# EDGAR Filing Document

**Accession Number:** 0000318299
**File Stem:** 0001493152-26-012196
**Filing Date:** 2026-3
**Character Count:** 106798
**Document Hash:** bab4e049ba19da5ac12557c41fe8ed03
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-012196.hdr.sgml**: 20260323

**ACCESSION NUMBER**: 0001493152-26-012196

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 55

**CONFORMED PERIOD OF REPORT**: 20260131

**FILED AS OF DATE**: 20260323

**DATE AS OF CHANGE**: 20260323

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SPARTA COMMERCIAL SERVICES, INC.
- **CENTRAL INDEX KEY:** 0000318299
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-BUSINESS SERVICES, NEC [7389]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 300298178
- **FISCAL YEAR END:** 0430

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-09483
- **FILM NUMBER:** 26783241

**BUSINESS ADDRESS:**
- **STREET 1:** 555 FIFTH AVENUE
- **STREET 2:** 14TH FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10017
- **BUSINESS PHONE:** 2122392666

**MAIL ADDRESS:**
- **STREET 1:** 555 FIFTH AVENUE
- **STREET 2:** 14TH FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10017

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TOMAHAWK INDUSTRIES INC
- **DATE OF NAME CHANGE:** 20001120

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TOMAHAWK OIL & MINERALS INC
- **DATE OF NAME CHANGE:** 19831216

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

(Mark One)

☒ QUARTERLY
 REPORT according to SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**For the quarterly period ended January 31, 2026**

☐ TRANSITION REPORT according to SECTION 13 OR 15(d) OF THE EXCHANGE ACT

**For the transition period from ________ to ___________.**

Commission file number: **<u>0-9483</u>**

**SPARTA COMMERCIAL SERVICES, INC.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Nevada** | **30-0298178** |
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification No.) |

---

**<u>555 Fifth Avenue, 14th Floor, New York, NY 10017</u>**

(Address of principal executive offices) (Zip Code)

**<u>(212) 239-2666</u>**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| Common stock, $.001 par value | SRCO | OTCQB |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 504 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to file such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large, accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large, accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☐ Smaller reporting company ☒ <br> (Do not check if a smaller reporting company) Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of March 23, 2026, we had 52,992,665 shares of common stock issued and outstanding.

**SPARTA COMMERCIAL SERVICES, INC.**

**FORM 10-Q**

**FOR THE QUARTER ENDED January 31, 2026**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| **PART I.** | **[FINANCIAL INFORMATION](#sh_001)** | 3 |
| Item 1. | [Financial Statements (Unaudited)](#sh_002) | 3 |
|  | [Condensed Consolidated Balance Sheets as of January 31, 2026 (unaudited) and April 30, 2025](#sh_003) | 3 |
|  | [Condensed Consolidated Statements of Operations for the Three and Nine Months ended January 31, 2026, and 2025 (unaudited)](#sh_004) | 4 |
|  | [Condensed Consolidated Statement of Changes in Stockholders' Deficit for the Three and Nine Months ended January 31, 2026 (unaudited)](#sh_005) | 5 |
|  | [Condensed Consolidated Statements of Cash Flows for the Nine Months ended January 31, 2026, and 2025 (unaudited)](#sh_006) | 7 |
|  | [Notes to Unaudited Condensed Consolidated Financial Statements](#sh_007) | 8 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#HK_020) | 16 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#HK_021) | 23 |
| Item 4. | [Controls and Procedures](#HK_022) | 23 |
| **PART II.** | **[OTHER INFORMATION](#HK_023)** | 25 |
| Item 1. | [Legal Proceedings](#HK_024) | 25 |
| Item 1A. | [Risk Factors](#HK_025) | 25 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#HK_027) | 26 |
| Item 3. | [Defaults Upon Senior Securities](#HK_028) | 26 |
| Item 5. | [Other Information](#HK_029) | 26 |
| Item 6. | [Exhibits](#HK_030) | 26 |
| [Signatures](#HK_026) | [Signatures](#HK_026) | 27 |

---

**PART I. FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS**

**SPARTA COMMERCIAL SERVICES, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**AS OF JANUARY 31, 2026 AND APRIL 30, 2025**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **January 31,**<br>**2026** | **April 30,**<br>**2025** |
|  | ('Unaudited) | **\*** |
| **ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;**Current Assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $70116 | $131003 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 8032 | 5167 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | 1473 | 4607 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans receivable | 843981 | 606802 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Current Assets** | 923602 | 747579 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rent deposit | 9000 | 9000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $932602 | $756579 |
| **LIABILITIES AND STOCKHOLDERS' DEFICIT** |  |  |
| &nbsp;&nbsp;&nbsp;**Liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Current Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $1423522 | $1333852 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short Term Loan | 1585 | 1585 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current portion notes payable | 8997986 | 7973762 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative liabilities | 967564 | 1007598 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Current Liabilities** | 11390657 | 10316797 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Long Term Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans payable-related parties | 646776 | 636233 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes payable- net of current portion | 101219 | 396614 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Long Term Liabilities** | 747995 | 1032847 |
| &nbsp;&nbsp;&nbsp;**Total liabilities** | 12138652 | 11349644 |
| &nbsp;&nbsp;&nbsp;**Stockholders' Deficit:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Preferred stock A, $0.001 par value; 10,000,000 shares authorized of which 35,850 shares have been designated as Series A convertible preferred stock, with a stated value of $100 per share, 125 and 125 shares issued and outstanding as of January 31, 2026 and April 30, 2025, respectively** | 12500 | 12500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Preferred stock C,** 4,200,000 shares have been designated as Series C redeemable, convertible preferred, $0.001 par value, with a liquidation and redemption value of $1 per share, 1,953,157 and 1,953,157 shares issued and outstanding as of January 31, 2026 and April 30, 2025, respectively | 1953 | 1953 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Preferred stock D**, 2,000,000 shares have been designated as Series D redeemable, convertible preferred, $0.001 par value, with a liquidation and redemption value of $1.00 per share, 768,288 and 773,548 shares issued and outstanding as of January 31, 2026 and April 30, 2025, respectively | 769 | 774 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Common stock,** $0.001 par value; 750,000,000 shares authorized, and 45,673,996 and 40,133,669 shares issued and outstanding as of January 31, 2026 and April 30, 2025, respectively | 45674 | 40134 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Common stock to be issued** 35,899,343 and 33,612,875 as of January 31, 2026 and April 30, 2025, respectively | 35900 | 33613 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Additional paid-in-capital** | 57999899 | 57221495 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Accumulated deficit** | (70342036) | (68918984) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total deficit in stockholders' equity** | (12245341) | (11608515) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Non-controlling interest** | 1039289 | 1015450 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Stockholders' Deficit** | (11206052) | (10593065) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities and Stockholders' Deficit** | $932602 | $756579 |

---

\* Derived from audited information

See accompanying notes to unaudited condensed consolidated financial statements.

**SPARTA COMMERCIAL SERVICES, INC.**

**CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS**

**FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 2026 AND 2025**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | For the three months ended | For the three months ended | For the nine months ended | For the nine months ended |
|  | January 31, | January 31, | January 31, | January 31, |
|  | **2026** | **2025** | **2026** | **2025** |
| **Revenue** |  |  |  |  |
| Information technology | $32814 | $25599 | $100496 | $87638 |
| Wellness products | 6966 | 15172 | 28956 | 26354 |
| Merchant financing | 52382 | 38227 | 158705 | 54365 |
| **Total Revenue** | 92162 | 78998 | 288157 | 168357 |
| Less Cost of goods sold | 5490 | 7448 | 22759 | 20685 |
| **Gross profit** | $86672 | $71550 | $265398 | $147672 |
| **Operating expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Compensation and related costs | 187807 | 128027 | 539746 | 516223 |
| &nbsp;&nbsp;&nbsp;Accounting and legal Fees | 7535 | 11300 | 63095 | 59190 |
| &nbsp;&nbsp;&nbsp;Consulting fees | 41602 | 58085 | 227257 | 237460 |
| &nbsp;&nbsp;&nbsp;Rent and lease | 18000 | 18000 | 54000 | 54000 |
| &nbsp;&nbsp;&nbsp;General office expenses | 39945 | 41858 | 143025 | 139209 |
| **Total operating expenses** | 294889 | 257270 | 1027123 | 1006082 |
| **Loss from operations** | $(208217) | $(185720) | $(761725) | $(858410) |
| **Other income (expense):** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commission on Municipal Bonds | $(1803) | $(8842) | $(12850) | $(18835) |
| &nbsp;&nbsp;&nbsp;Interest Expense on notes | 345221 | 40347 | 688021 | 493257 |
| &nbsp;&nbsp;&nbsp;Loss (gain) in changes in fair value of derivative liability | (146598) | 188916 | (40035) | 467620 |
| &nbsp;&nbsp;&nbsp;Other income | 251 | - | 2352 | (11995) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other (income) expense | $197071 | $220421 | $637488 | $930047 |
| **Net loss** | (405288) | (406141) | (1399213) | (1788457) |
| Net profit (loss) attributable to minority shareholder | 8770 | 4871 | 23839 | 3260 |
| Preferred dividend | - | - | - | - |
| **Net loss attributed to common stockholders** | $(414058) | $(411012) | $(1423052) | $(1791717) |
| Basic and diluted loss per share: |  |  |  |  |
| Loss from continuing operations attributable to Sparta Commercial Services, Inc. common stockholders | (0.01) | (0.01) | (0.03) | (0.05) |
| Net loss attributable to Sparta Commercial Services, Inc. common stockholders | $(0.01) | $(0.01) | $(0.03) | $(0.05) |
| Weighted average shares outstanding | **45255151** | **35388095** | **42883737** | **33948761** |

---

See accompanying notes to unaudited condensed consolidated financial statements.

**SPARTA COMMERCIAL SERVICES, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT**

**FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 2026 AND 2025**

**(Unaudited)**

**FOR THE NINE MONTHS ENDED JANUARY 31, 2026** 

**(Unaudited)**

---

| | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A** | **Series A** | **Series C** | **Series C** | **Series D** | **Series D** | | | **Common Stock** | **Common Stock** | | | | | |
|  | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | **to be issued** | **to be issued** | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid in**<br>**Capital**<br>**(Warrants)** |<br>**Additional**<br>**Paid in**<br>**Capital** |<br>**Accumulated**<br>**Deficit** |<br>**Non**<br>**controlling**<br>**Interest** |<br><br>**Total** |
| **Balance April 30, 2025** | **125** | $**12500** | **1953157** | $**1953** | **773548** | **774** | **40133669** | **40134** | **33612875** | **33613** | **431661** | **56789834** | **(68918984)** | **1015450** | **(10593065)** |
| Subscribed shares issued |  |  |  |  |  |  | 1907478 | 1907 | (1768160) | (1768) |  | (139) |  |  |  |
| Issuance of common stock for cash |  |  |  |  |  |  |  |  | 3014628 | 3015 | 67891 | 144094 |  |  | 215000 |
| Issuance of common stock for services |  |  |  |  |  |  | 1400000 | 1400 |  |  |  | 155177 |  |  | 156577 |
| Issuance of common stock for extinguishment of debt |  |  |  |  |  |  | 136809 | 137 |  |  |  | 19848 |  |  | 19985 |
| Issuance of common stock with debt |  |  |  |  |  |  |  |  | 85000 | 85 | 11474 | 9805 |  |  | 21364 |
| Issuance of common stock for conversion debt |  |  |  |  |  |  | 1675000 | 1675 | 475000 | 475 |  | 212850 |  |  | 215000 |
| Conversion of preferred shares |  |  |  |  | (5260) | (5) | 21040 | 21 |  |  |  | (16) |  |  |  |
| Default shares issued |  |  |  |  |  |  | 400000 | 400 | 430000 | 430 |  | 153470 |  |  | 154300 |
| Commitment Shares not yet issued |  |  |  |  |  |  |  |  | 50000 | 50 |  | 3950 |  |  | 4000 |
| Net Income (loss) | - | - | - | - | - | - | - | - | - | - | - | - | (1423052) | 23839 | (1399213) |
| **Balance January 31, 2026** | **125** | $**12500** | **1953157** | $**1953** | **768288** | $**769** | **45673996** | $**45674** | **35899343** | $**35900** | $**511025** | $**57488873** | $**(70342036)** | $**1039289** | $**(11206052)** |

---

**FOR THE THREE MONTHS ENDED JANUARY 31, 2026** 

**(Unaudited)**

---

| | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A** | **Series A** | **Series C** | **Series C** | **Series D** | **Series D** | | | **Common Stock** | **Common Stock** | | | | | |
|  | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | **to be issued** | **to be issued** | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid in**<br>**Capital**<br>**(Warrants)** |<br>**Additional**<br>**Paid in**<br>**Capital** |<br>**Accumulated**<br>**Deficit** |<br>**Non**<br>**controlling**<br>**Interest** |<br><br>**Total** |
| **Balance November 1, 2025** | **125** | $**12500** | **1953157** | $**1953** | **773548** | $**774** | **44573124** | $**44574** | **34772174** | $**34772** | $**488887** | $**57251832** | $**(69927979)** | $**1030520** | $**(11062166)** |
| Subscribed shares issued |  |  |  |  |  |  | 579832 | 579 | (440514) | (440) |  | (139) |  |  |  |
| Issuance of common shares for cash |  |  |  |  |  |  |  |  | 662683 | 663 | 22138 | 27199 |  |  | 50000 |
| Issuance of common shares for services |  |  |  |  |  |  | 100000 | 100 |  |  |  | 9502 |  |  | 9602 |
| Issuance of common stock for conversion debt |  |  |  |  |  |  |  |  | 475000 | 475 |  | 47025 |  |  | 47500 |
| Conversion of preferred shares |  |  |  |  | (5260) | (5) | 21040 | 21 |  |  |  | (16) |  |  |  |
| Default shares issued |  |  |  |  |  |  | 400000 | 400 | 430000 | 430 |  | 153470 |  |  | 154300 |
| Net Income (loss) | - | - | - | - | - | - | - | - | - | - | - | - | (414058) | 8770 | (405288) |
| **Balance January 31, 2026** | **125** | $**12500** | **1953157** | $**1953** | **768288** | $**769** | **45673996** | $**45674** | **35899343** | $**35900** | $**511025** | $**57488873** | $**(70342036)** | $**1039289** | $**(11206052)** |

---

**FOR THE NINE MONTHS ENDED JANUARY 31, 2025**

**(Unaudited)**

---

| | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A** | **Series A** | **Series C** | **Series C** | **Series D** | **Series D** | | | **Common Stock** | **Common Stock** | | | | | |
|  | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | **to be issued** | **to be issued** | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid in**<br>**Capital**<br>**(Warrants)** |<br>**Additional**<br>**Paid in**<br>**Capital** |<br>**Accumulated**<br>**Deficit** |<br>**Non**<br>**controlling**<br>**Interest** |<br><br>**Total** |
| **Balance April 30, 2024** | **125** | $**12500** | **1965157** | $**1965** | **803548** | **804** | **29495189** | **29495** | **33395883** | **33396** | **204385** | **55869674** | **(66795350)** | **1006534** | **(9636597)** |
| Subscribed shares issued |  |  |  |  |  |  | 3868253 | 3868 | (3868253) | (3868) |  |  |  |  |  |
| Issuance of common stock for cash |  |  |  |  |  |  | 2885043 | 2885 | 4583094 | 6425 |  | 725261 |  |  | 734571 |
| Issuance of common stock for services |  |  |  |  |  |  | 353956 | 354 |  |  |  | 77662 |  |  | 78016 |
| Conversion of notes payable |  |  |  |  |  |  | 850000 | 850 |  |  |  | 84150 |  |  | 85000 |
| Warrants issued on equity issuance |  |  |  |  |  |  |  |  |  |  | 218808 | (161880) |  |  | 56928 |
| Default shares issued |  |  |  |  |  |  | 664847 | 665 |  |  |  | (410) |  |  | 255 |
| Conversion of preferred shares |  |  | (12000) | (12) | (30000) | (30) | 156000 | 156 |  |  |  | (114) |  |  |  |
| Commitment Shares not yet issued |  |  |  |  |  |  |  |  | 200000 | 200 |  | 18440 |  |  | 18640 |
| Net Income (loss) | - | - | - | - | - | - | - | - | - | - | - | - | (1791717) | 3260 | (1788457) |
| **Balance January 31, 2025** | **125** | $**12500** | **1953157** | $**1953** | **773548** | $**774** | **38273288** | $**38273** | **34310724** | $**36153** | $**423193** | $**56612783** | $**(68587067)** | $**1009794** | $**(10451644)** |

---

**FOR THE THREE MONTHS ENDED JANUARY 31, 2025**

**(Unaudited)**

---

| | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A** | **Series A** | **Series C** | **Series C** | **Series D** | **Series D** | | | **Common Stock** | **Common Stock** | | | | | |
|  | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | **to be issued** | **to be issued** | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid in**<br>**Capital**<br>**(Warrants)** |<br>**Additional**<br>**Paid in**<br>**Capital** |<br>**Accumulated**<br>**Deficit** |<br>**Non**<br>**controlling**<br>**Interest** |<br><br>**Total** |
| **Balance November 1, 2024** | **125** | $**12500** | **1965157** | $**1965** | **803548** | $**804** | **36210837** | $**36211** | **33490238** | $**34174** | $**327224** | $**56591591** | $**(68176055)** | $**1004923** | $**(10166663)** |
| Subscribed shares issued |  |  |  |  |  |  | 633095 | 633 | (633095) | (633) |  |  |  |  |  |
| Issuance of common shares for cash |  |  |  |  |  |  | 863356 | 863 | 1453581 | 2612 |  | 183596 |  |  | 187071 |
| Issuance of common shares for services |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Conversion of notes payable |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Warrants issued on equity issuance |  |  |  |  |  |  |  |  |  |  | 95969 | (161880) |  |  | (65911) |
| Default shares issued |  |  |  |  |  |  | 410000 | 410 |  |  |  | (410) |  |  |  |
| Conversion of preferred shares |  |  | (12000) | (12) | (30000) | (30) | 156000 | 156 |  |  |  | (114) |  |  |  |
| Net Income (loss) | - | - | - | - | - | - | - | - | - | - | - | - | (411012) | 4871 | (406141) |
| **Balance January 31, 2025** | **125** | $**12500** | **1953157** | $**1953** | **773548** | $**774** | **38273288** | $**38273** | **34310724** | $**36153** | $**423193** | $**56612783** | $**(68587067)** | $**1009794** | $**(10451644)** |

---

See accompanying notes to unaudited condensed consolidated financial statements.

**SPARTA COMMERCIAL SERVICES, INC.**

**CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS**

**FOR THE NINE MONTHS ENDED JANUARY 31, 2026 AND 2025**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | For the nine months ended | For the nine months ended |
|  | January 31, | January 31, |
|  | **2026** | **2025** |
| **CASH FLOWS FROM OPERATING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(1399213) | $(1788457) |
| &nbsp;&nbsp;&nbsp;**Adjustments to reconcile net loss to net cash used in operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (Gain) from change in fair value of derivative liabilities | (40035) | 467620 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash financing cost | 25364 | 179767 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares issued for services | 156577 | 78016 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stocks issued as note holder incentive |  | 18895 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Default shares issued | 154300 |  |
| &nbsp;&nbsp;&nbsp;**Changes in operating assets and liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (2865) | (5707) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | 3134 | (1116) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans receivable | (237179) | (751057) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 614830 | 622062 |
| &nbsp;&nbsp;&nbsp;Net cash used in operating activities | $(725087) | $(1179977) |
| **CASH FLOWS FROM FINANCING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of stock | $215000 | $611732 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Proceeds from notes payable | 492000 | 525000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments of notes payable | (42800) | (4000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments of related party loans | - | (4244) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | $664200 | $1128488 |
| **Net decrease in cash** | $(60887) | $(51489) |
| **Cash and cash equivalents, beginning of period** | 131003 | 100953 |
| **Cash and cash equivalents , end of period** | $70116 | $49464 |
| **Cash paid for:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest | $1127 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes | $- | $- |

---

See accompanying notes to unaudited condensed consolidated financial statements.

**SPARTA COMMERCIAL SERVICES, INC.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**JANUARY 31, 2026**

**(Unaudited)**

**NOTE A – SUMMARY OF ACCOUNTING POLICIES**

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

**<u>Business</u>**

**General Overview**

Sparta Commercial Services, Inc. ("Sparta," "we," "us," or the "Company") is a Nevada corporation with headquarters in New York, New York, and a corporate website at www.spartacommercial.com, with subsidiary addresses in Stamford, CT. We operate as a multi-disciplined parent corporation across four primary business sectors: FinTech Services, Financial Services, E-Commerce & Mobile Technology, and Health and Wellness. Our operations are conducted through wholly owned subsidiaries and joint ventures that provide specialized financing products, technology-driven solutions, and consumer wellness offerings.

Sparta's origins are in the Powersports consumer finance industry, historically providing retail installment loans and leases through authorized motorcycle dealerships in 33 states, supported by financing lines of credit from institutional lenders. We built and maintained a full underwriting and servicing platform for our portfolio until discontinuing our consumer loans and leases business after the 2008 financial crisis.

**<u>Basis of Presentation</u>**

The accompanying unaudited condensed consolidated financial statements as of January 31, 2026, and for the nine months ended January 31, 2026, and 2025 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission, including Form 10-Q and Regulation S-K. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. The Company believes that the disclosures provided are adequate to make the information presented not misleading.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and explanatory notes for the year ended April 30, 2025, as disclosed in the Company's Form 10-K for that year as filed with the Securities and Exchange Commission on August 13, 2025.

The results of operations for the three and nine months ended January 31, 2026, are not necessarily indicative of the results to be expected for any other interim period or the full year ending April 30, 2026.

**<u>Principles of Consolidation</u>**

The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The third-party ownership of the Company's subsidiary is accounted for as noncontrolling interest in the consolidated financial statements. Changes in the noncontrolling interest are reported in the statement of changes in deficit.

**<u>Estimates</u>**

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.

**<u>Revenue Recognition</u>**

Revenue is recognized in accordance with Accounting Standards Codification ("ASC") Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue utilizing the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

The following table presents our revenues disaggregated by revenue source:

---

| | | |
|:---|:---|:---|
|  | For the Nine Months Ended January 31, | For the Nine Months Ended January 31, |
|  | 2026 | 2025 |
| Information Technology | $100496 | $87638 |
| Wellness products | 28956 | 26354 |
| Merchant financing | 158705 | 54365 |
|  | $288157 | $168357 |

---

**<u>Cash Equivalents</u>**

All liquid investments with three months or less maturity are cash equivalents for the accompanying financial statements.

**<u>Website Development Costs</u>**

The Company recognizes website development costs in accordance with ASC 350-50, *"Accounting for Website Development Costs."* As such, the Company expenses all costs incurred 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.

**<u>Fair Value Measurements</u>**

The Company adopted ASC 820, *"Fair Value Measurements* ("ASC 820")*."* ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets the lowest priority to unobservable inputs to fair value measurements of certain assets and Liabilities. The three levels of the fair value hierarchy under ASC 820 are described below:

● *Level 1 —* Quoted prices for identical instruments in active markets. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as certain securities that are highly liquid and are actively traded in over-the-counter markets.

● *Level 2 —* Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which all significant inputs and significant value drivers are observable in active markets.

● *Level 3 —* Unobservable inputs that are supported by little or no market activity and that are significant to the fair value measurements. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques based on significant unobservable inputs, as well as management judgments or estimates that are significant to valuation.

This hierarchy requires the Company to use observable market data when available and to minimize the use of unobservable inputs when determining fair value. Observable inputs may not always be available for some products or in certain market conditions.

**<u>Income Taxes</u>**

We utilize ASC 740 "*Income Taxes*" which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at year-end based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

The Company recognizes the impact of a tax position in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense.

**<u>Stock-Based Compensation</u>**

We account for our stock-based compensation under ASC 718 "*Compensation–Stock Compensation*" using the fair value-based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments.

We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock-based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods.

**<u>Inventories</u>**

The Company's inventories represent finished goods, consisting of available products. They are accounted for using the first-in, first-out (FIFO) method and valued at the lower of cost or net realizable value. Inventory consists of finished goods for the Company's New World Health business.

**<u>Property and Equipment</u>**

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 | 3 years |
| Furniture and fixtures | 7 years |
| Website costs | 3 years |
| Computer Equipment | 5 years |

---

**<u>Concentrations of Credit Risk</u>**

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents, and receivables. The Company places its cash and temporary cash investments with high-credit quality institutions. At times, such investments may be more than the FDIC insurance limit.

**<u>Net Loss Per Share</u>**

The Company uses ASC 260-10, "*Earnings Per Share,*" for calculating the basic and diluted loss per share. The Company computes basic loss per share by dividing net loss and net loss attributable to common shareholders by the weighted average number of common shares outstanding. Common equivalent shares are excluded from the computation of net loss per share if their effect is anti-dilutive.

The Company has 35,899,343 and 33,612,875 shares of common classified as to be issued at January 31, 2026, and April 30, 2025, respectively included on the balance sheet were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share.

**<u>Derivative Liabilities</u>**

The Company assessed the classification of its derivative financial instruments as of January 31, 2026, and April 30, 2025, which consist of convertible instruments and rights to shares of the Company's common stock. It determined that such derivatives meet the criteria for liability classification under ASC 815.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed conventional, as described.

The Company determined the fair value of the derivative liabilities of convertible notes using a Binomial model option-pricing model with the following assumptions, market value of common stock on measurement date, risk free interest rate, expected volatility, expected dividend yields and instrument lives in years.

**<u>Convertible Instruments</u>**

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for "*Accounting for Derivative Instruments and Hedging Activities*."

The Company assessed the classification of its derivative financial instruments as of January 31, 2026, and April 30, 2025, which consist of convertible instruments and rights to shares of the Company's common stock and determined that such derivatives meet the criteria for liability classification under ASC 815.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.

**<u>Reclassifications</u>**

Certain reclassifications have been made to conform with prior periods' data to the current presentation. These reclassifications did not affect reported losses.

**<u>Recent Accounting Pronouncements-</u>**

Recently adopted accounting pronouncements require public companies to disclose the impact of new standards on their financial statements, including details about the standard, the adoption date, method of adoption, and expected effects. These disclosures help investors understand how changes in accounting principles will affect a company's financial performance and position.

***Recently Adopted Accounting Pronouncements.*** In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this update expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment among other disclosure requirements. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of this standard is on a modified retrospective basis and had no impact on the Company's financial position, results of operations, cash flows or net income per share. As of 2024 and 2023 the Company had one reporting segment, all revenue is reported under this segment Sparta Commercial Services, Inc.

Other accounting standards and amendments to existing accounting standards that have been issued and have future effective dates are not applicable or are not expected to have a significant impact on the Company's consolidated financial statements.

**NOTE B – GOING CONCERN MATTERS**

The accompanying consolidated 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. The accompanying consolidated financial statements show that the Company has incurred recurring losses and generated negative cash flows from operating activities since inception. As of January 31, 2026, the Company had an accumulated deficit of $70,342,036 and a working capital deficit (total current liabilities exceeded total current assets) of $10,467,055. The Company's cash balance and revenues generated are not currently sufficient and cannot be projected to cover its operating expenses for the next twelve months from the filing date of this report. These factors among others raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the issuance of these financial statements.

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

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

**NOTE C – NOTES PAYABLE AND DERIVATIVES**

The Company has outstanding numerous notes payable to various parties. The notes bear interest at rates of 5% - 20% per year and are summarized as follows:

---

| | | |
|:---|:---|:---|
| **Notes Payable** | **January 31, 2026** | **April 30, 2025** |
| Convertible notes payable | $5733579 | $5124971 |
| Non-convertible notes payable | 1512400 | 1338200 |
| Accrued interest | 1853226 | 1907205 |
|  | 9099205 | 8370376 |
| Discount on notes payable | - | - |
| Notes payable, net | $9099205 | $8370376 |

---

Certain notes payable contains variable conversion rates, and the conversion features are classified as derivative liabilities. The conversion prices are based on the market price of the Company's common stock, at discounts of 60% to market value.

The Company's derivative financial instruments are embedded derivatives related to the outstanding short-term Convertible Notes Payable. These embedded derivatives included certain conversion features indexed to the Company's common stock. The accounting treatment of derivative financial instruments requires that the Company record the derivatives and related items at their fair values as of the inception date of the Convertible Notes Payable and at fair value as of each subsequent balance sheet date. In addition, under the provisions of Accounting Standards Codification subtopic 815-40, Derivatives and Hedging; Contracts in Entity's Own Equity ("ASC 815-40"), as a result of entering into the Convertible Notes Payable, the Company is required to classify all other non-employee stock options and warrants as derivative liabilities and mark them to market at each reporting date. Any change in fair value, including modifications of terms, will be recorded as non-operating, non-cash income, or expense at each reporting date. If the fair value of the derivatives is higher at the subsequent balance sheet date, the Company will record a non-operating, non-cash charge. If the fair value of the products is lower at the subsequent balance sheet date, the Company will record non-operating, non-cash income. These Notes are subject to a six-year Statute of Limitations in which to bring any potential claims.

The change in fair value of the derivative liabilities of convertible notes outstanding at January 31, 2026, was calculated with the following average assumptions, using a Binomial option-pricing model are as follows:

SCHEDULE OF DERIVATIVE LIABILITIES ASSUMPTIONS USING BLACK-SCHOLES OPTION

---

| | |
|:---|:---|
| **Significant Assumptions:** | |
| Risk free interest rate | 3.66% |
| Expected stock price volatility | 194% |
| Expected dividend payout | 0 |
| Expected options life in years | 2 years |

---

Changes in derivative liability during the nine months ended January 31, 2026, and 2025 were:

---

| | | |
|:---|:---|:---|
|  | **January 31,**<br>**2026** | **January 31,**<br>**2025** |
| Balance, beginning of year | $1007598 | $1119232 |
| Fair value adjustments | (40034) | 89328 |
| Balance, end of period | $967564 | $1208560 |

---

**NOTE D – LOANS PAYABLE TO RELATED PARTIES**

As of January 31, 2026, and April 30, 2025, aggregated loans payable to related parties and, without demand to officers and directors, were $646,776 and $636,233 respectively.

**NOTE E** – **EQUITY TRANSACTIONS**

Preferred Stock

The Company is authorized to issue 10,000,000 shares of preferred stock with $0.001 par value per share, of which 35,850 shares have been designated as Series A convertible preferred stock with a $100 stated value per share; 1,000 shares have been designated as Series B Preferred Stock with a $10,000 per share liquidation value; 4,200,000 shares have been designated as Series C Preferred Stock with a $1.00 per share liquidation value, and 2,000,000 shares have been designated as Series D Preferred Stock with a $1 per share liquidation value. During the nine months ended January 31, 2026, and 2025, the Company did not issue any preferred stock.

Common Stock

The Company is authorized to issue 750,000,000 shares of common stock, $0.001 par value. The Company had 45,673,996 and 40,133,669 shares of common stock issued and outstanding as of January 31, 2026, and April 30, 2025, respectively. The Company had 35,899,343 and 33,612,875 shares of common classified as to be issued at January 31, 2026, and April 30, 2025, respectively.

During the nine months ended January 31, 2026, the Company

● Issued 1,907,478 shares and 1,246,468 shares to be issued valued at $215,000 to accredited investors related to equity investments which includes 1,838,656 warrants at fair value of $67,891

● Issued 1,400,000 shares valued at $156,577 for consulting services

● Issued 136,809 shares of common stock valued at $19,985 upon the settlement of liability

● Issued 1,675,000 shares of common stock valued at $167,500 upon the conversion of convertible notes

● 85,000 shares of common stock to be issued valued at $21,364 upon the issuance debt which includes 100,000 warrants at fair value of $11,474

● 50,000 shares of common stock to be issued valued at $4,000 to accredited investors relating to promissory notes

● Issued 21,040 shares of common stock valued at $5,260 upon the conversion of preferred series D shares.

● Issued 400,000 shares and 430,000 shares of common stock to be issued as penalty to noteholders valued at $154,300 .

During the nine months ended January 31, 2025, the Company:

● Issued 4,539,683 shares and 2,928,454 shares to be issued valued at $791,500 to accredited investors related to equity investments.

● Issued 353,956 shares valued at $78,016 for consulting services.

● 989,847 shares of common stock to be issued as an incentive or penalty to noteholders valued at $201,789 .

● Issued 850,000 shares of common stock valued at $85,000 upon the conversion of convertible notes

● Issued 36,000 shares valued at $6,000 upon the conversion of preferred series C shares

● Issued 120,000 shares valued at $30,000 upon the conversion of preferred series D shares

**<u>Preferred Stock</u>**

The Company is authorized to issue 10,000,000 shares of preferred stock with $0.001 par value per share, of which 35,850 shares have been designated as Series A convertible preferred stock with a $100 stated value per share; 1,000 shares have been designated as Series B Preferred Stock with a $10,000 per share liquidation value; 4,200,000 shares have been designated as Series C Preferred Stock with a $1 per share liquidation value, and 2,000,000 shares have been designated as Series D Preferred Stock with a $1 per share liquidation value.

During the nine months ended January 31, 2026, and 2025, the Company did not issue any preferred stock.

As of January 31, 2026, and April 30, 2025, the Company had:

SCHEDULE OF PREFERRED STOCK OUTSTANDING SHARES

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | January 31, | January 31, | April 30, | April 30, |
| **Preferred stock outstanding shares** | 2026 | 2026 | 2025 | 2025 |
| Series A |  | 125 |  | 125 |
| Series B |  |  |  |  |
| Series C |  | 1953157 |  | 1953157 |
| Series D |  | 768288 |  | 773548 |

---

**NOTE F – FAIR VALUE MEASUREMENTS**

The Company follows the guidance established pursuant to ASC 820 which established a framework for measuring fair value and expands disclosure about fair value measurements. ASC 820 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes the following three levels of inputs that may be used:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

Level 3: Unobservable inputs when there is little or no market data available, thereby requiring an entity to develop its own assumptions. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The table below summarizes the fair values of financial liabilities as of January 31, 2026, and April 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **Fair Value Measurement Using** | **Fair Value Measurement Using** | **Fair Value Measurement Using** |
|  | **Fair Value at**<br>**January 31, 2026** | **Level 1** | **Level 2** | **Level 3** |
| Derivative liabilities | $967564 |  |  | $967564 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **Fair Value Measurement Using** | **Fair Value Measurement Using** | **Fair Value Measurement Using** |
|  | **Fair Value at**<br>**April 30, 2025** | **Level 1** | **Level 2** | **Level 3** |
| Derivative liabilities | $1007598 |  |  | $1007598 |

---

The following is a description of the valuation methodologies used for these items:

*Derivative liabilities* — these instruments consist of certain variable conversion features related to notes payable obligations and certain outstanding warrants. These instruments were valued using pricing models incorporating the Company's stock price, volatility, U.S. risk-free rate, dividend rate, and estimated life.

The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value following A.S.C. Topic 825, "*The Fair Value Option for Financial Issuances*."

**NOTE G - PROPERTY AND EQUIPMENT**

Major classes of property and equipment at January 31, 2026, and April 30, 2025, consist of the following:

---

| | | |
|:---|:---|:---|
|  | **2026** | **2025** |
| Computer equipment, software and furniture | $213262 | $213262 |
| Less: accumulated depreciation | (213262) | (213262) |
| Net property and equipment | $- | $- |

---

All equipment is fully depreciated as of the fiscal year end April 30, 2025. No additional investment in equipment during the nine months ended January 31, 2026.

**NOTE H – WARRANTS AND STOCK OPTIONS:**

During the nine months ended January 31, 2026, the Company

● Issued 1,938,656 warrants exercisable between $0.25 and $0.30 per share and lives of 2 years

● Issued 4,560,000 stock options exercisable at $0.14 and lives of 5 years

During the nine months ended January 31, 2025, the Company:

● Issued 3,733,073 warrants exercisable between $0.30 and $0.55 per share and lives of 2 years.

No stock options were issued to employees or service providers during the three months ended January 31, 2026. As of January 31, 2026, a total of 16,457,707 stock options were vested. The computed fair value was $47,808.

**NOTE I – LOANS RECEIVABLE**

The Company has outstanding loan receivables from short-term lines of credit extended to merchants. These receivables are measured at amortized cost and include an allowance for credit losses based on expected credit loss models. Management assessed that the receivables are subject to minimal credit risk because the lines of credit are secured by liens on merchant assets. Consequently, there is $0 allowance for credit losses as of January 31, 2026, and April 30, 2025, reflecting management's assessment of the collectability of these loans. The Company monitors economic and regulatory developments that could impact the valuation and recoverability of the receivables.

The loans are based on agreements where the principal amount of the loan, repayment amount, interest amount along with number of payments are fixed over the agreed term of a particular disbursement irrespective of the pattern in which repayments may be received from the borrower during such term of disbursement.

As of January 31, 2026, and April 30, 2025, the outstanding loan receivables were $843,981 and $606,802 respectively.

**NOTE J - COMMITMENTS AND CONTINGENCIES**

**<u>Operating Lease Commitments</u>**

Our executive offices are located in New York, NY. We have an agreement for use of office space at this location under a sublease which expired on July 31, 2018, and continues on a month-to-month basis thereafter. The monthly base rent is $6,000.

Rent expense was $54,000 and $54,000 for the nine months period ending January 31, 2026, and 2025, respectively.

**<u>Employment and Consulting Agreements</u>**

The Company does not have employment agreements with any of its non-executive employees.

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

The Company entered into five-year employment agreements with its CEO, Anthony L Havens and Vice President of Operations, Sandra L Ahman. As part of their employment agreements, Mr. Havens received five-year options to purchase 376,256 shares of the Company's common stock at $0.14 per share. The options vest in three equal tranches over three years. Ms. Ahman received five-year options to purchase 125,419 shares of the Company's common stock at $0.14 per share. The options vest in three equal tranches over three years.

**Accrued Payroll Taxes (FICA and State Tax Payable)**

Accrued payroll taxes consist primarily of obligations for Federal Insurance Contributions Act ("FICA") taxes and various state payroll-related taxes incurred in the ordinary course of business. These amounts represent taxes withheld from employees as well as employer-paid payroll tax obligations that have not yet been remitted to the appropriate taxing authorities as of the balance sheet date.

As of January 31, 2026, the Company recorded accrued payroll tax liabilities of approximately $284,777, compared to **$**281,317 as of January 31, 2025. The balance includes federal payroll taxes, primarily Social Security and Medicare, along with applicable state unemployment and withholding taxes.

The Company is in negotiation with the IRS and expects to settle within the next 12 months. Management believes that adequate provisions have been made for all payroll tax obligations; however, the ultimate amount payable may differ from recorded amounts due to changes in tax regulations, audit outcomes, or other factors.

**<u>Litigation</u>**

The Company is subject to legal proceedings and claims arising in its business's ordinary course. Sparta can make no representations about the potential outcome of such proceedings.

As of January 31, 2026, there is no pending litigation against Sparta and any and all prior litigation has been discontinued, settled or otherwise resolved with no liability whatsoever against Sparta.

**NOTE K – SUBSEQUENT EVENTS**

The Company has evaluated subsequent events for recognition and disclosure as of the date the financial statements were available to be issued. No other matters were identified affecting the accompanying financial statements and related disclosures.

Subsequent to January 31, 2026, the Company:

● Issued 2,185,191 shares valued at $158,800 to accredited investors related to equity agreements.

● Issued 4,658,478 shares valued at $250,000 to an accredited investor. Shares were issued with a lock up and restrictions that ensure the shares are subject to forfeiture, are not transferable, must remain in book entry form, and are not negotiable in any fashion.

● Issued 475,000 shares valued at $47,500 upon the conversion of promissory note. For the same note, the Company received an additional $25,000 .

● Company received $5,000 that was added to an existing promissory note.

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**General**

The following discussion of our financial condition and results of operations should be read in conjunction with (1) our interim unaudited, condensed consolidated financial statements and their explanatory notes included as part of this quarterly Report and (2) our annual audited consolidated financial statements and explanatory notes for the year ended April 30, 2025, as disclosed in our annual Report on Form 10-K for that year as filed with the S.E.C.

**"FORWARD-LOOKING" INFORMATION**

This report on Form 10-K contains various statements that may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Rule 175 promulgated thereunder, Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder which represent our expectations and beliefs, including, but not limited to, statements concerning the Company's business and financial plans and prospects and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. The words "believe," "expect," "anticipate," "estimate," "project," and other similar expressions can, but not always, identify forward-looking statements, which speak only as of the date such statement was made. We base these forward-looking statements on our current expectations and projections about future events, our assumptions regarding these events and our knowledge of facts at the time the statements are 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. Risks and uncertainties that could cause our financial performance to differ materially from our goals, plans, expectations and projections expressed in forward-looking statements include those set forth in our filings with the Securities and Exchange Commission ("SEC"), including Item 1A of the Company's Annual Report of Form 10-K for the year ended April 30, 2025. Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made or to reflect the occurrence of unanticipated events. You should consider any forward-looking statements in light of this explanation, and we caution you about relying on forward-looking statements.

**General Overview**

Sparta Commercial Services, Inc. ("Sparta," "we," "us," or the "Company") is a Nevada corporation with headquarters in New York, New York, and a corporate website at www.spartacommercial.com, with subsidiary addresses in Stamford, CT. We operate as a multi-disciplined parent corporation across four primary business sectors: FinTech Services, Financial Services, E-Commerce & Mobile Technology, and Health and Wellness. Our operations are conducted through wholly owned subsidiaries and joint ventures that provide specialized financing products, technology-driven solutions, and consumer wellness offerings.

Agoge Global USA, Inc. is a fintech company revolutionizing cross-border trade for Brazilian importers by offering staged financing and automated payment solutions. Through a joint venture with Brazil's WeDev Group, Agoge provides a proprietary platform that simplifies and accelerates invoice payments, customs clearance, and regulatory compliance. The system reduces costly delays, lowers transaction fees, and improves cash flow by enabling importers to pay suppliers, freight, and customs fees in stages—giving them time to sell goods before loans mature. Positioned in a $252 billion market, Agoge is targeting small-to-midsize importers across high-demand sectors and is seeking debt financing to scale its platform and meet growing client demand.

Sparta's subsidiary, Sparta Crypto, Inc., www.SpartaCrypto.com, was established in September 2020, and is in the process of completing a proprietary state-of-the-art platform designed to connect users of widely adopted digital currencies with sellers of various goods and services. The platform is scheduled to launch in 2026, and the Company can make no assurances that the described plan will reach implementation. In addition, the Company completed and tested a cryptocurrency payment gateway called SpartaPayIQ, <u>www.SpartaPayIQ.com</u>, which was formally announced on March 3, 2022.

In 2007, the Company introduced a new initiative, Municipal Financing, (<u>www.spartamunicipal.com</u>), which since inception and through the current date has provided financing over 100 jurisdictions to date. Sparta's Municipal Finance program is also currently available to all nonprofit organizations, institutions and entities. All nonprofit organizations which adhere to IRS guidelines, including 501 (c) 3 of the Internal Revenue Code, are eligible. Both public nonprofits, also known as public charities, supported with publicly collected funds, and private nonprofits, also known as private foundations, supported by an individual or business entity, qualify for the program.

Consumers, retailers, municipals, nonprofits, auction houses, banks, and insurance companies scrutinize title history reports for the vital information needed and factored into crucial business decisions affecting the bottom line. Vehicle History Reports are a staple of Sparta's E-Commerce Technology subsidiary iMobile Solutions, Inc. Whether a vehicle is intended for business or recreational use, Sparta's Vehicle History Reports are highly regarded for accuracy and completeness. They have been sold across all 50 states and in 62 countries worldwide. They provide a trusted layer of assurance to vehicle buyers and are available on our websites as well as on various dealership websites. They include Cyclechex (Motorcycle History Reports at www.cyclechex.com), RVchex (Recreational Vehicle History Reports at www.rvchex.com), and Truckchex (Heavy Duty Truck History Reports at www.truckchex.com).

The Company's E-Commerce and Mobile Technology subsidiary name change to iMobile Solutions, Inc., from Specialty Reports, Inc., in 2016, signifies its ever-broadening service offerings in the evolving technology landscape. With iMobile App (www.imobileapp.com), the Company provides mobile technology services, including web and mobile application creation, development, and management for a wide range of businesses to increase revenue, build brand recognition, and improve customer engagement. Our ever-broadening business base of mobile applications includes vehicle dealerships and racetracks, private clubs and country clubs, schools and entertainment venues, restaurants, grocery stores, and various other merchant types. (www.imobileapp.com/app-gallery). The Company also designs, launches, maintains, and hosts websites for businesses incorporating SEO (search engine optimization), social media marketing, and online reviews to improve their presence online.

We provide specific, tailored action plans for our clients' websites that include services such as eCommerce, CRM (Customer Relationship Management), development, and integration. This custom software helps businesses communicate with customers and can also be used for employees to communicate internally. The CRM software can be web-based, integrated with a mobile app, or both. We work with clients to understand their unique needs and incorporate the features and requirements that are most important to them and will facilitate their business growth and success. Correspondingly, the Company designs and builds custom kitchen ordering software for independent grocery stores, delicatessens, and other food service businesses. The software can be designed in various ways, including mobile devices and in-store ordering. The kitchen ordering software is enabled with payment integration, text messaging notification, wireless printing, and other features. iMobile Solutions, Inc. provides a turn-key solution for businesses looking to simplify or streamline their kitchen ordering process. Additionally, we offer text messaging services, which supplement business marketing strategies to gain and retain brand loyalty among its clients, customers, and investors. Our text messaging platform allows clients to manage, schedule, and analyze text message performance quickly.

In August 2020, we launched an online B to C website: <u>www.newworldhealthbrands.com</u>, featuring high-quality nutritional supplements, including vitamins and minerals, such as, Iodine for children and adults, Boron, copper/Zinc/Selenium, Magnesium, Spermidine, Vitamin B Complex, Vitamin C and PQQ, with more products to come. All health and wellness offerings are exclusively sourced and manufactured in the United States and adhere to strict U.S. standards and guidelines to ensure the safety and quality of our products. Sparta's commitment to high standards and transparency is tantamount to being a trusted brand.

**RESULTS OF OPERATIONS**

Below is a summary of the results of operations for the three months ended January 31, 2026, and 2025.

**<u>Revenues</u>**

Revenues totaled $92,162 for the three months ended January 31, 2026, compared to $78,998 for the three months ended January 31, 2025. Revenues were up by $13,164 or 17% due primarily to an increase in merchant financing fees.

**<u>Cost of Revenue</u>**

The cost of revenue consists of costs and fees paid to third parties to construct and maintain mobile apps, as well as fees for subscription services related to vehicle history reports.

**<u>Operating Expenses</u>**

Operating expenses were $294,889 during the three months ended January 31, 2026, compared to $257,270 during the three months ended January 31, 2025, an increase of $37,619, or 15% primarily due to an increase in compensation and related costs of $59,780 offset by a decrease in consulting fees of $16,483 and accounting and legal fees of $3,765.

The following are the major expense categories:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **January 31, 2026** | **January 31, 2025** | **Increase (Decrease)** | % |
| **Compensation and Related cost** | 187807 | 128027 | 59780 | 47% |
| **Accounting and Legal Fees** | 7535 | 11300 | (3765) | -33% |
| **Consulting Fees** | 41602 | 58085 | (16483) | -28% |
| **Rent and Lease** | 18000 | 18000 |  | 0% |
| **General office Expenses** | 39945 | 41858 | (1913) | -5% |
|  | 294889 | 257270 | 37619 | 15% |

---

**<u>Other income (expense)</u>**

During the three months ended January 31, 2026, other expense of $197,071 is comprised primarily of financing costs of $345,221 offset by a gain of the change in valuation of derivative liabilities of $146,598, and other commission income of $1,803.

During the three months ended January 31, 2025, other expense of $220,421 is comprised primarily of financing costs of $40,347 and a loss of the change in valuation of derivative liabilities of $188,916, offset by other commission income of $8,842.

**<u>Net Income (Loss)</u>**

Our net loss attributed to common stockholders for the three months ended January 31, 2026, was $414,058 compared to a net loss of $411,012 for the three months ended January 31, 2026, primarily due to the change in valuation of derivative liabilities and change in financing costs for the three months ended January 31, 2026, as compared for the three months ended January 31, 2025.

Below is a summary of the results of operations for the nine months ended January 31, 2026, and 2025.

**<u>Revenues</u>**

Revenues totaled $288,157 for the nine months ended January 31, 2026, compared to $168,357 for the nine months ended January 31, 2026. Revenues were up by $119,800 or 71% due primarily to an increase in merchant financing fees.

**<u>Cost of Revenue</u>**

The cost of revenue consists of costs and fees paid to third parties to construct and maintain mobile apps, as well as fees for subscription services related to vehicle history reports.

**<u>Operating Expenses</u>**

Operating expenses were $1,027,123 during the nine months ended January 31, 2026, compared to $1,006,082 during the nine months ended January 31, 2025, a increase of $21,041, or 2% primarily due to an increase in compensation and related costs of $23,523 and general office expense of $3,816 offset by a decrease in consulting fees of $10,203.

The following are the major expense categories:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **January 31, 2026** | **January 31, 2025** | **Increase (Decrease)** | % |
| **Compensation and Related cost** | 539746 | 516223 | 23523 | 5% |
| **Accounting and Legal Fees** | 63095 | 59190 | 3905 | 7% |
| **Consulting Fees** | 227.257 | 237460 | (10203) | -4% |
| **Rent and Lease** | 54000 | 54000 |  | 0% |
| **General office Expenses** | 143025 | 139209 | 3816 | 3% |
|  | 1027123 | 1006082 | 21041 | 2% |

---

**<u>Other income (expense)</u>**

During the nine months ended January 31, 2026, other expense of $637,488 is comprised primarily of financing costs of $688,021 offset by a gain of the change in valuation of derivative liabilities of $40,035, and other commission income of $12,850.

During the nine months ended January 31, 2025, other expense of $930,047 is comprised primarily of financing costs of $493,257 and a loss of the change in valuation of derivative liabilities of $467,620, offset by other commission income of $18,835.

**<u>Net Income (Loss)</u>**

Our net loss attributed to common stockholders for the nine months ended January 31, 2026, was $1,423,052 compared to a net loss of $1,791,717 for the nine months ended January 31, 2026, primarily due to the change in valuation of derivative liabilities and change in financing costs for the nine months ended January 31, 2026, as compared for the nine months ended January 31, 2025.

**LIQUIDITY AND CAPITAL RESOURCES**

As of January 31, 2026, we had an accumulated deficit of $70,342,036 and a total stockholders' deficit of $12,245,341. The net cash flow used by operations was $725,087 for the nine months ended January 31, 2026. This deficit results primarily from our net loss of $1,399,213 and increases in loans receivable related to Agoge Global USA, Inc. of $237,179, offset by decreases in non-cash expenses of $296,206 and increases in accounts payable and accrued expenses of $614,830.

We met our cash requirements during the period through revenue of $288,157 and proceed from the sale of common shares $215,000 and proceed from convertible notes $492,000.

We do not anticipate incurring significant research and development expenditures, and we do not anticipate the sale or acquisition of any significant property, plant or equipment, during the next twelve months. At January 31, 2026, we had 4 full-time employees and three part-time employee, and 2 full-time consultants. If we fully implement our business plan, we anticipate our employment base may increase during the next twelve months. As we continue to expand, we will incur additional cost for personnel. This potential increase in personnel is dependent upon our generating increased revenues and obtaining sources of financing. There is no guarantee that we will be successful in raising the funds required or generating sufficient revenues to fund the potential increase in the number of employees. Our employees are not represented by a union.

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 potential future cash flow deficits from operations.

We continue to seek additional financing, which may be in the form of senior debt, subordinated debt or equity. We currently have no commitments for financing that are not at the investor's election. There is no guarantee that we will be successful in raising the funds required to support our operations.

We estimate that we will need approximately $1,000,000 in addition to our normal operating cash flow to conduct operations during the next twelve months. However, 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 us. Any additional equity financing may be dilutive to stockholders and such additional equity securities may have rights, preferences or privileges that are senior to those of our 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 our operating flexibility. 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 our revenue and operating results was not significant. Our operations are located in North America and there are no seasonal aspects that would have a material effect on our 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, 2025, and 2024 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.

In order to improve the Company's liquidity, the Company's management is actively pursuing additional financing through discussions with investment bankers, financial institutions and private investors. There can be no assurance that the Company will be successful in its effort to secure additional 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 increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.

**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 acquisition or sale of any significant property, plant or equipment during the next twelve months.

**Number of Employees**

From our inception through the period ended January 31, 2026, we have relied on the services of outside consultants for services and currently have four full-time employees and three part-time employees. In order for us to attract and retain quality personnel, we anticipate we will have to offer competitive salaries to future employees. If we fully implement our business plan, we anticipate our employment base may increase 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 our costs and the ability to pass on cost increases to our customers overtime is dependent upon market conditions. We are not aware of any inflationary pressures that have had any significant impact on our operations over the past year, and we do not anticipate that inflationary factors will have a significant impact on future operations.

**CRITICAL ACCOUNTING POLICIES**

The preparation of our 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 financial statements, we believe the following critical accounting policy involves the most complex, difficult and subjective estimates and judgments.

**Revenue Recognition**

The Company acts as the principal in its revenue transactions as it is the primary obligor. The Company's main source of revenue is comprised of the following:

***●***  ***Information Technology*** -Sparta creates mobile applications (mobile apps) for small and medium-size businesses under the tradename iMobileApp. iMobileApp. Sparta provides Cyclechex Motorcycle History Reports (Cyclechex.com) contain valuable information for consumers, motorcycle dealers, insurers, auction houses, and lenders including verifying the specific make, model, and year of a pre-owned motorcycle. Also, through its websites (www.cyclechex.com) Sparta provides vehicle history report which contain valuable information for consumers, dealers, insurers, auction houses, and lenders. Revenues from mobile app products are generally recognized upon delivery. Revenues from History Reports are typically recognized upon delivery/download. Prepayments received from customers before delivery (if any) are recognized as deferred revenue and recognized upon delivery. The Company records deferred revenues when cash payments are received or due before our performance, including refundable amounts.

***●***  ***Wellness products* -** Our Wellness products feature high quality dietary supplements, including vitamins and minerals, such as, Iodine for children and adults, Boron, copper/Zinc/Selenium, Magnesium, Spermidine, Vitamin B Complex, Vitamin C and PQQ. In addition to our B to C website: www.newworldhealthbrands.com, our Wellness products are also offered on on-line marketplaces such as Amazon, Walmart, and Etsy. Revenues from New World Health Brands products are generally recognized upon delivery.

***●***  ***Merchant financing -*** Sparta offers Brazilian importers staged financing and automated payment solutions. The system reduces costly delays, lowers transaction fees, and improves cash flow by enabling importers to pay suppliers, freight, and customs fees in stages—giving them time to sell goods before loans mature. Revenues from merchant financing are recognized monthly based on the outstanding balance of the loans.

During the first quarter of 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), using the cumulative-effect method. The new standard requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The adoption did not have an impact in our consolidated financial statements, other than the enhancement of our disclosures related to our revenue-generating activities.

The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions.

Revenues from mobile app products and New World Health Brands products are generally recognized upon delivery. Revenues from History Reports are generally recognized upon delivery / download. Prepayments received from customers before delivery (if any) are recognized as deferred revenue and recognized upon delivery. The Company records deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable.

Information Technology:

The Company recognizes revenue when the following criteria have been met persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable is reasonably assured, and the fees are fixed or determinable. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions.

Revenues from mobile app products are generally recognized upon delivery. Revenues from History Reports are generally recognized upon delivery / download. Prepayments received from customers before delivery (if any) are recognized as deferred revenue and recognized upon delivery.

New World Health Brands:

Revenues from New World Health Brands products are generally recognized upon delivery.

**Stock-Based Compensation**

The Company adopted *Financial Accounting Standards Board Accounting Standard Codification Topic 718* ("ASC 718-10"), which records compensation expense on a straight-line basis, generally over the explicit service period of three to five years.

ASC 718-10 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to be vest is recognized as expense over the requisite service periods in the Company's Consolidated Statement of Operations. The Company is using the Black-Scholes option-pricing model as its method of valuation for share-based awards. The Company's determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company's stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include but are not limited to the Company's expected stock price volatility over the term of the awards, and certain other market variables such as the risk-free interest rate.

**<u>Inventories</u>**

The Company's inventories represent finished goods, consist of products available for sale and are accounted for using the first-in, first-out (FIFO) method and valued at the lower of cost or net realizable value. Inventory consists of finished goods for the Company's New World Health Brands business.

**<u>Convertible Instruments</u>**

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for "*Accounting for Derivative Instruments and Hedging Activities*" ("ASC 815-40").

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when "*Accounting for Convertible Securities with Beneficial Conversion Features*," as those professional standards pertain to "Certain Convertible Instruments." Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40 provides that, among other things, generally, if an event is not within the entity's control could or require net cash settlement, then the contract shall be classified as an asset or a liability.

**<u>Derivative Liabilities</u>**

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.

**RECENT ACCOUNTING PRONOUNCEMENTS**

Recently adopted accounting pronouncements require public companies to disclose the impact of new standards on their financial statements, including details about the standard, the adoption date, method of adoption, and expected effects. These disclosures help investors understand how changes in accounting principles will affect a company's financial performance and position.

***Recently Adopted Accounting Pronouncements.*** In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this update expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment among other disclosure requirements. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of this standard is on a modified retrospective basis and had no impact on the Company's financial position, results of operations, cash flows or net income per share. As of January 31, 2026, and April 30, 2025, the Company had one reporting segment, all revenue is reported under this segment Sparta Commercial Services, Inc.

Other accounting standards and amendments to existing accounting standards that have been issued and have future effective dates are not applicable or are not expected to have a significant impact on the Company's consolidated financial statements.

**Off-Balance Sheet Arrangements**

We do not maintain off-balance sheet arrangements, nor do we participate in non-exchange traded contracts requiring fair value accounting treatment.

**RECENT ACCOUNTING PRONOUNCEMENTS**

For information regarding recent accounting pronouncements and their effect on the Company, see "*Recent Accounting Pronouncements*" in Note A of the Notes to Consolidated Financial Statements contained herein.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

Not applicable.

**ITEM 4. CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Exchange Act, 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 periods specified in the SEC's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Under the supervision and participation of our management, including our Chief Executive Officer and Principal Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures as of January 31, 2026. Based on the evaluation of these disclosure controls and procedures and in light of the material weaknesses found in our internal controls, the Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective.

**Management Report on Internal Control over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act. Under the supervision and with the participation of our Chief Executive Officer and Principal Financial Officer, we evaluated the effectiveness of our internal control over financial reporting as of January 31, 2026, using the criteria established in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness yet necessary enough to merit attention by those responsible for oversight of the Company's financial reporting. In our assessment of the effectiveness of internal control over financial reporting as of January 31, 2026, we determined that control deficiencies existed that constituted material weaknesses, as described below:

● lack of documented policies and procedures.

● we have no audit committee.

● there is a risk of management override, given that our officers have a high degree of involvement in our day-to-day operations.

● there is no effective separation of duties, which include monitoring controls, between the members of management.

Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. As a result, we have been unable to improve our internal controls over financial reporting during the quarter ending January 31, 2026. However, to the extent possible, we will implement procedures to ensure that the initiation of transactions, the custody of assets, and the recording of transactions will be performed by separate individuals. Management is currently evaluating the steps to address these material weaknesses.

Accordingly, these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by our internal controls.

As a result of the material weaknesses described above, management has concluded that we did not maintain effective internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control Integrated Framework issued by COSO.

In light of these significant deficiencies, we performed additional analyses and procedures to conclude that our consolidated financial statements for the quarter ended January 31, 2026, included in this quarterly report on Form 10-Q, were fairly stated in accordance with U.S. GAAP. Accordingly, management believes that despite our significant deficiency, our consolidated financial statements for the three months ended January 31, 2026, are fairly stated, in all material respects, in accordance with U.S. GAAP.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit a smaller reporting company to provide only management's report in its annual report.

Statement of Auditing Standards No. 100, Interim Financial Information ("SAS100") requires a registrant to engage an independent accountant to review the registrant's interim financial information. The financial statements included in this filing has not been subject to a review by its independent public accountant

**PART II. OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

As of January 31, 2026, there is no pending litigation against Sparta and any and all prior litigation has been discontinued, settled or otherwise resolved with no liability whatsoever against Sparta.

**ITEM 1A. RISK FACTORS**

We are subject to certain risks and uncertainties in our business operations, including those described below. The risks and uncertainties described below are not the only risks we face. Additional risks and uncertainties not presently known or deemed immaterial may also impair our business operations. A description of factors that could materially affect our business, financial condition, or operating results was included in Item 1A, "Risk Factors," of our Form 10-K for the year ended April 30, 2025, and is incorporated herein by reference.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

Each issuance and sale of securities described below was deemed exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, as transactions by an issuer not involving a public offering. No advertising or general solicitation was employed in offering the securities. Each purchaser is a sophisticated investor (as described in Rule 506(b) (2) (ii) of Regulation D) or an accredited investor (as defined in Rule 501 of Regulation D). Each received adequate information about the Company or had access to such information, through employment or other relationships, to such information.

Sales of Preferred Stock, Common Stock, and Warrants:

During the nine months that ended January 31, 2026, the Company:

● Sold 1,907,478 and subscribed 1,246,468 shares of common stock to accredited investors for cash of $215,000 which includes 1,938,656 warrants at fair value of $67,891

● Entered into promissory notes with accredited investors totaling $316,000

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 5. OTHER INFORMATION**

Not applicable.

**ITEM 6. EXHIBITS**

The following exhibits are filed with this Report:

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 31.1\* | [Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a)](ex31-1.htm) |
| 31.2\* | [Certification of Principal Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a)](ex31-2.htm) |
| 32.1\* | [Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350](ex32-1.htm) |
| 101. I.N.S.\* | Inline XBRL Instance Document |
| 101. S.C.H.\* | Inline XBRL Taxonomy Extension Schema |
| 101. C.A.L.\* | Inline XBRL Taxonomy Extension Calculation Linkbase |
| 101. D.E.F.\* | Inline XBRL Taxonomy Extension Definition Linkbase |
| 101. L.A.B.\* | Inline XBRL Taxonomy Extension Label Linkbase |
| 101. P.R.E.\* | Inline XBRL Taxonomy Extension Presentation Linkbase |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

\*Filed herewith

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **SPARTA COMMERCIAL SERVICES, INC.** | **SPARTA COMMERCIAL SERVICES, INC.** |
| Date: March 23, 2026 | By: | */s/ Anthony L. Havens* |
|  |  | Anthony L. Havens, Chief Executive Officer, |
|  |  | Principal financial and accounting officer |

---

## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATIONS**

I, Anthony L. Havens, certify that:

1. I have reviewed this Report on Form 10-Q for the period ended January 31, 2026, of Sparta Commercial Services, Inc.;

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report.

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report.

4. As the registrant's sole certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this Report is being prepared.

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d) Disclosed in this Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. As the registrant's sole certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 23, 2026

---

| |
|:---|
| */s/ Anthony L. Havens* |
| Anthony L. Havens |
| Chief Executive Officer, principal executive officer |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATIONS**

I, Anthony L. Havens, certify that:

1. I have reviewed this Report on Form 10-Q for the period ended January 31, 2026, of Sparta Commercial Services, Inc.;

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report.

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report.

4. As the registrant's sole certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this Report is being prepared.

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d) Disclosed in this Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. As the registrant's sole certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 23, 2026

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| |
|:---|
| */s/ Anthony L. Havens* |
| Anthony L. Havens |
| Principal financial and accounting officer |

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## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION**

**PURSUANT TO 18 U.S.C. SECTION 1350**

In connection with the Quarterly Report of Sparta Commercial Services, Inc. (the "Company") on Form 10-Q for the period ended January 31, 2026, as filed with the Securities and Exchange Commission on the date therein specified (the "Report"), I, Anthony L. Havens, Chief Executive Officer and principal financial and accounting officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The
 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended and

(2) The
 information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations
 of the Company.

Date: March 23, 2026

---

| |
|:---|
| */s/ Anthony L. Havens* |
| Anthony L. Havens, Chief Executive Officer, |
| Principal executive officer, principal financial and accounting officer |

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