Sparta Commercial Services Reports Revenue Growth but Increased Net Loss for Quarter Ending January 31, 2025

Sparta Commercial Services, Inc. reported its financial results for the quarter ending January 31, 2025, revealing a total revenue of $78,998, a significant increase from $36,736 in the same quarter of the previous year. For the nine months ending January 31, 2025, the company generated $168,357 in revenue, up 11% from $151,433 in the prior year. The growth was primarily driven by increased merchant financing fees and sales of wellness products, particularly in the wellness sector, which saw revenue rise from $6,665 to $15,172 year-over-year for the quarter.

Despite the revenue growth, Sparta reported a net loss attributable to common stockholders of $411,012 for the three months ended January 31, 2025, compared to a loss of $99,556 in the same period last year. For the nine-month period, the net loss increased to $1,791,717 from $675,291, largely due to changes in the valuation of derivative liabilities. Operating expenses also rose to $1,006,082, a 16% increase from $866,886 in the previous year, driven by higher compensation costs and consulting fees.

In terms of operational developments, Sparta's total assets increased to $826,072 as of January 31, 2025, compared to $119,681 at the end of the previous fiscal year. The company reported a significant rise in accounts receivable, which grew to $12,431 from $6,724, and inventory increased to $4,120 from $3,004. However, total liabilities also rose sharply to $11,277,716, up from $9,756,278, reflecting an increase in accounts payable and accrued expenses.

Sparta's strategic initiatives included the continued development of its wellness product line and the expansion of its merchant financing services. The company has also been actively pursuing additional equity financing to address its liquidity challenges, as indicated by its accumulated deficit of $68,587,067. Management is focused on raising approximately $1,000,000 to support operations over the next twelve months, although there are no guarantees regarding the success of these efforts.

Looking ahead, Sparta's management remains committed to enhancing its business operations and securing necessary funding. The company is exploring various financing options, including senior and subordinated debt, as well as equity investments. However, the ongoing net losses and the need for additional capital raise substantial doubts about its ability to continue as a going concern. The management's ability to execute its business plan and achieve profitability will be critical in the coming months.