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spartacommercial.comAI Executive Summary
AI-powered analysis of 10-K filing content
Sparta Commercial Services remains a going concern with an accumulated deficit of $71.8 million, negative working capital of $11.6 million, and total liabilities of $12.5 million against minimal revenues of $345,312. Despite a 47% revenue increase, operating expenses rose 70% year-over-year driven largely by a new $751,152 provision for credit losses, and management has explicitly stated disclosure controls and internal controls over financial reporting are not effective. The company needs to raise approximately $1 million in the next twelve months just to sustain operations, indicating severe liquidity and viability concerns.
Red Flags Detected (9)
Going concern doubt expressed by independent auditors for both FY2026 and FY2025
Accumulated deficit of $71,790,476 and negative working capital of $11,553,887
Total liabilities of $12,459,845 against minimal revenue base of $345,312
6 more red flags detected
Key Takeaways
Company remains pre-profitability with revenues under $350K against liabilities exceeding $12 million
Core legacy Powersports lending business was discontinued post-2008 crisis; current strategy relies on diversification into FinTech, municipal leasing, e-commerce, and wellness segments with unclear scale
3 more takeaways
Filing Overview
What This Means
High Risk Filing: This company is showing signs of financial stress or significant operational challenges.
Deteriorating Trend: Conditions are worsening compared to previous filings. This may create opportunities for service providers.
Annual Report: Comprehensive filing covering the full fiscal year with audited financial statements.