Sparta Commercial Services, Inc. - Condensed Consolidated...

Sparta Commercial Services, Inc. - Recent Material Event

Item 1.		Financial Statements (Unaudited)

		Condensed Consolidated Balance Sheets as of January 31, 2008 and April 30, 2007

		Condensed Consolidated Statements of Operations for the Three and Nine Months Ended January 31, 2008 and 2007

		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended January 31, 2008 and 2007

		Notes to Unaudited Condensed Consolidated Financial Statements

Item 2.		Management's Discussion and Analysis or Plan of Operation

Item 3.		Controls and Procedures

PART II.		OTHER INFORMATION

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds

Item 6.		Exhibits

Signatures

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SPARTA COMMERCIAL SERVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	January 31, 2008			April 30, 2007
	(unaudited)
ASSETS
Cash and cash equivalents	$	1,248		$	22,032
RISC loan receivables, net of reserve of $100,547 and $59,338, respectively (NOTE D)		3,523,300			2,492,819
Motorcycles and other vehicles under operating leases net of accumulated depreciation of $309,165and $ 221,800 respectively, and loss reserve of $34,431 and $ 26,059, respectively (NOTE B)		1,188,677			1,088,686
Interest receivable		46,858			25,832
Accounts receivable		84,871
Prepaid expenses and other assets					27,137
Inventory (NOTE C)		63,411			20,784
Property and equipment, net of accumulated depreciation and amortization of $125,488 and $97,047, respectively (NOTE E)		65,759			94,200
Restricted cash		397,547			284,943
Deposits		50,692			50,692
Total assets	$	5,422,362		$	4,107,125

LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY

Liabilities:
Accounts payable and accrued expenses		1,190,926		$	1,219,067
Accrued equity based compensation (NOTE G)					40,310
Accrued equity based penalties		2,178			2,380
Notes payable-Senior Lender (NOTE F)		4,440,810			2,985,207
Convertible Notes Payable (NOTE I)		1,975,759			775,259
Notes payable-Other (NOTE I)		1,130,000			365,000
Loans payable-related parties (NOTE J)		242,260			202,260
Deferred revenue		26,467			46,765
Total liabilities		9,008,400			5,636,248

Deficiency in Stockholders' Equity:
Preferred stock, $.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, 825 and 19,795 shares issued and outstanding, respectively		82,500			1,979,500
Common stock, $.001 par value; 340,000,000 shares authorized, 128,056,157 and 123,216,157 shares issued and outstanding, respectively		128,056			123,216
Common stock to be issued, 12,272,730, and 0, respectively		12,273			-
Additional paid-in-capital		17,473,613			14,595,827
Deferred compensation					(24,000	)
Accumulated deficit		(21,282,480	)		(18,203,666	)
Total deficiency in stockholders' equity		(3,586,038	)		(1,529,123	)
Total Liabilities and deficiency in stockholders’ equity	$	5,422,362		$	4,107,125

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SPARTA COMMERCIAL SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 2008 AND 2007

(UNAUDITED)

	For the Three Months Ended January 31,						For the Nine Months Ended January 31,
	2008			2007			2008			2007

Revenue	$	288,605		$	214,642		$	865,532		$	625,839

Operating expenses:
General and administrative		683,698			913,876			2,950,249			3,405,213
Depreciation and amortization		67,930			93,693			218,756			250,303

Total operating expenses		751,628			1,007,569			3,169,005			3,655,516

Loss from operations		(463,023	)		(792,927	)		(2,303,473	)		(3,029,677	)

Other expense:
Interest expense and financing cost, net		(335,207	)		(139,649	)		(749,521	)		(259,917	)
Change in value of warrant liabilities											299,663

Net loss		(798,028	)		(932,387	)		(3,052,792	)		(2,989,931	)

Preferred dividend		16,797			29,937