Sparta Commercial Services Reports 23% Revenue Growth but Faces Increased Losses and Financial Challenges

Sparta Commercial Services, Inc. reported a revenue increase of approximately 23% for the fiscal year ending April 30, 2025, totaling $235,544 compared to $192,040 in the previous year. This growth was primarily driven by an increase in merchant financing revenue, which was newly introduced during the fiscal year. Despite the revenue growth, the company continued to face significant financial challenges, incurring a net loss of $2,123,634, a substantial increase from the $644,490 loss reported in the prior year. The increase in losses was attributed to a decrease in gains from the valuation of derivative liabilities, which fell from $634,827 in 2024 to $266,658 in 2025.

Operating expenses rose sharply by 40% to $1,432,449, up from $1,019,762 in the previous year. This increase was largely due to higher compensation costs and a significant rise in consulting fees, which surged by 459% to $409,560. The company’s accumulated deficit reached $68,918,984 as of April 30, 2025, alongside a working capital deficit of $9,569,218, raising substantial doubts about its ability to continue as a going concern.

Strategically, Sparta has made notable advancements, particularly through its fintech subsidiary, Agoge Global USA, which focuses on cross-border trade finance solutions. The joint venture with WeDev Group has led to the development of a digital platform aimed at improving transaction efficiency and reducing costs for Brazilian importers. Additionally, the company has launched a virtual card and expense management platform, iGoCards, which is expected to enhance its service offerings in the fintech sector.

Operationally, Sparta has maintained a small workforce, with four full-time employees and three part-time employees as of April 30, 2025. The company is actively seeking to expand its employee base in line with revenue growth and financing capabilities. However, it faces challenges in securing the necessary capital to support its operations and growth plans, estimating a need for approximately $1 million in additional financing over the next twelve months.

Looking ahead, Sparta's management is focused on improving liquidity and is pursuing various financing options, including equity and debt. However, there is no assurance that the company will successfully raise the required funds. The ongoing financial losses and the need for additional capital underscore the uncertainty surrounding Sparta's future operations and its ability to achieve profitability.