Membership interests  issued
in exchange for
licensing fees in December
2003 at $1 per unit                   330,433             --       330,433             --             --             --

Tomahawk Shares retained by
Tomahawk stockholders in
connection with merger with
Sparta Commercial Services
LLC in February 2004, as
restated                                   --      7,079,654         7,080             --             --             --

Shares deemed to be issued to
Sparta members in relation to
merger with Sparta
Commercial Services LLC in
February 2004                      (6,818,433)            --    (1,718,683)    17,920,346         17,920             --

Net Loss                                   --             --            --             --             --             --
                                 ------------   ------------  ------------   ------------   ------------   ------------

Balance at April 30, 2004        $         --      7,079,654  $      7,080     17,920,346   $     17,920             --

Shares issued to Sparta
members in relation to merger
with Sparta Commercial
Services LLC in February
2004 (Note B)                              --     17,920,346        17,920    (17,920,346)       (17,920)            --


Balance of shares issued to
members                                    --     60,795,625        60,796             --        (60,796)

Preferred shares issued to
subscription holders                       --             --            --             --             --         18,100

Warrants issued to placement
agent in January 2005                      --             --            --             --             --             --

Warrants on convertible
preferred shares                           --             --            --             --             --             --

Beneficial conversion discount
on convertible preferred
shares                                     --             --            --             --             --             --

Warrants Issued for services
Issuance Cost of Preferred
shares                                     --             --            --             --             --             --

Shares Issued For Notes
Payable                                    --         96,155            96             --             --             --

Shares issued to employees
(vested portion)                           --        113,635           113             --             --             --

Net Loss                                   --             --            --             --             --             --
                                 ------------   ------------  ------------   ------------   ------------   ------------

Balance at April 30, 2005        $         --     86,005,415  $     86,005             --   $         --         18,100
                                 ============   ============  ============   ============   ============   ============

<CAPTION>
                                                                                 Total
                                  Preferred    Additional                    Stockholders'
                                    Shares      Paid-in       Accumulated       Equity
                                    Amount      Capital         Deficit      (Deficiency)
                                 ------------  ------------   ------------   ------------
<S>                              <C>           <C>            <C>            <C>
Balance at April 30, 2003        $         --  $         --   $    (86,674)  $     78,576

Proceeds from capital
contributions                              --            --             --        775,000

Membership interests issued
to consultants in exchange for
services in June 2003 at $1 per
unit                                       --            --             --        448,000

Membership interests  issued
in exchange for
licensing fees in December
2003 at $1 per unit                        --            --             --        330,433

Tomahawk Shares retained by
Tomahawk stockholders in
connection with merger with
Sparta Commercial Services
LLC in February 2004, as
restated                                   --        54,107             --         61,187

Shares deemed to be issued to
Sparta members in relation to
merger with Sparta
Commercial Services LLC in
February 2004                              --     1,700,763             --             --

Net Loss                                   --            --     (1,772,257)    (1,772,257)
                                 ------------  ------------   ------------   ------------

Balance at April 30, 2004                  --  $  1,754,870   $ (1,858,931)  $    (79,061)

Shares issued to Sparta
members in relation to merger
with Sparta Commercial
Services LLC in February
2004 (Note B)                              --            --             --


Balance of shares issued to
members

Preferred shares issued to
subscription holders                1,810,000            --             --      1,810,000

Warrants issued to placement
agent in January 2005                      --       383,284             --        383,284

Warrants on convertible
preferred shares                           --       487,660             --        487,660

Beneficial conversion discount
on convertible preferred
shares                                     --     1,322,340             --      1,322,340

Warrants Issued for services
Issuance Cost of Preferred
shares                                     --        89,980             --         89,980

Shares Issued For Notes
Payable                                    --      (129,000)            --       (128,904)

Shares issued to employees
(vested portion)                           --        82,291             --         82,404

Net Loss                                   --            --     (4,418,727)    (4,418,727)
                                 ------------  ------------   ------------   ------------

Balance at April 30, 2005           1,810,000  $  3,930,629   $ (6,277,658)  $   (451,024)
                                 ============  ============   ============   ============
</TABLE>

           See accompanying notes to consolidated financial statements


                                      F-4
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                             For the Year Ended April 30,
                                                                             ----------------------------
                                                                                  2005           2004
                                                                              -----------    -----------
<S>                                                                           <C>            <C>
Cash flows from Operating Activities:
Net loss                                                                      $(4,418,727)   $(1,772,257)

Adjustments to reconcile net loss to net cash used in operating activities:
Warrants issued with convertible preferred shares (Note I)                        487,660             --
Beneficial conversion discount on convertible preferred stock (Note I)          1,322,340             --
Depreciation and amortization (Note F)                                             28,740             30
                                                                              -----------    -----------
Cost of warrants issued                                                           473,264             --
Shares issued to employees (vested portion)                                        82,500             --
Shares issued in exchange for licensing fees                                           --        330,433
Shares issued to consultants for services (Note I)                                     --        448,000
Acquisition costs(Note B)                                                              --         61,187
Gain on sale of investments                                                            --         (8,711)

(Increase)decrease in:
Retail installment sale contract receivable                                       (36,285)            --
                                                                              -----------    -----------
Other current assets                                                               (6,700)            --
Prepaid expenses and deposits                                                     (48,967)            --
Increase(decrease) in:
Accounts payable                                                                  428,215         79,221
Increase in deferred revenue                                                       23,100             --
Due to related party                                                              (23,885)        80,999
                                                                              -----------    -----------
Net Cash used in Operating Activities                                          (1,688,745)      (781,098)

Cash Flows From Investing Activities:
Net payments for property and equipment                                          (120,964)        (1,223)
Payments for motorcycles                                                         (113,278)            --
(Payments for) proceeds from sale (purchase) of marketable securities              13,379         (4,668)
                                                                              -----------    -----------
Net Cash used in Investing Activities                                            (220,863)        (5,891)

Cash Flows From Financing Activities:
Proceeds from note payable(Note G)                                                300,000             --
Proceeds from note payable -related party(Note G)                                  25,000             --
Proceeds form  sale of equity interests, net                                    1,681,000        775,000
                                                                              -----------    -----------
Net Cash Provided by Financing Activities                                       2,006,000        775,000
</TABLE>

           See accompanying notes to consolidated financial statements


                                      F-5
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Continued)

<TABLE>
<CAPTION>
                                                              For the Years Ended April 30,
                                                              -----------------------------
                                                                   2005         2004
                                                                ----------   ----------
<S>                                                             <C>          <C>
Net increase (decrease) in cash and equivalents                     96,392      (11,989)
Cash and equivalents at beginning of period                         11,973       23,962
                                                                ----------   ----------
Cash and equivalents at end of period                           $  108,365   $   11,973
                                                                ==========   ==========

Supplemental disclosures of cash flow information:
Cash paid during the period for interest                        $       --   $       --
                                                                ----------   ----------
Cash paid during the period for taxes                           $       --   $       --
                                                                ----------   ----------

Non Cash Investing and Financing Transactions:
Shares issued in exchange for services (Note I)                 $       --   $  448,000
Shares issued to employees (vested portion)                         82,500           --
Cost of warrants issued                                            473,264           --
Warrants issued with convertible preferred shares                  487,660
                                                                             ----------
Shares issued in exchange for licensing fees                            --      330,433
Beneficial conversion discount on convertible preferred stock    1,322,340           --
Merger with Sparta: (Note B)
Common stock retained                                                   --           --
Liabilities assumed in excess of assets acquired                        --           --
Shares issued in exchange  for services(Note B)                         --       61,187
</TABLE>

           See accompanying notes to consolidated financial statements


                                      F-6
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE A - SUMMARY OF ACCOUNTING POLICICIES

A summary of the significant accounting policies applied in the preparation of
the accompanying financial statements follows.

Business and Basis of Presentation
----------------------------------

Sparta Commercial Services, Inc., formerly known as Tomahawk Industries, Inc.
(the "Company" or "Tomahawk") was formed on May 13, 1980 under the laws of the
State of Nevada. On February 27, 2004, the Company entered into an Agreement of
Plan and Reorganization ("Agreement") with Sparta Commercial Services, LLC
("Sparta"), a limited liability company formed on October 1, 2001 under the laws
of the State of Delaware under the name of Sparta Financial Services, LLC. .In
accordance with SFAS No. 141, Sparta was the acquiring entity. While the
transaction is accounted for using the purchase method of accounting, in
substance the Agreement is a recapitalization of the Company's capital
structure. As a result of the Agreement, there was a change in control of the
Company. Also, subsequently, the Company's name was changed from Tomahawk
Industries, Inc. to Sparta Commercial Services, Inc. From April 1988 until the
date of the Agreement, the Company was an inactive publicly registered shell
corporation with no significant assets or operations (see Note B).

The Company is in the business as an originator and indirect lender for retail
installment loan and lease financing for the purchase or lease of new and used
motorcycles (specifically 500cc and higher) and utility-oriented 4-stroke all
terrain vehicles (ATVs). The Company was in the development stage till January
31, 2005, as defined by Statement of Financial Accounting Standards No. 7 ("SFAS
No. 7").

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary, Sparta Commercial Services, LLC. All significant
intercompany transactions and balances have been eliminated in the consolidated
financial statements.

Estimates
---------

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.

Revenue Recognition
-------------------

The Company originates leases on new and used motorcycles and other powersports
vehicles from motorcycle dealers throughout the United States. All of the
Company's leases, which the Company enters into, are accounted for as operating
leases. At the inception of the lease, no lease revenue is recognized and the
leased motorcycles, together with the initial direct costs of originating the
lease, which are capitalized, appear on the balance sheet as "motorcycles under
operating leases-net". The capitalized cost of each motorcycle is depreciated
over the lease term, on a straight-line, basis down to the Company's original
estimate of the projected value of the motorcycle at the end of the scheduled
lease term (the "Residual"). Monthly lease payments are recognized as rental
income. An acquisition fee classified as fee income on the financial statements
is received and recognized in income at the inception of the lease.

The Company realizes gains and losses as the result of the termination of
leases, both at and prior to their scheduled termination, and the disposition of
the related motorcycle. The disposal of motorcycles, which reach scheduled
termination of a lease, results in a gain or loss equal to the difference
between proceeds received from the disposition of the motorcycle and its net
book value. Net book value represents the residual value at scheduled lease
termination. Lease terminations that occur prior to scheduled maturity as a
result of the lessee's voluntary request to purchase the vehicle have resulted
in net gains, equal to the excess of the price received over the motorcycle's
net book value.


                                      F-7
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

Early lease terminations also occur because of (i) a default by the lessee, (ii)
the physical loss of the motorcycle, or (iii) the exercise of the lessee's early
termination. In those instances, the Company receives the proceeds from either
the resale or release of the repossessed motorcycle, or the payment by the
lessee's insurer. The Company records a gain or loss for the difference between
the proceeds received and the net book value of the motorcycle.

The company also provides financing for motorcycles and other powersports
vehicles through the origination of retail installment sale contracts, where
revenue is recognized over the term of the loan contract. Provision is made for
delinquent accounts.

The Company charges fees to manufacturers and other customers related to
creating a private label version of the Company's financing program including
web access, processing credit applications, consumer contracts and other related
documents and processes. Fees received is amortized and booked as income over
the length of the contract. At April 30, 2005 and 2004, the Company had recorded
deferred revenue of $23,100 and $0, respectively.

Website Development Costs
-------------------------

The Company recognizes website development costs in accordance with Emerging
Issue Task Force ("EITF") No. 00-02, "Accounting for Website Development Costs."
As such, the Company expenses all costs incurred that relate to the planning and
post implementation phases of development of its website. Direct costs incurred
in the development phase are capitalized and recognized over the estimated
useful life. Costs associated with repair or maintenance for the website are
included in cost of net revenues in the current period expenses.

Cash Equivalents
----------------

For the purpose of the accompanying financial statements, all highly liquid
investments with a maturity of three months or less are considered to be cash
equivalents.

Marketable Securities
---------------------

The Company classifies its marketable securities as "available for sale"
securities which may be sold in response to changes in interest rates, liquidity
needs and for other purposes. Securities classified as "available for sale" are
carried in the financial statement at fair value. Realized gains and losses are
included in other income. Unrealized gains and losses are reported as a separate
component of stockholders' equity.

At April 30, 2005, the marketable securities balance was $0. At April 30, 2004,
marketable securities consist of:

                                                      Unrealized      Fair
                                            Cost         Gain      Market Value
Equity securities                         $    --       $   --       $    --
Mutual funds                               13,379           --        13,379
Total                                     $13,379       $   --       $13,379
                                          =======       ======       =======


                                      F-8
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

Income Taxes
------------

Deferred income taxes are provided using the asset and liability method for
financial reporting purposes in accordance with the provisions of Statements of
Financial Standards No. 109, "Accounting for Income Taxes". Under this method,
deferred tax assets and liabilities are recognized for temporary differences
between the tax bases of assets and liabilities and their carrying values for
financial reporting purposes and for operating loss and tax credit carry
forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be removed or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the statements
of operations in the period that includes the enactment date. Temporary
differences between taxable income reported for financial reporting purposes and
income tax purposes are insignificant.

Impairment of Long-Lived Assets
-------------------------------

The Company has adopted Statement of Financial Accounting Standards No. 121
(SFAS 121). The Statement requires that long-lived assets and certain
identifiable intangibles held and used by the Company be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. SFAS No. 121 also requires assets to be
disposed of be reported at the lower of the carrying amount or the fair value
less costs to sell.

Intangible Assets
-----------------

Organization costs have been expensed as incurred.

Comprehensive Income
--------------------

Statement of Financial Accounting Standards No. 130 ("SFAS 130"), Reporting
Comprehensive Income," establishes standards for reporting and displaying of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. At April 30, 2005 and 2004, the Company has $0, as
accumulated unrealized gain (loss) on marketable securities classified as held
for sale.

Segment Information
-------------------

The Company does not have separate, reportable segments under Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information ("SFAS 131"). SFAS establishes standards for
reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision making group, in making decisions
how to allocate resources and assess performance. The information disclosed
herein, materially represents all of the financial information related to the
Company's principal operating segment.


                                      F-9
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

Stock Based Compensation
------------------------

In December 2003, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123." This statement
amends SFAS No. 123, "Accounting for Stock-Based Compensation," to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation.

In addition, this statement amends the disclosure requirements of SFAS No. 123
to require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The Company has chosen to
continue to account for stock-based compensation using the intrinsic value
method prescribed in APB Opinion No. 25 and related interpretations.
Accordingly, compensation expense for stock Warrants is measured as the excess,
if any, of the fair market value of the Company's stock at the date of the grant
over the exercise price of the related option. The Company has adopted the
annual disclosure provisions of SFAS No. 148 in its financial reports from
January 1, 2003.

Had compensation costs for the Company's stock options been determined based on
the fair value at the grant dates for the awards, the Company's net loss and
losses per share would have been as follows (transactions involving stock
options issued to employees and Black-Scholes model assumptions are presented in
Note G):

<TABLE>
<CAPTION>
                                                                 2005           2004
                                                             -----------    -----------
<S>                                                          <C>            <C>
Net loss - as reported                                       $(4,418,727)   $(1,772,257)
Add: Total stock based employee
compensation  expense as reported under
intrinsic value method (APB. No. 25)                              82,500             --
Deduct: Total stock based employee
compensation expense as reported under fair value based
method (SFAS No. 123)                                           (247,100)            --
                                                             -----------    -----------
Net loss - Pro Forma                                         $(4,583,327)   $(1,772,257)
                                                             ===========    ===========

Net loss attributable to common stockholders - Pro forma     $(4,583,327)   $(1,772,257)
                                                             ===========    ===========
Basic (and assuming dilution) loss per share - as reported   $     (0.05)   $     (0.25)
                                                             ===========    ===========
Basic (and assuming dilution) loss per share - Pro forma     $     (0.05)   $     (0.25)
                                                             ===========    ===========
</TABLE>

On December 16, 2004, the Financial Accounting Standards Board (FASB) issued
FASB Statement No. 123R (revised 2004), "Share-Based Payment" which is a
revision of FASB Statement No. 123, "Accounting for Stock-Based Compensation".
Statement 123R supersedes APB opinion No. 25, "Accounting for Stock Issued to
Employees", and amends FASB Statement No. 95, "Statement of Cash Flows".
Generally, the approach in Statement 123R is similar to the approach described
in Statement 123. However, Statement 123R requires all share-based payments to
employees, including grants of employee stock options, to be recognized in the
income statement based on their fair values. Pro-forma disclosure is no longer
an alternative. On April 14, 2005, the SEC amended the effective date of the
provisions of this statement. The effect of this amendment by the SEC is that
the Company will have to comply with Statement 123R and use the Fair Value based
method of accounting no later than the third quarter of 2006. Management is
assessing the implications of this revised standard, which may materially impact
the Company's results of operations in the third quarter of fiscal year 2006 and
thereafter.

Liquidity
---------

As shown in the accompanying financial statements, the Company incurred a net
loss of $(6,277,658) during the period October 1, 2001 (date of inception)
through April 30, 2005. The Company's current liabilities exceeded its current
assets by $ 728,207 as of April 30, 2005.


                                      F-10
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

Concentrations of Credit Risk
-----------------------------

Financial instruments and related items, which potentially subject the Company
to concentrations of credit risk, consist primarily of cash, cash equivalents
and trade receivables. The Company places its cash and temporary cash
investments with high credit quality institutions. At times, such investments
may be in excess of the FDIC insurance limit. The Company periodically reviews
its trade receivables in determining its allowance for doubtful accounts. At
April 30, 2005 and 2004, allowance for doubtful accounts receivables was $0.

Research and Development
------------------------

Company-sponsored research and development costs related to both present and
future products will be expended in the period incurred.

Property and Equipments
-----------------------

Property and equipment are recorded at cost. Minor additions and renewals are
expensed in the year incurred. Major additions and renewals are capitalized and
depreciated over their estimated useful lives. Depreciation is calculated using
the straight-line method over the estimated useful lives. Estimated useful lives
of major depreciable assets are as follows:

Leasehold improvements        5 years
Automobiles                   5 years
Furniture and equipment       5 years
Computer Equipment            3 years

The Company follows a policy of charging the costs of advertising to expenses
incurred. During the years ended April 30, 2005 and 2004, the Company incurred
advertising costs of $28,107 and $4,057, respectively.

Net Earnings (Losses) Per Common Share
--------------------------------------

The Company computes earnings per share under Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" ("SFAS 128"). Net earnings (losses) per
common share is computed by dividing net income (loss) by the weighted average
number of shares of common stock and dilutive common stock equivalents
outstanding during the year. Dilutive common stock equivalents consist of shares
issuable upon conversion of convertible preferred shares and the exercise of the
Company's stock options and warrants (calculated using the treasury stock
method).

Reclassifications
-----------------

Certain reclassifications have been made to conform to prior periods' data to
the current presentation. These reclassifications had no effect on reported
losses.


                                      F-11
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE A - SUMMARY OF ACCOUNTING POLICIES (Continued)

New Accounting Pronouncements
-----------------------------

In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS
151, Inventory Costs-- an amendment of ARB No. 43, Chapter 4. This Statement
amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify
the accounting for abnormal amounts of idle facility expense, freight, handling
costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4,
previously stated that ". . . under some circumstances, items such as idle
facility expense, excessive spoilage, double freight, and rehandling costs may
be so abnormal as to require treatment as current period charges. . . ." This
Statement requires that those items be recognized as current-period charges
regardless of whether they meet the criterion of "so abnormal." In addition,
this Statement requires that allocation of fixed production overheads to the
costs of conversion be based on the normal capacity of the production
facilities. This Statement is effective for inventory costs incurred during
fiscal years beginning after June 15, 2005. Management does not believe the
adoption of this Statement will have any immediate material impact on the
Company.

In December 2004, the FASB issued SFAS No.152, "Accounting for Real Estate
Time-Sharing Transactions--an amendment of FASB Statements No. 66 and 67" ("SFAS
152) The amendments made by Statement 152 This Statement amends FASB Statement
No. 66, Accounting for Sales of Real Estate, to reference the financial
accounting and reporting guidance for real estate time-sharing transactions that
is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real
Estate Time-Sharing Transactions. This Statement also amends FASB Statement No.
67, Accounting for Costs and Initial Rental Operations of Real Estate Projects,
to state that the guidance for (a) incidental operations and (b) costs incurred
to sell real estate projects does not apply to real estate time-sharing
transactions. The accounting for those operations and costs is subject to the
guidance in SOP 04-2. This Statement is effective for financial statements for
fiscal years beginning after June 15, 2005 with earlier application encouraged.
The Company does not anticipate that the implementation of this standard will
have a material impact on its financial position, results of operations or cash
flows.


                                      F-12
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE A - SUMMARY OF ACCOUNTING POLICIES (Continued)

New Accounting Pronouncements (Continued)
-----------------------------------------

On December 16, 2004, the Financial Accounting Standards Board ("FASB")
published Statement of Financial Accounting Standards No. 123 (Revised 2004),
Share-Based Payment ("SFAS 123R"). SFAS 123R requires that compensation cost
related to share-based payment transactions be recognized in the financial
statements. Share-based payment transactions within the scope of SFAS 123R
include stock Warrants, restricted stock plans, performance-based awards, stock
appreciation rights, and employee share purchase plans. On April 14, 2005, the
SEC amended the effective date of the provisions of this statement. Accordingly,
the Company will implement the revised standard in the forth quarter of fiscal
year 2006. Currently, the Company accounts for its share-based payment
transactions under the provisions of APB 25, which does not necessarily require
the recognition of compensation cost in the financial statements. Management is
assessing the implications of this revised standard, which may materially impact
the Company's results of operations in the third quarter of fiscal year 2006 and
thereafter.

On December 16, 2004, FASB issued Statement of Financial Accounting Standards
No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29,
Accounting for Nonmonetary Transactions (" SFAS 153"). This statement amends APB
Opinion 29 to eliminate the exception for nonmonetary exchanges of similar
productive assets and replaces it with a general exception for exchanges of
nonmonetary assets that do not have commercial substance. Under SFAS 153, if a
nonmonetary exchange of similar productive assets meets a commercial-substance
criterion and fair value is determinable, the transaction must be accounted for
at fair value resulting in recognition of any gain or loss. SFAS 153 is
effective for nonmonetary transactions in fiscal periods that begin after June
15, 2005. The Company does not anticipate that the implementation of this
standard will have a material impact on its financial position, results of
operations or cash flows.

In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, "Accounting for
Conditional Asset Retirement Obligations, an interpretation of FASB Statement
No. 143," which requires an entity to recognize a liability for the fair value
of a conditional asset retirement obligation when incurred if the liability's
fair value can be reasonably estimated. The Company is required to adopt the
provisions of FIN 47 no later than the end of its fiscal 2006. The Company does
not expect the adoption of this Interpretation to have a material impact on its
consolidated financial position, results of operations or cash flows.

In May 2005 the FASB issued Statement of Financial Accounting Standards (SFAS)
No. 154, "Accounting Changes and Error Corrections, a replacement of APB Opinion
No. 20 and FASB Statement No. 3." SFAS 154 requires retrospective application to
prior periods' financial statements for changes in accounting principle, unless
it is impracticable to determine either the period-specific effects or the
cumulative effect of the change. SFAS 154 also requires that retrospective
application of a change in accounting principle be limited to the direct effects
of the change. Indirect effects of a change in accounting principle, such as a
change in non-discretionary profit-sharing payments resulting from an accounting
change, should be recognized in the period of the accounting change. SFAS 154
also requires that a change in depreciation, amortization, or depletion method
for long-lived, non-financial assets be accounted for as a change in accounting
estimate effected by a change in accounting principle. SFAS 154 is effective for
accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005. Early adoption is permitted for accounting changes and
corrections of errors made in fiscal years beginning after the date this
Statement is issued. The Company does not expect the adoption of this SFAS to
have a material impact on its consolidated financial position, results of
operations or cash flows.


                                      F-13
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE B - MERGER  AND CORPORATE RESTRUCTURE

On February 27, 2004, the Company entered into an Agreement of Plan and
Reorganization ("Agreement" or "Merger") with Sparta Commercial Services LLC
("Sparta"). As a result of the Merger, there was a change in control of the
public entity. In accordance with SFAS No. 141, Sparta was the acquiring entity.
While the transaction is accounted for using the purchase method of accounting,
in substance the Agreement is a recapitalization of Sparta's capital structure.

For accounting purposes, the Company accounted for the transaction as a reverse
acquisition and Sparta is the surviving entity. The total purchase price and
carrying value of net assets acquired was $61,187. The Company did not recognize
goodwill or any intangible assets in connection with the transaction. From April
1988 until the date of the Agreement, the Company was an inactive corporation
with no significant assets and liabilities.

Effective with the Agreement, all previously outstanding membership interests
owned by the Sparta's members were exchanged for an aggregate of 17,920,346
shares of the Company's common stock. The value of the stock that was issued was
the historical cost of the Company's net tangible assets, which did not differ
materially from their fair value.

The total consideration paid was $61,187 and the significant components of the
transaction are as follows:

         Common stock retained                        $ 56,637
         Assets acquired                                  (594)
         Liabilities assumed                             5,144
         Cash paid                                          --
                                                      --------
         Total consideration paid/organization cost   $ 61,187
                                                      ========

In accordance with SOP 98-5, the Company expensed $61,187 as organization costs.

NOTE C - PREPAID EXPENSE AND DEPOSITS

Prepaid expenses and deposits at April 30, 2005 and 2004 consist of the
following:

                                                         2005      2004
                                                       ---------    ------

         Security deposit to landlord                  $  40,800    $   --

         Advance lease system deposit                      5,000        --
         Consolidated electric deposit                     3,167        --
         Purchase option deposit                         250,000        --
         Less: valuation allowance                      (250,000)       --
                                                       ---------    ------

         Total prepaid expenses and deposits           $  48,967    $   --
                                                       =========    ======


                                      F-14
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE D - MOTORCYCLES AND OTHER VEHICLES UNDER OPERATING LEASES

Motorcycles and other vehicles under operating leases at April 30, 2005 and 2004
consist of the following:

<TABLE>
<CAPTION>
                                                                            2005        2004
                                                                          ---------    ------
        <S>                                                               <C>          <C>
        Motorcycles and other vehicles                                    $ 113,278    $   --
        Less: accumulated depreciation                                      (13,392)       --
                                                                          ---------    ------
        Motorcycles and other vehicles, net of accumulated depreciation      99,886        --
                                                                          ---------    ------
        Less: estimated reserve for residual values                              --        --
                                                                          ---------    ------
        Motorcycles and other vehicles under operating leases, net
                                                                          $  99,886    $   --
                                                                          =========    ======
</TABLE>

At April 30, 2005, motorcycles and other vehicles are depreciated to the
estimated residual values of $42,964 over the lives of their lease contracts.

The following is a schedule by years of minimum future rentals on non cancelable
operating leases as of April 30, 2005:

        Year ending April 30,
        2006                                                        $25,818
        2007                                                         30,700
        2008                                                         18,858
        2009                                                          2,530
                                                                    -------

        Total                                                       $77,906
                                                                    =======

NOTE E - RETAIL INSTALLMENT RECEIVABLES

Retail installment sale receivables, which are carried at cost, were $36,285 and
$0 at April 30, 2005 and 2004, respectively. The following is a schedule by
years of future payments related to these receivables. Future payments include
amortization of cost as well as a profit margin.

        Year ending April 30,
        2006                                                        $ 17,426
        2007                                                          17,300
        2008                                                           7,109
        2009                                                             991
                                                                    --------
                                                                      42,826
        Less: interest portion                                        (6,541)
                                                                    ========
                                                                      36,285
        Less: allowance for doubtful receivables                          --
                                                                    --------
                                                                      36,285
        Less: current receivables                                    (14,764)
                                                                    --------
                                                                    $ 21,521
                                                                    ========


                                      F-15
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE F - PROPERTY AND EQUIPMENT

Major classes of property and equipment at April 30, 2005 and 2004 consist of
the followings:

                                                             2005         2004
                                                           --------     --------
Computer equipment , web site and furniture                $122,187     $  1,223
Less: accumulated depreciation and amortization              15,378           30
                                                           --------     --------

Net property and equipment                                 $106,809     $  1,193
                                                           ========     --------

Depreciation and amortization expense was $15,348 and $30 for the years ended
April 30, 2005 and 2004, respectively.

NOTE G - NOTES PAYABLE

Notes payable at April 30, 2005 and 2004 are as follows:

<TABLE>
<CAPTION>
                                                                                                  2005        2004
                                                                                                ---------    ------
<S>                                                                                             <C>          <C>
Notes payables; 10% interest, unsecured, originally scheduled to expire on April
30, 2005, the note holders are entitled to an "Equity Kicker" equal to 128,206
restricted shares of common stock for each $100,000 loaned, in the event of
default, as penalty, the repayment after default of promissory note shall be
collateralized by certain security interest as per the terms of the agreement
Notes were subsequently extended until August 31, 2005 and beyond, with interest
increased to 20% in certain instances, and the Equity Kicker equal to
192,308 restricted shares of common stock for each $100,000 loaned in certain instances         $ 300,000    $   --

Note payable to officer of the Company,  unsecured,  non-interest bearing,  payable on demand
(Note H)                                                                                           25,000        --
                                                                                                ---------    ------
                                                                                                  325,000        --
Less: current portion                                                                            (325,000)       --
                                                                                                ---------    ------
Notes payable - long term                                                                       $      --    $   --
                                                                                                =========    ======
</TABLE>


                                      F-16
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE H - RELATED PARTY TRANSACTIONS

The Company entered in to a licensing agreement relating to the use of a
proprietary operating system, with an entity controlled by the Company's
President and Chief Executive Officer. During the years ended April 30, 2005 and
2004, the Company charged to operations $150,633 and $730,433, respectively, in
connection with the licensing agreement. At April 30, 2005 and 2004, the balance
outstanding on account of licensing agreement payable to related party was $0.
During the years ended April 30, 2005 and 2004, the Company paid $81,000 and $0,
for a purchase option agreement whereby the Company has the option to purchase
from a related party, portions of a certain portfolio of equipment leases for
motorcycles.

The Company entered into a purchase option agreement with American Motorcycle
Leasing Corp., an entity controlled by the Company's President and a significant
shareholder, on November 2, 2004 at a cost to Sparta Commercial Services of
$250,000.. This agreement granted Sparta Commercial Services the right, for a
two year period, to purchase portions of a certain portfolio of equipment leases
that American Motorcycle Leasing Corp. owns. The portfolio is secured by a first
priority security interest in favor of Citibank, N.A. or its assigns. The cost
of $250,000 has been charged to operations in fiscal 2005. As of April 30, 2005,
payments against this obligation of $81,000 were made. In June, 2005, an
additional $20,000 was paid.

Up to November 30, 2004, the Company leased office space from an entity
controlled by the Company's President and Chief Executive Officer. From December
1, 2004, the Company has entered into a lease agreement for office premises with
an unrelated party. (Note M)

In January 2005, the Company received a loan of $25,000 from an officer. This
loan is non-interest bearing and is payable on demand. (Note G)

NOTE I - EQUITY INSTRUMENTS

The Company is authorized to issue 10,000,000 shares of preferred stock with
$0.001 par value per share and $100 stated value per share, of which 35,840
shares have been designated as Series A convertible preferred stock and
340,000,000 shares of common stock with $0.001 par value per share. As of April
30, 2005 and 2004, the Company has issued and outstanding 18,100 and 0 shares of
preferred stock issued and outstanding, respectively. The Company has 86,005,415
and 7,079,654 shares of common stock issued and outstanding as of April 30, 2005
and 2004, respectively.

On December 27, 2004, the Company effected a one-for-two hundred reverse stock
split followed by a forward split of twenty five-for-one of its authorized and
outstanding shares of common stock, $.001 par value. All references in the
financial statements and notes to financial statements, numbers of shares and
share amounts have been retroactively restated to reflect the reverse split.

Common Stock
------------

In June 2003, Sparta issued 448,000 shares of membership interest to various
consultants in exchange for services valued at $1 per share. The units of
membership interest issued was valued at approximately $1 per share, which
represents the fair value of the units issued, which did not differ materially
from the value of the services rendered.

During the year ended April 30, 2004, Sparta issued for cash 775,000 shares of
membership interest for $775,000.


                                      F-17
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE I - EQUITY INSTRUMENTS (continued)

In December 2003, Sparta issued 330,433 shares of membership interest for
licensing fees payable to a company controlled by principal members of Sparta.
The units of membership interest issued was valued at approximately $1 per
share, which represents the fair value of the units issued, which did not differ
materially from the value of the services rendered.

In February 2004, as per agreement of Plan and Reorganization ("Agreement") with
Sparta, all previously outstanding membership interests owned by the Sparta's
members were exchanged for an aggregate of 17,920,346 shares of the Company's
common stock. In September 2004, the Company issued 17,920,346 shares of common
stock. The value of the stock that was issued was the historical cost of the
Company's net tangible assets, which did not differ materially from their fair
value. After the authorized capital of the company was increased, the Company
issued an additional 60,813,982 shares of its common stock that was due to
Sparta's former members under the merger agreement. Also, as per the Agreement,
7,079,654 shares of common stock were retained by the stockholders of the
Company.

 In January, 2005, 113,635 shares of restricted stock issued to the former Chief
Financial Officer, Daniel Lanjewar, were vested and issued.

In April, 2005, 96,155 shares were issued pursuant to an agreement with two
individuals who provided short term note payable financing to the Company.

Preferred Stock Series A
------------------------

In December 2004, the Company commenced a private placement to raise up to
$3,000,000 through the sale of up to 30 units of our securities at $100,000 per
unit. Each unit consists of (i) 1,000 shares of series A convertible, redeemable
preferred stock and (ii) warrants to purchase 320,513 shares of common stock,
exercisable for three years at $0.195 per share. The preferred stock has a
stated value of $100 per share, carries a 6% annual cumulative dividend, payable
semi-annually in arrears, and is convertible into shares of common stock at the
rate of one preferred share into 641 shares of common stock.

In December 2004, the Company began a private placement transaction utilizing a
designated registered broker-dealer as a placement agent. During the year ended
April 30, 2005, the Company issued 12,250 preferred shares at a stated value of
$100 per share and warrants to purchase 3,926,286 shares of common stock,
exercisable for three years at $0.195 per share, for aggregate gross proceeds of
$1,225,000 received from investors. In connection with the private placement,
during the year ended April 30, 2005, the Company issued as compensation to the
placement agent warrants to 785,257 shares of common stock, exercisable for five
years at $0.172 per share. The warrants, which were valued at approximately
$383,284 using the Black-Scholes option pricing model, were recognized as a cost
of issuance of the Series A Preferred shares.

During the year ended April 30, 2005, the Company sold rights to acquire
securities of the Company to investors for aggregate gross proceeds of $585,000.
Pursuant to the terms of the rights, as the Company conducted a closing to a
private placement transaction in 2004 utilizing a designated registered
broker-dealer as a placement agent, on January 1, 2005, the rights have
automatically converted into 5,850 preferred shares at a stated value of $100
per share and warrants to purchase 1,875,001 shares of common stock, exercisable
for three years at $0.195 per share.

In accordance with Emerging Issues Task Force Issue 98-5, Accounting for
Convertible Securities with a beneficial Conversion Features or Contingently
Adjustable Conversion Ratios ("EITF 98-5"), the Company recognized an imbedded
beneficial conversion feature present in the Preferred Stock. The Company
recognized and measured an aggregate of $1,810,000, which equals to the
intrinsic value of the imbedded beneficial conversion feature, to additional
paid-in capital and a return to the Preferred Stock holders. Since the preferred
shares were convertible at the date of issuance, the return to the preferred
shareholders attributed to the beneficial conversion feature has been recognized
in full at the date the Preferred Stock was issued.


                                      F-18
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE J - INCOME TAXES

Financial Accounting Standard No. 109 requires the recognition of deferred tax
liabilities and assets for the expected future tax consequences of events that
have been included in the financial statement or tax returns. Under this method,
deferred tax liabilities and assets are determined based on the difference
between financial statements and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected
to reverse. Temporary differences between taxable income reported for financial
reporting purposes and income tax purposes are insignificant.

At April 30, 2005, the Company has available for federal income tax purposes a
net operating loss carry forward of approximately $4,500,000, expiring in the
year 2024, that may be used to offset future taxable income. The Company has
provided a valuation reserve against the full amount of the net operating loss
benefit, since in the opinion of management based upon the earnings history of
the Company, it is more likely than not that the benefits will not be realized.
Also, due to change in the control after reverse acquisition of Sparta
Commercial Services, Inc., the Company's past accumulated losses to be carried
forward may be limited.

Components of deferred tax assets as of April 30, 2005 are as follows:

        Non current:
        Net operating loss carry forward                   $ 1,530,000
        Valuation allowance                                 (1,530,000)
                                                           -----------
        Net deferred tax asset                             $        --
                                                           ===========

NOTE K - LOSSES PER COMMON SHARE

The following table presents the computation of basic and diluted loss per
share:

<TABLE>
<CAPTION>
                                                               2005           2004
                                                           ------------    -----------
<S>                                                        <C>             <C>
        Net loss available for common shareholders         $ (4,418,727)   $(1.772,257)
                                                           ============    ===========
        Basic and diluted loss per share                   $      (0.05)   $     (0.25)
                                                           ============    ===========
        Weighted average common shares outstanding-basic
        Diluted                                              85,812,006      7,079,654
</TABLE>


                                      F-19
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE L - STOCK OPTIONS AND WARRANTS

On April 29, 2005, the Company issued to the Chief Operating Officer non
qualified stock options to purchase 875,000 shares of the company's common stock
at an exercise price of $0.605 per share. The options have a five year life.

a) The following table summarizes the stock options issued to officers and
employees outstanding and the related price. These are the first options issued
under the plan.

<TABLE>
<CAPTION>
                Stock Options Outstanding                                         Stock Options Exercisable
                -------------------------                                         -------------------------
                              Weighted Average
                                  Remaining               Weighted Average                         Weighted Average
Exercise        Number        Contractual Life                Exercise              Number             Exercise
 Prices      Outstanding           (Years)                     Price             Exercisable             Price
 ------      -----------           -------                     -----             -----------             -----
<S>            <C>                  <C>                        <C>                 <C>                  <C>
 $ 0.605       875,000              5.00                       $0.605              175,000              $0.605
</TABLE>

Transactions involving stock options issued to employees are summarized as
follows:

                                                              Weighted Average
                                            Number of Shares  Price Per Share
                                            ----------------  ---------------
Outstanding at April 30, 2003                         --         $   --
                                                 -------         ------
   Granted                                            --             --
   Exercised                                          --             --
Outstanding at April 30, 2004                         --             --
                                                 -------         ------
   Granted                                       875,000         $0.605
   Exercised                                          --             --
   Canceled or expired                                --             --
                                                 -------         ------
Outstanding at April 30, 2005                    875,000         $0.605
                                                 -------         ------

The weighted fair value of the stock options granted during the years ended
April 30, 2005 and 2004 and the weighted average significant assumptions used to
determine fair values, using the Black Scholes option pricing model are as
follows:

Significant Assumptions (weighted average):                     2005        2004
    Risk free interest rate at grant date:                       3%          n/a
    Expected stock price volatility                              60%         n/a
    Expected dividend payout                                      0          n/a
    Expected option life in years                                 5          n/a

If the Company recognized compensation cost for the non qualified stock option
plan in accordance with SFAS No. 123, the company would have incurred an
additional $247,100 in expense resulting in a pro forma net loss of
$(4,665,827), or $(0.05) per share.


                                      F-20
<PAGE>

                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE L - STOCK OPTIONS AND WARRANTS (CONTINUED)

b) The following table summarizes the changes in warrants outstanding and the
related prices for the shares of the Company's common stock issued to
non-employees of the Company.

<TABLE>
<CAPTION>
                Warrants Outstanding                                               Warrants Exercisable
                --------------------                                               --------------------
                              Weighted Average
                                  Remaining               Weighted Average                         Weighted Average
Exercise        Number        Contractual Life                Exercise              Number             Exercise
 Prices      Outstanding           (Years)                     Price             Exercisable             Price
 ------      -----------           -------                     -----             -----------             -----
<S>           <C>                   <C>                       <C>                 <C>                  <C>
$0.195          200,000             3.00                      $0.195                100,000            $0.195
$0.172          785,257             5.00                      $0.172                785,257            $0.172
$0.195        3,926,286             3.00                      $0.195              3,926,286            $0.195
$0.195        1,875,001             3.00                      $0.195              1,875,001            $0.195
------        ---------             ----                      ------              ---------            ------
$0.195        6,786,544             3.11                      $0.194              6,686,544            $0.194
======        =========             ====                      ======              =========            ======
</TABLE>

Non- Employee Stock Warrants (Continued)
----------------------------------------

Transactions involving stock warrants issued to non-employees are summarized as
follows:

                                                                        Weighted
                                                                         Average
                                                                          Price
                                                             Number        Per
                                                            of Shares     Share
                                                            ---------     ------
Outstanding at April 30, 2003                                      --     $   --
                                                            ---------     ------
   Granted                                                         --         --
   Exercised                                                       --         --
Outstanding at April 30, 2004                                      --         --
                                                            ---------     ------
   Granted                                                  6,786,544     $0.194
   Exercised                                                       --         --
   Canceled or expired                                             --         --
                                                            ---------     ------
Outstanding at April 30, 2005                               6,786,544     $0.194
                                                            ---------     ------

The weighted-average fair value of stock warrants granted to non-employees
during the years ended April 30, 2005 and 2004 and the weighted-average
significant assumptions used to determine those fair values, using a
Black-Scholes option pricing model are as follows:

                                                               2005       2004
                                                              --------  --------

Significant assumptions (weighted-average):
    Risk-free interest rate at  grant date                          3%     n/a
    Expected stock price volatility                                60%     n/a
    Expected dividend payout                                       --       --
    Expected option life-years (a)                            3.11 yrs     n/a
(a) The expected option life is based on contractual expiration dates.

The amount of the expense charged to operations for compensatory warrants
granted in exchange for services was $473,264 and $0 for the years ended April
30, 2005 and 2004, respectively.


                                      F-21
<PAGE>


                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE M - COMMITMENTS AND CONTINGENCIES

Operating Lease Commitments
---------------------------

In October 2004, the Company entered into a lease agreement with an unrelated
party for office space in New York City from December 1, 2004 through November
30, 2007. Total lease rental expense for the years ended April 30, 2005 and
2004, was $125,214 and $19,772, respectively.

Commitments for minimum rentals under non-cancelable leases at April 30, 2005
are as follows:

         Year ended April 30,                                         Amount
         2006                                                      $ 116,224
         2007                                                        177,061
         2008                                                        104,973
                                                                   ---------
                                                                   $ 449,258

Employment and Consulting Agreements
------------------------------------
The Company has employment agreements with all of its employees. In addition to
salary and benefit provisions, the agreements include non-disclosure and
confidentiality provisions for the protection of the Company's proprietary
information.

The Company has consulting agreements with outside contractors to provide
marketing and financial advisory services. The Agreements are generally for a
term of 12 months from inception and renewable automatically from year to year
unless either the Company or Consultant terminates such engagement by written
notice.

On November 1, 2004, the Company entered into an employment agreement with
Richard P. Trotter, pursuant to which the Company agreed to issue 125,000 shares
of common stock during the course of the agreement. The grant of shares is
subject to vesting and subject to continued employment. On November 1, 2004,
25,000 shares vested and are yet to be issued, and the reminder of the shares
are to vest, subject to proportionate adjustment in the event of employment
termination for any incomplete vesting period, as follows: 25,000 shares on
November 1, 2005; 25,000 shares on November 1, 2006; 25,000 shares on November
1, 2007; 12,500 shares on November 1, 2008; and 12,500 on November 1, 2009.
During the year ended April 30, 2005, the Company has recorded $20,000 as
expenses as per this employment agreement.

Litigation
----------

The Company is subject to legal proceedings and claims which arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters should not have a material adverse effect on its financial position,
results of operations or liquidity.


                                      F-22
<PAGE>


                        SPARTA COMMERCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2005 and 2004

NOTE N - SUBSEQUENT EVENTS

In the period since April 30, 2005, the Company has received an additional
$1,775,000 related to the private placement transaction. In connection with
these proceeds, the Company has issued 17,775 preferred shares at a stated value
of $100 per share and warrants to purchase 6,312,505 shares of common stock,
exercisable for three years at $0.195 per share, and as compensation to the
placement agent warrants to 1,137,822 shares of common stock, exercisable for
five years at $0.172 per share. A subscription received prior to April 30,2005
for 0.05 units was subsequently rescinded.

In the period since April 30, 2005, the Company also received an additional
$5,000 from a private investor with terms consistent with the private placement.

NOTE O - GOING CONCERN MATTERS

The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the accompanying
financial statements during the period October 1, 2001 (date of inception)
through April 30, 2005, the Company incurred a loss of $6,277,658. These factors
among others may indicate that the Company will be unable to continue as a going
concern for a reasonable period of time.

The Company's existence is dependent upon management's ability to develop
profitable operations. Management is devoting substantially all of its efforts
to developing its business and raising capital and there can be no assurance
that the Company's efforts will be successful. However, the planned principal
operations have not commenced and no assurance can be given that management's
actions will result in profitable operations or the resolution of its liquidity
problems. The accompanying statements do not include any adjustments that might
result should the Company be unable to continue as a going concern.

In order to improve the Company's liquidity, the Company's management is
actively pursing additional equity financing through discussions with investment
bankers and private investors. There can be no assurance the Company will be
successful in its effort to secure additional equity financing.

                                      F-23

<PAGE>


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Former Principal Accountant
---------------------------

On February 27, 2003, pursuant to an Agreement and Plan of Reorganization, we
acquired substantially all of the outstanding membership interests in Sparta
Commercial Services, LLC and issued shares representing approximately 91.75% of
the registrant, resulting in a change in control of our company.

On June 9, 2004, we notified S. W. Hatfield, CPA, our independent public
accountants, that we were terminating its services, effective as of that date.
Our decision to change its principal accountant was recommended and approved by
our Board of Directors.

The former principal accountants' report on our financial statements for the
years ended April 30, 2002 and 2003 (prior to our reverse acquisition of
Sparta), expressed substantial doubt with respect to our ability, at that time,
to continue as a going concern. The former principal accountants' reports on our
financial statements for the past two years did not contain an adverse opinion
or disclaimer of opinion, and were not modified as to uncertainty, audit scope,
or accounting principles, except as to going concern issues. Furthermore, during
such period, there were no disagreements with the former principal accountants
within the meaning of Instruction 4 to Item 304 of Regulation S-B under the
Securities Exchange Act of 1934 on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of the former principal
accountants, would have caused them to make reference in connection with their
opinion to the subject matter of the disagreement in connection with any report
they might have issued. We have authorized the former accountants to respond
fully to all inquires of the successor accountant concerning any matter.

New Principal Accountant
------------------------

On June 9, 2004, we engaged Russell Bedford Stefanou Mirchandani LLP as our
principal registered public accounting firm. Our Board of Directors approved the
selection of Russell Bedford Stefanou Mirchandani LLP as our principal
registered public accounting firm. We did not previously consult with Russell
Bedford Stefanou Mirchandani LLP regarding any matter, including but not limited
to:

      o     the application of accounting principles to a specified transaction,
            either completed or proposed; or
      o     the type of audit opinion that might be rendered on the Company's
            financial statements; or
      o     any matter that was either the subject matter of a disagreement (as
            defined in Item 304(a)(1)(iv) of Regulation S-B and the related
            instructions) or a reportable event (as defined in Item 304(a)(1)(v)
            of Regulation S-B).

                                      24
<PAGE>


ITEM 8A. CONTROLS AND PROCEDURES

Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act is accumulated and communicated to our management, including our
principal executive and financial officers, as appropriate to allow timely
decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer, who is
also presently serving as our Principal Financial Officer, evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(e) or Rule 15a-15(e) of the Exchange Act) as of the end of the period
covered by this report. Based upon that evaluation, the Chief Executive Officer
and Principal Financial Officer concluded that the Company's disclosure controls
and procedures were effective, as of the date of their evaluation, for the
purposes of recording, processing, summarizing and timely reporting material
information required to be disclosed in reports filed by the Company under the
Securities Exchange Act of 1934.

Changes in Internal Control over Financial Reporting

As required by Rule 13a-15(d), the Company's Chairman, Chief Executive Officer
and Principal Financial Officer, also conducted an evaluation of the Company's
internal controls over financial reporting to determine whether any changes
occurred during the fourth fiscal quarter that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting. During the preparation of the Company's financial
statements as of and for the year ended April 30, 2005, the Company has
concluded that the current system of disclosure controls and procedures was not
effective because of the internal control weaknesses identified below. As a
result of this conclusion, the Company has initiated the changes in internal
control, to the extent possible given limitations in financial and manpower
resources, also described below. It should be noted that any system of controls,
however well designed and operated, can provide only reasonable, and not
absolute, assurance that the objectives of the system will be met. In addition,
the design of any control system is based in part upon certain assumptions about
the likelihood of future events.

Lack of Adequate Accounting Staff

Because of the small size of our staff, the Chief Executive Officer and
Principal Financial Officer processed virtually all of our financial activity.
As such, there is an inherent lack of segregation of duties. The Company is
developing procedures to address this situation which will improve the quality
of future period financial reporting. With the exception of this weakness, our
Chief Executive Officer and Principal Financial Officer concluded that our
disclosure controls and procedures as of the end of the period covered by this
report were effective.

                                      25
<PAGE>


ITEM 8B. OTHER INFORMATION

In December 2004, we commenced a private placement to raise up to $3,000,000
through the sale of up to 30 units of our securities at $100,000 per unit. Each
unit consists of (i) 1,000 shares of series A convertible, redeemable preferred
stock and (ii) warrants to purchase 320,513 shares of common stock, exercisable
for three years at $0.195 per share. The preferred stock has a stated value of
$100 per share, carries a 6% annual cumulative dividend, payable semi-annually
in arrears, and is convertible into shares of common stock at the rate of one
preferred share into 641 shares of common stock. The private placement is being
conducted by a placement agent on a best efforts basis. The units are being
offered solely to accredited investors. The units offered have not been
registered under the Securities Act and may not be offered or sold in the United
States absent registration or an applicable exemption from registration
requirements. We agreed to file a registration statement, at our expense, for
the resale of common stock underlying the units within 90 days of the final
closing of the private placement. The placement agent is entitled to 10% of the
cash proceeds from the private placement and reimbursement for expenses, and
warrants to purchase such number of shares of common stock, exercisable for five
years at $0.172 per share from the date of issuance, as equals 10% of the number
of shares of common stock underlying the preferred stock sold. In transactions
with accredited investors deemed exempt from registration pursuant to Section
4(2) of the Securities Act, from December 2004 through April 30, 2005, we sold
12.25 units for proceeds of $1,225,000, and issued 785,257 warrants to the
placement agent. A subscription for 0.05 units was subsequently rescinded.
Through July, 2005, we sold an aggregate of 29.95 units for proceeds of
$2,995,000. We used the proceeds for working capital purposes.

In October and November 2004, pursuant to loan agreements, we issued promissory
notes for the aggregate principal amount of $375,000. Pursuant to the loan
agreements, the notes carried interest at the rate of 10% per year, and we
agreed to grant 128,206 restricted shares of common stock to the note holders
for each $100,000 loaned. The notes were to mature in April 2005. In the event
of default on repayment of the promissory notes, as penalty, (i) the interest
rate on the unpaid principal shall be increased to a rate of 20% per annum
commencing from the date of default, (ii) the equity kicker shall be increases
to a rate of 192,308 restricted shares of common stock for each $100,000 loaned,
and (iii) the repayment after default of the promissory notes shall be
collateralized by a subordinated security interest in the Company's assets. The
security interest shall be subordinate to the rights of any lending institution,
any asset-based lending agreement, and any rights and preferences of any
subscribers in the private placement of units that commenced in December 2004.
Through April 30, 2005, we repaid notes with an aggregate principal amount of
$75,000 and accrued interest thereon, and issued 96,155 shares of common stock
to the note holders. On May 2, 2005 an additional $75,000 was repaid and 96,155
shares of common stock will be issued. In April 2005, the four note holders of
the remaining principal amount of $225,000 agreed to extend the maturity date of
the loans from April 30, 2005 to May 31, 2005. In consideration of the
extension, the interest rate on three notes were increased to the rate of 20%
per year and the shares of common stock issuable to those note holders will be
based on 192,308 restricted shares of common stock for each $100,000 loaned. On
or about May 25, 2005 and May 27, 2005, the four note holders further agreed to
extend the maturity date of the loans, so that one note in the principal amount
of $50,000 was due June 15, 2005, and the three other notes in the aggregate
principal amount of $175,000 were due June 30, 2005. In June 2005, we repaid two
notes with the principal amount of $75,000 and issued 96,155 shares of common
stock to the note holders. An additional 48,076 shares is yet to be issued. In
June 2005, a holder of a $50,000 note due June 30, 2005 agreed to extend the
maturity date to August 15, 2005, and another holder of a $100,000 note due June
30, 2005 agreed to extend the maturity date to September 1, 2005.

In July, 2005, we sold to one accredited investor for the sum of $5,000, 50
shares of Series A convertible, redeemable preferred stock and warrants to
purchase 16,026 shares of common stock, exercisable for three years at $0.195
per share. The preferred stock has a stated value of $100 per share, carries a
6% annual cumulative dividend, payable semi annually in arrears, and is
convertible into shares of common stock at a rate of one preferred share into
641 shares of common stock. We used the proceeds for working capital purposes.

                                      26
<PAGE>


                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

OUR MANAGEMENT

The persons listed in the table below are our present directors and executive
officers.

Name                     Age     Position
-----------------        ---     --------
Anthony L. Havens        51      Chief Executive Officer, President and Chairman
Kristian Srb             50      Director
Jeffrey Bean             51      Director
Richard P. Trotter       62      Chief Operating Officer
Michael J. Mele          52      Chief Financial Officer
Sandra L. Ahman          42      Vice President, Secretary and Director

MANAGEMENT PROFILE

ANTHONY L. HAVENS, CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHAIRMAN. On February
27, 2004, Mr. Havens became our Chief Executive Officer, President and Chairman
of the Board. Mr. Havens has been the Managing Member and Chief Executive
Officer of Sparta Commercial Services, LLC since its inception in 2001. He is
involved in all aspects of Sparta's operations, including providing strategic
direction, and developing sales and marketing strategies. From 1994 to 2004, Mr.
Havens has been Chief Executive Officer and a director of American Motorcycle
Leasing Corp. He co-founded American Motorcycle Leasing Corp. in 1994, and
developed its operating platform and leasing program to include a portfolio
which includes both prime and sub-prime customers. Mr. Havens has over 20 years
of experience in finance and investment banking.

KRISTIAN SRB, DIRECTOR. Mr. Srb joined our Board of Directors in December 2004.
Mr. Srb has been a director of American Motorcycle Leasing Corp. from 1994 to
the present. Mr. Srb was President of American Motorcycle Leasing Corp. from
1994 to 1999. Since 1999, Mr. Srb has engaged in private investment activities.
He has over 16 years experience in international brand development and
management, including for 13 years with Escada A.G.

JEFFREY BEAN, DIRECTOR. Mr. Bean joined our Board of Directors in December 2004.
Mr. Bean is the founding partner of GoMotorcycle.com. Formed in January 1999,
GoMotorcycle.com is currently engaged in the sale of motorcycle parts and
accessories over the Internet. Prior to founding GoMotorcycle.com, Mr. Bean was
an institutional broker and trader at Refco, Inc. from 1985 to 1997. From 1977
to 1985, Mr. Bean was President of Thomaston Press, Ltd., a sales printing
concern. He received a B.A. degree from the University of Virginia.

RICHARD P. TROTTER, CHIEF OPERATING OFFICER. Mr. Trotter has been our Chief
Operating Officer since November 2004. From 2001 to 2004, Mr. Trotter was
President, Chief Credit Officer, of American Finance Company, Inc., purchasing
retail automobile installment contracts from independent automobile dealers
nationwide. From 1996 to 2001, he was Senior Vice President of Originations for
Consumer Portfolio Services, Inc., one of the nation's leading purchasers of
non-prime retail automobile installment contracts. From 1994 to 1996, he was
Senior Vice President of Marketing for Consumer Portfolio Services, Inc. His
experience also includes positions as Chief Operating Officer, Executive
Director and President, and Chief Credit Officer for banks and financial
institutions in California. Mr. Trotter has over 30 years experience in
financial institutions and over 20 years experience specializing in the
automobile lending, servicing, and collecting industry.

                                       27
<PAGE>

MICHAEL J. MELE, CHIEF FINANCIAL OFFICER. On April 29, 2005, we named Michael J.
Mele our Chief Financial Officer. Mr. Mele brings to Sparta over twenty-eight
years of experience in diversified industries, holding executive positions
throughout his career. Mr. Mele served as Senior Vice President of Finance and
Administration of Aon Consulting, a human resource outsourcing group, from 2002
to 2004. From 2001 to 2002, Mr. Mele served as Executive Vice President and
Chief Financial Officer of Hobart West Group, a legal and staffing services
firm. From 1997 to 2001, Mr. Mele served as Senior Vice President and Chief
Financial Officer of ASI Solutions, Inc., a human resource consulting and
training services company. Mr. Mele's also served as Vice President of Finance
and Administration of Linotype- Hell Company, a printing equipment company, from
1993 to 1997, as Vice President of Finance and Administration at Daimler-Benz's
AEG Electronics North American unit from 1991 to 1993, as Director of Business
Planning and Analysis for a German petfood subsidiary of Mars, Inc. and
Controller for the internal information technology division of Mars, Inc., and
in various senior management capacities, including Director of Internal Audit,
Marketing Manager, and Division Controller positions, at Thomas and Betts
Corporation from 1979 to 1986. From 1976 to 1979, Mr. Mele was a senior
accountant at Peat, Marwick. Mr. Mele was graduated from Rutgers College in 1975
with an A.B. in Economics and from Rutgers University in 1976 with a Masters of
Business Administration.

SANDRA L. AHMAN, VICE PRESIDENT, SECRETARY AND DIRECTOR. On March 1, 2004,
Sandra Ahman became Vice President of Operations and Secretary of Sparta, and a
Director on June 1, 2004. She has been a Vice President of Sparta Commercial
Services, LLC since formation. From 1994 to 2004, she was Vice President of
Operations of American Motorcycle Leasing Corp. Prior to joining American
Motorcycle Leasing Corp., Ms. Ahman was with Chatham Capital Partners, Ltd.
Before joining Chatham in 1993, she was Manager, Human Resources for Comart and
Aniforms, a sales promotion and marketing agency in New York, where she worked
from 1986 to 1993. For the past 10 years, Ms. Ahman has been an active volunteer
with The Children's Aid Society in New York City. She is the Chairperson of its
Associates Council, a membership of 500 committed volunteers.

BOARD OF DIRECTORS, COMMITTEES AND MEETING

Our directors are elected annually to serve for one year and hold office until
the next annual meeting of the shareholders and until their successors are
elected and qualified. Our Board of Directors may increase the size of the Board
of Directors. Any director who fills a position created by the Board of
Directors serves until the next annual meeting of the shareholders. Our officers
are elected by the Board of Directors at the first meeting after each annual
meeting of our shareholders, and hold office until their death, resignation or
removal from office.

There are no family relationships among our executive officers or directors.
None of the our directors or officers are directors of another reporting
company. None of the directors and officers during the past five years have
been: involved in a bankruptcy petition or a pending criminal proceeding;
convicted in a criminal proceeding (excluding traffic and minor offenses);
subject to any order, judgment, or decree, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; or found by a court, the SEC or the
CFTC to have violated a federal or state securities or commodities law.

During the fiscal year that ended on April 30, 2005, the Board of Directors did
not hold any formal meetings, . Other matters were undertaken by written consent
by the Board of Directors.

The Board of Directors does not currently maintain an audit, nominating or
compensation committee, or similar committees, of the Board of Directors. We
plan to appoint an audit, nominating and compensation committee in the near
future.

The Board of Directors is responsible for matters typically performed by an
audit committee. We do not have a separate audit committee, or any other
committee, of the Board of Directors. No person serving on our Board of
Directors qualifies as a financial expert. We seek to attract persons with
financial experience to serve on our Board of Directors and we intend to form an
audit committee of the Board of Directors during our fiscal year 2005.

CODE OF ETHICS

We have not yet adopted a code of ethics applicable to our directors, officers
and employees. However, we expect to adopt a code of ethics during our fiscal
year 2005.

                                       26
<PAGE>

CONFLICTS OF INTEREST

Certain management employees of our company have worked for American Motorcycle
and Leasing Corp. and will continue to do so on a limited basis for the near
future as we transition from a development stage company and commence active
operations. While our business plans differ from those of American Motorcycle
and Leasing Corp., we operate in the same industry as American Motorcycle and
Leasing Corp. Mr. Havens is an officer, director and significant equity owner of
American Motorcycle and Leasing Corporation. Pursuant to a license agreement
between Sparta Commercial Services and American Motorcycle and Leasing Corp.,
Sparta Commercial Services issued 330,433 membership interests to American
Motorcycle and Leasing Corp., which will be exchanged for 34,256,941 shares of
our common stock after we increase our authorized capital. Officers and
directors of Sparta who are also shareholders of American Motorcycle and Leasing
Corp. disclaim ownership of, and entitled to, any of those shares. Issues could
arise with respect to the taking of corporate opportunities of each other. Any
competition with American Motorcycle and Leasing Corp. could adversely affect
our business, operating results and financial condition. Accordingly, we may be
subject to legal proceedings and claims, including claims of alleged
infringement of the intellectual property, competition, conflict of interest,
and other business governance related claims. Such claims, even if not
meritorious, could result in the expenditure of significant financial and
managerial resources.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Sparta's executive officers, directors, and persons who beneficially own more
than ten percent of the Company's common stock to file with the Securities and
Exchange Commission initial reports of beneficial ownership and reports of
changes in beneficial ownership of Sparta's common stock. Such persons are also
required by Securities and Exchange Commission regulations to furnish Sparta
with copies of all such Section 16(a) forms filed by such person. Based solely
on a review of the copies of such reports furnished to Sparta, Sparta is not
aware of any material delinquencies in the filing of such reports, except as
follows: on June 1, 2005, Michael J. Mele filed a Form 3 reporting his status as
an officer as of April 29, 2005.

<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

The table below sets forth information concerning the annual and long-term
compensation during our last three fiscal years of our Chief Executive Officer
and all of our other officers ("Named Executive Officers").

Prior to February 27, 2004, management spent less than five hours per month on
company matters. Accordingly, no officer or director received any compensation
other than reimbursement for out-of-pocket expenses incurred on behalf of the
Company, and no cash compensation, deferred compensation, employee stock
options, or long-term incentive plan awards were issued or granted to our
management through February 27, 2004.

<TABLE>
<CAPTION>
                                                                                     Long Term
                                                                                    Compensation
                                                        Annual Compensation            Awards
                                                     -----------------------  -------------------------
Name and                                                           Other      Restricted     Securities
Principal                                                          Annual        Stock       Underlying    All Other
Position                           Year    Salary     Bonus     Compensation    Awards      Options/SARS  Compensation
-----------------------------      ----   --------   --------   ------------  ----------    ------------  ------------
<S>                                <C>    <C>        <C>        <C>                 <C>           <C>     <C>
Anthony L. Havens (1)              2005   $233,333   $      0   $        0          0             0       $        0
 Chief Executive Officer,          2004   $ 46,667   $      0   $        0          0             0       $        0
 President, and Director
Richard P. Trotter (2)             2005   $ 80,000   $      0   $        0    125,000(3)    875,000(4)    $        0
  Chief Operating Officer
Michael J. Mele (5)                2005   $  3,125   $      0   $        0          0             0       $        0
  Chief Financial Officer
Daniel J. Lanjewar (6)             2005   $105,001   $      0   $        0    227,272(7)          0       $        0
  Former Chief Financial Officer
Sandra L. Ahman (8)                2005   $ 75,000   $      0   $        0          0             0       $        0
 Vice President and Secretary      2004   $ 12,500   $      0   $        0          0             0       $        0
</TABLE>

(1)   Became an officer on February 27, 2004. His reported fiscal year 2004
      compensation covers the period February 27, 2004 through April 30, 2004.
(2)   Became an officer on November 1, 2004. His reported fiscal year 2005
      compensation covers the period November 1, 2004 through April 30, 2005.
(3)   Refers to restricted stock, subject to vesting, granted. Pursuant to an
      employment agreement, Mr. Trotter is entitled to up to 125,000 shares of
      common stock. The grant of shares is subject to vesting and subject to
      continued employment. On November 1, 2004, 25,000 shares vested. An
      additional 100,000 shares are subject to vesting at a future date, subject
      to proportionate adjustment in the event of employment termination for any
      incomplete vesting period, as follows: 25,000 shares on November 1, 2005;
      25,000 shares on November 1, 2006; 25,000 shares on November 1, 2007;
      12,500 shares on November 1, 2008; and 12,500 on November 1, 2009.
(4)   Refers to stock options, subject to vesting, granted. Pursuant to option
      agreement dated April 29, 2005, Mr. Trotter is entitled to up to 875,000
      stock options, subject to vesting. The stock options are exercisable for
      five years from the vesting date at $0.605 per share. On April 29, 2005,
      stock options to purchase 175,000 shares vested, and the remaining options
      are to vest in equal installments over the next four anniversary date of
      the agreement.
(5)   Became an officer on April 29, 2005. His reported fiscal year 2005
      compensation covers the period from April 29, 2005.
(6)   Became an officer on August 2, 2004, and resigned on April 29, 2005. His
      reported fiscal year 2005 compensation covers the period August 2, 2004
      through April 29, 2005.
(7)   Refers to shares vested. Pursuant to an employment agreement, Mr. Lanjewar
      was entitled to up to 568,175 shares of common stock. The grant of shares
      was subject to vesting and subject to continued employment. On January 1,
      2005, 113,635 shares vested, and the reminder of the shares were to vest
      in equal portions on July 1, 2005, July 1, 2006, July 1, 2007, and July 1,
      2008, subject to proportionate adjustment in the event of employment
      termination for any incomplete vesting period. In April 2005, Mr. Lanjewar
      resigned as our Chief Financial Officer, and was vested with an additional
      113,637 shares of common stock.
(8)   Became an officer on March 1, 2004. Her reported fiscal year 2004
      compensation covers the period March 1, 2004 through April 30, 2004.

                                       27
<PAGE>


                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                                INDIVIDUAL GRANTS


                                         % of Total
                                        Options/SARs
                         Number of       Granted to
                         Securities       Employees
                         Underlying          in         Exercise or
                        Options/SARs       Fiscal        base price  Expiration
Name                     Granted(#)         Year           ($/Sh)       Date
------------------      ------------    -----------     -----------  -----------
Richard P. Trotter       875,000 (a)        100%           $0.605    4-29-10 (b)

(a)   Refers to stock options, subject to vesting, granted. Pursuant to option
      agreement dated April 29, 2005, Mr. Trotter is entitled to up to 875,000
      stock options, subject to vesting. The stock options are exercisable for
      five years from the vesting date at $0.605 per share. On April 29, 2005,
      stock options to purchase 175,000 shares vested, and the remaining options
      are to vest in equal installments over the next four anniversary date of
      the agreement.

(b)   Refers to expiration date of vested options.

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
                                                                Number of securities
                                                               underlying unexercised               Value of unexercised
                                                                    Options/SARs                 in-the-money options/SARs
                       Shares Acquired on                           at FY-end (#)                     at FY-end ($)(a)
                            Exercise        Value Realized          -------------                     ----------------
Name                           (#)                ($)          Exercisable       Unexercisable    Exercisable       Unexercisable
----                           ---                ---          -----------       -------------    -----------       -------------
<S>                            <C>                <C>         <C>                <C>               <C>                <C>
Richard P. Trotter             --                 --              175,000            600,000           $0                 $0
</TABLE>

(a)   The dollar values were calculated by determining the difference between
      the fair market value at fiscal year-end of the common stock underlying
      the options and the exercise price of the options. The last sale price of
      a share of Sparta's common stock on April 29, 2005 as reported by the OTC
      Bulletin Board was $0.605.

DIRECTOR COMPENSATION

Directors have not been compensated for their services on the Board of
Directors. We may, in the future, establish a compensation plan for our
independent directors.

MANAGEMENT EMPLOYMENT AGREEMENTS

We reserve the right to enter into written employment agreements with our
executive officers and other employees for their services at competitive
compensation rates, including bonuses and other benefits, including issuance of
stock options, as may be determined by the Board of Directors.


                                       28
<PAGE>

Employment Agreement with CEO
-----------------------------

We entered into an employment agreement, dated as of July 12, 2004, with Anthony
L. Havens who serves as our Chief Executive Officer. The employment is for a
term of five years. The employment term is to be automatically extended for one
five-year period, and additional one-year periods, unless written notice is
given three months prior to the expiration of any such term that the term will
not be extended. His base salary is at an annual rate of $280,000. He is
entitled to defer a portion of his base salary each year. He is entitled to
annual increases in his base salary and other compensation as may be determined
by the Board of Directors. He is entitled to a $1,000,000 term insurance policy.
He is entitled to six weeks of paid vacation per year, and health insurance,
short term and long term disability insurance, retirement benefits, fringe
benefits, and other employee benefits on the same basis as is generally made
available to other senior executives. He is entitled to reimbursement of
reasonable business expenses incurred by him in accordance with company
policies. If terminated, he is entitled to three months of severance for up to
six months of service for each year of employment, plus full participation in
all standard employee benefits during the period of severance payments. The
employment agreement provides for termination for cause. If he resigns for good
reason or is terminated without cause within twelve months after a change in
control, he is entitled to receive an additional lump sum payment equal to the
greater of the severance payment or the balance of his base salary for the
remaining employment term, continued coverage under any welfare benefits plans
for two years, and full vesting of any account balance under a 401(k) plan. For
purposes of the employment agreement, a change in control refers to:

      o     a change in voting power, due to a person becoming the beneficial
            owner of 50% or more of the voting power of our securities and our
            largest shareholder;

      o     during any period of two consecutive years, individuals who at the
            beginning of such period constitute the Board of Directors,
            including later approved directors, ceasing to consisted a majority
            of the Board of Directors;

      o     a merger or consolidation of our company with a third party, after
            which our shareholders do not own more than 50% of the voting power;
            or

      o     a sale of all or substantially all of our assets to a third party.

If we elect not to renew the employment agreement, he shall be entitled to
receive severance equal to thirty months of his base salary plus standard
employment benefits. If we fail to fully perform all or any portion of our
post-termination obligations, we are be obligated to pay to him an amount equal
to five times the value of the unperformed obligation.

Employment Agreement with COO
-----------------------------

We entered into an employment agreement, effective November 1, 2004, with
Richard P. Trotter, to serve as our Chief Operating Officer. The term of
employment is one year. The employment term is to be automatically extended for
one two-year period, and an additional two-year period, unless written notice is
given three months prior to the expiration of any such term that the term will
not be extended. His initial base salary is at an annual rate of $160,000. On
May 1, 2005, his base salary increases to $200,000. He is entitled to annual
increases in his base salary and other compensation as may be determined by the
Board of Directors. He is entitled to a grant of 1,000,000 shares of our common
stock. The grant of shares is subject to vesting and subject to continued
employment. On November 1, 2004, 25,000 shares vested. An additional 100,000
shares are subject to vesting at a future date, subject to proportionate
adjustment in the event of employment termination for any incomplete vesting
period, as follows: 25,000 shares on November 1, 2005, 25,000 shares on November
1, 2006; 25,000 shares on November 1, 2007; 12,500 shares on November 1, 2008;
and 12,500 on November 1, 2009. He is entitled to three weeks of paid vacation
during the first year of employment, and four weeks per year thereafter. He is
entitled to health insurance, short term and long term disability insurance,
retirement benefits, fringe benefits, and other employee benefits on the same
basis as is made generally available to other employees. He is entitled to
reimbursement of reasonable business expenses incurred by him in accordance with
company policies. The employment agreement provides for termination for cause.
If terminated without cause, he is entitled to severance. As severance, he shall
be entitled to one week's base salary as of the date of termination for the
first full year of service, and thereafter, two weeks' base salary for each
succeeding year of service, up to an aggregate of four months of such base
salary.


                                       29
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

<TABLE>
<CAPTION>
                                     Number of securities to    Weighted-average        Number of securities
                                     be issued upon exercise    exercise price of        remaining available for
                                     of outstanding options,    outstanding options,    future issuance under
Plan category                        warrants and rights        warrants and rights     equity compensation plan
-------------                        -------------------        -------------------     ------------------------
<S>                                        <C>                         <C>                    <C>
Equity compensation plans                          0                   N/a                    8,500,000
approved by securities holders

Equity compensation plans not              1,075,000                    $0.529                      N/a
Marketable securities

Total                                      1,075,000                    $0.529                8,500,000
</TABLE>

In July 2004, we adopted a stock incentive compensation plan. The plan
authorized the Board to grant securities, including stock options, to employees,
directors and others, in the aggregate amount of 8,500,000 shares of common
stock. Securities issued under the plan may be stock awards, non-qualified
options, incentive stock options, or any combination of the foregoing. In
general, stock options granted under the plan have a maximum duration of ten
years from the date of the grant and are not transferable. The per share
exercise price of any incentive stock option granted under the plan may not be
less than the fair market value of the common stock on the date of grant.
Incentive stock options granted to persons who have voting control over ten
percent or more of our capital stock are granted at 110% of fair market value of
the underlying common stock on the date of grant and expire five years after the
date of grant. No options may be granted after July 1, 2014. During the year
ended April 30, 2005, no securities were granted under this plan.

On April 29, 2005, pursuant to an option agreement with Richard Trotter, our
Chief Operating Officer, we issued stock options to purchase up to 875,000
shares of our common stock. Subject to vesting, the stock options are
exercisable for five years from the vesting date at $0.605 per share. On April
29, 2005, stock options to purchase 175,000 shares vested, and the remaining
options are to vest in equal installments over the next four anniversary date of
the agreement.

In April 2005, we issued warrants to purchase 200,000 shares of our common stock
to Jaffoni & Collins Incorporated pursuant to a consulting agreement for public
relations services. The warrants are exercisable for three years at $0.195 per
share.

COMMON STOCK OWNERSHIP

The following table sets forth information regarding the number of shares of the
common stock beneficially owned as of July 11, 2005, by each person who is known
by us to beneficially own 5% or more of our common stock, each of our directors
and executive officers, and all of our directors and executive officers as a
group. This information was determined in accordance with Rule 13(d)-3 under the
Securities Exchange Act of 1934, and is based upon the information provided by
the persons listed below. As of July 11, 2005, we had 86,293,879 shares of
common stock issued and outstanding.

All persons named in the table have the sole voting and dispositive power with
respect to common stock beneficially owned. Beneficial ownership of shares of
common stock that are acquirable within 60 days upon the exercise or conversion
of stock options, warrants or other rights are listed separately. For each
person named in the table, the calculation of percent of class gives effect to
those acquirable shares.


                                       30
<PAGE>

Except as otherwise set forth below, the business address of each of the persons
listed below is c/o the Company, 462 Seventh Ave, 20th Floor,, New York, NY
10018

<TABLE>
<CAPTION>
                                                    Amount and Nature     Additional Shares
                                                      Of Beneficial           Acquirable        Percent of
Name                                                    Ownership           Within 60 days       Class (1)
----                                                    ---------           --------------       ---------
<S>                                                      <C>                 <C>                   <C>
Anthony L. Havens (a)(1)                                32,983,262                    0            38.2%
Kristian Srb (a)(2)                                     33,056,562                    0            38.3%
Jeffrey Bean (a)                                                 0                    0             *
Richard P. Trotter (a)                                      25,000 (3)          175,000 (4)         *
Michael J. Mele (a)                                              0                    0             *
Sandra L. Ahman (a)                                        580,865                    0             *
Glenn A. Little                                          5,000,000                    0 (5)         5.8%
     211 West Wall
Midland, TX 79701
Leo William Long                                         1,241,600           11,057,695 (6)        12.6%
   9109 Loiret Blvd
   Lenexa, KS 66215
All Directors and Executive Officers (6 persons)        66,645,689              175,000            77.2%
</TABLE>

*     Represents less than 1%.

(a)   Refers to an officer or director of the Company.

(1)   Mr. Havens' minor son owns 62,500 shares of common stock in a trust
      account. Mr. Havens is not the trustee for his son's trust account, and
      does not have direct voting control of such shares. Mr. Havens does not
      have the sole or shared power to vote or direct the vote of such shares,
      and, as a result, Mr. Havens disclaims beneficial ownership of such shares
      held in his son's trust account.

(2)   Includes 62,500 shares of common stock held by Mr. Srb's minor daughter,
      for which Mr. Srb may be deemed to have beneficial ownership of such
      shares.

(3)   Refers to vested shares. Pursuant to an employment agreement, Mr. Trotter
      is entitled to up to 125,000 shares of common stock. The grant of shares
      is subject to vesting and subject to continued employment. On November 1,
      2004, 25,000 shares vested. An additional 100,000 shares are subject to
      vesting at a future date, subject to proportionate adjustment in the event
      of employment termination for any incomplete vesting period, as follows:
      25,000 shares on November 1, 2005; 25,000 shares on November 1, 2006;
      25,000 shares on November 1, 2007; 12,500 shares on November 1, 2008; and
      12,500 on November 1, 2009.

(4)   Refers to vested stock options. Pursuant to option agreement, Mr. Trotter
      is entitled to up to 875,000 stock options to purchase shares of our
      common stock, subject to vesting. The stock options are exercisable for
      five years from the vesting date at $0.605 per share. On April 29, 2005,
      stock options to purchase 175,000 shares vested, and the remaining options
      are to vest in equal installments over the next four anniversary date of
      the agreement.

(5)   Does not include approximately 128,206 shares of common stock issuable in
      connection a $100,000 promissory note, due September 1, 2005. Does not
      include subscriptions for 1,000 shares of series A onvertible preferred
      stock, convertible into approximately 641,026 shares of common stock, and
      warrants to purchase 320,513 shares of common stock subscribed after July
      11, 2005.

(6)   Refers to approximately 7,371,795 shares of common stock underlying 11,500
      shares of series A convertible preferred stock, and warrants to purchase
      3,685,000 shares of common stock. Does not include subscriptions for 5,245
      shares of series A convertible preferred stock, convertible into
      approximately 3,362,179 shares of common stock and warrants to purchase
      1,681,091 shares of common stock subscribed after July 11,2005.

CHANGES IN CONTROL

We do not have any arrangements that may result in a change in control.


                                       31
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On February 27, 2004, pursuant to an Agreement and Plan of Reorganization with
Sparta Commercial Services, LLC and its members, we acquired all of the
membership interests of Sparta in exchange for the agreement for the issuance of
such number of shares of our common stock as would represent approximately
91.75% of our outstanding shares. At February 26, 2004, we had an authorized
capital of 200,000,000 shares and 56,637,228 shares issued and outstanding, and
we issued the remaining balance of authorized capital of 143,362,772 shares
(pre-split) to Sparta members. The remaining unissued balance of 486,511,854
shares (pre-split) due to the Sparta members were subsequently issued upon
completion of an increase in our authorized capital. Pursuant to the
acquisition, all of our former directors and officers resigned, and nominated
Anthony Havens, the designee of Sparta, as the officer and director. Present
officers of the company, Anthony Havens and Sandra Ahman, acquired their
respective ownership interest in our common stock pursuant to their exchange of
membership interests of Sparta. Glenn A. Little, the former principal
stockholder of the company, prior to the completion of acquisition owned
40,000,000 shares, or 71%, of our then issued and outstanding shares of common
stock. Sparta also entered into a consulting agreement for business and
financial services with Glenn A. Little. The agreement is for a term of one
year. Mr. Little received a fee of $100,000 pursuant to the consulting
agreement.

We entered into a license agreement, dated as of June 1, 2002, and as amended on
December 3, 2003, with American Motorcycle Leasing Corp. Under the agreement, we
have a non-exclusive, perpetual right to use American Motorcycle Leasing Corp.'s
proprietary operating systems related to consumer credit underwriting
procedures, vehicle and vehicle lease value evaluation methods, rental stream
collection and insurance tracking policies and procedures. The license fee
consisted of $300,000 and 330,433 membership interests of Sparta Commercial
Services, LLC, which will be exchanged for 34,256,941 shares of Tomahawk upon an
increase in our authorized capital.

We entered into a services agreement, dated as of March 1, 2004, with American
Motorcycle Leasing Corp. For a period of three years, American Motorcycle
Leasing Corp. is to provide personnel, computer equipment and software, and
facilities, in connection with our credit and underwriting activities and our
use of the operating systems that we had licensed from American Motorcycle
Leasing Corp. In return for such services, we agreed to pay $100,000 by March 1,
2005, and for the time of the personnel utilized at their salary rate at
American Motorcycle Leasing Corp.

On August 2, 2004, pursuant to an employment agreement with Daniel J. Lanjewar,
our former Chief Financial Officer, we agreed to issue 568,175 shares of our
common stock in a transaction deemed exempt from registration pursuant to
Section 4(2) of the Securities Act. The grant of shares was subject to vesting
and subject to continued employment. On January 1, 2005, 113,635 shares vested,
and the reminder of the shares were to vest in equal portions on July 1, 2005,
July 1, 2006, July 1, 2007, and July 1, 2008, subject to proportionate
adjustment in the event of employment termination for any incomplete vesting
period. In April 2005, Mr. Lanjewar resigned as our Chief Financial Officer, and
was vested with an additional 113,637 shares of common stock.

We entered into a purchase option agreement with American Motorcycle Leasing
Corp. on November 2, 2004 at a cost to Sparta Commercial Services of $250,000..
This agreement granted Sparta Commercial Services the right, for a two year
period, to purchase portions of a certain portfolio of equipment leases that
American Motorcycle Leasing Corp. owns. The portfolio is secured by a first
priority security interest in favor of Citibank, N.A. or its assigns. The cost
of $250,000 has been charged to operations in fiscal 2005. As of April 30, 2005,
payments against this obligation of $81,000 were made. In June, 2005, an
additional $20,000 was paid.

In January 2005, the Company received a loan of $25,000 from Kristian Srb, a
director of the Company.. This loan is non-interest bearing and is payable on
demand.

On April 29, 2005, pursuant to an option agreement with Richard Trotter, our
Chief Operating Officer, we agreed to issue options to purchase up to 875,000
shares of our common stock. Subject to vesting, the stock options are
exercisable for five years from the vesting date at $0.605 per share. Twenty
percent of the options vested on April 29, 2005, and the remaining options are
to vest in equal installments over the next four anniversary date of the
agreement.

In June 2005, Kristian Srb, a director of the Company, purchased on various
dates, an aggregate of 10,800 shares of our common stock at prices of $0.45 to
$0.55 per share in the open market, as follows: on 6/13/2005, purchased 3,062
shares at $0.51 per share; on 6/13/2005, purchased 1,938 shares at $0.55 per
share; on 6/14/2005, purchased 800 shares at $0.55 per share; and on 6/20/2005,
purchased 5,000 shares at $0.45 per share.


                                       32
<PAGE>

ITEM 13. EXHIBITS

The following exhibits are filed with this report:

Exhibit Number    Description of Exhibit
--------------    ----------------------

Exhibit 2         Agreement and Plan of Reorganization, dated as of February 27,
                  2004 (Incorporated by reference to Exhibit 2 of Form 10-KSB
                  filed on August 13, 2004)

Exhibit 3(i)(1)   Articles of Incorporation of Tomahawk Oil and Minerals, Inc.
                  (Incorporated by reference to Exhibit 3(i)(1) of Form 10-KSB
                  filed on August 13, 2004)

Exhibit 3(i)(2)   Certificate of Amendment of Articles of Incorporation,
                  November 1983 (Incorporated by reference to Exhibit 3(i)(2) of
                  Form 10-KSB filed on August 13, 2004)

Exhibit 3(i)(3)   Certificate of Amendment of Articles of Incorporation for name
                  change, August 2004 (Incorporated by reference to Exhibit 3(i)
                  of Form 8-K filed on August 27, 2004)

Exhibit 3(i)(4)   Certificate of Amendment of Articles of Incorporation for
                  increase in authorized capital, September 2004 (Incorporated
                  by reference to Exhibit 3(i) of Form 8-K filed on September
                  17, 2004)

Exhibit 3(i)(5)   Certificate of Amendment of Articles of Incorporation for
                  decrease in authorized capital, December 2004 (Incorporated by
                  reference to Exhibit 3(i) of Form 8-K filed on December 23,
                  2004)

Exhibit 3(i)(6)   Certificate of Designation for Series A Redeemable Preferred
                  Stock, December 2004 (Incorporated by reference to
                  Exhibit 3(i) of Form 8-K filed on January 4, 2005)

Exhibit 3(ii)(1)  By-laws (Incorporated by reference to Exhibit 3(ii)(1) of Form
                  10-KSB filed on August 13, 2004)

Exhibit 3(ii)(2)  By-laws Resolution (Incorporated by reference to
                  Exhibit 3(ii)(2) of Form 10-KSB filed on August 13, 2004)

Exhibit 3(ii)(3)  Board of Directors Resolutions amending By-laws (Incorporated
                  by reference to Exhibit 3(ii) of Form 10-QSB filed on December
                  15, 2004)

Exhibit 4         2005 Stock Incentive Compensation Plan (Incorporated by
                  reference to Exhibit 4 of Form 10-KSB filed on August 13,
                  2004)

Exhibit 10.1      Service Agreement with American Motorcycle Leasing
                  Corp.(Incorporated by reference to Exhibit 10.1 of Form 10KSB
                  filed on August 13, 2004)

Exhibit 10.2      License Agreement with American Motorcycle Leasing Corp.
                  (Incorporated by reference to Exhibit 10.1 of Form 10KSB filed
                  on August 13, 2004)

Exhibit 10.3      Amended License Agreement with American Motorcycle Leasing
                  Corp. (Incorporated by reference to Exhibit 10.1 of Form 10KSB
                  filed on August 13, 2004)

Exhibit 10.4      Form of Employment Agreement with Anthony Havens (Incorporated
                  by reference to Exhibit 10.4 of Form 10-KSB filed on August
                  13, 2004)

Exhibit 10.5      Employment Agreement with Danny Lanjewar (Incorporated by
                  reference to Exhibit 10.5 of Form 10-KSB filed on August 13,
                  2004)

Exhibit 10.6      Consulting Agreement with Glenn Little (Incorporated by
                  reference to Exhibit 10.6 of Form 10-KSB filed on August 13,
                  2004)

Exhibit 10.7      Employment Agreement with Richard Trotter (Incorporated by
                  reference to Exhibit 10 of Form 8-K filed on October 29, 2004)

Exhibit 10.8      Purchase Option Agreement with American Motorcycle Leasing
                  Corp., dated November 2, 2004 (Incorporated by reference to
                  Exhibit 10.8 of Form 10-KSB filed on July 25, 2005)

Exhibit 10.9      Lease for office facilities (Incorporated by reference to
                  Exhibit 10 of Form 10-QSB filed on December 15, 2004)

Exhibit 10.10     Option Agreement with Richard Trotter (Incorporated by
                  reference to Exhibit 10.1 of Form 8-K filed on May 5, 2005)

Exhibit 11        Statement re: computation of per share earnings is hereby
                  incorporated by reference to "Financial Statements" of Part I
                  - Financial Information, Item 1 - Financial Statements,
                  contained in this Form 10-QSB.

Exhibit 21        List of Subsidiaries (Incorporated by reference to Exhibit 21
                  of Form 10-KSB filed on August 13, 2004)

Exhibit 31.1*     Certification of Chief Executive Officer and Principal
                  Financial Officer Pursuant to Securities Exchange Act Rule
                  13a-14(a)/15d-14(a)

Exhibit 32.1*     Certification of Chief Executive Officer and Principal
                  Financial Officer Pursuant to Securities Exchange Act Rule
                  13a-14(b) and 18 U.S.C. Section 1350

----------
* Filed herewith.


                                       33
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees
----------

Fees for audit services provided by our principal accountant during the years
ended April 30, 2004 and 2005 were $23,769 and $39,746, respectively. Audit
services consisted primarily of the annual audits, review of our financial
statements, and services that are normally provided by our accountants in
connection with statutory and regulatory filings or engagements for those fiscal
years.

Audit-Related Fees
------------------

There were no fees billed for services reasonably related to the performance of
the audit or review of our financial statements outside of those fees disclosed
above under the caption Audit Fees for fiscal years ended April 30, 2004 and
2005.

Tax Fees
--------

Fees for tax services provided by our principal accountant during the years
ended April 30, 2004 and 2005 were $2,500 and $1,500, respectively. Tax services
related primarily to the preparation of company tax filings with regulatory
agencies.

All Other Fees
--------------

There were no other fees billed for services.

Audit Committee Procedure
-------------------------

The Board of Directors is responsible for matters typically performed by an
audit committee. We do not presently have a separate audit committee of the
Board of Directors. The Board of Directors considered whether, and determined
that, the auditor's provision of non-audit services was compatible with
maintaining the auditor's independence. All of the services described above for
fiscal years ended April 30, 2004 and 2005 were approved by the Board of
Directors. We intend to continue using our principal registered public
accounting firm, solely for audit and audit- related services, tax consultation
and tax compliance services, and, as needed, for due diligence in acquisitions
and similar transactions.

Pre-Approval Policies and Procedures
------------------------------------

The Board of Directors approved all of the services described above, and all
fees paid. The Board of Directors did not have pre-approval policies and
procedures in place during our fiscal years ended April 30, 2004 and 2005. In
fiscal year 2006, we intend to implement a policy whereby, we will, prior to
engaging our accountants to perform a particular service, obtain an estimate for
the service to be performed and begin pre-approving all services.


                                       34
<PAGE>

                                   SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        SPARTA COMMERCIAL SERVICES, INC.


                                        By: /s/ Anthony L. Havens
                                            ------------------------------------
                                            Anthony L. Havens
                                            Chief Executive Officer
                                            and Principal Financial Officer

                                        Date: January 6, 2006


      In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities
indicated and on the dates indicated:


Date:  January 6, 2006                  By: /s/ Anthony L. Havens
                                            ------------------------------------
                                            Anthony L. Havens
                                            Chief Executive Officer,
                                            Principal Financial Officer, and
                                            Chairman of the Board


Date:  January 6, 2006                  By: /s/ Sandra L. Ahman
                                            ------------------------------------
                                            Sandra L. Ahman
                                            Vice President and Director


Date:  January 6, 2006                  By: /s/ Kristian Srb
                                            ------------------------------------
                                            Kristian Srb
                                            Director


                                       35