x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended April 30, 2015
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from __________ to __________.
|
|
Commission file number:
0-9483
|
SPARTA COMMERCIAL SERVICES, INC.
|
(Exact name of registrant as specified in its charter)
|
NEVADA
|
30-0298178
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
370 Lexington Ave., Suite 1806, New York, NY
|
10017
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Common Stock, par value $0.001
|
(Title of class)
|
Large accelerated filer
o
|
Accelerated filer
o
|
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
x
|
Page
|
||
PART I
|
||
Item 1.
|
3
|
|
Item 1A.
|
10
|
|
Item 1B.
|
13
|
|
Item 2.
|
14
|
|
Item 3.
|
14
|
|
Item 4.
|
14
|
|
PART II
|
||
Item 5.
|
15
|
|
Item 6.
|
19
|
|
Item 7.
|
19
|
|
Item 7A.
|
23
|
|
Item 8.
|
24
|
|
Item 9.
|
50
|
|
Item 9A.
|
50
|
|
Item 9B.
|
50
|
|
PART III
|
||
Item 10.
|
51
|
|
Item 11.
|
53
|
|
Item 12.
|
55
|
|
Item 13.
|
57
|
|
Item 14.
|
58
|
|
Item 15.
|
59
|
|
61
|
·
|
Prevent the introduction or reintroduction of stolen motor vehicles into interstate commerce
|
·
|
Protect states, consumers (both individual and commercial), and other entities from fraud
|
·
|
Reduce the use of stolen vehicles for illicit purposes including funding of criminal enterprises
|
·
|
Provide consumer protection from unsafe vehicles
|
Fiscal Year Ended
|
||||||||
April 30,
|
April 30,
|
|||||||
2015
|
2014
|
|||||||
Revenues
|
$
|
41,714
|
$
|
122,372
|
||||
Net loss
|
$
|
(246,537
|
)
|
$
|
(280,441
|
)
|
·
|
Fair Debt Collection Practices Act. The Fair Debt Collection Practices Act and applicable state law counterparts prohibit us from contacting customers during certain times and at certain places, from using certain threatening practices and from making false implications when attempting to collect a debt.
|
·
|
Truth in Lending Act. The Truth in Lending Act requires us and the dealers we do business with to make certain disclosures to customers, including the terms of repayment, the total finance charge, and the annual percentage rate charged on each contract.
|
·
|
Consumer Leasing Act. The Consumer Leasing Act applies to any lease of consumer goods for more than four months. The law requires the seller to disclose information such as the amount of initial payment, number of monthly payments, total amount for fees, penalties for default, and other information before a lease is signed.
|
·
|
The Consumer Credit Protection Act of 1968. The Act required creditors to state the cost of borrowing in a common language so that the consumer can figure out what the charges are, compare costs, and shop for the best credit deal.
|
·
|
Equal Credit Opportunity Act. The Equal Credit Opportunity Act prohibits creditors from discriminating against loan applicants based on race, color, sex, age, or marital status. Pursuant to Regulation B promulgated under the Equal Credit Opportunity Act, creditors are required to make certain disclosures regarding consumer rights and advise consumers whose credit applications are not approved of the reasons for the rejection.
|
·
|
Fair Credit Reporting Act. The Fair Credit Reporting Act requires us to provide certain information to consumers whose credit applications are not approved on the basis of a report obtained from a consumer reporting agency.
|
·
|
Gramm-Leach-Bliley Act. The Gramm-Leach-Bliley Act requires us to maintain privacy with respect to certain consumer data in our possession and to periodically communicate with consumers on privacy matters.
|
·
|
Soldiers' and Sailors' Civil Relief Act. The Soldiers' and Sailor's Civil Relief Act requires us to reduce the interest rate charged on each loan to customers who have subsequently joined, enlisted, been inducted or called to active military duty, if requested to do so.
|
·
|
Electronic Funds Transfer Act. The Electronic Funds Transfer Act prohibits us from requiring our customers to repay a loan or other credit by electronic funds transfer ("EFT"), except in limited situations that do not apply to us. We are also required to provide certain documentation to our customers when an EFT is initiated and to provide certain notifications to our customers with regard to preauthorized payments.
|
·
|
Telephone Consumer Protection Act. The Telephone Consumer Protection Act prohibits telephone solicitation calls to a customer's home before 8 a.m. or after 9 p.m. In addition, if we make a telephone solicitation call to a customer's home, the representative making the call must provide his or her name, our name, and a telephone number or address at which our representative may be contacted. The Telephone Consumer Protection Act also requires that we maintain a record of any requests by customers not to receive future telephone solicitations, which must be maintained for five years.
|
·
|
Bankruptcy. Federal bankruptcy and related state laws may interfere with or affect our ability to recover collateral or enforce a deficiency judgment.
|
·
|
Dodd-Frank Wall Street Reform and Consumer Protection Act. The Dodd-Frank Wall Street Reform and Consumer Protection Act authorized the creation of a Bureau of Consumer Financial Protection. The impact on the Company of the newly created agency is unknown at this time as the agency is yet to be formed.
|
High
|
Low
|
|||||||
Fiscal Year 2015
|
||||||||
First quarter (May 1, 2014 – July 31, 2014)
|
$
|
1.24
|
$
|
0.43
|
||||
Second quarter (August 1, 2014 – October 31, 2014)
|
$
|
0.58
|
$
|
0.17
|
||||
Third quarter (November 1, 2014 – January 31, 2015)
|
$
|
0.32
|
$
|
0.14
|
||||
Fourth quarter (February 1, 2015 – April 30, 2015)
|
$
|
0.14
|
$
|
0.04
|
||||
Fiscal Year 2014
|
||||||||
First quarter (May 1, 2013 – July 31, 2013)
|
$
|
0.70
|
$
|
0.39
|
||||
Second quarter (August 1, 2013 – October 31, 2013)
|
$
|
0.74
|
$
|
0.41
|
||||
Third quarter (November 1, 2013 – January 31, 2014)
|
$
|
1.29
|
$
|
0.45
|
||||
Fourth quarter (February 1, 2014 – April 30, 2014)
|
$
|
1.32
|
$
|
0.93
|
●
|
sold 9,655,415 shares of common stock to eighteen accredited investors for $978,886
|
●
|
issued 9,487,478 shares of common stock upon the conversion of convertible notes and accrued interest in the amount of $684,788 of which 122,449 shares were classified as to be issued at April 30, 2014 and 1,963,350 shares remained to be issued at April 30, 2015, see following text for details of the notes converted,
|
●
|
issued 1,353,830 shares of common stock with 51,000 shares of common stock to be issued at April 30, 2015 valued at $181,912 pursuant to terms of various notes of which 24,809 shares were classified as to be issued at April 30, 2014,
|
●
|
issued 1,234,959 shares of common stock valued at $352,942 pursuant to consulting agreements, of which 60,000 shares remained to be issued,
|
●
|
issued 538,160 shares of common stock in payment of $80,154 in accounts payable of which 20,000 shares were classified as to be issued at April 30, 2014, and 100,000 were classified as to be issued at April 30, 2015.
|
●
|
issued 31,780 shares of common stock valued at $77,460 to three employees in exchange for their outstanding stock purchase options.
|
Fiscal Year Ended
|
||||||||
April 30,
|
April 30,
|
|||||||
2015
|
2014
|
|||||||
Revenues
|
$
|
41,714
|
$
|
122,373
|
||||
Net loss
|
$
|
(246,537
|
)
|
$
|
(280,441
|
)
|
·
|
seeking institutional investors for equity investments in our company; and
|
·
|
initiating negotiations to secure short term financing through promissory notes or other debt instruments on an as needed basis.
|
Page
|
||
25
|
||
26
|
||
27
|
||
28
|
||
29
|
||
30 - 49
|
||
As of
|
||||||||
April 30, 2015
|
April 30, 2014
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
14,034
|
$
|
70,456
|
||||
Accounts receivable
|
10
|
182,343
|
||||||
Other current assets
|
5,706
|
51,364
|
||||||
Total Current Assets
|
19,750
|
304,163
|
||||||
Property and equipment, net of accumulated depreciation and amortization of $203,215 and
$199,367, respectively (NOTE B)
|
10,047
|
9,974
|
||||||
Goodwill
|
10,000
|
10,000
|
||||||
Other assets
|
9,628
|
9,628
|
||||||
Deposits
|
79,776
|
40,568
|
||||||
Total Long Term Assets
|
109,451
|
70,170
|
||||||
Total assets from continuing operations
|
129,201
|
374,333
|
||||||
ASSETS FROM DISCONTINUED OPERATIONS (NOTE C)
|
13,955
|
90,024
|
||||||
Total assets
|
$
|
143,156
|
$
|
464,357
|
||||
LIABILITIES AND DEFICIT
|
||||||||
Liabilities:
|
||||||||
Current Liabilities
|
||||||||
Accounts payable and accrued expenses
|
$
|
1,382,598
|
$
|
1,259,368
|
||||
Current portion notes payable net of beneficial conversion feature of $762,426 and $296,384, respectively (NOTE D)
|
1,374,786
|
821,511
|
||||||
Derivative liabilities
|
1,605,535 | 601,000 | ||||||
Total Current Liabilities
|
4,362,919
|
2,681,879
|
||||||
Long term portion of notes payable
|
1,263,369
|
1,198,368
|
||||||
Loans payable-related parties (NOTE E)
|
385,853
|
385,853
|
||||||
Total Long Term Liabilities
|
1,649,222
|
1,584,221
|
||||||
Total liabilities from continuing operations
|
6,012,141
|
4,266,100
|
||||||
LIABILITIES FROM DISCONTINUED OPERATIONS (NOTE C)
|
70,117
|
130,420
|
||||||
Total liabilities
|
6,082,258
|
4,396,520
|
||||||
Deficit:
|
||||||||
Preferred stock, $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, respectively
|
12,500
|
12,500
|
||||||
Preferred stock B, 1,000 shares have been designated as Series B redeemable preferred stock,
$0.001 par value, with a liquidation and redemption value of $10,000 per share, 0 and 157
shares issued and outstanding, respectively
|
-
|
1,570
|
||||||
Preferred stock C, 200,000 shares have been designated as Series C redeemable, convertible
preferred, $0.001 par value, with a liquidation and redemption value of $10 per share, 0 and
0 shares issued and outstanding, respectively
|
-
|
-
|
||||||
Common stock, $0.001 par value; 750,000,000 shares authorized, 43,238,320 and 20,987,353
shares issued and outstanding, respectively
|
43,238
|
20,987
|
||||||
Common stock to be issued 2,356,598 and 283,777, respectively
|
2,356
|
284
|
||||||
Preferred stock B to be issued, 0 and 72.48 shares, respectively
|
-
|
72
|
||||||
Additional paid-in-capital
|
42,528,909
|
41,738,613
|
||||||
Subscriptions receivable
|
-
|
(2,118,309
|
)
|
|||||
Accumulated deficit
|
(49,178,453
|
)
|
(44,257,306
|
)
|
||||
Total deficiency in stockholders' equity
|
(6,591,450
|
)
|
(4,601,588
|
)
|
||||
Noncontrolling interest
|
652,348
|
669,424
|
||||||
Total Deficit
|
(5,939,102
|
)
|
(3,932,164
|
)
|
||||
Total Liabilities and Deficit
|
$
|
143,156
|
$
|
464,357
|
Year Ended
|
||||||||
April 30,
|
||||||||
2015
|
2014
|
|||||||
Revenue
|
||||||||
Information technology
|
$ | 604,842 | $ | 476,022 | ||||
Cost of goods sold
|
192,112 | 154,961 | ||||||
Gross profit
|
412,730 | 321,061 | ||||||
Operating expenses:
|
||||||||
General and administrative
|
3,108,073 | 2,240,154 | ||||||
Depreciation and amortization
|
3,848 | 4,572 | ||||||
Total operating expenses
|
3,111,921 | 2,244,726 | ||||||
Loss from operations
|
(2,699,191 | ) | (1,923,665 | ) | ||||
Other (income) expense:
|
||||||||
Other income
|
(22,182 | ) | (77,190 | ) | ||||
Interest expense and financing cost, net
|
499,618 | 337,688 | ||||||
Non-cash financing costs
|
181,994 | 113,260 | ||||||
Amortization of debt discount
|
1,013,934 | 417,291 | ||||||
(Gain) loss in changes in fair value of derivative liability
|
318,372 | 166,932 | ||||||
Total other expense
|
1,991,736 | 957,981 | ||||||
Net loss from continuing operations
|
(4,690,926 | ) | (2,881,646 | ) | ||||
Net loss from discontinued operations
|
(246,537 | ) | (280,441 | ) | ||||
Net Loss
|
(4,937,464 | ) | (3,162,087 | ) | ||||
Net loss attributed to Noncontrolling interest
|
17,076 | 53,767 | ||||||
Preferred dividend
|
(758 | ) | (157,328 | ) | ||||
Net loss attributed to common stockholders
|
$ | (4,921,148 | ) | $ | (3,265,648 | ) | ||
Basic and diluted loss per share
|
$ | (0.18 | ) | $ | (0.16 | ) | ||
Basic and diluted loss per share attributed to
common stockholders
|
$ | (0.19 | ) | $ | (0.19 | ) | ||
Weighted average shares outstanding
|
26,440,126 | 17,637,942 |
Series A
|
Series B
|
Common Stock
|
Additional
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred
Stock
|
Preferred
Stock
|
Shares to
be issued
|
Common
Stock
|
to be
issued
|
Subscriptions
|
Paid
in
|
Accumulated
|
Non-controlling | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Receivable
|
Capital
|
Deficit
|
Interest
|
Total
|
||||||||||||||||||||||||||||||||||||||||||||||
Balance April 30, 2013
|
125 | $ | 12,500 | 157 | $ | 1,570 | 57 | $ | - | 14,131,242 | $ | 14,131 | 625,340 | $ | 625 | $ | (2,118,309 | ) | $ | 38,483,198 | $ | (40,991,658 | ) | $ | 723,191 | $ | (3,874,694 | ) | ||||||||||||||||||||||||||||||||
Correcting
|
(40 | ) | - | (85,826 | ) | (87 | ) | 12 | (75 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred dividend to be issued
|
15 | - | - | - | - | - | 156,554 | 156,569 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative liability reclassification
|
518,379 | 518,379 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sale of common stock
|
3,883,899 | 3,884 | (72,201 | ) | (72 | ) | 1,295,165 | 1,298,977 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued for financing cost
|
158,766 | 158 | 16,677 | 17 | 113,085 | 113,260 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued for conversion of notes and interest
|
1,886,804 | 1,887 | (205,713 | ) | (205 | ) | 775,004 | 776,686 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock compensation
|
926,682 | 927 | 5,500 | 6 | 386,008 | 386,941 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee options expense
|
11,208 | 11,208 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(3,265,648 | ) | (53,767 | ) | (3,319,414 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance April 30, 2014
|
125 | $ | 12,500 | 157 | $ | 1,570 | 72 | $ | - | 20,987,353 | $ | 20,987 | 283,777 | $ | 284 | $ | (2,118,309 | ) | $ | 41,738,613 | $ | (44,257,305 | ) | $ | 669,424 | $ | (3,932,163 | ) | ||||||||||||||||||||||||||||||||
Correcting
|
345 | (430 | ) | (1 | ) | - | (1 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of preferred B stock
|
(157 | ) | (1,570 | ) | (72 | ) | 2,118,309 | (2,309,678 | ) | (193,011 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Derivative liability reclassification
|
768,174 | 768,174 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sale of common stock
|
9,655,415 | 9,656 | 65,249 | 65 | 969,145 | 978,866 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued for financing cost
|
1,302,830 | 1,303 | 27,069 | 27 | 180,582 | 181,912 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued for conversion of notes, interest and accounts payable
|
10,025,638 | 10,025 | 1,920,933 | 1,921 | 752,996 | 764,942 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock compensation
|
1,234,959 | 1,235 | 60,000 | 60 | 351,647 | 352,942 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee stock & options expense
|
31,780 | 32 | 77,428 | 77,460 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(4,921,148 | ) | (17,076 | ) | (4,938,223 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance April 30, 2015
|
125 | $ | 12,500 | - | $ | - | 0 | $ | - | 43,238,320 | $ | 43,238 | 2,356,598 | $ | 2,356 | $ | - | $ | 42,528,908 | $ | (49,178,453 | ) | $ | 652,348 | $ | (5,939,102 | ) |
FY ENDED
|
||||||||
APRIL 30,
|
||||||||
2015
|
2014
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net Loss
|
$
|
(4,921,148
|
)
|
$
|
(3,265,648
|
)
|
||
Adjustments to reconcile net loss to net cash used in
operating activities:
|
||||||||
Adjustments
|
(1
|
) |
(75
|
)
|
||||
Dividend on preferred stock
|
-
|
156,569
|
||||||
Loss allocable to non-controlling interest
|
(17,076
|
)
|
(53,767
|
)
|
||||
Depreciation and amortization
|
3,848
|
4,572
|
||||||
Change in fair value of derivative liabilities
|
318,372
|
166,932
|
||||||
Amortization of debt discount
|
1,013,934
|
417,291
|
||||||
Equity based finance cost
|
181,912
|
113,260
|
||||||
Equity based compensation
|
430,402
|
398,149
|
||||||
(Increase) decrease in operating assets:
|
||||||||
Accounts receivable
|
(10,678
|
) |
(28,496
|
)
|
||||
Prepaid expenses and other assets
|
45,659
|
(3,083
|
)
|
|||||
Deposits
|
(39,209
|
)
|
-
|
|||||
Increase (decrease) in operating liabilities:
|
|
|
||||||
Accounts and accrued expenses
|
331,081
|
217,692
|
||||||
Net cash used in operating activities
|
(2,662,903
|
)
|
(1,876,605
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of equipment
|
(3,921
|
)
|
-
|
|||||
Net cash (used in) investing activities
|
(3,921
|
)
|
-
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Net proceeds from sale of common stock
|
978,866
|
1,298,977
|
||||||
Net proceeds from convertible notes
|
2,298,770
|
966,433
|
||||||
Net payments on convertible notes
|
(778,000
|
)
|
(309,500
|
)
|
||||
Net proceeds from other notes
|
95,000
|
65,000
|
||||||
Net payment on other notes
|
-
|
(65,000
|
)
|
|||||
Net payment on related notes
|
-
|
(7,407
|
)
|
|||||
Net cash provided by financing activities
|
2,594,636
|
1,948,503
|
||||||
Cash flows from discontinued operations:
|
||||||||
Cash provided by (used in) operating activities of discontinued operations
|
15,766
|
(39,655
|
)
|
|||||
Net Cash flow from discontinued operation
|
15,766
|
(39,655
|
)
|
|||||
Net Decrease in cash
|
$
|
(56,422
|
)
|
$
|
32,243
|
|||
Unrestricted cash and cash equivalents, beginning of period
|
$
|
70,456
|
38,213
|
|||||
Unrestricted cash and cash equivalents , end of period
|
$
|
14,034
|
$
|
70,456
|
||||
Cash paid for:
|
||||||||
Interest
|
$
|
109,654
|
$
|
11,438
|
||||
Income taxes
|
$
|
1,244
|
$
|
5,600
|
||||
Non cash investing and financing activities ( see: Note M)
|
·
|
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.
|
Leasehold improvements
|
3 years
|
Furniture and fixtures
|
7 years
|
Website costs
|
3 years
|
Computer Equipment
|
5 years
|
2015
|
2014
|
|||||||
Computer equipment, software and furniture
|
$
|
213,262
|
$
|
209,341
|
||||
Less: accumulated depreciation
|
(203,215
|
)
|
(199,367
|
)
|
||||
Net property and equipment
|
$
|
10,047
|
$
|
9,974
|
Fiscal Year Ended
|
||||||||
April 30,
|
April 30,
|
|||||||
2015
|
2014
|
|||||||
Revenues
|
$
|
41,714
|
$
|
122,373
|
||||
Net loss
|
$
|
(246,537
|
)
|
$
|
(280,441
|
)
|
2015
|
2014
|
|||||||
Motorcycles and other vehicles
|
$
|
22,086
|
$
|
60,686
|
||||
Less: accumulated depreciation
|
(13,455
|
)
|
(5,016
|
)
|
||||
Motorcycles and other vehicles, net of accumulated depreciation
|
8,631
|
55,670
|
||||||
Less: estimated reserve for residual values
|
(2,437
|
)
|
(4,252
|
)
|
||||
Motorcycles and other vehicles under operating leases, net
|
$
|
6,194
|
$
|
51,418
|
Year ending April 30,
|
||||
2016
|
$
|
27,460
|
||
2017
|
-
|
|||
Total
|
$
|
27,460
|
2015
|
2014
|
|||||||
Secured, subordinated individual lender (a)
|
$
|
58,037
|
$
|
117,508
|
||||
Secured, subordinated individual lender (b)
|
12,080
|
12,912
|
||||||
Total
|
$
|
70,117
|
$
|
130,420
|
(a)
|
The Company had financed certain of its leases and RISCs through two third parties. The repayment terms are generally one year to five years and the notes are secured by the underlying assets. The weighted average interest rate at April 30, 2015 is 15.29%.
|
(b)
|
On October 31, 2008, the Company purchased certain loans secured by a portfolio of secured motorcycle leases (“Purchased Portfolio”) for a total purchase price of $100,000. The Company paid $80,000 at closing, $10,000 in April 2009 and agreed to pay the remaining $10,000 upon receipt of additional Purchase Portfolio documentation. As of April 30, 2015, no such documents have been received. Proceeds from the Purchased Portfolio started accruing to the Company beginning November 1, 2008. To finance the purchase, the Company issued a $150,000 Senior Secured Note dated October 31, 2008 (“Senior Secured Note”) in exchange for $100,000 from the holder. Terms of the Senior Secured Note require the Company to make semi-monthly payments in amounts equal to all net proceeds from Purchased Portfolio lease payments and motorcycle asset sales received until the Company has paid $150,000 to the holder. To finance the purchase, the Company issued a $150,000 Senior Secured Note dated October 31, 2008 (“Senior Secured Note”) in exchange for $100,000 from the holder. Terms of the Senior Secured Note require the Company to make semi-monthly payments in amounts equal to all net proceeds from Purchased Portfolio lease payments and motorcycle asset sales received until the Company has paid $150,000 to the holder. The Company was obligated to pay any remainder of the Senior Secured Note by November 1, 2009, which was extended to August 15, 2015, and has granted the note holder a security interest in the Purchased Portfolio. On January 31, 2013, the holder converted $50,000 of the outstanding balance of the Note into 60,606 shares of the Company’s restricted common stock.
|
Year ended April 30,
|
Amount
|
|||
2016
|
$
|
70,117
|
||
2017
|
-
|
|||
Total Due
|
$
|
70,117
|
Notes Payable
|
April 30,
2015
|
April 30,
2014
|
||||||
Notes convertible at holder’s option (a)
|
$
|
2,707,080
|
$
|
1,901,263
|
||||
Notes convertible at Company’s option (b)
|
15,000
|
-
|
||||||
Notes with interest only convertible at Company’s option (c)
|
285,000
|
390,000
|
||||||
Non-convertible notes payable d)
|
393,500
|
25,000
|
||||||
Subtotal
|
3,400,580
|
2,316,263
|
||||||
Less, Debt discount
|
(762,426
|
)
|
(296,384
|
)
|
||||
Total
|
$
|
2,638,154
|
$
|
2,019,879
|
Significant Assumptions:
|
|||||
Risk free interest rate
|
Ranging from
|
0.09% to 1.32%
|
|||
Expected stock price volatility
|
230% | ||||
Expected dividend payout
|
0 | ||||
Expected options life in years
|
Ranging from
|
0.59 years to 4.51 years
|
Significant Assumptions:
|
|||||
Risk free interest rate
|
Ranging from
|
0.001% to 0.24%
|
|||
Expected stock price volatility
|
230% | ||||
Expected dividend payout
|
0 | ||||
Expected options life in years
|
Ranging from
|
0. years to 1 year
|
April 30,
2015
|
||||
Opening balance
|
$
|
601,000
|
||
Derivative liability reclassified to additional paid in capital
|
768,174
|
|
||
Derivative financial liability arising on the issue of convertible notes
|
554,733
|
|||
Fair value adjustments
|
(318,372
|
)
|
||
Closing balance
|
$
|
1,605,535
|
●
|
sold 9,655,415 shares of common stock to eighteen accredited investors for $978,866,
|
●
|
issued 9,487,478 shares of common stock upon the conversion of convertible notes and accrued interest in the amount of $684,788, of which 122,451 shares were classified as to be issued at April 30, 2014 and 1,963,350 shares remained to be issued at April 30, 2015,
|
●
|
issued 1,353,830 shares of common stock with 51,000 shares of common stock to be issued at April 30, 2015 valued at $181,912 pursuant to terms of various notes of which 24,809 shares were classified as to be issued at April 30, 2014,
|
●
|
issued 1,234,959 shares of common stock valued at $352,942 pursuant to consulting agreements, of which 60,000 shares remained to be issued,
|
●
|
issued 538,160 shares of common stock in payment of $80,154 in accounts payable of which 20,000 shares were classified as to be issued at April 30, 2014, and 100,000 were classified as to be issued at April 30, 2015.
|
●
|
issued 31,780 shares of common stock valued at $77,460 to three employees in exchange for their outstanding stock purchase options.
|
Amount
|
||||
Balance at April 30, 2013
|
$
|
723,191
|
||
Noncontrolling interest’s share of losses
|
(53,767
|
)
|
||
Balance at April 30, 2014
|
$
|
669,424
|
||
Noncontrolling interest’s share of losses
|
(17,076
|
)
|
||
Balance at April 30, 2015
|
$
|
652,348
|
Fair Value at
|
Fair Value Measurement Using
|
|||||||||||||||
April 30,
|
||||||||||||||||
2015
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Derivative liability
|
$
|
1,605,535
|
-
|
-
|
$
|
1,605,535
|
||||||||||
Derivative liability
|
$
|
1,605,535
|
-
|
-
|
$
|
1,605,535
|
April 30,
|
||||||||
2015
|
2014
|
|||||||
Noncurrent:
|
||||||||
Net operating loss carry forward
|
$
|
10,329,233
|
$
|
8,976,606
|
||||
Valuation allowance
|
(10,329,233
|
)
|
(8,976,606
|
)
|
||||
Net deferred tax asset
|
$
|
-
|
$
|
-
|
Options Outstanding
|
Options Exercisable
|
|||||||||||||||||
Number
Outstanding
|
Weighted Average
Remaining Contractual
Life (Years)
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
||||||||||||||
327,335
|
2.22
|
$
|
0.50
|
327,335
|
$
|
0.50
|
Number
of Shares
|
Weighted Average
Price
Per Share
|
|||||||
Outstanding at April 30, 2013
|
379,667
|
$
|
3.20
|
|||||
Granted
|
-
|
- | ||||||
Exercised
|
-
|
-
|
||||||
Canceled or expired
|
(19,666
|
)
|
(20.05
|
)
|
||||
Outstanding at April 30, 2014
|
360,001
|
$
|
2.41
|
|||||
Granted
|
-
|
-
|
||||||
Exercised
|
(32,666
|
)
|
(2.37
|
) | ||||
Canceled or expired
|
- |
-
|
|
|||||
Outstanding at April 30, 2015
|
327,335
|
$
|
0.50
|
Warrants Outstanding
|
Warrants Exercisable
|
|||||||||||||||||||||
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual Life
(Years)
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||
$
|
1.275
|
25,938
|
.86
|
$
|
1.275
|
25,938
|
$
|
1.275
|
||||||||||||||
$
|
0.8475
|
123,145
|
1.15
|
$
|
0.8475
|
123,145
|
$
|
0.8475
|
||||||||||||||
$
|
0.80
|
20,000
|
2.67
|
$
|
0.80
|
20,000
|
$
|
0.80
|
||||||||||||||
$
|
0.75
|
21,680
|
1.30
|
$
|
0.75
|
21,680
|
$
|
0.75
|
||||||||||||||
$
|
0.65
|
40,000
|
5
|
$
|
0.65
|
40,000
|
$
|
0.65
|
||||||||||||||
$
|
0.60
|
40,000
|
2.16
|
$
|
0.60
|
40,000
|
$
|
0.60
|
||||||||||||||
$
|
0.40
|
150,000
|
2
|
$
|
0.40
|
150,000
|
$
|
0.40
|
||||||||||||||
420,763
|
1.02
|
$
|
0.66
|
420,763
|
$
|
0.66
|
Number
of
Shares
|
Weighted
Average
Exercise Price Per Share
|
|||||||
Outstanding at April 30, 2013
|
439,196
|
$
|
1.27
|
|||||
Granted
|
-
|
-
|
||||||
Exercised
|
-
|
-
|
||||||
Canceled or expired
|
(41,311
|
)
|
(5.40
|
)
|
||||
Outstanding at April 30, 2014
|
397,885
|
1.99
|
||||||
Granted
|
190,000
|
0.45
|
||||||
Exercised
|
(167,122
|
) |
(0.8475
|
)
|
||||
Canceled or expired
|
-
|
-
|
||||||
Outstanding at April 30, 2015
|
420,763
|
$
|
0.66
|
2015
|
2014
|
|||||||
Significant assumptions (weighted-average):
|
||||||||
Risk-free interest rate at grant date
|
1.09%
|
-
|
||||||
Expected stock price volatility
|
140%
|
-
|
||||||
Expected dividend payout
|
-
|
-
|
||||||
Expected option life-years
|
3.42
|
-
|
·
|
Issued 167,260 shares of common stock that were classified as to be issued at April 30, 2014.
|
|
·
|
Issued 1,353,830 shares of common stock (of which, 51,000 shares remained to be issued at April 30, 2015) valued at $181,912 pursuant to the terms of various notes.
|
|
·
|
Derivative liability reclassification of $768,174.
|
|
·
|
Issued 9,883,187 shares of common stock (of which 2,063,350 shares remained to be issued at April 30, 2015) for conversion of notes, interest, and accounts payable of $764,942.
|
·
|
Issued 567,240 shares of common stock that were classified as to be issued at April 30, 2013.
|
|
·
|
Issued 158,766 shares of common stock valued at $113, 260 pursuant to the terms of various notes.
|
|
·
|
Derivative liability reclassification of $518,379.
|
|
·
|
Issued 1,888,804 shares for conversion of notes, interest, and accounts payable of $776,686.
|
|
·
|
Issued 20,000 shares of common stock, valued at $6,200, to a note holder as inducement.
|
·
|
Sold 760,456 shares of restricted common stock to an accredited investor for $20,000.
|
·
|
Issued 391,059 shares of restricted common stock valued at $11,078 to two six-note holders pursuant to the terms of their notes.
|
·
|
Issued 2,846,000 shares of restricted common stock valued at $82,080 to two consultants.
|
·
|
Issued 2,024,371 shares restricted common stock that had been classified as to be issued at April 30, 2015.
|
·
|
Issued 340,000 shares of common stock in partial settlement of $14,500 of accounts payable.
|
·
|
Issued 22,049,916 shares of common stock to ten note holders upon conversion of $374,152 of notes payable.
|
·
|
Issued 35,056 shares of common stock to three employees pursuant to vesting terms of prior stock grant awards.
|
·
|
Repaid $173,000 of convertible notes.
|
·
|
Borrowed a $33,000, 8% note due February 21, 2016 and a $38,000 8% note due April 17, 2016. Both notes are convertible at the note holder’s option at a variable conversion prices such that during the period during which the notes are outstanding, with all notes convertible at 58% multiplied by the average of the three lowest closing bid prices for the common stock during the ten trading day period ending one trading day prior to the submission date of the conversion notice by the note holder to the Company (the “Discount Conversion Rate”). In the event the notes are not paid when due, the interest rate is increased to twenty-two percent until the note is paid in full.
|
·
|
Borrowed a $55,000, 8% note due April 30, 2016 and a $100,000 8% note due April 30, 2016. Both notes are convertible at the note holder’s option at a variable conversion prices such that during the period during which the notes are outstanding, with all notes convertible at 58% multiplied by the average of the three lowest trading price for the common stock during the ten trading day period ending one trading day prior to the submission date of the conversion notice by the note holder to the Company (the “Discount Conversion Rate”). In the event the notes are not paid when due, the interest rate is increased to twenty-four percent until the note is paid in full.
|
·
|
Borrowed a $55,000 8% convertible note due May 27, 2016, and a $58,000 8% convertible note due July 8, 2016 of which $25,000 was due to be paid July 29, 2015. The notes are convertible at a 40% discount from the lowest closing price for the twenty trading days prior to conversion. In the event the notes are not paid when due, the interest rate is increased to fifteen percent until the notes are paid in full.
|
·
|
Borrowed a $31,900 10% convertible note due July 28, 2016. The note is convertible at a 42% discount from the lowest closing price for the twenty trading days prior to conversion. In the event the notes are not paid when due, the interest rate is increased to fifteen percent until the notes are paid in full.
|
·
|
Borrowed $27,500, (the initial tranche of a $165,000 5% convertible note) due June 15, 2016. The lender may lend additional consideration to the Company in such amounts and at such dates as lender may choose in its sole discretion. The principal sum due to lender shall be prorated based on the consideration actually paid by lender (plus an approximate 10% original issue discount that is prorated based on the consideration actually paid by the lender as well as any other interest or fees) such that the Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this note. The maturity date of each note is one year from the effective date of each payment and is the date upon which the principal sum of this note, as well as any unpaid interest and other fees, shall be due and payable. The conversion price for the notes is the lesser of $0.60 or 70% of the lowest closing price during the 20 trading days immediately before the day the conversion notice is delivered to the Company.
|
·
|
Borrowed a $22,500, 8% convertible note due July 19, 2016. The note is convertible at the note holder’s option at a variable conversion of 60% multiplied by lowest closing bid price in the ten trading day period ending one trading day prior to the submission date of the conversion notice by the note holder to the Company (the “Discount Conversion Rate”). In the event the notes are not paid when due, the interest rate is increased to twenty-four percent until the notes are paid in full.
|
·
|
Borrowed a $50,000, 8% convertible note due June 2, 2016. The note is convertible at the note holder’s option at a variable conversion of 60% multiplied by lowest closing bid price in the ten trading day period ending one trading day prior to the submission date of the conversion notice by the note holder to the Company (the “Discount Conversion Rate”). In the event the notes are not paid when due, the interest rate is increased to twenty-four percent until the notes are paid in full.
|
·
|
Borrowed from four accredited investors, four one-year notes at 10% interest as follows: $25,000 due June 29, 2016, $10,000 due June 29, 2016, $5,000 due July 20, 2016, and $21,000 due July 22, 2016. As inducement for the notes, the Company agreed to issue such number of shares of the Company’s common stock that equaled two-and-one-half times the amount of the note. The notes are convertible at $0.30 per share at the Company’s option if, and only if the closing price of Company’s common stock meets or exceeds $0.30 per share for ten consecutive trading days prior to any conversion.
|
·
|
Borrowed from three accredited investors, nine one-year notes at 10% interest as follows: $50,000 due May 5, 2016, $32,000 due May 13, 2016, $50,000 due May 18, 2016, $20,000 due May 28, 2016, $25,000 due May 29, 2016, $50,000 due June 24, 2016, $22,500 due July 8, 2016, $20,000 due July 14, 2016, and $25,000 Due July 31, 2016. As inducement for the notes, the Company agreed to issue such number of shares of the Company’s common stock that equaled two-and-one-half times the amount of the note.
|
●
|
lack of documented policies and procedures;
|
|
●
|
we have no audit committee;
|
|
●
|
there is a risk of management override given that our officers have a high degree of involvement in our day-to-day operations.
|
|
●
|
there is no effective separation of duties, which includes monitoring controls, between the members of management.
|
Name
|
Age
|
Position
|
||
Anthony L. Havens
|
61
|
Chief Executive Officer, President, and Chairman
|
||
Kristian Srb
|
60
|
Director
|
||
Jeffrey Bean
|
62
|
Director
|
||
Anthony W. Adler
|
75
|
Executive Vice President and Principal Financial Officer
|
||
Richard P. Trotter
|
72
|
Chief Operating Officer
|
||
Sandra L. Ahman
|
52
|
Vice President, Secretary and Director
|
Stock
|
Option
|
All Other
|
||||||||||||||||||||||||
Salary
|
Bonus
|
Awards
|
Awards
|
Compensation
|
Total
|
|||||||||||||||||||||
Name and Principal Position
|
Year
|
($)(a)
|
($)
|
($)(b)
|
($)(b)(b)
|
($)(c)
|
($)
|
|||||||||||||||||||
Anthony L. Havens
|
2015
|
280,000
|
-
|
-
|
45,586
|
325,586
|
||||||||||||||||||||
Chief Executive Officer
|
2014
|
280,000
|
-
|
-
|
106,615
|
386,615
|
||||||||||||||||||||
Anthony W. Adler
|
||||||||||||||||||||||||||
Executive Vice President and
|
2015
|
185,000
|
-
|
-
|
-
|
-
|
185,000
|
|||||||||||||||||||
Principal Financial Officer
|
2014
|
185,000
|
-
|
-
|
-
|
-
|
185,000
|
|||||||||||||||||||
Richard P. Trotter
|
2015
|
100,000
|
-
|
-
|
-
|
-
|
100,000
|
|||||||||||||||||||
Chief Operating Officer
|
2014
|
100,000
|
-
|
-
|
-
|
-
|
100,000
|
(a)
|
For Mr. Adler includes accrued; unpaid net salary of $112,018, $119,025, and $78,420 at year end 2015, 2014 and 2013, respectively. For Mr. Trotter, includes accrued; unpaid net salary of $74,754 and $52,198 at year end 2015 and 2014, respectively
|
(b)
|
Represents the stock-based compensation recognized in accordance with ASC 718. Stock-based awards are valued at the fair value on the grant date using a Black-Scholes model. Assumptions made in the valuation of stock-based awards are discussed in Note J to the consolidated financial statements.
|
(c)
|
This column reports the total amount of perquisites and other benefits provided, if such total amount exceed $10,000. In fiscal 2015 and 2014, for Mr. Havens, this includes $45,586 and $106,615, respectively, for garage rental, life insurance and reimbursement of unused vacation time.
|
|
·
|
a change in voting power, due to a person becoming the beneficial owner of 50% or more of the voting power of our securities and our largest stockholder;
|
|
·
|
during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors, including later approved directors, ceasing to constitute a majority of the board;
|
|
·
|
a merger or consolidation of our company with a third party, after which our stockholders do not own more than 50% of the voting power; or
|
|
·
|
a sale of all or substantially all of our assets to a third party.
|
Option Awards
|
Stock Awards
|
||||||||||||||||||||
Name
|
Number of
securities
underlying
unexercised
options
(#)
Exercisable
|
Number of
securities
underlying
unexercised
options
(#)
Unexercisable
|
Option
exercise
price
($)(3)
|
Option
expiration
date(3)
|
Number of
shares or units
of stock that
have not vested
(#)
|
Market value
of shares or
units of stock
that have
not vested
($)
|
|||||||||||||||
Anthony L. Havens (1)
|
88,967
|
-
|
0.50
|
5/12/2017
|
-
|
-
|
|||||||||||||||
Anthony W. Adler (2)
|
16,000
|
-
|
0.50
|
9/21/2016
|
- | - | |||||||||||||||
Anthony W. Adler (1)
|
53,267
|
-
|
0.50
|
5/12/2017
|
-
|
-
|
|||||||||||||||
Sandra H. Ahman (1)
|
41,933
|
-
|
0.50
|
5/12/2017
|
-
|
-
|
|||||||||||||||
Richard P. Trotter (1)
|
53,550
|
-
|
0.50
|
5/12/2017
|
-
|
-
|
(1)
|
Granted pursuant to an option agreement dated May 12, 2011. The options are exercisable, subject to vesting, for a period of five years from the grant date at $1.875 per share. See note (3)
|
(2)
|
Granted pursuant to an option agreement dated September 22, 2006. The options are exercisable for a period of five years from the vesting date at $14.355 per share. See note (3)
|
(3)
|
Pursuant to resolutions of the Company’s Board of Directors in August 2014, the exercise price on the 327,333 options held by the Company’ s officers and directors was reduced to $0.50 per share from exercise prices ranging from $0.60 to $14.355, and the expiration dates were extended by two years. The $63,149 valuation of this action was fully expensed during the year.
|
Plan category
|
Number of shares issued
during the year
ended April 30, 2015
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights (a)
|
Weighted-average exercise
price of outstanding options,
warrants and rights (b)
|
Number of securities
remaining available for
future issuance under
equity compensation plan
|
||||||||
Equity compensation plans
approved by securities holders
|
||||||||||||
2005 Plan
|
113,334 (1)
|
-
|
-
|
-
|
||||||||
Equity compensation plans not
approved by security holders
|
||||||||||||
2009 Plan
|
238,160
|
-
|
-
|
116,270
|
||||||||
2014 Plan
|
200,000
|
-
|
-
|
2,800,000
|
||||||||
Total
|
551,494
|
-
|
-
|
2,916,270
|
(a)
|
For purposes of the table, does not include shares issued and outstanding pursuant neither to the Company’s 2009 Consultant Stock Plan, nor 1,334 shares vested pursuant to a restricted stock grant.
|
(b)
|
Calculation excludes shares issued pursuant to stock grants.
|
(1)
|
The shares vest as follows: 37,780 shares on June 30, 2014; 37,777 shares on June 30, 2015; and 37,777 shares on June 30, 2016.
|
Name (a)
|
Number of Shares
Beneficially Owned
|
Percentage of Class
Beneficially Owned
|
||||||
Anthony L. Havens (1)
|
348,085
|
0.80%
|
||||||
Kristian Srb (2)
|
445,144
|
1.02%
|
||||||
Jeffrey Bean (3)
|
31,032
|
0.07%
|
||||||
Anthony W. Adler (4)
|
121,833
|
0.28%
|
||||||
Richard P. Trotter (5)
|
121,138
|
0.28%
|
||||||
Sandra L. Ahman (6)
|
49,678
|
0.11%
|
||||||
All current directors and named officers as a group (6 in all)
|
1,116,910
|
2.25%
|
(a)
|
Unless indicated otherwise, the address for each person named in the table is c/o Sparta Commercial Services, Inc., 370 Lexington Avenue, Suite 1806, New York, NY 10017.
|
(1)
|
Mr. Havens' minor son owns approximately 50,000 shares of common stock in a trust account. Mr. Havens is not the trustee for his son's trust account, and does not have the sole or shared power to vote or direct the vote of such shares. Mr. Havens disclaims beneficial ownership of such shares held in his son's trust account.
|
|
Includes 88,967 vested options, all exercisable at $0.50 per share until May 12, 2017.
|
(2)
|
Includes 32,867 vested options, all exercisable at $0.50 per share until May 12, 2017. And, 13,333 vested stock options, all exercisable at $0.50 until November 22, 2018.
|
(3)
|
Includes 1,333 vested stock options, exercisable at $0.50 per share until October 23, 2016, and 12,750 vested options all exercisable at $0.50 per share until May 12, 2017. And, 13,333 vested stock options all exercisable at $0.50 until November 22, 2018.
|
(4)
|
Includes 16,000 vested stock options, exercisable at $0.50 per share until September 22, 2016, and 44,445 shares held by The Anthony W. Adler Irrevocable Trust, dated October 1, 2009. Includes 53,267 vested stock options, exercisable at $0.50 per share until May 12, 2017.
|
(5)
|
Includes 1,667 vested shares and 44,445 shares held by The Richard and Kay Trotter Trust Established March 18, 2009. Includes 21,476 shares to be issued to Mr. Trotter in lieu of salary. Includes 53,550 vested stock options, all exercisable at $0.500 per share until May 12, 2017.
|
(6)
|
Includes 41,993 vested stock options, all exercisable at $0.50 per share until May 12, 2017.
|
Exhibit Number
|
Description of Exhibit
|
|
3(i)(1)
|
Articles of Incorporation of Tomahawk Oil and Minerals, Inc. (Incorporated by reference to Exhibit 3(i) (1) of Form 10-KSB filed on August 13, 2004)
|
|
3(i)(2)
|
Certificate of Amendment of Articles of Incorporation, November 1983 (Incorporated by reference to Exhibit 3(i) (2) of Form 10-KSB filed on August 13, 2004)
|
|
3(i)(3)
|
Certificate of Amendment of Articles of Incorporation for name change, August 2004 (Incorporated by reference to Exhibit 3(i) of Form 8-K filed on August 27, 2004)
|
|
3(i)(4)
|
Certificate of Amendment of Articles of Incorporation for increase in authorized capital, September 2004 (Incorporated by reference to Exhibit 3(i) of Form 8-K filed on September 17, 2004)
|
|
3(i)(5)
|
Certificate of Amendment of Articles of Incorporation for decrease in authorized capital, December 2004 (Incorporated by reference to Exhibit 3(i) of Form 8-K filed on December 23, 2004)
|
|
3(i)(6)
|
Certificate of Designation for Series A Redeemable Preferred Stock, December 2004 (Incorporated by reference to Exhibit 3(i) of Form 8-K filed on January 4, 2005)
|
|
3(i)(7)
|
Certificate of Designation for Series B Preferred Stock (Incorporated by reference to Exhibit B to Preferred Stock Purchase Agreement, dated as of July 29, 2009 (see Exhibit 10.21 below)
|
|
3(i)(8)
|
Certificate of Amendment of Articles of Incorporation for increase in authorized capital, September 21, 2009 (Incorporated by reference to Exhibit 3(i)(8) of Form S-1 filed on October 2, 2010)
|
|
3(i)(9)
|
Certificate of Designations of Series C Convertible Preferred Stock (Incorporated by reference to Exhibit 5.03(i) of Form 8-K filed on November 19, 2009)
|
|
3(ii)(1)
|
By-laws (Incorporated by reference to Exhibit 3(ii) (1) of Form 10-KSB filed on August 13, 2004)
|
|
3(ii)(2)
|
By-laws Resolution (Incorporated by reference to Exhibit 3(ii) (2) of Form 10-KSB filed on August 13, 2004)
|
|
3(ii)(3)
|
Board of Directors Resolutions amending By-laws (Incorporated by reference to Exhibit 3(ii) of Form 10-QSB filed on December 15, 2004)
|
|
10.1+
|
Form of Employment Agreement with Anthony Havens (Incorporated by reference to Exhibit 10.4 of Form 10-KSB filed on August 13, 2004)
|
|
10.2+
|
Stock Option Agreement with Jeffrey Bean, dated October 23, 2006 (Incorporated by reference to Exhibit 10.1 of Form 8-K filed on October 24, 2006)
|
|
10.3+
|
2005 Stock Incentive Compensation Plan (Incorporated by reference to Exhibit 4 of Form 10-KSB filed on August 13, 2004)
|
|
10.4
|
2010 Consultant Stock Plan (Incorporated by reference to Exhibit 99.1 of Form S-8 filed on May 12, 2010)
|
|
10.5
|
Form of Promissory Note (Incorporated by reference to Exhibit 10.3 of Form 10-QSB filed on December 18, 2006)
|
|
10.6
|
Form of Promissory Note (Incorporated by reference to Exhibit 10.4 of Form 10-QSB filed on December 18, 2006)
|
|
10.7
|
Preferred Stock Purchase Agreement, dated as of July 29, 2009, by and among Sparta Commercial Services, Inc. and Optimus Capital Partners, LLC (Incorporated by reference to Exhibit 10.1 of Form 8-K filed on July 30, 2009)
|
|
11.0* | Form of Convertible Note |
12**
|
2014 Equity Incentive Plan
|
|
14.1
|
Code of Ethics (Incorporated by reference to Exhibit 14.1 of Form 10-K filed on August 15, 2011)
|
|
21.1*
|
||
23.1*
|
||
31.1*
|
||
31.2*
|
||
32.1*
|
||
32.2*
|
||
101.INS*
|
XBRL Instance Document
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase
|
SPARTA COMMERCIAL SERVICES, INC.
|
|||
By:
|
/s/ Anthony L. Havens
|
||
Anthony L. Havens
|
|||
Chief Executive Officer
|
|||
Date: August 13, 2015
|
By:
|
/s/ Anthony L. Havens
|
||
Anthony L. Havens
|
|||
Chief Executive Officer, President
|
|||
and Chairman of the Board
|
|||
Date: August 13, 2015
|
|||
By:
|
/s/ Anthony W. Adler
|
||
Anthony W. Adler
|
|||
Executive Vice President, and
|
|||
Interim Principal Financial Officer
|
|||
Date: August 13, 2015
|
|||
By:
|
/s/ Sandra L. Ahman
|
||
Sandra L. Ahman
|
|||
Vice President and Director
|
|||
Date: August 13, 2015
|
|||
By:
|
/s/ Kristian Srb
|
||
Kristian Srb
|
|||
Director
|
|||
Date: August 13, 2015
|
|||
By:
|
/s/ Jeffrey Bean
|
||
Jeffrey Bean
|
|||
Director
|
|||
Date: August 13, 2015
|
THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT”)
US $
|
PREPAY DATE
|
PREPAY AMOUNT
|
< 30 days
|
110% of principal plus accrued interest
|
31- 60 days
|
115% of principal plus accrued interest
|
61-90 days
|
120% of principal plus accrued interest
|
91-120 days
|
125% of principal plus accrued interest
|
121-150 days
|
130% of principal plus accrued interest
|
151-180 days
|
135% of principal plus accrued interest
|
1.
|
I have reviewed this report on Form 10-K for the fiscal year ended April 30, 2015 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.
|
The registrant’s other certifying officer(s) and I are 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 our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us 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 our 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 our 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.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our 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.
|
/s/ Anthony L. Havens
|
||
Anthony L. Havens
|
||
Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-K for the fiscal year ended April 30, 2015 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.
|
The registrant’s other certifying officer(s) and I are 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 our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us 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 our 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 our 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.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our 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.
|
/s/ Anthony W. Adler
|
||
Anthony W. Adler
|
||
Principal Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Anthony L. Havens
|
||
Anthony L. Havens
|
||
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Anthony W. Adler
|
||
Anthony W. Adler
|
||
Principal Financial Officer
|