A struggling commercial services provider with negative net income, massive liabilities, and declining revenue that relies heavily on non-controlling interests for solvency.
An aggressive investor might view the recent share issuances as an opportunity to acquire significant equity at depressed valuations before a potential turnaround; The company's ability to generate gross profit suggests underlying service demand exists despite high operating expenses and administrative costs; If management can reduce the massive retained earnings deficit and stabilize revenue, the current negative equity could present a deep value opportunity.
The stock carries extreme risk given that total liabilities of $11.3M significantly exceed total assets of $756,579, creating an insolvent balance sheet; Revenue has contracted from $0.3M in 2023 to $0.2M in subsequent years while net income has plunged from $1.0M to -$2.1M; The massive operating expenses and negative cash flow from operations indicate a business model that cannot sustain itself without continuous capital injections.
SPARTA COMMERCIAL SERVICES, INC. (SRCO) is a commercial services entity operating within the broader service sector, generating revenue primarily through operational service contracts and related administrative activities. The company serves clients requiring specialized commercial support solutions, though specific product lines are not detailed in the current financial statements. With significant non-controlling interests and complex capital structures, the firm navigates a challenging fiscal environment characterized by substantial debt obligations.
The company reported a net loss of $2.1M in 2025, representing a significant deterioration from a $1.0M profit in 2023 and a smaller loss in 2024. Cash flow from operations turned negative at -$1.2M while the company relied on $1.3M in financing cash flows to maintain its cash position of $131,003. The financial picture is further complicated by a retained earnings deficit of -$68.9M and current liabilities of $10.3M that far exceed shareholders' equity of -$10.6M.
The commercial services industry typically provides essential support functions such as cleaning, maintenance, or specialized consulting to businesses across various sectors. Companies in this space often face pressure on margins due to competition and the need for constant operational efficiency improvements. Market participants must navigate economic cycles that can impact client spending budgets on non-essential or discretionary service contracts.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $256.9K | $192.0K | $235.5K |
| Cost of Revenue | $43.0K | $36.8K | $28.2K |
| Gross Profit | $213.9K | $155.3K | $207.4K |
| Operating Expenses | $-1.6M | $1.0M | $1.4M |
| Operating Income | $-1.4M | $-864.5K | $-1.2M |
| G&A | $251.4K | $184.9K | $196.0K |
| Other OpEx | $-1.9M | $834.8K | $1.2M |
| Non-Operating Income | $0 | $0 | $0 |
| Pre-Tax Income | $-1.4M | $-864.5K | $-1.2M |
| Income Tax | $-2.4M | $-257.2K | $889.6K |
| Continuing Ops | $1.0M | $-607.3K | $-2.1M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $1.0M | $-607.3K | $-2.1M |
| Minority Interest | $9.1K | $37.2K | $8.9K |
| Net to Common | $1.0M | $-644.5K | $-2.1M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $4.0K | $110.7K | $747.6K |
| Cash & Equivalents | $4.0K | $101.0K | $131.0K |
| Accounts Receivable | — | $6.7K | $5.2K |
| Inventory | — | $3.0K | $4.6K |
| Other Current Assets | $0 | $0 | $606.8K |
| Long-Term Assets | $9.0K | $9.0K | $9.0K |
| Total Assets | $13.0K | $119.7K | $756.6K |
| Current Liabilities | $9.8M | $9.1M | $10.3M |
| Long-Term Liabilities | $435.8K | $637.1K | $1.0M |
| Total Liabilities | $10.3M | $9.8M | $11.3M |
| Shareholders' Equity | $-10.2M | $-9.6M | $-10.6M |
| Paid-In Capital | $54.9M | $56.1M | $57.2M |
| Retained Earnings | $-66.2M | $-66.8M | $-68.9M |
| Total L&E | $13.0K | $119.7K | $756.6K |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $1.0M | $-607.3K | $-2.1M |
| Non-Cash Adjustments | $-2.2M | $-126.6K | $-553.4K |
| Working Capital Changes | $-1.9M | $-480.5K | $1.4M |
| Cash from Operations | $-3.1M | $-1.2M | $-1.2M |
| Cash from Investing | $6.2M | $-1 | $0 |
| Cash from Financing | $-3.1M | $1.3M | $1.3M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $3.7K | $96.9K | $30.1K |
| Beginning Cash | $317 | $4.0K | $101.0K |
| Ending Cash | $4.0K | $101.0K | $131.0K |
Commercial Services Operations generating core revenue; Non-Operating Financial Activities involving significant common share issuances and financing cash flows; Administrative and General Support functions contributing to high operating expenses; Debt Financing and Capital Management activities reflecting a heavy reliance on external capital injections to offset operational deficits.
Severe liquidity crisis evidenced by current liabilities of $10.3M exceeding total assets and a retained earnings deficit of -$68.9M; Declining revenue trend over the last three years indicating potential market contraction or loss of clients; High operating expenses consuming nearly 60% of gross profit, leaving little room for error in cost control.
Potential low-cost labor structure allowing for margin preservation despite high expense ratios; Flexible service offerings adaptable to diverse commercial client needs; Established relationships with non-controlling interest holders providing liquidity buffers during periods of negative cash flow from operations.
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.